Money Gets Even Tighter in Europe

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The European Central Bank has raised interest rates yet again, despite the persistence of very high unemployment outside the core EU countries. Why? Because continued low interest rates might run the risk of overheating things in Germany, where the economy is fairly strong. Matt Yglesias argues that this would be fine:

If you think about the problem of divergence between the low unemployment German-led “core” block and the high unemployment periphery, it seems to me that persistent labor shortages in the “core” are exactly what’s needed. That should either induce migration from Spain, Portugal, etc. northward to where the jobs are or else induce core-based firms to find ways to shift some production to the periphery. Obviously, that’s not an ideal strategy….

He’s right, of course, but “not ideal” is a considerable understatement. The German public, which is already being asked to bail out the Greeks and Irish and the Portuguese, would go berserk if the ECB deliberately followed a policy that encouraged either outsourcing of German business
or migration into Germany from countries on the periphery. The ECB knows this perfectly well, despite its supposedly nonpolitical mandate, and it also knows perfectly well that German support is still critical to the success of the euro project going forward. So monetary policy will continue to be made with Europe’s core countries in mind, and the rest of the euro area will just have to live with it.

Whether that works out in the long run is a very good question. We’ll see.

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Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

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