Walter Russell Mead neatly sums up the dilemma facing Germany: Northern governments may only now be waking up to the deep cynicism with which some southern governments are approaching the crisis.  Neither the Greeks nor the Italians have anything but moral contempt for German and Nordic financial puritanism.  They see the northern banks (and bank [...]

The following comment from one of Tyler Cowen’s readers explains perfectly why we are in such a pickle. The filp side of AD is unused capacity which is why it takes long to adjust, more of the same can be produced from productivity improvements alone and more investment is unnecessary. This means high profits for [...]