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How Germany got it right on the economy

washingtonpost.com

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Re: How Germany got it right on the economy

#51

Post by paganel »

binomial wrote: post #33
forkandwait wrote: post #14

Earlier quoted context omitted.

Just as a plug for German innovation -- consider the 19th century: if you include Austria/ Vienna, people who spoke German (and were often Jewish) basically invented modern thought, ranging from mathematics to chemistry to music to philosophy to psychology etc. England was great in applied physics and math, France in dynamics and biology, but in theoretical math, music, and philosophy Germany TOWERS above anyone in t…

To say that Germans "invented modern thought" is pushing it. Perhaps you can qualify that with an appropriate definition of "modern thought". The first few disciplines were around long before the 19th century.

> To say that Germans "invented modern thought" is pushing it

Kant was German. As was Hegel. And Marx. Maybe it's just me, but I'd say that the history (including that of intellectual thought) of the last 200 years would be completely different if it weren't for these 3 guys.

Re: How Germany got it right on the economy

#52

Post by lispm »

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.

Germany has been consistently exporting its goods over two decades, independent of the exchange rates. The German export success is not tied to the exchange rate. German companies learned to live with high exchange rates. For example the automotive industry has factories in the US, Mexico, Brasil, ...

Re: How Germany got it right on the economy

#53

Post by Derbasti »

Mrich30 wrote: post #39
Derbasti wrote: post #34

Earlier quoted context omitted.

Remember that in Germany, you are legally unemployed if you earn less than 400 Euros (500-600$) per month. If you are unemployed, you don't have to pay taxes. This makes most employees of Starbucks, McDonalds etc. count as unemployed.

To the contrary, you do not count as unemployed towards the official statistics. You will get benefits in addition to your salary though. Essentially the same manipulations are done to the statistics here as in many countries, they try to remove most unemployed people from the numbers by sending them to training, minimum wage jobs (so called 1 euro jobs). This has gotten a lot worse in the past years and the social d…

Actually, I am not sure about the statistics. Even though 400E-jobs are considered unemployed legally, they might still include them in the statistics to make them look better.

Re: How Germany got it right on the economy

#54

Post by lispm »

rb2k_ wrote: post #35
whakojacko wrote: post #20

Earlier quoted context omitted.

>But you could make the same argument against any US state that remains cost competitive due to the currency. Indeed you can. >And it also discounts the fact that Germany did very well during the period when it did have it's own currency. This is true. However Germany also gets decent manufacturing benefits from the income disparity in the east. >As it is, German economic performance does have an effect on the Euro,…

> However Germany also gets decent manufacturing benefits from the income disparity in the east. Strangely enough, the east has (by far) the highest unemployment rate in Germany: http://upload.wikimedia.org/wikipedia/commons/6/6f/Arbeitslo... The big German manufacturing plants for e.g. cars are usually also found in the south/west (Daimler + Porsche around Stuttgart, BMW in Bavaria). This goes even as far as adding…

The automotive industry was the first to build new state of the art factories in East Germany. Porsche in Leipzig, VW's transparent factory ( http://www.glaesernemanufaktur.de/gmd.jsp?dok=&lang=&#38... ), ...

Re: How Germany got it right on the economy

#55

Post by lispm »

Derbasti wrote: post #32
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.

What you are missing here is that the Euro only works if the stronger countries support the weaker ones financially. Without this, the Euro could not be a stable currency. If a country like Greece or Ireland is basically collapsing, it survives because countries like Germany and France pay for it. There is no such thing as a free lunch. What Germany gains now because of the weak Euro, it had to pay a few months ago t…

Ireland and Greece were not supposed to be 'weak' countries.

Ireland just a few years ago was seen as a model for economic growth (supported by very low tax rates for companies). Ireland is a victim of its own misguided policies (housing bubble, banking system, ...) and its orientation to anglo-saxon economic policies.

Greece also failed to reform its economic policies (after cheating on the economic data for quite some time). There was time enough to do that.

I also don't think these countries are 'collapsing'. But adjusting their economic policies will be tough.

Re: How Germany got it right on the economy

#56

Post by Derbasti »

sb wrote: post #40
Derbasti wrote: post #34

Earlier quoted context omitted.

Remember that in Germany, you are legally unemployed if you earn less than 400 Euros (500-600$) per month. If you are unemployed, you don't have to pay taxes. This makes most employees of Starbucks, McDonalds etc. count as unemployed.

Hm, that seems kind of strange to me--while it might legally be considered unemployed, would these employees not have health-insurance paid by their employer and receive retirement compensation?

They do get health insurance. However, it is paid as part of the general German welfare system (hence, tax money) and not by the employer. As far as I know they get the same retirement compensation as if they were unemployed. (Not so sure, there)

Social security benefits however are a rather alien concept to Germans in general. Healthcare and retirement compensation are government regulated, so individual companies do not need to provide special bonuses to make the system worthwhile.

Re: How Germany got it right on the economy

#57

Post by lispm »

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…

When I was young it was in to drive Jaguar here in Hamburg. Now they are mostly gone...

The UK was strong in manufacturing for a long time, and still is. But the 'masters of the universe' decided it was easier to earn money by selling oil and financial products. The result: the oil runs out and the financial products were ponzi schemes.

Re: How Germany got it right on the economy

#58

Post by lispm »

nickpinkston wrote: post #25
forkandwait wrote: post #22

Earlier quoted context omitted.

What I meant to say was that any statement saying that Germany is an "uninnovative" country is just hogwash. The downvote -- why? Because you disagree?

I didn't downvote you, and I also didn't say they didn't innovate. Rather, modern German innovation rarely takes the form of transformation, more of incremental innovation. I can't think of any modern industries revolutionized by German companies. Automotive saw a steady stream of good innovation no doubt, but hardly very transformative.

Depends on where you look at. There are entire industrial niche markets 'owned' by German Mittelstand companies. It is just not in your focus of attention.

Re: How Germany got it right on the economy

#59

Post by kleiba »

arethuza wrote: post #45
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

Back in the 90's there was a song called "Parklife" by "Blur", and in it you can hear actor Phil Daniels reference this expression. I was always puzzled where that came from (had to look up the lyrics though - it's difficult to understand the phrase as pronounced by an Englishman).

Re: How Germany got it right on the economy

#60

Post by _grrr »

roel_v wrote: post #44
_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…

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 anyo…

The UK spends ~£6 Billion/yr on EU. Total UK Budget is £620 Billion.

Sources:

UK Budget: http://www.guardian.co.uk/news/datablog/2010/may/17/uk-publi...

EU Contributions: http://news.bbc.co.uk/1/hi/8036096.stm

Afraid I don't have figures for US.

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