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The Wrong Euro-Villains

Steven Pearlstein has a good column today explaining that Germany, not Greece, is Europe's real problem:

While European governments surely have long-term structural budget problems, the immediate fiscal challenge comes from the decline in tax revenues and the increase in transfer payments that result from slow growth and high unemployment. The right policy response to that -- along with the very real threat of price deflation in Europe -- isn't to put the entire continent in a fiscal straitjacket that makes the recession even worse. The immediate need is for the European Central Bank to deliver additional monetary stimulus in the form of lower interest rates and direct purchases of government bonds. The reality is that the price of avoiding a dangerous deflationary spiral in Greece and Spain is allowing inflation in Germany to rise to 3 or 4 percent.

This is one case where we need to trust the cultural instincts Hollywood has instilled in us. When a movie villain is European, how often is he German? Right: all the time. How often is he Greek? Practically never.