[Paul] Krugman also told Handelsblatt he wouldn\u2019t rule out sanctions against Germany if it continued to rely on its export-driven model. \u201cIf the euro falls to parity with the dollar, the Europeans are going to be surprised by the demands that will come out of the U.S. Congress, and I would support that,\u201d\u009d he said.<\/p>\n
That fiscal and economic policy critique probably won\u2019t gain any more traction in Germany than his monetary policy one. Germans see their government finances and trade competitiveness as an example to be followed by Greece, Portugal and other troubled countries in Europe. And they clearly don\u2019t see the U.S. model as one worth chasing.<\/p>\n
Wolfgang Franz, who heads the German government\u2019s economic advisory panel known as the Wise Men, tore into Krugman \u201d\u201d and the US \u201d\u201d in an op-ed in the German business daily Wednesday, titled \u201cHow about some facts, Mr. Krugman?\u201d\u009d<\/p>\n
\u201cWhere did the financial crisis begin? Which central bank conducted monetary policy that was too loose? Which country went down the wrong path of social policy by encouraging low income households to take on mortgage loans that they can never pay back? Who in the year 2000 weakened regulations limiting investment bank leverage ratios, let Lehman Brothers collapse in 2008 and thereby tipped world financial markets into chaos?\u201d\u009d he wrote.<\/b><\/p>\n