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While certainly Germany has done a lot right and deserve credit for their current economic strength, we have to recognize that they've both chosen a very differ

While certainly Germany has done a lot right and deserve credit for their current economic strength, we have to recognize that they've both chosen a very different path: i.e. stability over growth, and also have a very different culture than we Anglo-Saxons - which I would argue are quite inter-related. When it comes to quality manufactured goods, Germany is legendary and has strongly biased its economy over the past 100 years to take advantage. The US & Briton on the other hand, have always been first movers to adopt breakthrough tech - often at the expense of quality, stability of investments, etc, and are seemingly always better at the "soft" side of business: sales & marketing. The world needs both the Teutonic and Anglo-Saxon models, and seemingly they both are still going to head down the same paths as before will little change in overall direction - with the exception of America trying to get better educated the Germans trying to become better sales/marketers.

Bertrood 16y ago
Well stated. The US can learn from Germany though. A mild midcourse correction could help. The US needs to emphasize the value of all stakeholders. With this, the US will have greater growth over the longterm. Its the stable growth economies that grow and prosper over the boom-and-bust economies.
- nickpinkston 16y ago
  Certainly US system suffers from myopia. Though I'm not sure at what point we stifle the swashbuckling nature that has made us the country of the new in business/tech/research. I err on the side of increased transparency of financial sector, stronger FTC actions against monopolists, IP reform, etc. than on Germany's more activist bent. Ours is more of an economy of the new, and our Anglo-Saxon nature should be embraced by better regulation - not necessarily more.
edderly 16y ago
I suggest that people don't go too overboard in praising Germany. Their unemployment rate over the past 20 years has been a disgrace and do not forget that though their trade surplus is healthy some consider it also reflects the weakness in German commodity consumption. Some food for thought (though the later figures don't seem accurate): http://www.wolframalpha.com/input/?i=us+gdp+growth+since+1991+vs+germany http://www.wolframalpha.com/input/?i=us+gdp+growth+since+199... http://www.wolframalpha.com/input/?i=us+employment+since+1991+vs+germany http://www.wolframalpha.com/input/?i=us+employment+since+199... Germany's (previous) economic woes could be reflective of the pain of integrating E. Germany. But then again that illustrates the problem of comparing economies directly. For e.g. could the influx 'cheap' east German labor make the overall German economy more competitive.
- michaelchisari 16y ago
  Their unemployment is 6.7%, which observing from the US (9% after massive government stimulus), I have a real hard time seeing that as a disgrace.
  - Derbasti 16y ago
    Remember that in Germany, you are legally unemployed if you earn less than 400 Euros (500-600$) per month. If you are unemployed, you don't have to pay taxes. This makes most employees of Starbucks, McDonalds etc. count as unemployed.
    - michaelchisari 16y ago
      Which would mean that their unemployment rate is even lower than 6.7%, wouldn't it? I've also read that they do more accurate accounting of unemployment than the US. Some say the real unemployment rate in the U.S. is around 17%. http://www.youtube.com/watch?v=QudPK1uJii8 http://www.youtube.com/watch?v=QudPK1uJii8
    - Mrich30 16y ago
      To the contrary, you do not count as unemployed towards the official statistics. You will get benefits in addition to your salary though. Essentially the same manipulations are done to the statistics here as in many countries, they try to remove most unemployed people from the numbers by sending them to training, minimum wage jobs (so called 1 euro jobs). This has gotten a lot worse in the past years and the social divide has become as large as in e.g. The US.
      - Derbasti 16y ago
        Actually, I am not sure about the statistics. Even though 400E-jobs are considered unemployed legally, they might still include them in the statistics to make them look better.
      - brazzy 16y ago
        the social divide has become as large as in e.g. The US. Not even close. Gini coefficient of Germany 2005: 0.28. The USA in 2009: 0.46 http://www.eurofound.europa.eu/areas/qualityoflife/eurlife/index.php?template=3&radioindic=158&idDomain=3 http://www.eurofound.europa.eu/areas/qualityoflife/eurlife/i... http://www.census.gov/newsroom/releases/archives/income_wealth/cb10-144.html http://www.census.gov/newsroom/releases/archives/income_weal...
forkandwait 16y ago
Just as a plug for German innovation -- consider the 19th century: if you include Austria/ Vienna, people who spoke German (and were often Jewish) basically invented modern thought, ranging from mathematics to chemistry to music to philosophy to psychology etc. England was great in applied physics and math, France in dynamics and biology, but in theoretical math, music, and philosophy Germany TOWERS above anyone in the 19th century. It all went south with the Kaiser's attempt to imitate Napolean and then National Socialism; but if Germany had avoided militarism and kept the Jews they basically would own Europe by now (they sort of do even with the setbacks of the first half of the twentieth century).
- forkandwait 16y ago
  What I meant to say was that any statement saying that Germany is an "uninnovative" country is just hogwash. The downvote -- why? Because you disagree?
  - nickpinkston 16y ago
    I didn't downvote you, and I also didn't say they didn't innovate. Rather, modern German innovation rarely takes the form of transformation, more of incremental innovation. I can't think of any modern industries revolutionized by German companies. Automotive saw a steady stream of good innovation no doubt, but hardly very transformative.
    - rb2k_ 16y ago
      well, there was MP3 (invented, at least partially, at the Fraunhofer Society).
    - lispm 16y ago
      Depends on where you look at. There are entire industrial niche markets 'owned' by German Mittelstand companies. It is just not in your focus of attention.
    - jules 16y ago
      Can you give an example of any industry revolutionized by any company?
cdavid 16y ago
I think so-called German "miracle" is mostly a journalist and politics invention. What happened in the last few years is basically forced deflation through salary stagnation (even reduction), since you cannot play with you money anymore in the eurozone. This is very good for the companies which export a lot, but is pretty bad for everyone else (including its neighbours). Economic improvemnts are mainly coming from productivity gains - artificially lowering your costs instead of trying to build more with less is not a sustainable past. But this kind of story is gold for newspapers: export (good !) vs import (bad !), family capitalism (good !) vs shareholders (bad !). All the usual cliches are there. This story has been told for years in Europe, especially in France, where it is said we should follow the German way. It is very ingrained in the news reporting and the general level of discussions. One striking example is the French left and right discussing about Germany: both will assume that German growth has been better than France, and the left will claim that it shows growths is not well shared, and the right will use it as the proof that salaries are too high in France. Even though until 2008, Germany per year gdp growth has always been lower than France since the reunification.(http://www.wolframalpha.com/input/?i=gdp+growth+france+germany http://www.wolframalpha.com/input/?i=gdp+growth+france+germa...). The OP article basically tells the same story from an Americain POV, even though the data do not back it up at all.
- forkandwait 16y ago
  > What happened in the last few years is basically forced deflation through salary stagnation (even reduction). As I understand it (which is too say barely), German salaries at the high end are nowhere near the UK or the USA.... Some of us think that might be a good thing, but if that is your metric, yeah, Germany probably sucks.
  - cdavid 16y ago
    I am talking about average/median salaries (everyday worker) - high end salaries don't matter much at a country's scale, I think. If neither gdp growth (below other European countries in the same category as Germany) nor median income growth is a good metric, what do you suggest instead to measure German success ? Your comment made me realize I may have not been very clear - the issue is that Germany's success is measured in terms of exportation as is, which is known to be a common fallacy in economics. If it were because German's products became better at a cheaper price, then it would have been a good thing, but I am arguing it has been mostly through artificial deflation (income stagnation instead of money deflation as this is impossible in the eurozone). This is not very polemic, btw, and is pretty much agreed upon by quite a few people, independently of their political inclination (see e.g. http://www.nakedcapitalism.com/2010/03/martin-wolf-china-germany-commiting-world-to-deflation.html http://www.nakedcapitalism.com/2010/03/martin-wolf-china-ger... for one reference)
arethuza 16y ago
On the point of Germans becoming better sales/marketers - it is perhaps interesting to note that one of the most durable company taglines here in the UK is in German: Vorsprung durch Technik
- kleiba 16y ago
  Back in the 90's there was a song called "Parklife" by "Blur", and in it you can hear actor Phil Daniels reference this expression. I was always puzzled where that came from (had to look up the lyrics though - it's difficult to understand the phrase as pronounced by an Englishman).
lispm 16y ago
When I was young it was in to drive Jaguar here in Hamburg. Now they are mostly gone... The UK was strong in manufacturing for a long time, and still is. But the 'masters of the universe' decided it was easier to earn money by selling oil and financial products. The result: the oil runs out and the financial products were ponzi schemes.

Bertrood 16y ago

Well stated. The US can learn from Germany though. A mild midcourse correction could help. The US needs to emphasize the value of all stakeholders. With this, the US will have greater growth over the longterm. Its the stable growth economies that grow and prosper over the boom-and-bust economies.

nickpinkston 16y ago
Certainly US system suffers from myopia. Though I'm not sure at what point we stifle the swashbuckling nature that has made us the country of the new in business/tech/research. I err on the side of increased transparency of financial sector, stronger FTC actions against monopolists, IP reform, etc. than on Germany's more activist bent. Ours is more of an economy of the new, and our Anglo-Saxon nature should be embraced by better regulation - not necessarily more.

edderly 16y ago

I suggest that people don't go too overboard in praising Germany. Their unemployment rate over the past 20 years has been a disgrace and do not forget that though their trade surplus is healthy some consider it also reflects the weakness in German commodity consumption. Some food for thought (though the later figures don't seem accurate): http://www.wolframalpha.com/input/?i=us+gdp+growth+since+1991+vs+germany http://www.wolframalpha.com/input/?i=us+gdp+growth+since+199... http://www.wolframalpha.com/input/?i=us+employment+since+1991+vs+germany http://www.wolframalpha.com/input/?i=us+employment+since+199... Germany's (previous) economic woes could be reflective of the pain of integrating E. Germany. But then again that illustrates the problem of comparing economies directly. For e.g. could the influx 'cheap' east German labor make the overall German economy more competitive.

michaelchisari 16y ago
Their unemployment is 6.7%, which observing from the US (9% after massive government stimulus), I have a real hard time seeing that as a disgrace.
- Derbasti 16y ago
  Remember that in Germany, you are legally unemployed if you earn less than 400 Euros (500-600$) per month. If you are unemployed, you don't have to pay taxes. This makes most employees of Starbucks, McDonalds etc. count as unemployed.
  - michaelchisari 16y ago
    Which would mean that their unemployment rate is even lower than 6.7%, wouldn't it? I've also read that they do more accurate accounting of unemployment than the US. Some say the real unemployment rate in the U.S. is around 17%. http://www.youtube.com/watch?v=QudPK1uJii8 http://www.youtube.com/watch?v=QudPK1uJii8
  - Mrich30 16y ago
    To the contrary, you do not count as unemployed towards the official statistics. You will get benefits in addition to your salary though. Essentially the same manipulations are done to the statistics here as in many countries, they try to remove most unemployed people from the numbers by sending them to training, minimum wage jobs (so called 1 euro jobs). This has gotten a lot worse in the past years and the social divide has become as large as in e.g. The US.
    - Derbasti 16y ago
      Actually, I am not sure about the statistics. Even though 400E-jobs are considered unemployed legally, they might still include them in the statistics to make them look better.
    - brazzy 16y ago
      the social divide has become as large as in e.g. The US. Not even close. Gini coefficient of Germany 2005: 0.28. The USA in 2009: 0.46 http://www.eurofound.europa.eu/areas/qualityoflife/eurlife/index.php?template=3&radioindic=158&idDomain=3 http://www.eurofound.europa.eu/areas/qualityoflife/eurlife/i... http://www.census.gov/newsroom/releases/archives/income_wealth/cb10-144.html http://www.census.gov/newsroom/releases/archives/income_weal...

forkandwait 16y ago

Just as a plug for German innovation -- consider the 19th century: if you include Austria/ Vienna, people who spoke German (and were often Jewish) basically invented modern thought, ranging from mathematics to chemistry to music to philosophy to psychology etc. England was great in applied physics and math, France in dynamics and biology, but in theoretical math, music, and philosophy Germany TOWERS above anyone in the 19th century. It all went south with the Kaiser's attempt to imitate Napolean and then National Socialism; but if Germany had avoided militarism and kept the Jews they basically would own Europe by now (they sort of do even with the setbacks of the first half of the twentieth century).

forkandwait 16y ago
What I meant to say was that any statement saying that Germany is an "uninnovative" country is just hogwash. The downvote -- why? Because you disagree?
- nickpinkston 16y ago
  I didn't downvote you, and I also didn't say they didn't innovate. Rather, modern German innovation rarely takes the form of transformation, more of incremental innovation. I can't think of any modern industries revolutionized by German companies. Automotive saw a steady stream of good innovation no doubt, but hardly very transformative.
  - rb2k_ 16y ago
    well, there was MP3 (invented, at least partially, at the Fraunhofer Society).
  - lispm 16y ago
    Depends on where you look at. There are entire industrial niche markets 'owned' by German Mittelstand companies. It is just not in your focus of attention.
  - jules 16y ago
    Can you give an example of any industry revolutionized by any company?

cdavid 16y ago

I think so-called German "miracle" is mostly a journalist and politics invention. What happened in the last few years is basically forced deflation through salary stagnation (even reduction), since you cannot play with you money anymore in the eurozone. This is very good for the companies which export a lot, but is pretty bad for everyone else (including its neighbours). Economic improvemnts are mainly coming from productivity gains - artificially lowering your costs instead of trying to build more with less is not a sustainable past. But this kind of story is gold for newspapers: export (good !) vs import (bad !), family capitalism (good !) vs shareholders (bad !). All the usual cliches are there. This story has been told for years in Europe, especially in France, where it is said we should follow the German way. It is very ingrained in the news reporting and the general level of discussions. One striking example is the French left and right discussing about Germany: both will assume that German growth has been better than France, and the left will claim that it shows growths is not well shared, and the right will use it as the proof that salaries are too high in France. Even though until 2008, Germany per year gdp growth has always been lower than France since the reunification.(http://www.wolframalpha.com/input/?i=gdp+growth+france+germany http://www.wolframalpha.com/input/?i=gdp+growth+france+germa...). The OP article basically tells the same story from an Americain POV, even though the data do not back it up at all.

forkandwait 16y ago
> What happened in the last few years is basically forced deflation through salary stagnation (even reduction). As I understand it (which is too say barely), German salaries at the high end are nowhere near the UK or the USA.... Some of us think that might be a good thing, but if that is your metric, yeah, Germany probably sucks.
- cdavid 16y ago
  I am talking about average/median salaries (everyday worker) - high end salaries don't matter much at a country's scale, I think. If neither gdp growth (below other European countries in the same category as Germany) nor median income growth is a good metric, what do you suggest instead to measure German success ? Your comment made me realize I may have not been very clear - the issue is that Germany's success is measured in terms of exportation as is, which is known to be a common fallacy in economics. If it were because German's products became better at a cheaper price, then it would have been a good thing, but I am arguing it has been mostly through artificial deflation (income stagnation instead of money deflation as this is impossible in the eurozone). This is not very polemic, btw, and is pretty much agreed upon by quite a few people, independently of their political inclination (see e.g. http://www.nakedcapitalism.com/2010/03/martin-wolf-china-germany-commiting-world-to-deflation.html http://www.nakedcapitalism.com/2010/03/martin-wolf-china-ger... for one reference)

arethuza 16y ago

On the point of Germans becoming better sales/marketers - it is perhaps interesting to note that one of the most durable company taglines here in the UK is in German: Vorsprung durch Technik

kleiba 16y ago
Back in the 90's there was a song called "Parklife" by "Blur", and in it you can hear actor Phil Daniels reference this expression. I was always puzzled where that came from (had to look up the lyrics though - it's difficult to understand the phrase as pronounced by an Englishman).

lispm 16y ago

When I was young it was in to drive Jaguar here in Hamburg. Now they are mostly gone... The UK was strong in manufacturing for a long time, and still is. But the 'masters of the universe' decided it was easier to earn money by selling oil and financial products. The result: the oil runs out and the financial products were ponzi schemes.