November 18, 2002
More Criticism of Relatively High European Interest Rates

Writing in the Wall Street Journal, Steve Liesman is--politely--incredulous at and infuriated by the arguments the ECB uses to justify its monetary policy:


WSJ.com - The Macro Investor ...The ECB held [interest rates] pat for reasons I find unconvincing. With its two largest economies -- France and Germany -- now stalling, the ECB held firm to its dogmatic policy that its raison d'etre is fighting inflation, not promoting growth. (The U.S. Fed, by contrast, has a dual mandate to promote price stability and growth.) And how much inflation was it worried about? October inflation in the dozen countries that make up the Euro area was 2.2%, against its target of 2%. (And there's reason to believe that European inflation, which uses less sophisticated measurement techniques than the U.S., overstates the problem.) What did King Richard III say, something about losing his kingdom for want of a horse?

But it gets worse. In his statement following the meeting, ECB President Wim Duisenberg acknowledged that the inflation problem likely reflects "developments in energy prices." Oil prices, of course, are very volatile and, Mr. Duisenberg continued, further inflation increases "should only be temporary." All of this was said right before Mr. Duisenberg went on to discuss "the hesitant pace of economic expansion and current, lackluster confidence" throughout the Euro zone. And what do they think over there? That Europe is somehow going to prosper, that it's stocks and economy will rise while the U.S. economy is in the dumps?

I'll tell you what gets me angry about all this. This is at least the second time in about two years that Mr. Duisenberg and the ECB have misjudged Europe's place in the globalized world. In July of 2000, Mr. Duisenberg "scoffed at any concerns that the expected U.S. slowdown could drag Europe down with it, calling it "a weak wind that the European economy could easily withstand," according to The Wall Street Journal. Now he scoffs at the global deflationary downdraft afflicting equity and goods prices world-wide, focusing instead on chimeric inflationary pressures...

Posted by DeLong at November 18, 2002 11:36 AM | Trackback

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Oh yes, and a few years ago everyone was deriding the ECB because the euro was 80 cents. Now it's back over parity. Things change.


Here's one person who thinks the ECB is doing a better job than the Fed strategy of it's-Tuesday-I-increase-rates-it's-Thursday-
I-lower-them. When economic agents can no longer plan on interest rates, it only adds a new uncertainty in the economy - it could create more risk and ultimately be nefarious.


Last time I checked economics was an empirical science, and economies are complex structures. Let's wait a couple of years before judging Greenspan and his handling of the economy. It could well turn out that all his lowering of interest-rates only served to create a bubble in the housing market which, when it pops (as it seems to be doing now), only creates a worse deflation in the long-term. I don't know. But I do think history could well have a very different judgment about Alan "Atlas" Greenspan.

Posted by: Andrew Boucher on November 18, 2002 12:07 PM

Though the recession in America was not especially severe, it was especially dangerous. The bear market is stocks was the deepest and longest since 1929, and should have reminded us of the problems Japan found after the end of its bull market in 1990 and subsequent series of minor recessions.

Japan has not found a way to spur growth for 12 years, and is experiencing deflation. China is experiencing deflation. Germany is slowing in growth, as is the Euro zone as a whole.

If the Federal Reserve Board had not lowered interest rates repeatedly, the American economy would have experienced a much deeper and longer recession. The point was to spur consumer expenditure until inventory and capacity adjustments were complete and industry began increasing its capital expenditures enough to bring GDP growth to 4% or better. Even with the Fed actions, growth is still quite slow.

The Fed has bought us time, and will continue to do so to avoid the sort of stagnation Japan has experienced. That the Euro Bank has not seen the danger there could cause significant stagnation in Europe and further weaken the world economy. The Euro Bank is copying the policy mistakes of the Bank of Japan from 1990.

Posted by: on November 18, 2002 12:46 PM

The labor department recorded a decline in price for 40% of the goods and services in the consumer price index between September 2001 and September 2002.

Posted by: on November 18, 2002 01:02 PM

Bruce Ferguson posts a useful link in the thread below on the Fed rate cut. It compares US and European central banking experiences. It is a piece by Henry CK Liu:

http://www.atimes.com/atimes/Global_Economy/DK16Dj02.html

One intersting difference in the two banking traditions is the prevalence in Germany of cross shareholding relationships between banks and nonbank customers. For some reason that is not obvious to me just yet, perhaps this inclines a central bank to conservatism about credit policy and inflation management. Certainly, this has been the pattern in Japan, where cross shareholding relationships are also the rule. I can't help but think we Americans have been blessed to be spared this, both because cross shareholding compromises the capital market and because it may produce very conservative macro management.

Not to beat a dead horse--well maybe a little bit--perhaps the ECB is also less taken with the geopolitical risk that I have asserted may be influencing the Fed. This would be understandable, since the Europeans are less seized than the Americans are with the need to act on Iraq, and thus perhaps are less inclined to take the probability of war as being as high as we do. This calculation may change by the end of the year. We'll see.

Posted by: on November 18, 2002 01:34 PM

"One intersting difference in the two banking traditions is the prevalence in Germany of cross shareholding relationships between banks and nonbank customers. For some reason that is not obvious to me just yet, perhaps this inclines a central bank to conservatism about credit policy and inflation management."

Please continue with this thought. Cross shareholding is prevalent in both Japan and Germany, but why should it cause a central bank to be less responsive to a slowing economy. Why not be more responsive to what has become a chronic high unemployment rate in Germany, or a decade of poor GDP growth in Japan?

Why has there not been more agitation by the public in Japan or Germany for more agressive central bank action.

Posted by: on November 18, 2002 01:47 PM

"One intersting difference in the two banking traditions is the prevalence in Germany of cross shareholding relationships between banks and nonbank customers. For some reason that is not obvious to me just yet, perhaps this inclines a central bank to conservatism about credit policy and inflation management."

Please continue with this thought. Cross shareholding is prevalent in both Japan and Germany, but why should it cause a central bank to be less responsive to a slowing economy. Why not be more responsive to what has become a chronic high unemployment rate in Germany, or a decade of poor GDP growth in Japan?

Why has there not been more agitation by the public in Japan or Germany for more agressive central bank action?

Posted by: on November 18, 2002 01:48 PM

If the Federal Reserve Board had not lowered interest rates repeatedly, the American economy would have experienced a much deeper and longer recession. The point was to spur consumer expenditure until inventory and capacity adjustments were complete and industry began increasing its capital expenditures enough to bring GDP growth to 4% or better. Even with the Fed actions, growth is still quite slow.

How do you know what would have happened had the Fed not lowered rates? How do you know the U.S. will not experience a worse recession in the coming years because the Fed tried to put a milder one off, and instead created a bubble in the housing market, which is now bursting? Since when is it a good idea to spur consumer spending when all that means is encouraging the consumer to go further into debt - using his house as collateral and exposing him to a decline in housing prices? And who really thinks that 4% growth is in the hands of the Fed and monetary policy?

Perhaps, just perhaps, before passing judgment on what a super job the Fed is doing, we actually consider that what matters is not what the macroeconomists' models say will happen, but what actually does happen. Economists have been terribly wrong before (see the Great Depression, or the idea they could "finetune" the economy in the 60s). Let's wait a couple of years and see how things play out, before passing judgment on Alan "Atlas" Greenspan, or saying how stupid the ECB is.

Posted by: Andrew Boucher on November 18, 2002 02:12 PM

The simple truth of the matter is that the Euro project was flawed from the start, as some of us have been saying for years. Europe's single currency project was primarily motivated by the political aspiration for European integration but with insufficient regard to whether the economic conditions were yet propitious or whether the political structures at the community level were mature enough to deal with fiscal policy coordination as countries particpating in the monetary union lost monetary autonomy. My own awakening to the problems in store owed much to the late Rudi Dornbusch's paper in Foreign Affiars for September 1996.

At the launch of the Euro on 1 January 1999, the DMark got locked in at an over-valued rate. An appreciation of this can be gained from the data for total employee compensation costs of production workers in manufacturing in Germany compared with other Eurozone economies and the US as posted on the US Bureau of Labor Statistics website: http://www.bls.gov/fls/flsichcc.pdf

The data show employee compensation costs in terms of the US Dollar to be higher in Germany than in any of the other countries covered in the survey. Average labor productivity in German industry is not high enough to compensate for the high employment costs. The outcome is that Germany industry is generally not cost competitive so the economy stagnates and this has a depressing effect on the whole Eurozone since Germany's economy is just over a third of the total.

This fundamental will not change if the ECB cuts its refinancing rate. A rate cut when the Eurozone's inflation rate has been and still is, if only just, running over the ECB's target rate of max 2% will hazard the ECB's credibility, with likely downstream consequences in other circumstances, and exacerbate social tensions in countries like the Netherlands and Spain where inflation is already running well above the 2% target. Concern for those countries has to be part of the consideration.

The appropriate policy response is for Germany to set about reform of its social welfare system financed by supplementary costs to wages paid. This problem of uncompetitive total employment costs has been long recognised. The Kohl government attempted to push through reforms in the early 1990s but these were blocked in the Bundesrat, the upper chamber of the German legislature, where the Social Democrats were then able to marshall a blocking coalition. The Social Democrats, who now control the Bundestag, the lower chamber of the legislature, have inherited a problem partly of their own creation. The result is political paralysis and economic stagnation.

Posted by: Bob Briant on November 18, 2002 04:15 PM

>>focusing instead on chimeric inflationary pressures...<<

Wait until the optimal window for the invasion of Irak, i.e. December-February, opens up, and we will see how chimeric inflationary pressures really are. The real question is: how realistic is it to preempt oil-price driven inflation.

It must be that Duisenberg expects a (trade-transmitted) demand push from the war on Irak. Otherwise, I can't see how he can form preferences for deflation over stagflation...

P.S. Is anybody arguing that California should get off the dollar currency area? :) Right now it could use some extra monetary / exchange rate stimulus... Instead, software engineers are packing their stuff and flying back to India and elsewhere... I say Ireland should introduce German as a second language... (Just kidding, of course.)

Posted by: Jean-Philippe Stijns on November 18, 2002 06:27 PM

I confess I'm going to fall short on the assertion that cross share holding institutions promote a conservative bias in monetary policy. I started with the empirics on this one and then thought I'd search for a theory, or prompt one of you guys to create one.

But could it be that a central bank presiding over an economy with a banking system heavily invested in cross shareholding arrangements with nonbank institutions is marginally more inclined to pursue policies that protect the asset side of the banking system's balance sheet, and has an incentive to avoid price level changes that erode the real value of the banking systems claims on the nonbank sector? To continue the dynamic: Cross share holding, to the extent it promotes suboptimal capital allocation, also is likely to undermine the return on these assets, and so the central bank restores some of the real value of the assets by accepting a deflationary environment. I'm assuming here that banks hold more claims on nonbanks than vica versa, which I think is the case.

Other ideas welcome.

Posted by: Jim Harris on November 19, 2002 06:05 AM

There was an article last week ("Germany must go shopping") by John Plender in the FT. He pointed out that consumer debt levels (as a percentage of income) are much lower in "Euroland" than in the US or the UK. The debt level in Italy is 46%, in Germany it is 74% and in the US it is a whopping 108%. Such differences are important in the setting of monetary policy. Rate cuts by the Fed have a much more dramatic effect on US consumers, who can subsequently refinance and are faced with lower interest charges. The financial markets in "Euroland" are not as efficient as in the US (less securitisations etc.), so the effect of a rate cut has a less dramatic effect on the behaviour of European consumers, who also are not as willing to take on debt as Americans are. This is also shown by the savings rates in Europe which are high in comparison to the US (i.e. France: 15% US: -3 %).

IMO, it seems that the Fed is merely granting the US consumer "a stay of execution" by constantly inducing consumers to pile up debt (i.e. in the form of home equity) and spend it. However, at some point the US consumer will be out of breath from all these trips to the mall and will be forced to rebuild the balance sheet, just as US corporations have begun in the last couple of years. Rebuilding the household balance sheet by US consumers will have a chilling effect on US consumer spending (the thing that keeps the US economy going). This is likely to force the US and, for sure, the world economy into a very deep and long recession as the US savings rate has to revert to a normal state. Thus, the Fed's monetary policy might, contrasted with the ECB's, not be so wise after all, because it is creating asset price inflation and an enormous debt overhang. It's also likely to make Bush a one-term president (once again, it's the economy ......), which might be the only good thing about the scenario I envisage.

Posted by: Nescio on November 19, 2002 07:08 AM

The latest Eurostat data releases show the Eurozone inflation rate edged up to 2.3% for the 12 months to October, compared with 2.1% in September, and seasonally adjusted industrial production showed a decrease, month on month, of 0.2% in September compared with August.

For one reason or another, I have often found it difficult to access or navigate the Eurostat website to obtain latest data releases. The currently most helpful access point seems to be: http://europa.eu.int/comm/eurostat/Public/datashop/print-catalogue/EN?catalogue=Eurostat&collection=01-Press%20Releases

Posted by: Bob Briant on November 19, 2002 07:25 PM

if the consumer bubble pops before corporations are investing again, its a problem... but if it pops as they're on the up swing, you could see a parrallel to the current economy...

whatever the outcome, it was at least an effort to avoid an extremely deep and nasty recession that we would have had with interest rates 4% higher... corps would be cutting back much more severely, and consumers would be hacking and slashing... that ain't pretty...

but what happens if oil price drops (rather than spikes, as most of you seem to be hoping for)? Bush looks like a genius, and y'all get your asses handed to you for another 4 years....

what seems ironic, and kind of depressing, is that lefties seem to talk down the economy, hoping to ride a negative economy to victory...

Posted by: Libertarian Uber Alles on November 19, 2002 08:58 PM

Dear Uber,
>what seems ironic, and kind of depressing, is that lefties seem to talk down the economy, hoping to ride a negative economy to victory...

If only it was all only a leftist plot, life would be simpler. Just one of the problems is that the whole Euro project is deeply flawed at present. The Eurozone's Stability and Growth Pact is an albatross. The European Central Bank's asymmetric inflation target inflicts a bias in stabilisation policy. The Bank's lack of transparency in its interest rate setting decisions is archaic and apt to trigger confidence crises. Many market analysts believe the DMark got locked into the Euro at an over-valued rate.

In January 1998, the WSJ reported: "For Germany's political establishment, challenging European economic and monetary union is the ultimate heresy. But four renowned German professors are planning to do just. In a last-ditch effort to stop the euro from being introduced in 1999, they plan to file a 300-page complaint at Germany's Constitutional Court Monday. They argue that the Maastricht treaty's convergence criteria for the common currency haven't been fulfilled, and so EMU must at least be delayed. The challenge has stirred up considerable controversy in Germany, where markets, businesses and politicians have all assumed EMU is a done deal." - from : http://www-personal.umd.umich.edu/~mtwomey/newspapers/0112euro.html

Perhaps the professors knew a thing or two about what was in store.

Britain's treasury minister, Gordon Brown, has recently proposed reforming the Stability Pact, the ECB's inflation target and transparency block on its decision process. Doubtless reforms would help ease the way for Britain to join the Euro but reforms are justified on their own merits regardless of whether Britain joins the Euro or not. After all, with Britain's inflation rate running about half that in the Eurozone according to the same price index, with double the rate of GDP growth and with the average unemployment rate in the Eurozone 50% higher, it is just possible that arrangements and institutions in the Eurozone are not quite as well tuned as they might be.

What happens? Tony Blair gets slapped down in a meeting with Alain Juppé, the former French prime minister and leading ally of President Jacques Chirac, and told Britain can only hope to influence reforms if we first join the (? unreformed) Euro - see: http://www.no-euro.com/mediacentre/dossiers/display.asp?IDNO=879

One entirely rational interpretation is that some leading European politicians would really rather Britain did not join the Euro.

Highlights of Mr Juppé's political career are reported at: http://news.bbc.co.uk/1/hi/world/europe/2485613.stm

Posted by: Bob Briant on November 20, 2002 08:19 AM

>>what seems ironic, and kind of depressing, is that lefties seem to talk down the economy, hoping to ride a negative economy to victory...<<

If there is any plot out there, it's that of getting the economy out of the dolldrums by going to war against Irak and the whole Middle-East if necessary. Deja vu...

Re: talking down the economy, I don't think the Bush administration needs the Lefties' help. The best way to depress the markets is to unconvincingly talk them up... giving along the way the impression that the Captain doesn't even realize the boat is going through a storm.

Posted by: Jean-Philippe Stijns on November 20, 2002 07:48 PM

This is status of the Dow Jones as of five minutes ago: 8829.22 +206.21

It looks like at least a few investors are cautiously optimistic about the American economy. Hmm, would they have been this confident if the Democrats had done better on election day? Somehow, I don't think so.

Posted by: David Thomson on November 21, 2002 10:45 AM

"Last time I checked economics was an empirical science"

Did someone actually say this with a straight face? Economics is definitely not an empirical science! This field of study is a Liberal Art that requires some knowledge of the hard sciences. Adam Smith was a moral philosopher--and each and every other economist since the beginning of time is some sort of philosopher.

Posted by: David Thomson on November 21, 2002 10:54 AM

Labels, labels, labels . . .

Posted by: on November 21, 2002 12:48 PM

Least any think economists are only now having reservations about the flawed Euro with the benefit of hindsight that is not so. From a report in the Financial Times of 9 February 1998:
"More than 150 German economics professors have called for an "orderly postponement" of economic and monetary union because economic conditions in Europe are "most unsuitable" for the project to start. The call to delay Emu "for a couple of years" is made in a declaration signed by 155 university professors and sent to the Financial Times and the Frankfurter Allgemeine Zeitung newspaper in Germany. It signals intensified opposition to the government's euro policy. . . ."

Source: http://www.internetional.se/9802brdpr.htm

See also: http://news.bbc.co.uk/1/hi/business/46673.stm
http://www-personal.umd.umich.edu/~mtwomey/newspapers/0112euro.html

Posted by: Bob Briant on November 22, 2002 06:08 AM

In case anyone believes that, in Europe, hostility towards markets and economic forces is some unique obsession of the political left we have this:

Jack Kemp > In the words of former French Prime Minister Edouard Balladur, "What is the market? It is the law of the jungle, the law of nature," while "civilization is the struggle against nature." Markets, according to Balladur, are jungles where primitive urges compete in a barbaric struggle for survival while "civilization" (read "government") represents a heroic struggle of refined politicians against the baser impulses of men and women to harness market forces in pursuit of progress and the collective good.
Source: http://www.townhall.com/columnists/jackkemp/jk20020530.shtml

Note: Edouard Balladur 1929–, French political leader, b. Turkey. He moved to France as a child and grew up in Marseille. A Gaullist and member of the Rally for the Republic, he served under Premier Georges Pompidou in the 1960s and was finance minister under conservative premier Jacques Chirac from 1986 to 1988.
Source: http://www.infoplease.com/ce6/people/A0805921.html

Posted by: on November 22, 2002 07:23 AM

"In case anyone believes that, in Europe, hostility towards markets and economic forces is some unique obsession of the political left.."

This is absolutley correct. Capitalism is a liberal phenomenon that threatens all conservative societies. We should also not forget our own Pat Buchanan hostility to free trade. Both the radical right and the far left are contemptuous toward free market policies. This is one of the central reasons why I describe myself as a neo-conservative. I highly recommend that everyone find a copy of Peter Berger's fantastic "The Capitalist Revolution: Fifty Propositions about Prosperity, Equality, and liberty"

Posted by: David Thomson on November 23, 2002 11:30 AM

David,
>This is one of the central reasons why I describe myself as a neo-conservative.

If you meet a fellow claimant to "neo-conservatism", how do you know whether (s)he intends that label to denote the same collection of values and policies that you do?

Posted by: Bob Briant on November 23, 2002 01:04 PM

Regretfully, I have not been elected the infallible pope of Neo-Conservatism. It seems that Irving Kristol may have that honor. However, it’s safe to say that my economic views represent the majority of those describing themselves as adherents.

We are considered to be scum bags by both the hard right Pat Buchanans and the Libertarian Ayn Rands. The free market is yucky, disgusting, and sometimes downright awful, but it’s still far better than any other economic system devised in the history of humankind. Laissez faire capitalism is senseless and utterly unworkable. Wealthy entrepreneurs often possess good and bad traits, and are not secular saints like Rand’s John Galt. Socialism is simply a waste of valuable time and resources.

Democratic Capitalism is the best way to enrich a society, but it comes with a price tag. The dogma of creative destruction exacts a cruel and unavoidable cost on those who are in the wrong place at the wrong time.

Posted by: David Thomson on November 23, 2002 04:58 PM

David,
>The free market is yucky, disgusting, and sometimes downright awful, but it’s still far better than any other economic system devised in the history of humankind. Laissez faire capitalism is senseless and utterly unworkable.

Markets evolved. Hammurabi's Legal Code of 18th century BC contained criminal and family law but also elements of commercial law, including protection of property rights, and provision for statutory control of specified prices and charges.
Source: http://www.wsu.edu/~dee/MESO/CODE.HTM

I never cease to be amazed how archeological finds repeatedly turn up with artefacts showing evidence of international trade over huge distances in ancient times.

Governments of all mature capitalist market economies intervene in markets, not least with legal frameworks and judicial systems to define and protect property rights and to regulate market transactions. All governments raise taxes; some subsidise selected business activities. So much is common experience. The notion of "free markets" as a concept owes more to a hypothetical base line devised by economists to analyse the ways markets function. The important questions about government "intervention" relate to: How? Why? And whether the overall benefits of particular intervention are sufficiently large to justify both the apparent and hidden costs imposed.

The fact is that industrialisation was pioneered in Britain, starting in the late 18th century, without government direction or much control. That is what economic historians mean broadly by "laissez-faire". Indeed, the government of the time was hardly placed to know what was happening apart from occasional reportage, and data from customs and excise revenues and then income tax, after it was first introduced in 1799 by Pitt to finance Britain's engagement in the Napoleonic Wars. The first census was not until 1801. Britain's population trebled over the next hundred years. Suppose someone had the foresight to predict that from demographics and ask: But where are all the extra jobs coming from? Who could have answered that when there were then no railways, no steam ships, no gas or electricity distribution networks, no means of bulk steel production . . .

Surprising as it is in retrospect, the beginning of large scale industrialisation is only some 200 or so years old, a mere blink in human history. It was important because such data as there are from Britain's historic records going back to the early 14th century show real wages to be approximately constant on trend through to c. 1800, apart from the 25 years or so following the Black Death plague in 1348-9, which is estimated to have killed perhaps as much as a third of the population. Increasing real wages on trend was an outcome of industrialisation, which is why some economists argue that the original industrial revolution was more important in historic terms than the present revolution in information technologies.

All of which isn't much help in discerning what "neo-conservatism" denotes.

Posted by: Bob Briant on November 24, 2002 06:30 AM

“Governments of all mature capitalist market economies intervene in markets, not least with legal frameworks and judicial systems to define and protect property rights and to regulate market transactions. All governments raise taxes; some subsidise selected business activities. So much is common experience. The notion of "free markets" as a concept owes more to a hypothetical base line devised by economists to analyse the ways markets function. The important questions about government "intervention" relate to: How? Why? And whether the overall benefits of particular intervention are sufficiently large to justify both the apparent and hidden costs imposed.”

I agree with every single word of your comments. This is what separates us from the laissez faire fanatics. There is no such thing as a completely “free market.” It would be far more accurate to say “freer market.” A viable social order recognizes that its best to allow the markets as much freedom as possible. The socialist lunacy is to argue that bureaucrats can adequately
respond to the minute economic issues of everyday life. My guess is that you fail to distinguish between legitimate government interference and the failed nostrums of socialist ideology. It is not an all or nothing propostion.

Posted by: David Thomson on November 24, 2002 09:16 AM

"...some subsidise selected business activities."

This is particularly true regarding military spending. The computer industry benefited greatly from these expenditures. However, the politicians must be extremely careful. I am not an absolutist and long ago realized that compromises have to be made. This is why we will never have a perfect world. The very premise of government depends upon granting politicians certain powers while at the same we should be leery and looking over their shoulder.

Posted by: David Thomson on November 24, 2002 09:29 AM

>This is particularly true regarding military spending. The computer industry benefited greatly from these expenditures.

Add NASA to military, and make it the computer electronics and software and aerospace industries, which benefited. At least some Europeans have disentangled some of the mythology.

>However, the politicians must be extremely careful. I am not an absolutist and long ago realized that compromises have to be made. This is why we will never have a perfect world.

The US Constitution has better built-in checks and balances than most because the founding fathers in the Constitutional Convention did not start off with a presumption that humankind is perfectable or even necessarily "noble" in its intentions as Rousseau had envisaged with his notion of the "noble savage". Contrast that with Roberspierre's declared intention, during the French Revolution, of creating a "virtuous society". It seemed to follow naturally from there that any critics were opposed to virtue and could therefore be justly eliminated to thereby make society more virtuous according to Robespierre's lights. There is the difference, I think.

Posted by: Bob Briant on November 24, 2002 11:18 AM

The mistake many folks make is that they restrict the premise of democracy to the political sphere. The reality is that the check and balances of democracy also underpin the cultural and economic aspects of our lives. I even contend that this is true in the growth and development of the English language!

Posted by: David Thomson on November 24, 2002 12:44 PM
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