Economy
See other Economy Articles
Title: How Germany got it right on the economy
Source:
washingtonpost.com
URL Source: http://www.washingtonpost.com/wp-dy ... 010/11/23/AR2010112306280.html
Published: Nov 24, 2010
Author: Harold Meyerson
Post Date: 2011-05-19 11:44:40 by Godwinson
Keywords: None
Views: 9587
Comments: 21
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.
One key to Germany's miracle is the mittelstand, as the family-owned small and mid-size manufacturing firms that dominate the economy are known. Last week, I visited AWS Achslagerwerk, a factory of one such firm, in the farmlands of Saxony-Anhalt, about two hours west of Berlin. As in many such companies, this factory turns out specialized products: axle-box housings for Chinese and German high-speed trains, machine tools requiring climate-controlled precision measurement. With annual revenue of 24 million euros, the factory has won a significant share of the world market, though it employs only 175 production workers.
The workers at AWS Achslagerwerk are highly skilled, and most stay with the firm for decades. When the downturn hit Germany in late 2008, manufacturing firms' business declined the most, but subsidies from a government program called kurzarbeit allowed firms to keep their workers part time rather than lay them off. "Fifteen to 20 percent of our workers were on kurzarbeit," Klaas Hubner, a former member of the German parliament and owner of the mittelstand company that includes AWS Achslagerwerk, told me. By keeping their skilled workers, companies like Hubner's were able to rev up production quickly when China's stimulus boosted the market for their products in 2009.
In America, alas, firms like Hubner's are increasingly hard to find. The mittelstand remains blissfully immune to many pressures that share-price-oriented financial markets inflict on their American counterparts. "We don't have short-term strategies, only long-term strategies," says Hubner. Mittelstand companies are not publicly traded, and they benefit from an extensive system of vocational education and a sector of municipally owned savings banks that work solely with local businesses. Roughly two-thirds of German small and mid-size businesses get their loans from these banks. "Over the past decade, banking largely became a self-fulfilling activity," says Patrick Steinpass, chief economist for the national organization of savings banks. "But our banks are restricted to doing business in their regions; they have to concentrate on the real economy." Through such radical notions has Germany thrived.
Germany's large manufacturers - Volkswagen, Siemens, BMW - surely feel market pressures, but they, unlike a growing number of their American counterparts, still invest quite profitably at home. In large part, that's due to Germany's system of co-determination, which places an equal number of union and management members on corporate boards. The German metal workers union, IG Metall, has been working with automakers to train workers, for instance, to mass-produce electric cars. "Our goal is to really retain high-value-added manufacturing in Germany," says Martin Allespach, the union's policy director. It's hard to identify any group with real input into corporate conduct that's pursuing such a goal in the United States.
Mixing social democratic values with Jimmy Stewart localism, Germany's economy is running rings around America's. "What we have here is stakeholder capitalism, not shareholder capitalism," says Hubner. And like most mittelstand owners, he adds: "I live where my company is located. I want a good image in the town I live in."
They know how to goose an economy, those Germans. Ours, by contrast, seems more and more a turkey.
meyersonh@washpost.com
Post Comment Private Reply Ignore Thread
Top • Page Up • Full Thread • Page Down • Bottom/Latest
German Socialism Beats American Capitalism like a rented mule
List of those unable to think:
mcgowanjm, ferret mike, skippy, fartboy/yukko, white sands, bucky, lucys idiot mom, e_type_jackoff, go56, badlie, wreck, calCON, Kafir, war, Banjo Boris, Biff, Godwinson and meguro. If you're on the above list...? PISS OFF.
Bumper sticker on DwarF's car:
#2. To: Capitalist Eric (#1)
I support Socialism shooting the American economy in the head because the American mule needs to be taken out of its misery.
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
#3. To: Godwinson (#0)
you might want to see how Canada is faring vs. the U.S. too.
"Thats because your basically and idiot."
Badeye posted on 2011-04-29 10:30:22 ET
#4. To: Godwinson (#2)
In which country do you live? You seem to be very anti-American.
#5. To: Godwinson (#2)
I support Socialism shooting the American economy in the head
I support us starting with you first.
List of those unable to think:
mcgowanjm, ferret mike, skippy, fartboy/yukko, white sands, bucky, lucys idiot mom, e_type_jackoff, go56, badlie, wreck, calCON, mininggold, war, Banjo Boris, Biff, Godwinson and meguro. If you're on the above list, you're too fucking stupid to hold a real conversation.
Bumper sticker on DwarF's car:
#6. To: Abcdefg (#4)
In which country do you live? You seem to be very anti-American.
No, I am anti-Republican party. You so called conservative Republicans keep assuming America and your political ideals are the same thing. I am here to inform you that not only is that false, but you are actually anti-American traitors on top of failures.
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
#7. To: Godwinson (#6) (Edited)
No, I am anti-Republican party.
Translation: You're a socialist.
You so called conservative Republicans keep assuming America and your political ideals are the same thing.
Since the country and the Constitution were indeed founded on Conservative principles- demonstrably so- you're a fucking liar. But that's what socialists do, when the facts contradict their preconceived (and stupid) opinions.
I am here to inform you that not only is that false, but you are actually anti-American traitors on top of failures.
I'll be happy to stand opposite you, on the field of battle.
Let that day come soon... because I'm tired of waiting.
List of those unable to think:
mcgowanjm, ferret mike, skippy, fartboy/yukko, white sands, bucky, lucys idiot mom, e_type_jackoff, go56, badlie, wreck, calCON, mininggold, war, Banjo Boris, Biff, Godwinson and meguro. If you're on the above list, you're too fucking stupid to hold a real conversation.
Bumper sticker on DwarF's car:
#8. To: Capitalist Eric (#7)
Since the country and the Constitution were indeed founded on Conservative principles- demonstrably so- you're a fucking liar.
Conservative principles in 1776 were being pro monarchy - the Founding Fathers were liberals (Latin for freedom).
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
#9. To: Godwinson (#8)
The Founders wer classical liberals who stood for freedom. You modern liberals do NOT stand for freedom. You stand for slavery of the people to an even more tyrannical government than that of George III's ever dreamed of being.
God Almighty you are an idiot.
war has to do something for entertainment. The voices in his head aren't speaking to him and his imaginary friends have found reasons not to come over anymore.
#10. To: Rudgear (#9) (Edited)
You modern liberals do NOT stand for freedom. You stand for slavery of the people to an even more tyrannical government than that of George III's ever dreamed of being.
No soldiers quartered in my home and no one is making me pray to a god plus there are no more slaves and women can vote so I would say we are more free than the era of the founding fathers.
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
#11. To: Godwinson (#10)
You're not free to steal land from the Indians, shoot cattle rustlers, or sell snake oil to the rubes.
The Republican budget goes after children and the poor. Courage would be going after defense and the rich. Bill Maher
#12. To: lucysmom, Rudgear (#11)
Yea, but because we need a driver's license to operate a vehicle to these kooks that means were are living under a totalitarian dictatorship....
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
#13. To: Godwinson (#6)
you are actually anti-American traitors on top of failures.
I will give your opinion all the consideration it deserves.
#14. To: go65 (#3) (Edited)
you might want to see how Canada is faring vs. the U.S. too
Thanks to Bush and Obama, The Heritage Foundation rates Canada as a freer economy than the U.S. today.
1. Hong Kong 2. Singapore 3. Australia 4. New Zealand 5. Switzerland 6. Canada 7. Ireland 8. Denmark 9. United States 10. Bahrain
Hong Kong and Singapore have been on top for years. New Zealand too. But Australia? Canada? DENMARK???
Unless we rein in the evil government, the U.S. won't even be in the top 20 in 5 years.
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
#15. To: jwpegler (#14)
Thanks to Bush and Obama, The Heritage Foundation rates Canada as a freer economy than the U.S. today.
i'm all for adopting Canadian style banking regulations.
"Thats because your basically and idiot."
Badeye posted on 2011-04-29 10:30:22 ET
#16. To: Godwinson (#10)
...so I would say we are more free than the era of the founding fathers.
Yeah, but that's because you're a fucking idiot.
You can't even play the "pretend-antagonist-who's-really-a-protagonist" con worth a shit.
Tag line: I wuz HACKED, cuz I SAY so!
#17. To: Wood_Chopper (#16)
...so I would say we are more free than the era of the founding fathers.Yeah, but that's because you're a fucking idiot.
Most Americans today would not have qualified for the vote during the time of the founding fathers. So yea, we are freer today than back then. You cunts can't really deny reality.
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
#18. To: lucysmom (#11)
sell snake oil to the rubes.
What you talking about. The rubes voted for Obunghole.
#19. To: Godwinson (#12)
You give a bad name to black people.
#20. To: jwpegler (#14)
But Australia? Canada? DENMARK???
Yeah, that should tell you something about economic freedom in a market economy and how your slavish devotion to an ideology gets it all wrong.
The Republican budget goes after children and the poor. Courage would be going after defense and the rich. Bill Maher
#21. To: Godwinson (#17)
You cunts can't really deny reality.
Correct. That's why I said to you, "Yeah, but that's because you're a fucking idiot."
And why I said,"You can't even play the "pretend-antagonist-who's-really-a-protagonist" con worth a shit."
And THAT, is reality.
Tag line: I wuz HACKED, cuz I SAY so!
Top • Page Up • Full Thread • Page Down • Bottom/Latest
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]