Why the German economy is surging
By skepticalscott
Even though a debt crisis is gripping the European continent – the German economy is surging. According to the latest economic data – German unemployment fell in the month of December – bringing the average number of unemployed people in that nation to a two-decade low. Economists are now openly wondering just how long the German economy can be immune from the chaos surrounding it in places like Greece where unemployment is at 18% and Spain where unemployment just topped 23%. But the better question is why their economy is doing so well. The answer is they do what we used to do. They protect domestic manufacturing with high barriers to imports, and they encourage labor unions. In fact, nearly the entire German auto industry is unionized, allowing the nation to produce twice as many cars as the United States – while at the same time paying their workers more than $60 on average and still make healthy profits. On top of that – the German government has recession-proof programs like the “short-week” that pays businesses to cut back on the hours of workers rather than lay them off during economic downturns. Plus, Germany's constitution gives the labor force a say in everything from pay to working conditions in the factories they work for. All in all – Germany has given more power and protection to workers in their economy – and as a result their economy is growing. We should be taking some notes over here.
Comments
#2
We are too arrogant to learn from a successful European nation. And we think allowing corporations to have a free hand in our economy is great for corporations and they have convinced most of us that it must great for all of us as well. In the end, this is a sure way to ruin everything in pursuit of short term profits and to hell with the future of everyone else.
#3
Vott a question!
Doesn't anyone see that former fascist Germany, Swiss Bankers and the Mob have made The United States into the New Old World by corrupting our politicians, high-ranking military, department of justice, and financial institutions? The people who are torturing us now are the same organization which tortured our parents, grandparents, and great-parents all the way back to the Germania from which they fled.
Of course Germany is doing well. They get our bilk. Plus, we have been able to help them launder so much loot since WWII. I'm rather ticked off that ThyssenKrupp is all over the place while we buy their steel and have none of our own. I'd rather walk 27 flights of stairs.
We can thank the Germans for centralizing and cruelly industrializing our agriculture and fuels, putting them in control of the Queen with the help of the good old American Bar Association, FTC, and SEC.
Those who are thanking Bank of America can recall it is originally the Bank of Italy- arrived just before the fire, then stepped in to save San Francisco, like a Phoenix from the ashes.
#4
Geöbels says no.
An expanding republic who's constitution becomes controversial, has reached the tertiary stage of empire. 90% of people i ask, think the media is liberal, they think republicons are fiscally conservative, and they think that the phone number for the "FED" is in the gov't section of the phone book. We've got a ton of unlearning to do before we can re-learn something as basic as the benifits of democracy in the work place.
One thing we can learn is how easy it is to control public opinion by taking a look at what the nazi's did in the 30's. They took over all forms of media and turned on the salami machine. A slice at a time, week by week, ratcheting up the rhetoric until the water was boiling. Frog legs anyone? More filling than sushi and less Cesium137.
My uncles dad defended the guy that was framed for burning down the Reichstag in Berlin. He was later rounded up and was headed to Auswitch but escaped. His book is called Might Makes Right. If anyone still believes that it can't happen here, that book points out the blueprint they used to dismantle the German constituion. The same process happened in Rome. Check out dancarlin.com/hardcorehistory and you'll see how it looks.
#5
Our Michigan Governor Rick Snyder continues to quisle Michigan’s middle class for the benefit of Trans-National Corporations in the form of corporate tax cuts and giveaways. He steals from the cities in the form of Financial Emergency Managers who break contracts with city employees, strip powers from elected officials, and steal land donated in perpetuity in Benton Harbor. In essence, Gov. Snyder channels our treasury upwards to the Trans-National Corporations while placing even more of the burden on Michigan’s poorest residents. And, his mantra is “this will create more jobs in Michigan. Let's reinvent Michigan.”
#6
God bless Germany!
By the way, the Germans also have a minimum requirement for paid vacations.....it's 34 days per year. The United States minimum requirement is 0 days...that's right we are the only "rich modern nation" that has no minimum requirement, we still depend on the good will of our job creators, unless of course you have a union. Hell, we can't even get a public option!
I'm sure all of the anti govt. monkeys, "tea baggers," would have major cognitive dissonance hearing about the German system, it might be just the kind of intervention they need. I can hear Michelle Bachmann now....Thaaaaaat's Socialism....oh well......I say it's the pursuit of happiness working!
"The whole art art of government consists in the art of being honest"... TJ
#7
Thank you Natanode for that web site! I had to just enter www.dancarlin.com because the link you gave gives a "not found". I have added Dan Carlin to my podcast subscriptions. That business about your uncle's dad sounds pretty interesting. Was that talked about on one of the Dan Carlin podcasts? I noticed, on wikipedia, the listing of topics Dan Carlin has addressed. Several possibilities but nothing specifically about the reichstag fire.
Question: If you are talking about Marinus van der Lubbe, the "framed" arsonist?...Wikipedia says that he was beheaded but then many years later...like in January of 2008, he was pardoned by the German state...gee...thanks a lot Germany...I'm sure van der Lubbe's rotting body appreciates that! I cannot find the book that you have mentioned...it is probably out of print.
#8
Unfortunately, there weren't a lot of the books printed but i'm trying to arrange an ebook reading. I almost said book on tape, man i gotta get with the times here. Dan didn't talk about it much. He just mentions it as the 911 of the times and moves on. I think the guys name was Tallesmann. He was a labor organizer. No need for them in a fascist state or even a country like Columbia for that matter. I had to put it down because i started really reading it right after 911 and the pages were turning in unison. Kinda spooked me out. We have copied every move with an american media refined flare. For far too many, it actually feels good. People here think they will hear the jackboots marching down the street sans night vision. History doesn't repeat itself but human nature does. They didn't have the kind of omni-pervasive technology that we have, because if they did, wir would nur be Deutch sprachen jetz. Nein? Sick of porno scanners, everyones socks, old lady terror groping? Well, now you can get feel copped at your local bus or train station. You never know when someone is going to throw thurmite from the train on a big tressel do you. I'm sure they've already prevented hundreds of Bus jackings. I mean when doesn't that happen?
Did the public have a say in this? I don't remember a big outcry from public transit passengers feeling all threatened by any diaper clad 90 year old who stormed the beaches in normandy, stopping periodically to help his buddies try to recover their body parts, only to go on dodging fate thru a hail of lead, kick ass, come home, build a country into the most powerful superpower the world has ever known, then be thanked by later generations with mistrust and public humilation. Who is running the show here?
The most bizarre thing about Obama is that he never says anything about whats going on. Or maybe i've just tuned him out.
#9
Germans are lefties.
Compared to the GOP average, even the German Christian conservatives (CDU and CSU) would be called "communists" here. They are compassionate Christians. Generally the average German thinks fairly socialist since the terrible experiences of the Nazi regime and WWII. They hate injustice and abuse of power. They also distrust corporations much more than average Americans do. Today's Germans are better Americans than we are. We could learn a lot from them....
But will we learn from them? Well, I'm a bit pessimistic in this point. Our big talk about "American exceptionalism" is in the way. This stupid bragging about "America is the greatest country in the world". Why, we are not. We aren't exceptional -- we are mainly Europeans which immigrated here. We are the same human species, the laws of nature, physics and markets aren't different from those in Europe. We are just a bunch of timid self-deceivers -- afraid to change.
The saying "America is the greatest country" in the world is bunch of hooey. The saying "America is exceptional" is bunch of hooey. The average American loves to hear those silly phrases and there's where all the mess in this country starts. Because they think that way.
Well, that sounds pretty hard. But I want to change the thinking in this country. If you love America, you gotta speak it out and help changing it. We have to change radically -- like those Germans after WWII. If you think this would be "communism", you're just a hick who doesn't get even a simple thing like this. Communism is dictatorship. Germans are social and democratic.
#10
Germany's CEOs aren't overpaid gasbags like the American CEOs who seem to think they are entitled to their outrageous salaries and bonuses that are made on the backs and wallets of workers/taxpayers and consumers/taxpayers.
EVERYONE should travel to this ultra-clean and friendly country and see how people live responsibly within their environment and their economic means and behave humanely toward others. I traveled there in 1998 and saw much of southern Germany on foot and by car--what an eye-opener to the excessiveness and waste of the US lifestyle.
#11
Okay, why is my herring gull nice like a peaceful dog?
http://Miss-G-in-church-on-St.Francis-day.jpg
Because she lives in social security. Not communism! Social security. And this generates peaceful individuals in a peaceful society. I am sharing everything with Miss G and we trust each other.
We could change to a more peaceful and less stingy society, if we only wanted. We could be nicer.
Those birds taught it to me yesterday: there. (This link goes to my comment yesterday, here on Thom's blog.)
#12
One quibble with the story here: Germany actually does not have "high tariff barriers to imports". They follow a free trade policy. The German strategy has been quite different: they focus on quality. That results in high exports, and eliminates the need for tariff barriers.
One thing that should be stressed about labor participation in the German economy: by law, unions have a representative on the board of directors for large companies. That means the workers can see the books, and understand exactly what kind of wage and benefit demands they can reasonably expect, without killing the golden goose. It makes management and labor partners, which is exactly what they should be.
The adversarial labor/management relationship is deeply ingrained in American business culture, but many of the newer smarter companies have moved beyond that. The future will no doubt be more cooperative and less confrontational, particularly for knowledge-based businesses, but the old dinosaurs of American industry will probably lumber to their doom in a straight line.
Of course, a legal change to bring labor into the boardroom might change that. It might make American industry much more competitive too. But since the USA is the greatest in every way, the idea of emulating a socialist system like Germany seems very unlikely. (The fact that a socialist system in Germany has resulted in more competitive business model is something that no conservative could comprehend without their head exploding!)
#13
Elioflight, I totally agree with your sentiment, the working class generates directly and indirectly much of the unearned wealth the overpaid 1%ers think they're entitled to possess and hoard. A more progressive tax system would be one way to recycle this illgotten wealth back into the society that actually worked hard to create it.
Hey, thanks for the kind words a while back.....you're a kindred spirit.
#14
You're most welcome 2950-10k. Would that more could understand and act upon these truths.
#15
Thom,
I've heard you say you read your blogs so I hope you see this and can answe this question. Another thing you've said frequently is that we've lost some half million state public jobs thanks to Republican Governors and Legislators. I can't find those figures anywhere although I'm not surprised. Do you have a source for those figures?
Thanks in advance
sm
#16
Oh Thom. I listened to the episode on Sirius when you talked about how we should be more like Germany. Their unemployment is low. The BMW union workers make $67 per hour..etc. etc. what you did not reveal is how all these wonderful programs are funded. The middle class, which is $53k to $250k in Germany, pays a 42 percent income tax. The top tier is 45. So do the millionaires pay their fair share. Oh, that is another discussion. Also, did you mention the 19 percent sales tax? Did you mention the 7-19 percent healthcare tax? Let's add this up. 42+19+10 (I will split that healthcare tax with you)= 71 percent tax on the middle class. No thanks. Not interested in my government taking nearly 3/4 of my earned income. No wonder BMW pays $67 per hour. The government steals $47.50 of that for social welfare program funding. So these workers really make $19.50 per hour in take home. Not that great of a pay scale is it? I bet our auto workers in Detroit make more than that. This does not count any union dues that are paid. Interesting you fail to mention the whole story and bash our country. If Europe is so great, why do you live here? Also, I laughed when I heard your commercial for Quicken Loans. I thought the banksters were criminals? Must not be when they are paying you to do a commercial for them.
#17
Not enough. Government is way too big. Cut it in half. No need for all these high paying do nothing jobs anyway
#18
If it is so great, why don't you move there? Seriously. Why stay in this horrible country, who pollutes and steals from the poor and middle class. Go and give the German government 70% of you income.
#19
Oh, you think you’re smart, do ya? Let me pat down your pockets and see what comes to light….
Quote Badams:healthcare tax
LOL What's that? Never heard of sutch a weird thing! If I read ya, I always wanna laugh!
Healthcare premium being taxed?! On basis of what German tax law? Or do you consider the premium a tax?? You're really a funny guy. Do you pay life insurance tax too? And care insurance tax? LOL You don't know what insurance is, you have really no idea. Look out, the driver in the taxi cab is gonna tax ya too!
Don't fool me with income taxes, I've learned that! The German income tax is very flexible, called "progressive" -- it's not that easy. It's far away from a fixed flat tax. Whatsoever, we should adapt ourselves to the German income tax system, for it's better than ours. It's just.
Germany really belongs to the 1st world — they have a higher quality of living and the life expectation of their middle class is definitely higher than ours. Any poor American who has a chance to go there: why not? Of course they prefer wealthy and highly skilled people, as we do. So it's not as easy as all that.
I can't really tell your age, but your comments sound like being typed by a wealthy, stingy old man. But maybe you're not really that bad and it's just the nasty style you type your comments in....
#20
Quote Badams:The government steals $47.50 of that for social welfare program funding. So these workers really make $19.50 per hour in take home. Not that great of a pay scale is it? I bet our auto workers in Detroit make more than that.
You made this all up. Stop faking facts that don't exist -- this is all bunch of hooey! BMW workers would laugh at you if you told them your queer tales.
#21
Quote Badams:If it is so great, why don't you move there? Seriously. Why stay in this horrible country, who pollutes and steals from the poor and middle class. Go and give the German government 70% of you income.
Whoa, 70%! And you're soooo darn afraid you're gonna pay that much tax one day in America? That's why you came in here or what? Cuz your beloved money doesn't let you sleep nights, so you blog all night on progressive websites? In your scariest nightmares you might dream about 250% income tax. LOL
How about emigrating Thom, so this poor old fellow can sleep?
#22
German children are tested early in their school years. Based on the perfomance on the test, they are assigned an academic track or a vocational track. This has lead to world recognized quality. The old saying that you don't want to buy a US auto built on a Monday or Friday, was a direct realization of US citizens that US labor was only marginally capable of quality, while everthing German has always been viewed as quality.
Perhaps paying a BMW or Mercedies factory worker $60/hour for quality is justified, by paying $60/hour for the guy who built my Silverado is questionable, with the exterior trim falling off.
#23
It's hilarious to me that people here are calling the Germans facist when we are now much closer to that system than they are. It is also hilarious to hear people trying to tear down the German government when they were essentially the only government that didn't crash and burn in 2008.
Their people live great lives. Great salaries, vacations and benefits. They have a fantastic educational system. Even better their workers are allowed to and even required by law to participae in the decision making process of the corporations which is one of the main reasons why the corps are so productive and the government so succesful over there. Incidently, multi-national means all of the corporations here are present in all of these other countries. They accept that workers participating in the process is actually more profitable there. They accept that universal healthcare is actually more succesful and much more beneficial over there. They also know through years of studies that O&G by-products cause cancer as do their drugs and the hormones we use in our food products. In fact many are outlawed in every country but ours.
The only reason those things are even allowed here is because these corporate leaders are lazy and greedy while killing this country. We have virtually the worst educational system, infrastructure, healthcare, governmental system (due to corruption), job availability etc., all because the corporate leadership is so poor. Wake up.
#24
My admiring the Germans doesn't go that far. I love the American worker -- many of them are good guys -- give 'em decent pay, let unions do their jobs! I assure you, the American workers will give something back to all of us then. They will do their best. So let 'em feel they're worth it, let 'em feel like human beings. Well, in case they read your lines here.... how must they feel? Oh well..... I know you don't mean it really that way. :)
Somewhere else you just wrote something on school drop-outs. Y'know, depressed workers raise depressed kids.
Love your neighbor, Americans! Appreciate your fellow Americans. Let them feel like worthy human beings.
___________________________
P:S.: My argumentation was rather aiming at German social standards for American workers. They're worth it too!
#25
I agree with you. U r on the correct track.
#26
Thanks for the replies. I have family in Germany, so my figures are fairly accurate on their taxes there. What keeps me awake at night are people like you who think it is ok to redistribute my successes and wealth to those whom have opportunities such as I, yet do nothing with them. Unfortunately, there are winners and losers in capitalism. I am by no means wealthy and make under $100 k a year. However, I do donate several thousands of dollars annually to a couple of choice charities in my local community. Also, Ispend time volunteering to help my fellow neighbors whcare not as fortunate as I. That is just the right thing to do for all of us. If we all toothat's approach,don't would not need government intruding on our private property and such.
#27
This is not made up. I have a relative who works for BMW. Thanks for trying to discredit me. I expected that on this site. You may ask, why does this conservative post on here? Well honestly, I do like to hear all sides speak. I listen to Thom on Sirius each day. I agree with some things, and disagree with some things. I do atrongly oppose this want to transform America into a socialist society. I just deep down do not think it is right or in with the Founding Fathers. However, it is your opinion, so I respect it. I just would really like to understand why you would like it to be this way? This week on the show from Sweden, the fellow being interviewed spoke of how Sweden was great in terms of the nationalized healthcare, social programs, etc. however, he also stated that America was great because the individual was responsible for themselves ( not the government). This is what makes America great. We control our own destinies, for the most part. Sure, there will be bumps in the road. Some will have mountains to climb, andsome will never get out of the gutter. Don't you like the fact that YOU control your destiny as opposed to having nearly everything handed to you by a government?
#28
I am not that bad :). I did error when I said healthcare tax, as corrected by my relative in Gemany. My bad. I am not an old wealthy man, but a young one in my 20's. It just upsets me when I see how people want to be like all these socialist countries in Europe.
#29
http://healthcare-economist.com/tag/germany/
please correct me if I am wrong on the 15% heathcare tax thing.
#30
Quote Berry: please correct me if I am wrong on the 15% heathcare tax thing.It's easy: There is no such thing as "healthcare tax". A premium is a premium and not a tax. Your taxophobia makes you see taxes everywhere.
Your relationship to an insurance is a membership, like being member of a club. As membership fees aren't taxes, if you're a club member.
We are not as bad as many countries in Africa and Asia, but America is underdeveloped, flat-out uncivilized in quite some points. And we have to change that. The idea everybody cares for themselves is savage attitude. We have to change that. Sooner or later, the change will come -- whether you like it or not. These days America's majority is managing to overcome homophobia and this anti-social libertarian attitude will go away too. It will get better as time goes by.....
European countries like Sweden and Germany are social democracies. People over there are as free as we are here in America. On the contrary, the police isn't cracking down on protesters as hard as here. The German police did this during the 60s, 70s and 80s -- so you really see how behind we are. Our violently savaging cops would lose their jobs in Europe at once.
Europeans don't live in fear to starve or die in the cold, if they lose their jobs, because their social security prevents this.
__________________
German payroll tax: You can't tell, if you don't add the information, is the employee married and how many kids has he? As there are some more points to be watched....
German payroll tax card for 2010: http://upload.wikimedia.org/wikipedia/commons/9/95/Lohnsteuerkarte_2010_2011.jpg
#31
Let me ask you this. Are you ok with paying 50% plus in Federal income tax? If so, why. If not, why not? How are we to sustain these high levels of spending and entitlements without getting to this point. Do you think it is right for the government to take half of your income so that it can be spread out to others? I agree that the tax system is broke. I do agree hat we should have a progressive tax system, where the wealthier pay more in proportion to their income. How about we fix some if our wasteful spending and channel these resources into legitimate programs that help people. I definitely disagree with you that we are heading to a socialist democracy. That is hundreds of years away (thank GOD).
As far a fear from losing employment, this can be debated. People, not all but say half, don't want to work because they are freeloading on our money. You have to agree that this happens. At my evil corporation (which happened to donate over $70 million last year to charities by the way), we are alway hiring employees for good paying, union jobs. We can't fill the demand because it is tough labor. Why us it is hard for us to fill these positions if there are so many unemployed? My sisters company has over 500 job openings that they can't get enough applicants for. These pay over $40 k per, with great healthcare, 4 weeks vacation upon hiring, and a 37.5 hour work week for salaried folks. . I agree with Obama when he said we have become somewhat lazy in America. We expect things to be handed to us because we are Anericans and have been spoiled for decades with prosperity. Now we have our backs to the wall and we crumble? We need to look in the mirror and take accountability for our lives and well being. It was never the job if the government to do this for us. Sure. It is a good thing that we have unemployment benefits to help us when we are down, but for two years? Really? What is the incentive to bounce back. We have many many jobs that need done. How about, if you a going to be on public assistance, you work for it. There is plenty of litter needing picked up, tons of grass to be mowed in public parks, plenty of walks to be painted, etc. I just do not understand this entitlement "right" that the progressives subscribe to. Help meunderstand this. I do appreciate your replies and dialogue. I also respect your ideology, though I disagree.
#32
I'm against radical overdoing and all kinds of revolutionary rushing.* I think the reasonable goal right now is to go back to the tax rates before President Bush. I don't think Thom is advocating European tax rates in the U.S. -- he just showed those foreign examples to proof that we tax extremely low.
What is socialist? Lenin, Stalin and all the Soviet dictators who followed him called their system "socialist". European right-wing Social Democrats (vague comparable to our blue-dogs) were speaking about "socialism" at the same time. The German National Socialists (Nazis) abused this term too. This term has been abused by communists and fascists a lot. They even abused Karl Marx himself. Marx was just a philosopher and he didn't appreciate those who called themselves "Marxists". Once he said in France: "Je ne suis pas Marxist." ("I'm not a Marxist"). The real socialists were the Social Democrats who wanted nothing but democracy with social security. Communists always hated that, because if you ease the distress and pain of the poor, they won't be ready for revolution anymore. A social democracy is constructive and deals with realities. Communism is destructive and aims at visions that are entirely different from reality.
As I read your lines, I see you're pretty socially thinking too. What is my ideology? I just woke up last summer, when the teapartiers scared me, Congress gridlock worried me and the U.S. downgrade made me angry. Then I followed the Iowa straw poll. I heard Michelle Bachmann advocating actually 0% taxes, when she was like, "Every dollar you make is yours!" I also heard Herman Cain ect./ect. .... All this made me overreact radically at times. This is kinda radical temper, but actually I'm not a radical. I call myself a liberal Catholic or progressive Catholic. Why not say "socialist Catholic"? I like this kind of unionizing conflicting counterparts.
What makes me wonder are people who live on food stamps, publicly advocating to abolish food stamps. Or those who are radically against "big government", but want social security. I mean, social security is to organize by "big government" -- it's a whole lot of work! Many people don't understand. We can call ourselves lucky to have Thom, who educates those Americans. He should really NOT emigrate to Germany! ;)
_________________________________
* As Ron Paul is unreasonably radical in global issues: All U.S. Forces home at once and do away with Department of Defense -- this kind of rushing and overdo is harmful
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Yes but just give Angela Merkel a chance...she'll screw things up really good.
"Angela Merkel wants the German government and the ECB to buy the debts of Greece and Portugal and other countries in trouble, because otherwise they’re going to default. This would mean losses for the French and German banks have bought these governments’ bonds. As governments are unable to roll over their loans – that is, to re-borrowing the funds as past borrowings fall due – banks and other investors insist on much higher yields to compensate them for the risk of default. They also buy default insurance, paying a premium over the interest rate that governments pay. But the investors and guarantors then turn around and demand that the government take all the risk and promise to bail out the governments – leaving the banks with large interest premiums while taking insurance speculators off the hook. So there is an underlying hypocrisy at work.
If governments default on these bonds, the banks will lose money. So the banks are now saying that they’re sorry they insisted that the ECB not create money. Creating it to pay the banks turns out to be a good thing, they say. It’s only bad if it benefits labor and employers instead of the financial sector.
Mrs. Merkel insists that she has no qualms at all about pushing Greece and other debtors into poverty and demanding that debtor economies act as defeated countries and forfeit their land, their water and sewer systems and even the Parthenon to the creditors as if they were conquered militarily. So the question is whether Germany and Europe can do this without an army, as used to be the case.
Greek labor unions and citizens are protesting and holding general strikes to protest the fact that the EU is turning out not to be the peaceful and basically socialist project anticipated half a century ago, when the European Economic Community was formed in 1957. It is a financially bellicose, extractive attempt to create a financial oligarchy and impoverish Europe, stripping the assets of debtors to pay creditors. This partly explains why Mrs. Merkel is finding such opposition even in her own right-wing party. Many Germans do not want to see themselves taxed to bail out their banks for the reckless lending these banks have made – and the even more reckless “road to serfdom” ideology that prevents EU governments from financing their own budget deficits. The euro is threatening with being pulled apart by the greed, short-sightedness and ideological extremism of the anti-debtor, anti-labor neoliberals who have gained control of the legal system and much of the political system.
European banks have the same fallback position that U.S. banks had here in 2008 after Lehman Brothers failed. They are threatening to wreck the economy if the government doesn’t save them from taking a loss on loans gone bad as a result of the over-indebted economy. They have the power to disrupt the payment system and hold the economy hostage if the government doesn’t take their losses onto the public balance sheet. "
http://michael-hudson.com/2011/09/debt-deflation-on-the-rise/