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Ear to the Ground

At Least the German Economy’s Growing

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Posted on Aug 13, 2010
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Prost! Germany reached a new economic growth record at the end of June.

The U.S. economy is still an unholy mess, but someone is doing something right over in Germany, which reported record growth over the three-month period from April through June—the biggest such spike since the once-split nation reunified. The fiscal situation was slightly improved in France and Spain, but Greece? Down 1.5 percent.  —KA

BBC:

“Such quarter-on-quarter growth has never been recorded before in reunified Germany,” the national statistics office, Destatis, said.

The main reason for the higher-than-expected growth was strong exports, helped by a weaker euro.

The eurozone economy grew by 1% during the quarter.

This compares with growth of 0.2% in the first three months of the year, the area’s official statistics agency, Eurostat, said.

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By expat in germany, August 15, 2010 at 4:53 am Link to this comment
(Unregistered commenter)

Something else not mentioned here: Germans do not buy on credit. They pay almost exclusively with cash. If they can’t afford something, they don’t buy it.

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By dihey, August 15, 2010 at 4:32 am Link to this comment

SolaSailor: you have hit a crucial issue. When I was in Germany recently I watched a TV interview of German entrepreneurs who had removed their production plants from Asia and returned them to Germany. Their reason? It was uniformly: “we could not run our plants there with an insufficiently educated work force. Too many costly mistakes were made which destroyed expensive machinery”.

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By wildflower, August 14, 2010 at 3:59 pm Link to this comment

Re MeHere: “The main thing is that Germany has taken care of its people for many years. And, apparently, that has not detracted from thriving businesses.”

Yes, this should tell the U.S. something, but it hasn’t. The corporate greed factor pretty much dominates anything and everything in the U.S. - for now anyway.

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By LJL, August 14, 2010 at 12:50 pm Link to this comment

One of several reasons Germany generally does well is that there is a greater sense of social cohesion there than in most other countries.  It is an attitude that was instilled in us as early as primary school.  At my school we students worked half days every other Saturday on maintenance projects.  Even though the actual cleaning and hauling we accomplished was probably minimal, what we learned about work and cooperation was inestimable. This not only explains the economy but also casts light on our 125 year commitment to universal health care and overall social security.

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By Chris Herz, August 14, 2010 at 10:30 am Link to this comment
(Unregistered commenter)

Don’t worry; the German gov’t & industry are working night and day to reduce their economy to one similar to that of the USA.  They started late and had further to go, but there is every hope they will soon catch up.

I have seen China, I have seen the future AND IT WORKS!

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By Mike3, August 14, 2010 at 9:48 am Link to this comment

dihey

You are correct Sir/Madam.

The whole of Europe is doing well, with the exception of Greece. But the touch stone of Europe is of course Germany. Germany is the weather vane. And Germany will save the Greeks. Why? Because that’s the way we are here in Europe. We are not Americans. And why has Greece tanked? Ask Goldman Sachs. As long as Americans stay out of Europe we’ll do just Fine.

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By omygodnotagain, August 14, 2010 at 9:36 am Link to this comment

Germany and the Netherland, the latter a country that give its citizens over $3000 to go on vacation, the former one with extensive social networks. For this country to recover we must end the financial Social Darwinism of the monetarists. I wouldn’t mind seeing Germany become the West’s powerhouse, they stand for quality and integrity unlike the Wall Street criminals and scam artists running this country.

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By SolaSailor, August 14, 2010 at 8:10 am Link to this comment

It’s all about education.  Compare our system to
Germany’s.

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PatrickHenry's avatar

By PatrickHenry, August 14, 2010 at 6:51 am Link to this comment

This is good news for Germany, what’s wrong with our picture?

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By Mike789, August 14, 2010 at 5:03 am Link to this comment

Concur with MeHere esp. his mention of labor’s participation. The controlling and evolving influence of guilds and their hierarchical structure in Europe (eleventh century or earlier)acted as a countervailing force over the rising mercantile class
and their money schemes. Good or bad, guilds’ heritage is inextricably cathexed with individuals’ accendency in industry and management there.

Our desparate and far reaching endeavors shaped unions into a clumping together of various skilled workers with little emphasis on particular skill level advancement and strict control of those skills. Without any real integration within the corporation, as a mere “body politic”, they have less footing now that labor can be exported.

It must also be kept in mind the incredible dynamism of the industrial revelution as it permeated our culture in the incipient 19th century. Automation and redundancy dissolved the dignity of manual labor and highly skilled craftmanship began to take a back seat.  The laborer couldn’t quite get a handle on his/her worth and evolved into an adversary rather than an indespensible asset vis a vis management.

Individualism, and “territorial manifest destiny” (where limitless expansion and opporunity prevailed) characterized America’s advancement. Though an inspiration, now we are faced with the limitation of resources and seem contained in corporate structured fiefdoms having plenty of vertical integration and a dirth of horizontal integraton.

There is sufficient individual talent in America. Brilliant individuals abound as is made evident by the ongoing level of commentary on the internet. There are business models thriving with a amalgam of labor and management where the very act of “doing” in the sense of creating, is integral to development and advancement of a company. Money for the sake of money may not prevail. Exporting synergies would ransom our future.

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By dihey, August 14, 2010 at 4:53 am Link to this comment

The New York Times is spreading the false information that “Germany is outperforming all of its neighbors”. Wrong. Although the Dutch economy is small compared to that of Germany, its advance of 2.2 percent is exactly equal to that of Germany.

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By Mike3, August 14, 2010 at 12:18 am Link to this comment

Yes, this is big news in the UK and US. The Guardian is still running an article with close to 400 letters! But dear reader, can you remember about 10 years ago, or even 5 years ago, when the arrogant Anglo-American monetarists, the “free-market” aficionados, the Milton Friedman’s were lambasting and criticizing the Germans and the European/Continental way of doing business (still incorporating aspects of Keynesianism no less), and saying it was CRAP! Sweet Jesus. The Germans could do nothing right. One article I read from the UK criticized the Germans for still making cars would you believe! And who looks like Goofy now?

Washington even set their attack dog George Soros on the euro, but to no avail.

Schadenfreude on my part? Not at all, not at all. But a massive problem in America is the huge pool of political ignorance. Friedman and the Chicago School operating within this pool of ignorance, had a political agenda, (did you know that?) because let me tell you something, he was a lousy economist, as you say in America, “he didn’t know shit”. His bum chum that other sicko Leo Strauss together changed America. And made it the glorious thing it is today. Of course with bipartisan assistance.

But you may ask, well what has all this to do with the American economy being as good as the German? Well, how can I put this as diplomatically as I can, if you do ask that question; I can’t help you.

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By MeHere, August 13, 2010 at 10:05 pm Link to this comment

The main thing is that Germany has taken care of its people for many years. And,
apparently, that has not detracted from thriving businesses and healthy trade.
Labor is respected and plays a role in how many industries are run. Are they just
lucky or have they done some things right?  Nothing is ever perfect or works
forever but common sense and realistic expectations can go a long way.

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