From Oslo I attended an economic briefing from the Chief Economist of a major European bank yesterday. It was fascinating to hear the financial crisis and recession described from the perspective of the OECD, where the recession has been much worse than in North America. For example, Germany’s GDP fell 6.5% from its peak, with its manufacturing down 25% and exports down 26%. And despite massive European fiscal and monetary stimulus, his expectation for 2010 and 2011 is slow OECD growth, as is mine for the US economy. His most insightful comment was a quote from a UK central banker, “It’s about the level, stupid,” an analogy to Bill Clinton’s 1990’s campaign comment that helped him knock George Bush out of the U.S. presidency. The gap between actual economic performance and full-capacity economic performance is so great across the industrial world that the…
