So what the ECB is saying, in effect, is that Europe should drive down nominal wages — which can only be done by raising the unemployment rate — in order to offset the effect of oil and food on headline inflation. (Real wages will fall in any case.)
Is this really a policy that the ECB would defend in so many words? I doubt it. But however sober and dignified talk of price stability may sound, that’s what the proposed policy amounts to.
Friday, March 4, 2011
Arnaud Montebourg is an ambitious man. A serious presidential run is still a way off, but he's young. He's also willing to stick his neck out: witness his report on corruption in the Socialist federation of Bouches-du-Rhône under Baron Jean-Noël Guérini. Yet the party leadership continues to defend its baron. Montebourg may suffer in the short run, but in the long run perhaps he'll get some credit for daring.