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How Germany got it right on the economy
Washington Post ^ | 11/24/2010 | Harold Meyerson

Posted on 11/24/2010 7:18:50 AM PST by SeekAndFind

It may be turkey week in America, but it's goose month in Germany. In many restaurants, you can get goose in your salad and goose in your soup to go with your goose entrée. Diners fairly honk their way through November.

But then, Germans have something to honk about. Germany's economy is the strongest in the world. Its trade balance - the value of its exports over its imports - is second only to China's, which is all the more remarkable since Germany is home to just 82 million people. Its 7.5 percent unemployment rate - two percentage points below ours - is lower than at any time since right after reunification. Growth is robust, and real wages are rising.

It's quite a turnabout for an economy that American and British bankers and economists derided for years as the sick man of Europe. German banks, they insisted, were too cautious and locally focused, while the German economy needed to slim down its manufacturing sector and beef up finance.

Wisely, the Germans declined the advice. Manufacturing still accounts for nearly a quarter of the German economy; it is just 11 percent of the British and U.S. economies (one reason the United States and Britain are struggling to boost their exports). Nor have German firms been slashing wages and off-shoring - the American way of keeping competitive - to maintain profits.

One key to Germany's miracle is the mittelstand, as the family-owned small and mid-size manufacturing firms that dominate the economy are known. Last week, I visited AWS Achslagerwerk, a factory of one such firm, in the farmlands of Saxony-Anhalt, about two hours west of Berlin. As in many such companies, this factory turns out specialized products: axle-box housings for Chinese and German high-speed trains, machine tools requiring climate-controlled precision measurement.

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: economy; germany
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To: r9etb
Hold on, now .... You can't blame those guys for the decisions American corporations made, to send manufacturing elsewhere. Nor would one normally lump the "Free Trade" crowd together with the "economic nitwits."

Yes you can on both counts. Government tax policies punish domestic manufacturing and incentivise offshoring. The demolition of domestic manufacturing was premeditated and is ongoing.

51 posted on 11/24/2010 9:57:47 AM PST by mas cerveza por favor
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To: Democrat_media
Since 1890, many laws that affect business have been passed that should have been passed. Employers aren't all living saints who can be allowed to operate precisely as they choose, with no standard or guideline of any sort to restrain them.

You need to learn a lot more about Nixon. He originated affirmative action, as well as the EPA.

Every half sensible person opposes cap and trade, but you are painting with such broad brush, and painting over 120 years of history, that it is pointless to try and respond any more to such sweeping generalities.

52 posted on 11/24/2010 10:06:06 AM PST by Will88
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To: UCFRoadWarrior
George Soros is on the phone right now....chewing out his buddies at the WaPo for printing such “rubbish”

Importing provides the banksters more opportunity for skimming at ports of entry and foreign exchange manipulation. That is one big reason they favor importing over domestic manufacturing.

53 posted on 11/24/2010 10:06:26 AM PST by mas cerveza por favor
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To: Buckeye McFrog
usually these stories head off down the Leftist track on how the Germans have very high rates of unionization and labor activists sitting on corporate boards.

Yes, but there is a difference. In the US everything is conflict. Culture war, capitalists vs. unions. German unions on the other hand are reasonable. Germany is about compromise. When the US created a huge bubble economy, German unions accepted wage hikes that often didn't even cover inflation, so that the German economy could become more competitive as a whole.
54 posted on 11/24/2010 12:27:26 PM PST by wolf78 (Inflation is a form of taxation, too. Cranky Libertarian - equal opportunity offender.)
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To: Will88
I consider the economic nitwits to be all those who constantly spew nonsense about free trade (that doesn't exist) and free trade agreements they say will open new markets for US products, but mostly open up more cheap labor for US jobs to move to, while removing tariffs for the export of the products back to the US.

Germany does trade 100% freely with states like Poland or Romania within the European union. The difference is twofold: There is a legal framework protecting e.g. intellectual property, so it's not like the Chinese stealing US know-how and Germany produces stuff that the other states really want like tunnel boring machines or really good regional trains. The US has a great biotech sector and Boeing isn't bad, either. But you cannot sell a real estate bubble and financial derivatives to the world forever.

Speaking of real estate: When the MOMA in New York built a new facade, they actually had it built in Germany and shipped over, because US contractors don't do that kind of cutting-edge stuff. The secret to many successful Mittelstand companies is doing a traditional product in a very high-tech way, like passive houses (i.e. no heating required) or Miele appliances.
55 posted on 11/24/2010 3:04:53 PM PST by wolf78 (Inflation is a form of taxation, too. Cranky Libertarian - equal opportunity offender.)
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To: Will88; All

It’s much worse than cap and trade . The EPA is basically shutting down the economy. It’s in the article. And the EPA is doing it around Congress and over the people of the U.S. This is tyranny.

A democrat Congress created the EPA. A president cannot write legislation,nor make laws.

So you are saying , one man Nixon is to blame for all our troubles? Nixon is one man, who doesn’t represent all Republicans nor all Conservatives nor anything except himself and his human failures like we all have. Just one man that’s all the the liberal media used to further the liberal agenda by getting even greater majorities of Democrats/Marxists in Congress


56 posted on 11/24/2010 6:27:26 PM PST by Democrat_media (Why is no government creating a product we can hold in our hands like a cell phone..?)
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To: Democrat_media

You have little or no understanding of what a “Republican” was in 1970, or of what a “Democrat” was in 1970. Things were very different then. The main difference was the war in Vietnam. There was a lot of agreement on many other issues, and there were many very conservative Democrats and many liberal Republicans still in Congress.


57 posted on 11/24/2010 7:19:14 PM PST by Will88
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To: Democrat_media
A democrat Congress created the EPA. A president cannot write legislation,nor make laws.

Creation of the EPA.

On July 9, 1970, amid a growing public demand for cleaner water, air and land, President Nixon submitted to Congress a reorganization plan proposing the establishment of a U.S. Environmental Protection Agency as an independent agency in the executive branch of the federal government. The plan proposed bringing together 15 components from five executive departments and independent agencies.

Creation of EPA and NEPA

As I said, Democrat and Republican meant something very different in 1970. If you could find a vote on Nixon's EPA plan in Congress, you'd likely find many Dems against it and many liberal Republicans for it.

And, yes, Nixon also did a great deal to advance affirmative action.

58 posted on 11/24/2010 7:39:16 PM PST by Will88
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To: Will88
And, yes, Nixon also did a great deal to advance affirmative action.

Indeed, he did.

But one of the observable facts of the last forty years is that a great deal of well-meaning legislation has been co-opted and perverted by Democrat administrations and the bureaucracy.

EPA, Dept of Education, Affirmitive Action, ADA, Clean Air Act, you name it. They all started out as modest and unobtrusive, with admirable goals.

And, then, the liberals got ahold of them...and distorted them into blunt instruments to attack American freedoms.

Liberals are parasites dedicated to the destruction of the host.

59 posted on 11/24/2010 7:49:44 PM PST by okie01 (THE MAINSTREAM MEDIA: Ignorance on Parade)
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To: Will88; All

Only Congress can create laws.

A democrat Congress wrote the laws that authorized and created the EPA.

Now defend the tens of thousands of other laws that your democrats/marxists created which are the problem: each e law created hundreds of agencies and hundreds of thousands of pages of anti-business regulations as in Obamacare.


60 posted on 11/24/2010 7:52:23 PM PST by Democrat_media (Why is no government creating a product we can hold in our hands like a cell phone..?)
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To: Democrat_media
Only Congress can create laws.

A democrat Congress wrote the laws that authorized and created the EPA.

So what? Learn something about how the most important legislation passed in the US came about and you will find a president and executive branch spearheading the initiative and probably outlining and being involved in writing much of it. And the major legislation often makes good on a campaign promise made by a presidential candidate.

And, only a president can sign legislation into law. Nixon could have vetoed the creation of the EPA, except that he actually spearheaded it.

You just don't want to accept the fact that you can't blame everything on the Dims back in 1970, or since.

And who was it that signed legislation to make the incandescent light bulb illegal, and require the new fluorescent bulbs, just about three years ago?

This is a waste of time, and far from the original topic of this thread.

61 posted on 11/24/2010 8:06:05 PM PST by Will88
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To: Will88; All

democrats have always been socialists/Marxists.

FDR a democrat and his democrat Congresses imposed upon America a lot of socialist laws including the New deal.

This was in the 1930’s.

You really think all these hundreds of thousands of pages of government regulations don’t cripple American manufactuers and businesses. Government/socialism doesn’t work: Just look at the TSA stooges.


62 posted on 11/24/2010 8:08:59 PM PST by Democrat_media (Why is no government creating a product we can hold in our hands like a cell phone..?)
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To: okie01
And, then, the liberals got ahold of them...and distorted them into blunt instruments to attack American freedoms.

That's true, and some of those liberals were Republicans, and some of them were named Bush and Ford and Nixon.

Do you know who put a moratorium on more area for offshore exploration and new drilling than any other president, and which presidents continued it?

Do you know who signed the Americans with Disabilities Act, No Child Left Behind, who supported and worked on Goals 2000 that Clinton later signed?

The problem is, with the exception of Reagan, the Republican presidents haven't been so different from the Dim presidents on many issues since the 1960s. The problem is not the difference between Democrats and Republicans, but the different between conservatives and progressives, and the progressives have been found in both parties and especially in the federal courts on many issues.

63 posted on 11/24/2010 8:34:22 PM PST by Will88
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To: SeekAndFind
Let me clue author Harold Meyerson in on just one thing:

GERMANY DOES NOT SHARE A BORDER WITH MEXICO.

64 posted on 11/24/2010 8:47:59 PM PST by Conservative Tsunami
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To: Democrat_media
democrats have always been socialists/Marxists.

Including all those very conservative southern Democrats pre-1970 or so? There were NO Republican office holders in the South from the late 1800s until around the 1970s. Do you think the southern Democrats were anti-war during the 1960s?

As I've said, you don't understand the make-up of Congress that existed in the time period I mention above. All southerners in Congress were conservative, and Democrats. And there were many very liberal Republicans from northern states. And the voting alignments around various issues were different than what we have today, where most Dims are very liberal and most Republicans conservative on most issues.

You need to find some of the voting records on major legislation pre-1970 and see how the Democrats and Republicans voted on various issue. It will probably be as much by region as by party on many issues.

65 posted on 11/24/2010 8:52:07 PM PST by Will88
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To: SeekAndFind
Another reason for Germany's resurgence that the Washington Post would rather not mention: when she took office, Merkel and her party slashed the corporate tax from 50% to 25%. As a result, German exports have boomed and unemployment dropped four points. Funny how that works.
66 posted on 11/26/2010 3:39:45 AM PST by Right_Wing_Madman
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To: Right_Wing_Madman

Slashing the tax burden on companies almost always helps to stabilize the economy and encourages companies to expand, and take risk.

You’ve just shown how it’s working for Germany (which has to shoulder the burden of the EU on its back)

The precedents even here in the USA are too numerous that only the willfully ignorant can miss it.

Count them -— Warren Harding, JFK, Ronald Reagan, even Clinton in his second term ( nudged on by Congress of course ), and Dubya after 9/11.

Tax cuts together with SPENDING RESTRAINT, that’s the real ticket.


67 posted on 11/26/2010 6:21:23 AM PST by SeekAndFind
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