By Juan Pedro Marín Arrese, in Madrid | Economics is not a science but rather a common sense attitude. An open mind approach is vital to grasp its core meaning. Policing it shouldn’t be handed over to people too fond of rigid rules. Let the Germans have a go at it and you’ll end up with a neutral fiscal and monetary stance all year around. No policy at all, in fact. In normal circumstances you wouldn’t bother. But confronted with a recession you should get concerned.
Why on earth Ms Merkel is so fond of golden rules that might lead us to the Iron Age? I guess it is simply that she fails to understand the logic of rules. They are supposed to be followed until something goes wrong. Take for instance the US Federal Reserve throwing to the dustbin all sound monetary principles faced with a potential downturn. Take for instance the Bank of England oblivion of orthodoxy when it comes to send a clear message to the market it will buy every Treasury bond in town. In both cases such a bold deviation from well entrenched rules has saved the day. US is growing at a reasonable pace. UK has never been subject to doubts on it sovereign solvency.
Euroland should learn the lesson that paving off depression is the paramount objective of any sensible policy-maker. The recent summit has grossly failed to understand that token measures like employment plans for young people amount to wasted money. You don’t need plans but rather jobs. And this can only be achieved if those running surpluses are forced to spend more. The clue lies in imposing tough rules on Germany, not on Greece.
* Juan Pedro Marín Arrese is an economist.