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**NOVEMBER 28, 2023**

On the Prospect website

The Secret Trial

Google tried to withhold practically every critical detail from the
public in its monopolization case. A band of advocates and journalists
fought back. BY LUKE GOLDSTEIN

Google's China Policy

How the National Security Council is trying to take over regulation of
global data flows on the basis of what's good for Big Tech BY ROBERT
KUTTNER

Israel's Brutality Is Stoking the Imagination of India's Far Right

As the genocide in Gaza continues, India's Prime Minister Narendra
Modi is taking notes. BY APARNA GOPALAN

Democrats Ask Biden Financial Regulator to Reverse Industry-Friendly
Derivatives Policy

Three Agriculture Committee senators want Rostin Behnam to drop a new
rule that would grant exemptions on swap trades. BY LUKE GOLDSTEIN

Meyerson on TAP

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**** Blocking Green Transitions

Upending government policies, the Fed is doing that here, while the high
court is doing that in Germany. Who elected these guys? (Nobody.)

As my colleague David Dayen noted

last week, America's climate policy and monetary policy are, to put it
gently, at odds. The core of the climate policy, which is also a
re-industrialization policy, are the provisions in the Inflation
Reduction Act that provide generous tax credits to companies hastening
our transition to green energy. In the little over a year since it was
enacted, the IRA has almost doubled the nation's rate of factory
construction, as electric-vehicle and battery factories have broken
ground in a multitude of states. In recent months, however, as David
pointed out, the high interest rates imposed by the Federal Reserve have
made the borrowing with which these companies fund their construction
projects prohibitively expensive, slowing construction or stopping it
altogether, thus undercutting the IRA and our transition to a cleaner,
safer economy.

Now, Germany has run smack into the same wall. In its pending budget for
2024, there were 60 billion euros allotted to a fund for a green
transition, with particulars-like subsidies for the purchase of
electric vehicles-much like ours. The government proposed to take that
60 billion from the unspent funds set aside to get the country through
the COVID pandemic. Last week, however, Germany's high court ruled
that the government could not repurpose those funds-nor, it said,
could the government borrow that 60 billion because the German
constitution restricts the government from borrowing more than 0.35
percent of the nation's GDP. In other words, despite its plans to
transition away from its heavy reliance on coal, despite its pledge to
provide funding to Ukraine, and despite the cutoff of the Russian oil
and gas that is causing Germany's economy actually to shrink this
year, the country is hemmed in by its long-standing commitment to
non-Keynesian, or pre-Keynesian, or anti-Keynesian economics.

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This should, at minimum, ring a faint bell. As the European economy
tanked in the wake of the 2008 global financial panic, Germany wielded
its outsized power in the EU and the European Central Bank to keep the
bank from loaning funds to Europe's most devastated nations, and to
require those nations to balance their budgets by cutting spending. In
the nations of the European South-most particularly Greece-this
turned the recession into a deep, prolonged depression from which Greece
has emerged only in the past few years.

A still fainter bell from Germany's own past also tinkles dimly.
Between the 1929 crash and the Nazis' rise to power in 1933,
successive German governments also cut spending to appease the gods of
budget balance, creating a level of mass unemployment and desperation
that helped bring Hitler to power.

The German economy is nowhere even remotely near such dire straits
today, but given Germany's problematic history of budget balance über
alles, the nation's failure to understand that the promotion of
investment and consumption is a necessary responsibility of government
shows an economic and social learning curve that is an almost perfectly
flat line.

This week, Germany's coalition government is struggling to see how it
can still build a cleaner economy within the constraints of its
constitution. What it really needs to do is to amend its constitution,
which is a lot easier to do in Germany than it is here. As the planet
needs a green Germany, as Europe needs a robust Germany, and as
civilization needs a Germany where the quasi-neo-Nazi AfD is not a
rising threat, the sooner Germany gets over its obsessive budget balance
disorder, the better.

~ HAROLD MEYERSON

Follow Harold Meyerson on Twitter

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