How Germany got it right on the economy

[mgc1961]

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.

Finish this article at http://www.washingtonpost.com/wp-dyn/content/article/2010/11/23/AR2010112306280.html?hpid=opinionsbox1

[BeyondGeography]

1. "We don't have short-term strategies, only long-term strategies."

That, plus a skilled work force and formalized local loyalty ("our banks are restricted to doing business in their regions; they have to concentrate on the real economy.") will get you somewhere.

Germany has built something enduring. Great read.

[eridani]

2. Long-term unemployment is still too high there

Europe and the rest of the world need to confront the fact that you just can't keep on having fewer and fewer people making more and more stuff under a regime that denies stuff to those who aren't producing it. Lavorare meno! Lavorare tutti!

[Crazy Dave]

4. Actually Germany has an excellent social safety net for the unemployed

And their peers along with the rest of their society doesn't treat them like outcasts.

[eridani]

6. Safety nets are all well and good. This does not obviate the fact that--

--we need to spread paid work around much more than we are now doing--Germany, the US--everyplace.

[OHdem10]

3. This is what happens when a country protects its workers.

This proves you can participate in Trade and at the
same time protect your own country's sovereignty
and your own economy. Our country opted to put
Business first, they ended up with all the rewards
from free trade.

[Crazy Dave]

5. Plus

Their businesses can be more competitive and have higher profit margins since they don't have to contribute to employee health care.

That's why I'm always so surprised big business never fought for single-payer health care in this country but I guess you don't have to if your manufacturing base is overseas and only your corporate and administration offices are here stateside to get subsidies and tax breaks.