File this under:The Pot Calling the Kettle Silver

Today's Wall Street Journal (subscription required) has a front page story that is dazzling for its chutzpah. For several weeks now we have been reading that the dollar's fall in value and possible pending collapse is due to Americans' excessive proclivity to spend money they do not have. The American people's net savings rate hovers around an appalling 2%. As Martin Wolf remarks in a recent issue of the Financial Times: "US gross external liabilities are some 11 times export earnings, while net liabilities are about three times exports. The latter figure is similar to those of crisis-hit Latin American economies such as Argentina and Brazil." If the dollar does collapse it could usher in a worldwide recession of Hoover-esque proportions. Just trying to get U.S. consumption down and savings up threatens a significant recession.

And the Wall Street Journal's take on what ails the world economy? It's the Europeans Stupid! They save too much money and don't spend enough, because, get this, they have national policies that encourage this sort of thing. GASP! SHOCK! HORROR!

I suppose we should call these the temerity files.