The destruction of middle class wealth in parts of the eurozone under current economic policies has parallels with the pre-World War II era that ushered in economic collapse, followed by extreme politics, says Wharton finance professor Franklin Allen. Debt monetizing policies by the European Central Bank and the Fed may also reduce competitiveness against China, India and other emerging economies.
For more comment from Franklin Allen on the new proposal by Draghi and the ECB, see:
Let Spain, Greece (and maybe Italy) Exit the Eurozone Temporarily, Devalue and Grow
Last Chance Café – Will the ECB Finally Become a Bank of Last Resort?
Don’t Expect Long-term Relief from the New ECB Funding Proposal
