Harold Meyerson: How Germany got it right on the economy

[flpoljunkie]

How Germany got it right on the economy
By Harold Meyerson

Wednesday, November 24, 2010;

Berlin

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 entree. 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.

more...

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/23/AR2010112306280.html

[DCKit]

1. What, no "gotcha" later in this WaPo article? I'm shocked.

It's actually a sensible read and exactly what we should be emulating in the U.S..

[Supersedeas]

2. worthy of serious consideration

[Joe Chi Minh]

3. Ha! Ha! Seems our masters haven't changed. That WikiLeaks report of the comment about Angela Merkel

being "risk-averse and unimaginative" had me in stitches.

Thanks to our risk-taking, bonus-pillaging high-rollers (with the public's money) in the UK and US, we live in much more "interesting times" than Angela Merkel would have allowed.

[wiggs]

4. Germany also requires that corporate boards consist of some percentage

of non-officer workers. Good idea. I also like the notion of a "stakeholder" capitalism as opposed to a "shareholder" capitalism. And their emphasis on making decisions for the long term, not the short term

Once again, it's the middle class and wage earners that drive a healthy economy, not the savings accounts of the top 2%. Should be an easy case to make for dem leaders. Except that they and their friends belong to the top 2%.

How broken is our political and economic system??

[Joe Chi Minh]

5. A strange thing to reflect on, is Old Black Jack Kennedy's famous

reply, when asked, after the (first) Wall Street Crash, why he had been selling all his stocks, when everyone else was buying: "When my shoeshine boy tells me what stocks I should buy, I know there is something wrong with the market....."

Surely, in the lead-up to this rolling, toxic paper and sub-prime apocalypse, who can doubt that he would have been musing along similar lines... although for "shoeshine boy" read Milton Friedman and Alan Greenspan giving their two-penn'orth.

And how history can turn on a dime, as you Americans say. When a neighbour, who was a novelist, button-holed Friedman by their communal lift, to tell him his view on current economics and future prospects, Friedman said that he replied (not verbatim): "Tell you what. When I want to learn about writing novels I'll ask you; and when you want to learn about economics, perhaps you should ask me?"

Now, just suppose Friedman had listened to that man. How differently might things have turned out for the entire planet. I also wonder if that novelist is still alive. It would be interesting to hear his story.