The G-8 communique this weekend is more of the same. The communique calls for "growth measures" for the Eurozone and is an implicit slap at the austerity measures that were imposed, by Merkel and Sarcozy, as the price of bailouts for Ireland and Greece. No mention of the over-regulation and labor laws that have made the Eurozone, even in the best of times, an impossible place for anyone under the age of 25 to find a job.
The G-8 politicians accepted the Obama Administration view that you can put an enormous tax on labor and still expect businesses to be enthusiastic about hiring workers. By piling mandate upon mandate upon employers who make the mistake of hiring anyone, the government has effectively put a huge tax on labor.
Is it any surprise no one wants to hire anyone, when it is effectively against the law to fire anyone in Spain? The 25 percent unemployment rate in Spain has nothing much to do with austerity measures, since so far there haven't really been any in Spain. Instead, the completely stifling labor laws are the main culprit for the plight of those in Spain looking for work.
So, what does the G-8 want? They want the US and Germany to fund the extravagant lifestyles of southern Europe and avoid making any of the tough choices about de-regulating their economies. Obama, of course, was the loudest trumpeter of the increased spending demands by the G-8. More infrastructure! Sounds great. But, where is the money going to come from for this? Obama pledges US funds. Really? From where?
The Eurozone countries look to Germany, but Germany will ultimately collapse if weighted down by the absorption of the debts of the rest of the Eurozone. So, what is the plan really? Avoid hard choices. Pretend that there is money from somewhere to continue to fund promises to the citizenry. Blame rich people. That's it. In other words, there is no plan, just rhetoric. That's the Obama way and is now the G-8 solution.
But, it doesn't really matter. The German public and the American public are out of chips. They can't fund this stuff, even if they wanted to. Which they don't. So put your head in the sand once more. Pretend like there is a way available for everyone to live high on the hog without anyone really working or saving. This is what I would call the "Ostrich policy." Pretend and pretend. It will not end well.