Brad, Oskar, Noam

Seth Ackerman SAckerman at
Thu Mar 18 12:42:22 PST 1999


I have to take exception to your criticism of Chomsky's commentary on Lafontaine.

Lafontaine had a few major policy goals: EU tax harmonization *upward*, wholesale reflation of the European economy, promoting capital controls internationally, and defending Europe's labor market regulations.

It simply defies credulity to say that Wall Street -- or Rubin or Summers or Greenspan -- shared these goals. They are certainly worried that the U.S. is bearing the brunt of absorbing the world's exports and would like to see Europe take on more. But that is qualitatively and quantitatively different from Lafontaine's plans for wholesale reflation of the European economy to bring down unemployment and fend off attacks on the regulatory and welfare state.

The ECB's strategy is to withhold the desired interest-rate cuts until it sees some labor-market "flexibility." There is every reason to believe that this was also the Treasury's preference until a couple of months ago.

I recall your saying that Chomsky tries to "hide the ball" from us -- that he induces us to read things between the lines that aren't true. Your argument that Robert Rubin is comrade-in-arms with Oskar Lafontaine because he'd like to see interest rates a few notches lower sounds like a perfect illustration of this.


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