Credit Crisis Schadenfreude

Compared with politicians in other countries, German political leaders usually seem a drab, stolid sort, the occasional spy or sex scandal notwithstanding.

But when it comes to global finance, they are apt to make bold pronouncements.

In 2005, the chairman of the Social Democratic Party, Franz Müntefering, referred to private-equity firms as "locusts."

Now, Germany's finance minister, Peer Steinbrück, says that the credit crisis threatens the United States' status as a financial superpower.

"The United States will lose its status as the superpower in the world financial system," he said. "The world financial system will become more multipolar."

The cause of the credit crisis, he told the Bundstag today, is the "irresponsible overemphasis of the laissez-faire principle."

Steinbrück pointed to the quest for maximum profits and huge bonuses.

"Investment bankers and politicians in New York, Washington and London were not willing to give these up," he said.

Of course, Herr Minister has a personal reason to be bitter about the credit crisis. Steinbrück is on the supervisory board of the state-controlled bank KfW, which transferred some $425 million to Lehman Brothers a little more than an hour before the Wall Street firm filed for bankruptcy protection.

"Germany's Dumbest Bank!" screamed the front-page headline in the newspaper Bild.

by Jeffrey Cane

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