Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How Germany got it right on the economy

washingtonpost.com

Post reply on HN
Print view View original

41–50 of 77 posts

Re: How Germany got it right on the economy

#41

Post by _grrr »

brc wrote: post #19
wheaties wrote: post #15

The problem with this article is that is glosses over one major problem: if Germany's currency moved in accordance with its economy rather than the entire European Union then its exports would be grossly overpriced and uncompetitive. It's the formation of the EU and a single currency that has allowed it to remain an exporting country rather. The article can not compare apples to oranges and make sense.

But you could make the same argument against any US state that remains cost competitive due to the currency. And it also discounts the fact that Germany did very well during the period when it did have it's own currency. As it is, German economic performance does have an effect on the Euro, being the largest member state.

>But you could make the same argument against any US state that remains cost competitive due to the currency

True, but, there is a policial union of states in the US that doesn't exist in the EU. The EU is a monetary union without a political union, this means that it's politically unpalatable to explicitly redistribute tax money from the relatively rich to poor regions (Germany/France to Greece/Portugal) in the same way as Washington or London might to W.Virginia or Newcastle.

Re: How Germany got it right on the economy

#42

Post by ckuehne »

_grrr wrote: post #41
brc wrote: post #19

Earlier quoted context omitted.

But you could make the same argument against any US state that remains cost competitive due to the currency. And it also discounts the fact that Germany did very well during the period when it did have it's own currency. As it is, German economic performance does have an effect on the Euro, being the largest member state.

>But you could make the same argument against any US state that remains cost competitive due to the currency True, but, there is a policial union of states in the US that doesn't exist in the EU. The EU is a monetary union without a political union, this means that it's politically unpalatable to explicitly redistribute tax money from the relatively rich to poor regions (Germany/France to Greece/Portugal) in the same…

Ahem, Germany is net payer into the European Union bugdet with an estimated net payment per capita of 1045 Euro ( http://en.wikipedia.org/wiki/Budget_of_the_European_Union#St...).

Re: How Germany got it right on the economy

#43

Post by Loic »

_grrr wrote: post #41
brc wrote: post #19

Earlier quoted context omitted.

But you could make the same argument against any US state that remains cost competitive due to the currency. And it also discounts the fact that Germany did very well during the period when it did have it's own currency. As it is, German economic performance does have an effect on the Euro, being the largest member state.

>But you could make the same argument against any US state that remains cost competitive due to the currency True, but, there is a policial union of states in the US that doesn't exist in the EU. The EU is a monetary union without a political union, this means that it's politically unpalatable to explicitly redistribute tax money from the relatively rich to poor regions (Germany/France to Greece/Portugal) in the same…

Europe is redistributing enormous amount of money from rich to poor countries within EU. Spain would still look like an underdeveloped country without the massive injection of money coming from the EU. EU (the organisation), even with problems here and there and the need to take a good diet, is working wonderfully at equalizing the rich/poor countries. This is why most of the countries do not want Turkey to be part of EU, under the EU rules, this would mean an insane amount of money going to Turkey every year for maybe 30 years or more.

With respect to the article itself, not everything is rosy in Germany, a large part of the population is living out of the social help system (7.5 millions people) and another large par is getting miserable wages, in the range of 4€/h or less. So yes, the German economy is robust, but the social state is struggling too.

Re: How Germany got it right on the economy

#44

Post by roel_v »

_grrr wrote: post #41
brc wrote: post #19

Earlier quoted context omitted.

But you could make the same argument against any US state that remains cost competitive due to the currency. And it also discounts the fact that Germany did very well during the period when it did have it's own currency. As it is, German economic performance does have an effect on the Euro, being the largest member state.

>But you could make the same argument against any US state that remains cost competitive due to the currency True, but, there is a policial union of states in the US that doesn't exist in the EU. The EU is a monetary union without a political union, this means that it's politically unpalatable to explicitly redistribute tax money from the relatively rich to poor regions (Germany/France to Greece/Portugal) in the same…

At first I had typed a paragraph here about how you are wrong, but then I realized that I don't have any numbers on this, nor do I even know a measure on how this could be quantified. I still think you're wrong, but I can't prove it. Do you have any numbers on the amount of redistribution that happens e.g. from blue to red states in the US? If so, is there a description of the methodology used somewhere? Or does anyone else know of figures or research in this area?

Re: How Germany got it right on the economy

#45

Post by arethuza »

nickpinkston wrote: post #5

While certainly Germany has done a lot right and deserve credit for their current economic strength, we have to recognize that they've both chosen a very different path: i.e. stability over growth, and also have a very different culture than we Anglo-Saxons - which I would argue are quite inter-related. When it comes to quality manufactured goods, Germany is legendary and has strongly biased its economy over the past…

On the point of Germans becoming better sales/marketers - it is perhaps interesting to note that one of the most durable company taglines here in the UK is in German:

Vorsprung durch Technik

Re: How Germany got it right on the economy

#46

Post by mooism2 »

Loic wrote: post #43
_grrr wrote: post #41

Earlier quoted context omitted.

>But you could make the same argument against any US state that remains cost competitive due to the currency True, but, there is a policial union of states in the US that doesn't exist in the EU. The EU is a monetary union without a political union, this means that it's politically unpalatable to explicitly redistribute tax money from the relatively rich to poor regions (Germany/France to Greece/Portugal) in the same…

Europe is redistributing enormous amount of money from rich to poor countries within EU. Spain would still look like an underdeveloped country without the massive injection of money coming from the EU. EU (the organisation), even with problems here and there and the need to take a good diet, is working wonderfully at equalizing the rich/poor countries. This is why most of the countries do not want Turkey to be part o…

The EU does redistribute a large amount of money between its member countries... but this is still small compared to intrastate transfers.

Re: How Germany got it right on the economy

#47

Post by brc »

_grrr wrote: post #41
brc wrote: post #19

Earlier quoted context omitted.

But you could make the same argument against any US state that remains cost competitive due to the currency. And it also discounts the fact that Germany did very well during the period when it did have it's own currency. As it is, German economic performance does have an effect on the Euro, being the largest member state.

>But you could make the same argument against any US state that remains cost competitive due to the currency True, but, there is a policial union of states in the US that doesn't exist in the EU. The EU is a monetary union without a political union, this means that it's politically unpalatable to explicitly redistribute tax money from the relatively rich to poor regions (Germany/France to Greece/Portugal) in the same…

I also don't have the numbers but I do know that the 'poor' EU member states do receive a lot of money from the richer economies of Germany, France and the UK. If anything threatens the strength of the EU and the Euro, it will be German taxpayers deciding they've had enough of paying for infrastructure in other countries and/or underwriting their profligate borrowing.

I think the amount of wealth that gets sent to West Virginia is probably overestimated as well.

Re: How Germany got it right on the economy

#48

Post by _grrr »

Loic wrote: post #43
_grrr wrote: post #41

Earlier quoted context omitted.

>But you could make the same argument against any US state that remains cost competitive due to the currency True, but, there is a policial union of states in the US that doesn't exist in the EU. The EU is a monetary union without a political union, this means that it's politically unpalatable to explicitly redistribute tax money from the relatively rich to poor regions (Germany/France to Greece/Portugal) in the same…

Europe is redistributing enormous amount of money from rich to poor countries within EU. Spain would still look like an underdeveloped country without the massive injection of money coming from the EU. EU (the organisation), even with problems here and there and the need to take a good diet, is working wonderfully at equalizing the rich/poor countries. This is why most of the countries do not want Turkey to be part o…

> Europe is redistributing enormous amount of money from rich to poor countries within EU

Yes, they are, but it's a political hot potato, arguably without mandate, and I doubt that it's on the scale of national regional development funds.

Don't get me wrong, I am pro Europe, but I think politicians have done an abysmal job of explaining the project to voters (esp in the UK).

Re: How Germany got it right on the economy

#49

Post by nl »

forkandwait wrote: post #21
jacques_chester wrote: post #18

Earlier quoted context omitted.

> Trade barriers, in the sense of protective tariffs to prevent outside manufactures selling cheaply in your domestic market, can be very, very, very good for industrial development. Not really. You hurt your own economy because your own consumers now to pay a higher price for their goods. The protected manufacturer has reduced incentive to reduce costs or improve quality. And of course you have hurt people on the ot…

>> Trade barriers, in the sense of protective tariffs to prevent outside manufactures selling cheaply in your domestic market, can be very, very, very good for industrial development. > Not really. Yes really, though not always. (The word "only" when talking about who benefits is a little to coarse a generalization...) The tradeoff is between cheap goods now and capitalization (building of factories, etc) for later;…

I think I could probably agree to some degree with an argument that short term trade barriers in emerging market segments may be useful as a tool to encourage investment.

Even that is dangerous because of the tendency of the emerging industry to rely on them.

An alternate model is that followed by Thailand and its car industry. The Thais aggressively pushed for and signed unilateral free trade agreements with a number of post-industrial and industrial economies and then leveraged those trade agreements as a tool to encourage large investments in heavy industry.

The fact that cars imported from Thailand attract no import duty in a large number of countries has made them a very attractive investment target for companies like Honda who have since built factories there.

Re: How Germany got it right on the economy

#50

Post by arethuza »

Stormbringer wrote: post #11

I find it interesting that over the last hundred years or so, especially in the US, the 'hidden cause' of financial upheavals is usually legal - often something as simple and innocuous as changes to the rules for how savings/superannuation are taxed. When you think about this it makes sense, the rich pay attention to these changes, and move their money accordingly. It's like trying to stabilise a rowboat, you notice…

I too favor German cars - although I did have a BMW that was manufactured in the US and I wasn't too impressed with it.

Having said that, I wouldn't mind owning the product of a certain Italian VW/Audi brand...

Post reply on HN