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

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

#241

Post by iSnow »

40acres wrote: post #119

Interesting that the labor culture in Germany relative to the rest of the EU is not mentioned at all. Germany is one of the strongest nations to be an industrial worker and has various laws that are pretty unique to the nation, such as co-determination, I believe this has acted as a defense vs. outsourcing (and when they do outsource, they go to high cost places such as the US) and has kept it's manufacturing base st…

Yes and no. German companies are outsourcing like crazy, but they have the whole central/eastern european countries as outsourcing destinations. Low wages, high level of education, short distances, EU membership make them really attractive.

A lot of very basic, work-intensive or energy-intensive work has left Germany over the last 30y, but the companies make a killing of value-added manufacturing.

Also, not least due to unification, till a couple of years ago, German wages were very stagnant, so it wasn't that great a country for industrial workers, paywise.

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

#242

Post by reaperducer »

dsfyu404ed wrote: post #219
reaperducer wrote: post #183

Earlier quoted context omitted.

It sounds like you've never been poor.

Speaking generally (not about this unnamed medical device): Poor people can scrape up $15 if it means the difference between 6mo and 2mo. Sure there's some times when the purchase falls on a week between paydays and you buy the cheap (cheap up front, more expensive on a per day basis) version but the next time (or maybe the time after that) the purchase will need to be made at a more convenient time and you will have…

When you receive $x in income each month, and $25 would put you over that $x, then spending $10 makes sense.

There are tens of millions of people in America on fixed incomes.

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

#243

Post by biztos »

owenversteeg wrote: post #78
geff82 wrote: post #43

Earlier quoted context omitted.

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...).

The Aldi is "third world"? What on earth? I personally shop in Lidl, not Aldi, but Lidl is often compared to Aldi, about as popular and occupies the same price segment. And I eat like a king from there! Excellent protected origin cheeses, meats, wines, organic products... Half the time I leave the Lidl I go with a shopping cart that would make an American foodie drool. My most recent purchase there included Manchego…

I'm American and I find Lidl to be absolutely ghetto; Aldi only marginally less so; but neither of them as scary as Netto! A lot of my friends shop at these places, because they're really cheap, and if you don't actually care who gets your money (or you can't afford to care) it's sorta like why not?

In their favor I will say that there is less choice of products than in, say, a Spar or Rewe (mid-market grocery chains) and thus shopping, especially for a family, can be both cheaper and more efficient. At least in Berlin there's also Edeka everywhere, which is sort of cheap-ish but not so soul-crushing.

I guess I'm pretty far off topic already, but I will add that I find it weird that there's no equivalent of Whole Foods in Germany. You have some chains of "Bioladen" like LPG (yuck) or BioCompany (pretty good IMO) -- but nobody's got that magic Whole Paycheck mix of yummy food, organic and also gourmet stuff, and that sort of vaguely aspirational shopping experience while also having a big fat parking lot.

Or maybe this exists in Munich?

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

#244

Post by iSnow »

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…

>The US today has a tight labor market which will eventually drive wages up if it persists long enough. Germany on the other hand has similar employment statistics but they did it with the Hartz reforms [2]. The unemployment stats look great because you can get a shitty low wage job [3].

Meh, that flies in the face of facts. Real wages in Germany had been depressed for long, not least due to unification, but are picking up: https://d3fy651gv2fhd3.cloudfront.net/charts/germany-wage-gr... and there's not reason to believe that is going to stop anytime soon.

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

#245

Post by mambojumbo »

moooo99 wrote: post #193
kensai wrote: post #167

Earlier quoted context omitted.

No pun intended, dude, but I think you speak mambo jumbo... :D "German products arent as high quality ad they used to be and most if them are pretty stale in terms of innovation." Germany just surpassed again South Korea as the most innovative country. News are just three days old. Where do you base your own assessment? Did your BMW break down? https://www.bloomberg.com/news/articles/2020-01-18/germany-b...

Disclaimer: I'm from Germany and work in the automotive industry I think he is partially right, at least when you define innovation as being mainly of digital nature. There have been lots of improvements on the mechanical side, cars have become a lot more efficient, and quieter (or louder if you prefer). But when it comes to making the cars smarter or even electric, there hasn't been a whole lot of innovation. Since…

Hackernews is one enormous echo chamber where people will naturally find reasons to prove their conformance to the norm. Your statement however matched what other people from germany told me. Also there is an almost regular post on HN about how self driving cars wont happen, usually coming from german carmakers. Those sound eerily identical to articles i used to read where they explained why electric cars wont ever happen, and so on. Making great drilling machines, construction machinery and maybe electronics is not innovation. The echo chamber doesnt understand such topics because its too busy trusting politica driven “innovation stats”. Perhaps they are the kind whom buy a new car because it has fancier leds as opposed to actual new tech.

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

#246

Post by iSnow »

v77 wrote: post #44

Paul Krugman often rails against German industrial policy vis-a-vis the EU and hits a lot of the same notes in this article. On the other hand, most of the EU countries seem to accept this status quo and many of their citizens end up immigrating to Germany directly or benefiting from the massive EU subsidy regime funded by Germany so there are various forms of wealth re-distribution within the union.

Krugman's rants are mostly for a US audience and he needs a villain to sell his narrative. Additionally, he hates that Germany doesn't follow his model and still is prospering. And he is a pompous ass who puts ideology before facts, as seen in his rift with Estonia.

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

#247

Post by IfOnlyYouKnew »

jpfr wrote: post #33

The analysis is incomplete. It does not take services into account. Yes, Germany has a positive trade balance in goods. But the trade balance in services is negative. This ... well ... balances the balances. The UK has shifted its economy from production to services. Hence the negative trade balance for physical products excluding services.

Adding in services doesn't change much: https://upload.wikimedia.org/wikipedia/commons/0/03/Balance_...

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

#248

Post by IfOnlyYouKnew »

onlyrealcuzzo wrote: post #233
rb808 wrote: post #223

Earlier quoted context omitted.

Its great being in an egalitarian country there is less poverty but middle classes have much less money than America, someone has to pay for it and it isnt the billionaires.

It's interesting to me how people view Europe as more equal than the US. Not that the US is a bastion of fairness, but there seems to be a teeny-tiny miniscule amount of meritocracy in the labor force. This doesn't really seem to exist in most of Europe. The top 10% of earners don't make much more than the bottom 10%. Meanwhile, aristocrats are richer than the median by more than in the US. This seems like the opposi…

Europe is fairer than the US.

Social mobility: https://www.economist.com/img/b/1280/761/85/sites/default/fi...

Inequality: https://www.motherjones.com/wp-content/uploads/2018/06/blog_...

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

#249

Post by rb808 »

onlyrealcuzzo wrote: post #233
rb808 wrote: post #223

Earlier quoted context omitted.

Its great being in an egalitarian country there is less poverty but middle classes have much less money than America, someone has to pay for it and it isnt the billionaires.

It's interesting to me how people view Europe as more equal than the US. Not that the US is a bastion of fairness, but there seems to be a teeny-tiny miniscule amount of meritocracy in the labor force. This doesn't really seem to exist in most of Europe. The top 10% of earners don't make much more than the bottom 10%. Meanwhile, aristocrats are richer than the median by more than in the US. This seems like the opposi…

> This seems like the opposite of Marx's dreams

Germany never was communist. (OK Eastern maybe but that was a long time ago)

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

#250

Post by ThrustVectoring »

The financial side of things is probably the bigger driver - the German government is notoriously unwilling to issue debt, so domestic German savers have a huge shortfall in safe assets that they must purchase abroad to acquire. These foreign financial assets, on net, can only be bought by sales receipts of exports.
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