How Germany is able to run the world’s second largest export economy • Hacker News Board

Re: How Germany is able to run the world’s second largest export economy

#131

Post by gimmeThaBeet » Tue, Jan 21, 2020, 5:40 PM UTC

Despegar wrote: post #48

I've said it before in another comment [1]: >There's nothing I enjoy more than the plight of the German Saver, who's obsession with "fiscal responsibility" has led to shitty austerity politics all across the EU (to be fair some other northern European countries like Netherlands also share the same view) and depressed growth for the poorer southern European countries. Germany has benefited most of all from the unfinis…

That's a pretty good overview of a good amount of things, Germany exports a lot of things, including their own problems imo. Germany has not held their own when it comes to demand growth. People seem to love Germany's fiscal discipline, but they don't realize that they pursue it to detrimental extent, if not for their own sake, than that of their neighbors. The schwarze null is kind of a cynical joke at this point.

The problem with being like, a systemic export nation, is that your shifting burden to someone else. It sounds okay on paper, but what you see is that can hide a lot of your own issues. If you aren't getting better, your sustained welfare is vampiric, it's coming from your counterparts.

And like you are saying, a personal pet peeve of mine is the outsized amount of private companies. Look at any global etfs, Germany is behind the UK, France, Switzerland (lot of multinationals tbf) and Canada (though not European). That's mainly the work large amounts of private companies. I'm sympathetic to the fact that its their companies, they don't have to sell them. But when it creates a fairly significant skew in sort of a capital picture, you can end up with stuff like this, where your capital class is even more walled off than elsewhere, since you can't build equity in a large portion of their economy even if you wanted to.

Re: How Germany is able to run the world’s second largest export economy

#132

Post by FabHK » Tue, Jan 21, 2020, 5:40 PM UTC

geff82 wrote: post #43

durnygbur wrote: post #34

The most un-understandable thing is that none of this export wealth reaches an individual, especially a guest worker, a foreigner. It's quite shocking to discover by a foreigner specialist lured to the country by the multitude of positive economic news. Cost-cutting and exorbitant charges and contributions everywhere. The entire export wealth is captured by the oligarch families and the highest level executive caste.

Someone with a regular job can not afford a house close to a major city any more and for sure can not afford any desirable German car. People dress cheaply, buy used cars and many live in frugal appartments, buy in stores that many American or Canadians would consider third world (never ever go buy stuff in an Aldi when you are used to Canadian standards...).

> Someone with a regular job can not afford a house close to a major city any more

Germany allows foreigners to purchase property, and as such prices in very desirable locations (Munich, Dusseldorf) have gone up. But not everywhere. Furthermore, it is really not necessary to own a house, as the rental market is well developed - many people choose to rent. Lastly, looking at The Economist data, affordability in Germany is better than, say, UK, Canada, and the US. [1]

> People dress cheaply, buy used cars and many live in frugal appartments

Yes, it is considered impolite to show off, and people don't really care about appearances, so they can be shabbily dressed. But then, they don't have to worry about healthcare, they travel quite a bit, and have time to read or follow their passions.

> buy in stores that many American or Canadians would consider third world

Aldi sells good food at excellent prices, by foregoing the eye candy and marketing found elsewhere.

[1] https://infographics.economist.com/2017/HPI/index.html or https://www.economist.com/graphic-detail/2019/06/27/global-h...

Re: How Germany is able to run the world’s second largest export economy

#133

Post by BurningFrog » Tue, Jan 21, 2020, 5:42 PM UTC

pergadad wrote: post #112

ailideex wrote: post #53

Earlier quoted context omitted.

> the common market has distorted things in Germany's favor, an effect that probably won't last. Quite by design. Having the whole Europe on Germany's monetary policy (i.e. Eurozone with EUR interest rates) while not sharing any other policy is heavily in Germany's favour and one of the main reasons the European debt crisis happened. Not to say that being a well governed country with good policy and a culture that is…

That's a very simplistic view and doesn't at all cover the whole picture. The union benefits all countries in varying ways (eg without the union Italian and Spanish and French banks would long have gone bankrupt). At the same time it also has negative effects. But you have the same issue internally inside any larger country.

> * without the union Italian and Spanish and French banks would long have gone bankrupt*

If you think sick institutions should die, that's not a benefit.

Re: How Germany is able to run the world’s second largest export economy

#134

Post by zozbot234 » Tue, Jan 21, 2020, 5:43 PM UTC

ergothus wrote: post #68

zwieback wrote: post #31

Not a word about the fact that Germany simply produces desirable products? Somehow that has to factor in. Financial policy and the education system favors a conservative manufacturing sector that incrementally improves upon what Germany has done for decades. While I got my ME degree in Germany my dad, who is a solid state physicist, spent all his energy trying to accelerate the development of a German electronics sec…

> Not a word about the fact that Germany simply produces desirable products? I dont think that's relevant though. Desirable products mean more countries buy your product, means the value of your currency changes, means your products are effectively "more expensive". Sharing a currency with other countries dilutes that effect, just like any prosperous region within a country sharing a currency with poorer regions. I'm…

Nope, tradable goods don't just become "more expensive" because of currency shifts. The prices of tradables are set in a global market and tied together by cross-trading (arbitrage) considerations. What happens when supplying a desirable product is that the industry seeks to expand and that might increase costs overall. The Dutch Disease is an extreme version of this, in which having a single dominating industry sector leads to e.g. bad governance, etc. But these are real effects that are unrelated to currency shifts.

Re: How Germany is able to run the world’s second largest export economy

#135

Post by BurningFrog » Tue, Jan 21, 2020, 5:43 PM UTC

nothis wrote: post #64

zwieback wrote: post #31

Not a word about the fact that Germany simply produces desirable products? Somehow that has to factor in. Financial policy and the education system favors a conservative manufacturing sector that incrementally improves upon what Germany has done for decades. While I got my ME degree in Germany my dad, who is a solid state physicist, spent all his energy trying to accelerate the development of a German electronics sec…

Economics in a nutshell: "There must be a single number that explains all of this!" It can't possibly be that Germany actually built its exports based on quality. That can't be replicated by tweaking some tax laws.

> Economics in a nutshell: "There must be a single number that explains all of this!"

My experience of Economists is that they love a lot of numbers!

Re: How Germany is able to run the world’s second largest export economy

#136

Post by gdrulia » Tue, Jan 21, 2020, 5:43 PM UTC

mambojumbo wrote: post #124

zwieback wrote: post #31

Not a word about the fact that Germany simply produces desirable products? Somehow that has to factor in. Financial policy and the education system favors a conservative manufacturing sector that incrementally improves upon what Germany has done for decades. While I got my ME degree in Germany my dad, who is a solid state physicist, spent all his energy trying to accelerate the development of a German electronics sec…

German products arent as high quality ad they used to be and most if them are pretty stale in terms of innovation. Sure they change the shape of cars and add new leds and interior eye candy but that is not progress. Imo german cars are low quality and lack diversity, and same goes for most machinery made in that country. US, Japanese, South Korean or other EU made products can be of similar or higher quality. Germany…

Disclaimer: I'm from Lithuania, little eastern Europe country.

There has been a lot of talk about eastern Europe being a junkyard for german cars (or old european cars in general) in recents times, not the least locally, especially by politicians trying to justify weird decisions. Most of the time one vital factor remains overlooked, people don't have money for anything else here. German cars are valued by most the people, whether that is deserved or not is a different question. There are plenty of mechanic shops for repairing those cars and cars itself are cheap. Public transport is mostly horrible, so a car is a must for most people. If a family has a budget of ~€1500 per month, how can you realistically choose anything else but an old imported car from western Europe (majority from germany).

Re: How Germany is able to run the world’s second largest export economy

#137

Post by thaumasiotes » Tue, Jan 21, 2020, 5:44 PM UTC

olivermarks wrote: post #100

gharding wrote: post #70

[flagged]

Germany is a very new country (1871) and still comprised of markedly different regions. the French German axis has increasingly dominated the EU and driven a strong export culture. As globalization has hit a plateau Germany are now in a tricky position. Many are loathe to admit it but the 'desirable products' Germany produces have a very distinctive Germanic flavor which people identify strongly with the idea of Germ…

> Germany is a very new country (1871) and still comprised of markedly different regions.

Interestingly, this is apparent in the genetics of Germans. You can distinguish, say, Frenchmen from non-Frenchmen fairly easily -- they form a natural cluster. Germans don't form a German cluster; they break down into three clusters focused in the north, south, and east. Northern Germans may look more like Danes than they do like Eastern Germans.

Re: How Germany is able to run the world’s second largest export economy

#138

Post by johnzim » Tue, Jan 21, 2020, 5:44 PM UTC

JanSt wrote: post #17

„ France and the UK were opposed to German reunification, and attempted to influence the Soviet Union to stop it.[8] However, in late 1989 France extracted German commitment to the Monetary Union in return for support for German reunification.[9]“ https://en.m.wikipedia.org/wiki/History_of_the_euro

We can look today at Germany as a mature, stable partner in the world but at the time, the argument that there might just be 'something in the soil' of the primary belligerent of the last 2 world wars was not entirely insane. Gratifyingly the world saw that the nation's contrition was sincere and we enjoy the fruits of its labour today.

Re: How Germany is able to run the world’s second largest export economy

#139

Post by jonathanstrange » Tue, Jan 21, 2020, 5:45 PM UTC

mambojumbo wrote: post #124

zwieback wrote: post #31

Not a word about the fact that Germany simply produces desirable products? Somehow that has to factor in. Financial policy and the education system favors a conservative manufacturing sector that incrementally improves upon what Germany has done for decades. While I got my ME degree in Germany my dad, who is a solid state physicist, spent all his energy trying to accelerate the development of a German electronics sec…

German products arent as high quality ad they used to be and most if them are pretty stale in terms of innovation. Sure they change the shape of cars and add new leds and interior eye candy but that is not progress. Imo german cars are low quality and lack diversity, and same goes for most machinery made in that country. US, Japanese, South Korean or other EU made products can be of similar or higher quality. Germany…

I cannot agree with this assessment, because you're talking about a key industry from the 80s. Germany's strengths is not just in cars, but also in tangible b2b products that require a high degree of know-how and engineering. Southern Germany is plastered with such companies, they deliver products to the rest of the world you and I haven't even heard of unless you're working in some specific business. These companies are very competitive and innovative.

Re: How Germany is able to run the world’s second largest export economy

#140

Post by gharding » Tue, Jan 21, 2020, 5:46 PM UTC

olivermarks wrote: post #100

gharding wrote: post #70

[flagged]

Germany is a very new country (1871) and still comprised of markedly different regions. the French German axis has increasingly dominated the EU and driven a strong export culture. As globalization has hit a plateau Germany are now in a tricky position. Many are loathe to admit it but the 'desirable products' Germany produces have a very distinctive Germanic flavor which people identify strongly with the idea of Germ…

I totally agree with you, even though what we are all heading towards is nothing but the total eradication of actual diversity, especially in Europe, pretty much on the American model that totally destroyed all unique characters of the American people of the various American states over the last 70+ years.

But the "Germany is a very new country" trope/propaganda is not accurate, as is rather easily identified by simply thinking about it for oneself for just a few minutes.

It's like saying the USA is a young country since Alaska joining the Union in 1959, when the current USA was created. Or that the USA has only existed since the Civil War that essentially ended the very core characteristics of the USA that was from then on basically just the USA in nominal (name only) manner, essentially totally void of its core characteristics. It's very much like when a corporation keeps the brand name, but the business becomes a totally different and even inverse of what people believe it still is. KMart/Sears comes to mind, a company that used to operate a retail giant, which was turned into a kind of private equity, real estate holding con job company that did not at all care about performing its core purpose of operating retail outlets.