Posted on 11/24/2010 7:18:50 AM PST by SeekAndFind
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 entrée. 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.
(Excerpt) Read more at washingtonpost.com ...
At beginning of the post-WWII trade policies, there was a huge opening of the US market to Japanese products in the '50s and '60s and beyond, with the primary goal of helping to rebuilt Japan into a strong Cold War ally.
That flood of Japanese imports is what really set in motion the response of US corporations. US corporations were not keen on moving operations out of the US in those years, but the flood of cheaper imports caused many corporate decisions that might not have been made otherwise.
The situation with US manufacturing and trade policy has been evolving in a major way since WWII, and I think government policies (often opposed by corporations) have been the biggest catalyst in bringing about our current situation, and then corporations have responded in various self-interested ways over the years.
In the U.S., we label the equivalent of the “mittelstand” (small businesses) the “rich,” since they make more than $250K/year, and therefore soak/destroy and overregulate them to death, since obviously if they make that much money they must be evil, greedy capitalists and therefore deserve what’s coming to them.
I don't have time to find out the Marxist reason they are writing this but I know everything they do is for their religion of Marxism/democrats.
All I know is China manufactures about 1000 times more products in tonnage than the U.S. and Germany combined. READ products sometimes to see what it says on labels :“MADE IN CHINA”
The “value” is just because of China's currency manipulations. Most things are made in China and pretty soon practically nothing will be made in the U.S. or Germany.
Trade schools... another reason Germany produces good stuff. Trade schools that produce craftsmen with an engineer’s eye to detail and who can look for and find problems before they become failures.
We, on the other hand, have a bunch of mostly self trained wrench slingers lacking in technical training and filled with a bunch of self-taught half truths.
For example, find me one hydraulic technician that actually knows the principles of operation of a hydrostatic transmission and can trouble shoot and repair one. Good luck in finding anyone who can do more than hunt, peck and replace parts in a random effort.
Texas State Technical Institute in Waco is a collection of ramshackle shacks on a former air base. It does not instill the image of being a paragon of industrial leadership or technical prowess. On the contrary. We should and must do better or we will continue our spiral downward... we may anyway.
If you include CEOs and boards of directors among the "economic nitwits," then I guess we can agree. And if you fold in a corporate culture that focuses on near-term profits without much regard to long-term consequences, then I agree even more.
But we have to acknoweledge that they didn't just randomly decide to off-shore manufacturing capabilities. In reality, they're responding to real economic pressures, related to the high relative costs of doing manufacturing in the US.
Those high costs have a lot of causes, including taxes, regulations, unions, and the wage/benefit expectations of American employees.
And it's all made worse by the fact that it's impossible in today's political environment to have an extended, rational discussion on any of those things.
Yes,thanks to hundreds of thousands of pages of anti-business and pro union regulations and the EPA, the U.S. manufactures very little.And even that is going away.
I think the reason for that, is because our society has decided that everybody ought to go to college, as opposed to encouraging people to learn a trade. We're a "service economy" now .... who would want to learn a dirty old trade?
That sort of thinking is a luxury -- it sprouted up at the peak of American power and wealth, and the idea has increasingly taken hold as our manufacturing base has diminished.
Short of a crash -- which I think is coming -- I don't think there's any way we'll return to a cultural mindset that actually values tradecraft.
The U.S. Taxpayer paid tens of billions of dollars to bail out Deutchebank’s sub-prime mortgage investments. Without that, the German Economy would have crashed.
A TON of AIG Bailout money went to them.
The US taxpayer must be proud.....
Harold Meyerson is a f’ing moron.
Perhaps you're just too young to remember how filthy the air and rivers were, back in the days before the EPA.
For all the EPA's over-reach today, one need only look at what China's polluting industries are doing to the land and people, to understand that environmental protection isn't all bad.
There is some truth to all of that, but I always think how one of the first industries to be decimated was textiles and the associated sewing plants. Those jobs were mostly non-union and paid around $8.00 per hour and less when they really began to disappear in the 1980s, or before. When jobs can be moved to $.50 per hour labor as was the case a few years back, still to $1.00 per hour labor, it doesn't have a lot to do with efficiency or anything else. It has to do with reducing the US standard of living because the jobs are only partially being replaced, as our real unemployment rate and the explosion of temp and part-time work shows.
And since China India have combined populations of 2.3 billion, and Indonesia and other nations easily kick that to 3 billion, then there is virtually unlimited cheap labor, both unskilled and skilled, available to export and outsource to.
It's just a question of how much Americans will allow their standard of living to be reduced. There is no strategy to combat the available cheap labor because it isn't possible to backfill with newly created jobs all the jobs that are being exported, because we need jobs for every educational and skill level. And we always will need large numbers of jobs at every skill level.
Germany has followed a sane policy. The US has not, but it will take more years and more deterioration before the nitwits and peddlers of one-sided trade as free trade will admit the to the disasters they have brought.
Wow...creating manufacturing jobs...not slashing wages....banks being responsible...6 weeks of vacation per year....Germany’s economy is growing.
I bet Germans see less of “Made in China” on products sold there
The Liberal Free Trade Globalists...who continue to push bank bailouts, Free Trade with Communist China, North American Union....and other failed economic programs...might just arse-plode. Germany is doing everything that the Liberal Free Trade Globalists recommend not doing...and its working for Germany
An article that says manufacturing is important to a strong economy, and that a trade surplus is preferable to a trade deficit? Who is allowing this heresy to be printed in the Washington Post? But the American know-it-all, economic nitwits will not learn anything from this one example.
George Soros is on the phone right now....chewing out his buddies at the WaPo for printing such “rubbish” /sarc
The Liberal Free Trade Globalists are going to arse-plode. I wonder how the supporters of Free Trade with Communist China gonna explain this one
Prior comment was a bit short on details.
Germany became an exporter of non-durables and the creditor to the PIIGS and southern and peripheral Europe as a whole.
Germany will never be repaid for the loans taken out to pay for consumer and governmental purchases of German goods in the last decade, and for the portions the Germans do get repaid on it will be in devalued Euro currency.
Germany destroyed the EU free trade zone through these policies and while not their fault they outcompeted other EUropean manufacturers, they would have been just as bankrupt as GReece if it weren’t for mark to fantasy accounting practices for German banks.
In Germany, banks can hold “secret state reserves” that can not be audited, and can be marked at any amount required to maintain the banks solvency, and the German state, German Federal, and EU politicians and regulators are forbidden by law from even knowing the amount put aside in this fund, because the German government considers it a military top secret.
While the immediate man on the street situation in Germany is indeed better than most of Europe and the US, the country in total has much less capital savings and credit than it should because the central bankers and politicians nuked their common currency accounts.
The effects of this won’t be felt until the Euro collapses when Spain collapses in the next year or three.
Well..... ok. But you've introduced a lot of rather difficult considerations here, not least of which is a significant measure of government control over business and industry.
And that, in a political environment that is characterized by factions whose very viability depends on avoiding rational discussion, let alone compromise.
“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.”
My heavens, what a novel concept. Banks actually involved in lending into the real economy in their locality as opposed to securitizing and packaging home loans and other debt to unsuspecting investors.
But being an investment banker is so much more fun and sexy than local lending especially when you own the politicians.
I'm not saying I'm for “free trade”. But if the U.S. wouldn't import then there would be hardly any products in the U.S. because the EPA has crippled U.S. manufacturing and is about to basically ban all new coal power plants (C02 global warming regulations).
Just take one example, energy production. The democrats have stopped nuclear power plant building,refinery building, oil shale,oil drilling in the U.S. and off U.S. coasts.
This makes electricity which is needed to manufacture products 10 times to 100 times more expensive than it needs to be.
There are also 100,000’s of thousands of more pages of anti-business and pro union laws and regulations that make most manufactoring unfeasible.
What needs to be done first is repeal all laws to 1890 when the government was limited.
That is why the liberal media wrote this article: to get people to say “Why we have to do something” which means more government control when what is needed is less.
Germany has followed a sane policy. The US has not, but it will take more years and more deterioration before the nitwits and peddlers of one-sided trade as free trade will admit the to the disasters they have brought.
Great postings Will....I am never to explain it so eloquently.
And government just keeps putting off the "rather difficult considerations", but they will have to be dealt with sooner or later. And a strong case can be made that business and industry control over government has become one of our greatest problems in the past two or three decades.>
But the US cannot go on and on serving as the host to a growing contingent of parasite economies. And that is just what we have been doing with decades of one-sided trade policies that have given away the US market while receiving not much in return other than access to cheap labor and lax regulation. Some day, some of the parasites will be stronger than the old host, and who knows what will happen to the host.
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