Statistics don't help in the battle between stimulus and austerity - WSJ.com

THE GEITNER, LAGARDE OSTRICH: Statistics don't help in the battle between stimulus and austerity - WSJ.com

One is either an ostrich or not.

What does one mean by 'ostrich'? Well, think of the two farmers.

Each farmer knows that he/she has to save 10% of each crop as seed for the next crop.

However one farmer (say Greece) just can't save 10%, it wants to consume more.

Another farmer, say China, decides it wants to grow and so it saves 20% and goes a bit hungry.

According to Geitner, et al, something is wrong with China, it's producing too much at too good prices.

Over time, the high cost of goods in Europe makes it hard for European individuals and businesses to be able to afford to be competitive and to be competitively productive. This can include featherbedding and work rules in Greece, etc.

So much of Europe and the US ignore the need to reward producers and savers and instead concentrate on social benefits, etc. - ignoring the long-term cost to society of doing so! The ignorance of an ostrich hiding its head in the sand.