Germany's new boom: making money by making stuff

[Rage for Order]

http://www.guardian.co.uk/world/2011/mar/14/germany-new-boom-making-stuff

While the UK and US increasingly relied on the financial sector, Germany concentrated on manufacturing

Strolling the broad, prosperous streets of Munich, it is worth recalling the times over the past decade when Gordon Brown used to boast in his budgets about how the UK economy was leaving Germany for dead.

Now – following the most successful year for Europe's biggest economy since the euphoria that followed reunification two decades ago – that looks like the sort of prediction English football fans make ahead of each World Cup: premature, based on little more than wishful thinking – and wrong. "We will have a golden decade now," says Hans-Werner Sinn, president of Munich's Ifo Institute, one of the country's leading thinktanks. Sinn wrote a book early in the last decade, when unemployment was high and pessimism rampant, called Can Germany be Saved? His view then was that it could be. Now he says it has been.

snip

Heiner Flassbeck, once adviser to Oskar Lafontaine – briefly the leftwing finance minister to Gerhard Schröder – is one who says there is no real comparison with the 1950s and 1960s, when the proceeds of growth were shared by companies and their employees. In those days, German workers worked hard and grew prosperous, earning higher wages as the factories they worked in became more efficient. Over the past decade, there has been another productivity spurt as German companies have overcome the handicap of an over-valued exchange rate on entry into the single currency by making themselves hyper-competitive. This time, though, workers have not enjoyed the fruits of their labour. Real wages have stagnated, consumption stayed weak.

"Over the next 10-15 years there has to be an increase in wages to shift demand from the export sector to domestic demand," Flassbeck says, echoing the calls from the International Monetary Fund and the Organisation for Economic Co-operation and Development for Germany to play its part in evening out the imbalances in the global economy between those countries that run massive trade surpluses and those with chronic deficits. As the two biggest exporters in the world, China and Germany are seen as sharing a common problem: "Chermany", it is said, needs to import more.

Much more at the link

What a novel idea. Maybe we should give it a try as well. :think:

[Codeine]

1. what a crazy notion.

We move money around on computers -- a much more rational basis for a national economy.

[Fumesucker]

3. To be fair..

We also lock up more people than any other country on the planet and we bomb brown people with considerable regularity.

See, there's more to the American economy than just moving money around on computers.

[RainDog]

2. and they're making things like windmills to generate energy!

how odd to put money into things that benefit all the people in a nation - why, it's positively horrid if you're a rabid right wing scum bag... but otherwise...

[Rage for Order]

4. Kick for the morning crowd

:kick:

[hifiguy]

5. Which is why Germany

is the world's #2 exporter and their economy has bounced back robustly. Creating wealth can only be done when you MAKE things, not wave your hands around over funny money papers like a newbie at Hogwarts. The Germans figured this out under Otto von Bismarck.

[JHB]

6. Didn't Very Serious People tell us this was obsolete?

...and a lot of myopic people whose paychecks depended on believing it believed them.

[NYC_SKP]

9. I remember being told that we didn't need manufacturing jobs anymore.

Everyone in america could have a white collar job in the information revolution.

woo hoo.

Other dark-skinned and funny talking people in strangely-named places could do all the dirty work of making stuff.

Sad. And wrong.

:patriot:

[old mark]

7. K&R We used to do that here, but we got "modern" and don't do much of it anymore...

Too bad Germany has all that socialism, like family/parental leave and long paid vacations and good health care and good food and strong unions and workers on the boards of the big corporations and rich people who actually love their country so much they volunteered to pay more taxes...UnAmerican!

mark

[PA Democrat]

8. We manufacture asset bubbles. What could possibly go wrong?

:sarcasm:

[Yavin4]

10. Germany Has Strong Labor Unions, National Health Care, Strong Social Safety Nets

and little national debt.

IOW, Germany completely disproves all right wing talking points.

[pampango]

12. And it has a trade surplus in spite of (or, more likely, because of)

these progressive factors. Germany is much more of a trading nation than the US.

Exports in 2010 were 1.15 trillion euros, while imports were 1.02 trillion euros. Trade (2.17 trillion euros) is 59% of their GDP (3.67 trillion euros). (By comparison US trade - $3.23 trillion - is only 22% of our GDP - $14.66 trillion.)

With strong unions, national health care, strong safety net and progressive taxation, highly paid workers can compete with anyone. It happens in Germany (and the rest of Europe). It's what happens in Canada, too, where trade is 51% of their GDP.

[hifiguy]

13. Lissen heer, sonny

no real 'murkan needs to be lernin nuthin from no soshlist furriners. They's probably teh gay anyway and there to dum to speek English. We got NASCAR, guns and Jebus so weer numba WUN!

[Blue_Tires]

11. So there is a benefit to keeping your manufacturing base in the country?

Don't tell those self-styled geniuses on Wall Street...:banghead: