Given how screwed up our economy is, combined with rampant political corruption via political contributions and so on, I wonder if we can get a do-over?
Germany’s success in 2010 has surprised most United States analysts, who tend to start every sentence about Europe with “sclerotic”. However, it is by no means the only country that is recovering from the great recession in a remarkably healthy fashion. China, Chile and Singapore are also stand-outs in this respect, while the United States, Ireland and southern Europe have done poorly. This year’s economic events can teach us again about which models of capitalism can be successful.
[…]
The German economic model works very well for a country with perpetually high labor costs. Education and training are of great importance, as are engineering skills – engineers have a much higher social position in German societies than in Anglo-American ones – while housing finance is given a low priority, since it is correctly regarded as unproductive.Finance plays little role in the system – it was notable during the 2008 debacle to what extent the German banks were helpless victims of Anglo-American shenanigans, with little creative role of their own. The typical successful German company is both smaller and longer-established than its US counterpart, with powerful shareholders who prevent management from engaging in self-dealing and mindless empire-building.
Read the rest of the article for comparisons of other countries and ours.
You mean nations known for austerity and frugality and are both penny and pound wise are faring better?
Whereas a nation deep into a culture of entitlement and is penny and pound foolish is not doing so well?
Wow! Who would have thought?
Cursor_
Hey! the Germans make good stuff.Here in Wisconsin we were settled in good part by German immigration and I like to feel we still benefit from it.The only problem with the modern German state was that it wanted to invade Europe every 50 years.This time when the U.S.S.R. fell they bought it instead.
But we have people who make millions catching and throwing balls through hoops and such. What does an engineer have, pocket protectors. We win. America Rules.
Cursor,
Pardon me, but you are an idiot. Germany has significant social services and a very comprehensive entitlement network. Try again.
#4
Maybe you don’t quite get the idea between entitlement and a culture that feels entitled through an inflated sense of ego?
The US lost its humility. It feels that it is the superior nation and so it cannot think WHY it can’t have whatever it wants.
There is a difference.
Cursor_
Cursor–you are childishly wrong, have been called on it, and argue for it still. I’d call that childish, if I hadn’t already.
“Culture of entitlement” is code for the welfare state which is code for the undeserving black/poor of America who in the main have been victims of our incessant race to the bottom from the time they were conceived until they are found living out of their cars.
One of the highest welfare states in the world also is one of the most successful capitalist economies.
Suck on it Cursor. Suck on it and then realize how the welfare state ((correctly done)) actually supports the societal supporting goals of a capitalist approach. WHAT THAT MEANS is that the USA has to do more than merely remove the CORRUPTION and political shenanigans from the wealth generating producers, we also have to support the labor part of the equation.
Sucks to have to balance things, but thats what ya got. But as with so many issues in America, the fact that the “proof” is pretty much staring us in the face, DOGMA, will rule the day until our destruction. Then the issue is what can be built from the rubble. Hey, we’ll still be 7-8th in the world. A real power player.
The article starts with a false premise, suggesting that the USA is a Capitalist society.
The USA is a Plutarchy, not a Capitalist society. Look up Plutocracy and Oligarchy for the meaning of Plutarchy. The USA is a society where the wealthy and the pseudo-royalty make the rules, where government is legally managed by the wealthy to do their bidding, all along manipulating the masses into believing that they are part of the great Capitalist system in order to make them think they are free.
Some also believe that the USA is a Democracy… the final nail was put in that coffin this year when corporations were allowed unlimited spending by the Supreme Court to manipulate the political system.
Capitalism in the USA is practiced as a two class system: slave owners (5%) and slaves (95%). It’s just that the slaves do not realize they are owned until their masters discard them (too old, too weak, too expensive to feed). Then the slaves clamor for more freedom for their masters so that they can become worthy slaves again. (Yes Tea Party, I am taking about you).
Awake==you say: “fighting to become worthy slaves.”
I think you’ve got it, well said. Your clarity upsets me, but the truth must be recognized if not rewarded?
At this time of year, I think about the kiddies fighting for the empty boxes while the adults play with the toys.
Yea, Verily.
Woah, cool.
So in order to get functioning capitalism we have to first be taken over by fascism, foment and lose a gigantic war, and spend decades as a nation of citizens spying on each other?
We’re almost there!
Cursor_ routinely demonstrates a lack of depth and a propensity to recite the same lame talking points. But if you take the time to read the article, which I highly recommend, (Martin Hutchinson is the author of Great Conservatives (Academica Press, 2005) – details can be found at greatconservatives.com)you find the Germans tend to take a long term view and value the workers who create the wealth – rather than the capitalista who go to great effort to minimize the workers via automation and outsourcing, who make money by blowing bubbles and trying to get out before they pop.
The fast recovery in Germany seems reminiscent of earlier recessions in the United States as illustrated by a graph of unemployment produced on the Calculated Risk blog.
The current cycle has been longer than every recession post WWII. In fact the falling part has been longer than just about every recession post WWII.
Perhaps the problem is an over-reliance on stimulus. This would also account in some ways for Japan.
When the only way the US economy can reach reasonable levels of employment is with government pork packages and interventions passed periodically one has to wonder. While not the start of this movement, the first Bush tax cuts and the rebates were passed as stimulus. The second round was also billed as the same thing. During the reign of Bush (43) there was a constant stream of stimulus talk. Obama has also continued this pattern.
Why would anyone want to invest, if the doctors (Congress and many in the business community) are behaving as though the patient is dying? In *some* ways nothing wrong, the patient (US Economy), however, is being told it is dying from a condition that it cannot perceive the impact of. The doctors continue administering placebos disguised as treatment and are not specific as to the desired results of the treatment. The doctors also tell the patient to report any change in condition for close examination. Since the patient does not know what is wrong every minor deviation is dutifully reported to the doctor and the doctors start administering even more nonspecific treatments for those ailments too.
The problem is quite plainly, the opportunities for investment were evaporated with all of the stimulus talk and the many of “investments” that did take place were in non-productive assets like housing. Perhaps this is another reason for the strong trend in offshoring. This problem is still being propagated with an economic policy that focuses too much on housing.
Dvorak has repeatedly made the point about Sarbanes-Oxley and he is right.
Clearly Germany is doing something right and the United States is not, but many Keynesians seem more preoccupied with using the media by spouting anti-German propaganda as a way to cover their great failure. The blogged article is a notable exception to this pattern.
This Der Spiegel article serves as a recent example and summary of anti-German propaganda that I have been encountering fairly frequently.
I remember not too long ago when Germany had a double digit unemployment rate and it had just dropped below ten.
Amazing how success is an object of ridicule. I expect more of this anti-German propaganda to continue.
I feel like a stranger in a stranger land. My america: self destructive, land of delusion.
The shortest of short term thinking over long term. Short term: scam. Long term: investment in the future. We are now in about our 4th “Lack of regulatory Control” meltdown of the past 20 years and we are crowing about the continuing lack of regulation. We ABSOLUTELY DESERVE TO FAIL–just as we are.
We are at the bottom of a hole and digging even faster. NO ONE in main stream media, or elsewhere although I assume it exists, is criticizing Obama for destroying the social safety net by caving into the Pukes for Deficit Spending to fund the Super Rich tax breaks. Yes, its mentioned only as a stepping stone to what a masterful politician Obama is.
Truth is just he opposite.
Truth is what hits you in the nose when you refuse to admit anything is there.
Truth is we can’t tell shit from shinola.
#6
You are completely wrong about the effect of lax regulation. The only place lower regulation works is on the domestic conservative talk show circuit. Once you step outside of that unreality bubble it looks a lot different.
It has been definitively shown that markets often DO NOT impose discipline, correctly measure risk, or reflect supply\demand.
There is no alternative but for the government to be involved.
In an ideal world where every executive’s interests were aligned with those of shareholders, and society at large, government intervention in public companies would not be necessary. This world demonstrably DOES NOT EXIST.
There is a startling disconnect in the conservative brain. Other countries = bad; companies = good. Since many of the biggest companies are bigger than mid-size countries, allowing them complete freedom is foolish and dangerous.
How can you guys have such a gaping blind spot?
We’ve just had over 10 years where some of the biggest businesses were merely notional. They didn’t exist to produce products, just accounting based profits.
There is no way that gets fixed without some regulators and some cops. That HAS to come from government.
I have to ask: are you stupid, misguided or lying?
#8 Awake. Yes, you got it!
America is no longer a capitalist country.
China is far more Capitalist than America. Also doing far better.
Here is something to think about.
The entire Gross Domestic Product (GDP) of China is about what the US government takes in taxes alone. The percentage of taxes the Chinese pay is only ~ 1/4 of income total including Federal, State, Local, sales, etc., unlike the US taxpayer which pays over half their income in one tax or another.
Therefore, China provides all the services we currently get here in the US and serves 3 times the population with only ~1/12 the budget (total US GDP /3 = Chinese GDP, /4 = Chinese Federal Budget = 1/12th that of the US).
And they can afford high speed rail.
Think about it.
#16
Please explain at greater length.
OK I am going to climb out on a limb here. What good are jobs if the wage won’t support you? What good is a product if it makes the soils unsuitable for growth? What good is growing economy if the water from your tap is unfit to drink? What good is having a job if the job kills you due to poor working conditions? Less regulation sounds like a great start until that very lack of regulation causes problems that then require regulations. Alfred you state “As for the crash, that too was caused by regulation, and corrupt politicians and regulators who got rich extorting money from Wall street, but providing no oversight to reign in the greed.” Was the growth prior to the crash due to regulation or lack of regulation? If the growth was due to the regulation than lack of regulation would have either prevented the growth leading to the crash or caused an even bigger crash from even more expansive growth. If the growth was due to lack of regulation than your argument fails because there would have been no regulation to reign in the greed as you put it and we are back to a bigger bubble. If the crash was due to lack of application of the appropriate oversight than a larger govt, with staff to provide oversight should have prevented both the bubble and the crash. Would the crash have been prevented by appropriate oversight by the regulators? would this oversight if done correctly prevented the growth as well? Sounds very much like a catch 22.
#16 Alfred,
Regulation is only required in order to control the possible abuses that can be made by those that are being regulated. If industry was effectively self regulated, then there would be no need for regulations. But industry is driven by one interest only, and that is profit, and if it is more profitable to litigate, then that is what they will do. Industry has no interest in your well being, none at all.
Look at the automobile industry for example…. do you really think that they have any interest in lowering pollution on their own? Or the mining industry… if killing 20 miners costs 40 million dollars, but providing a safer work environment costs 60 million, which will they choose? Or the financial industry, where they are allowed to completely gamble with your money, yet there are no personal repercussions for their bad decisions.
Where would you cut regulations? Food safety? Car safety? Airplane safety? Children’s toy safety? Financial safety? Home construction regulations? Where would you cut regulation? Maybe there could be a few ADA adjustments, but aside from that… there is very little that can really be reduced.
Maybe you think that civil rights anti discrimination regulations should be cut?
Lack of regulation is the core definition of Anarchy. Are you an anarchist?
When you look at it from a very realistic perspective, there are VERY few regulations in America that can be cut and make any difference to business, and quite a few that actually need further regulation because business need to be more effectively managed.
See what you started Chris? Now you have two other people wasting their time on Alfie. Shameful. Course, I do it too when I’m bored, but more and more, even watching the shadows move across my driveway are more entertaining.
Kneejerk unreasoning ditto heads have that effect.
Catch-up time.
#19 “Good way to become Cuba, or preCapitalist China and Russia, or like Modern North Korea…bad way to create wealth and jobs…”
So you’re saying that any restrictions\ auditing on businesses lead to a totalitarian state. That is complete rubbish.
I want you to explain to me how business people are immune to the negative impulses of humanity. Why shouldn’t they have domain specific cops looking after them?
Also, we have just been through a very low regulation environment, and during that time job growth was slight or negative. Big jobs growth sectors were often the same ones which ultimately lead to the credit crisis: real estate, insurance, and finance.
The traditional rejoinder to my argument is that the “freedom” was not total enough. It is the same with crackpot religious people. The unproven\unprovable\dis-proven ideology cannot be to blame, it must be the heretic subverting the true path…
I think you can do better than that, Comrade Persson! You can explain to me why there should be rules for everything, except all matters involving money.
Alfred,
If you aren’t well off and are defending GOP monetary policies, you are either an idiot like Cursor or you are a disingenuous dirtbag.
Germany is HEAVILY regulated, has a significant social safety net, long vacations, a medical system where most users never even see a bill, and long-term unemployment benefits with retraining for all who can’t get jobs after a certain period.
Paraphrased from The Jerk:
“I got my dogma and that’s all I need”
#3
I’ll keep saying it, I’m in the fcking wrong career. I should screwed my Engineer profession and go be a politician or business or lawyer and screw others instead.
Alfred,
So you are saying that because America is multicultural we can’t have a benefit and entitlement system like Germany? Are you implying that America is so racist that people like you cannot handle people not like you getting benefits?
In your second statment, are you saying that Germany is how they are because of trade tariffs? Do you think they march in cultural lockstep and only buy what is on a special list somewhere?
What the hell do you mean exactly? It is a common ploy of the asshat Right to couch their arguments in code words their ilk can understand, but it makes for poor discussion.
You are the loon, you make no sense at all with your idiotic statements.
OK you responded, but you didn’t answer the question.
“what extent the German banks were helpless”
(snort) HAHAHA!
German banksters are shoulder-deep in the fiascoes in Greece, Spain, Ireland and all of eastern Europe. And US taxpayers are bailing these jackwads out via the IMF.
“China, Chile and Singapore are also stand-outs”
China is the biggest bubble in world history and when it blows it will be VERY bad. Chile is doing well because it feeds commodities to China, Singapore acts as a broker.
When the “our sh** doesn’t stink” stories appear you can bet the sh** is about to hit the fan. Remember, it wasn’t so long ago that California had a new economic paradigm going, consisting of houses that always increased in value. With 60 million+ new vacant overpriced housing units in China and more vacant new cities in the pipeline, what do you think will happen to the commodity producers like Chile and Australia when it all blows up?
#27 & #28
You talk of people actively interfering with your business via regulation. Those are, by and large, going to be LOCAL government people. Clipboard having, ticket giving, ass-kissing required people.
If you actually own a small business then, like most everyone else, you are not a victim of overactive FEDERAL government regulation. You aren’t even on the radar. Effects to you are going to mostly come from an anemic fed response to regulating national\international firms.
Unlike you, the stereotypical small business operator, the top tier corps are connected. Not only do they benefit from economies of scale in operations, but they help craft regulatory structures to disadvantage new competitors. Pushing some of this business out to the Statehouses doesn’t solve the problem, either. The state level jobs are filled with people who hope, one day, to be dirty national level pols. They just get bought more cheaply. My issue that some special areas of the economy have NO effective regulation and\or IMPLICIT government backstops. Not by coincidence, these happen to be the big money areas.
You, the much vaunted American small business owner, are quite screwed: the Dems are going to assume you vote GOP, and the GOP is on another tit entirely.
You are looking in the wrong direction.
#33
A more apt comparison than US-Germany would be California-Germany or US-EU. Germany has already ceded some of its sovereign rights to the EU. California exists under a much more tightly integrated national economy than Germany does, in a sense, within the EU.
Smartalix is right in #31 about the problem of you or Cursor_,#1, using Germany as a model. They have too many good and practical aspects to really jibe with US conservatives.
It seems only the first poster read the article. They credit small government for the successes of these countries.
MikeN, nothing wrong with smaller government. Small and effective that is.
What I dislike about the hypocritical right (as opposed to the hypocritical left) is that they want to be bad at government. What is wrong with having a small and effective government? What is the problem with wanting, or even expecting, government to be good at governing?