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I've said it before in another comment [1]: >There's nothing I enjoy more than the plight of the German Saver, who's obsession with "fiscal responsibility" has

I've said it before in another comment [1]: >There's nothing I enjoy more than the plight of the German Saver, who's obsession with "fiscal responsibility" has led to shitty austerity politics all across the EU (to be fair some other northern European countries like Netherlands also share the same view) and depressed growth for the poorer southern European countries. Germany has benefited most of all from the unfinished project of the EU. Without becoming a federal union like the US, but having a common currency, Germany's exports have been artificially cheaper and thus more competitive for over 20 years. >This is the natural outcome from the obsession with running fiscal surpluses. Now Germany is on the brink of recession and they're finally starting to make some noises about fiscal spending, but the politics will likely limit it to modest deficits than anything transformational. Enjoy the negative rates. The common currency (Eurozone) is deeply flawed and it only allows a rich country like Germany to win at the expense of poorer countries like Greece or Portugal. I find it insane that EU politics have never really dealt with this. I find it absolutely insane that after the 2011 sovereign debt crisis, Germany somehow managed to escape with keeping the Eurozone intact and having the poor countries impose austerity instead. There absolutely needs to be a political revolution in the Eurozone countries. Either complete the EU project by becoming a United States of Europe, and receive all the equalizing payments of healthcare, social security, and common military spending at the federal level, or get rid of the common currency. It's just hurting the poorest people in the Eurozone to keep the current arrangement. You might be under the impression "well Germany might be parasitic vis a vis other Eurozone countries, but at least it's good for working Germans", but you'd be wrong. The US today has a tight labor market which will eventually drive wages up if it persists long enough. Germany on the other hand has similar employment statistics but they did it with the Hartz reforms [2]. The unemployment stats look great because you can get a shitty low wage job [3]. Germany has kept the wages of workers depressed in order to be an export powerhouse. It's parasitic on other Eurozone neighbors but also on German workers. The people who have benefited the most from this arrangement are the German capital class. The shareholders and managerial class of German industry, whether it's giants like Volkswagen or even the small Mittelstand companies. German workers should have gotten wealthier over time which would have made Germany similar to the US in being driven by domestic consumption. That in turn would have made other EU members better off because those wealthier Germans would have been able to consume more of their goods and services. It's truly baffling how even German workers have put up with this. They're losing to the benefit of German capital. [1] https://news.ycombinator.com/item?id=20793982 https://news.ycombinator.com/item?id=20793982 [2] https://theconversation.com/questioning-the-claim-of-germanys-employment-miracle-106895 https://theconversation.com/questioning-the-claim-of-germany... [3] https://en.wikipedia.org/wiki/Marginal_employment#Germany https://en.wikipedia.org/wiki/Marginal_employment#Germany

jhoechtl 7y ago
Thank you for taking the time and contributing a well-explained and argued line of argumentation. Yes, Germany is wealth because others (the southern countries) have to compete because of the union currency. I always thought people of the southern countries (i know people from spain and greece) would rage more vigrously against that. Interestingly rage is only mildly and not a big thing. Maybe it's the selction bias bubble I am living in, I don't know.
gimmeThaBeet 7y ago
That's a pretty good overview of a good amount of things, Germany exports a lot of things, including their own problems imo. Germany has not held their own when it comes to demand growth. People seem to love Germany's fiscal discipline, but they don't realize that they pursue it to detrimental extent, if not for their own sake, than that of their neighbors. The schwarze null is kind of a cynical joke at this point. The problem with being like, a systemic export nation, is that your shifting burden to someone else. It sounds okay on paper, but what you see is that can hide a lot of your own issues. If you aren't getting better, your sustained welfare is vampiric, it's coming from your counterparts. And like you are saying, a personal pet peeve of mine is the outsized amount of private companies. Look at any global etfs, Germany is behind the UK, France, Switzerland (lot of multinationals tbf) and Canada (though not European). That's mainly the work large amounts of private companies. I'm sympathetic to the fact that its their companies, they don't have to sell them. But when it creates a fairly significant skew in sort of a capital picture, you can end up with stuff like this, where your capital class is even more walled off than elsewhere, since you can't build equity in a large portion of their economy even if you wanted to.
imtringued 7y ago
That only explains a small portion of the problems. The reality is that there are governments in the EU that are even more incompetent than Germany's and it hurts them more than some little currency problem. Austerity isn't solution but telling them to stop spending their money carelessly is a step in the right direction.
zozbot234 7y ago
Keeping the wages of workers down is good for workers' incomes if the alternative is high structural unemployment as seen in other Eurozone countries that are not so well managed. The fact that the supply of ready and willing labor has yet to be exhausted (which would ultimately boost wages and plausibly final consumption) is neither here nor there.

jhoechtl 7y ago

Thank you for taking the time and contributing a well-explained and argued line of argumentation. Yes, Germany is wealth because others (the southern countries) have to compete because of the union currency. I always thought people of the southern countries (i know people from spain and greece) would rage more vigrously against that. Interestingly rage is only mildly and not a big thing. Maybe it's the selction bias bubble I am living in, I don't know.

gimmeThaBeet 7y ago

That's a pretty good overview of a good amount of things, Germany exports a lot of things, including their own problems imo. Germany has not held their own when it comes to demand growth. People seem to love Germany's fiscal discipline, but they don't realize that they pursue it to detrimental extent, if not for their own sake, than that of their neighbors. The schwarze null is kind of a cynical joke at this point. The problem with being like, a systemic export nation, is that your shifting burden to someone else. It sounds okay on paper, but what you see is that can hide a lot of your own issues. If you aren't getting better, your sustained welfare is vampiric, it's coming from your counterparts. And like you are saying, a personal pet peeve of mine is the outsized amount of private companies. Look at any global etfs, Germany is behind the UK, France, Switzerland (lot of multinationals tbf) and Canada (though not European). That's mainly the work large amounts of private companies. I'm sympathetic to the fact that its their companies, they don't have to sell them. But when it creates a fairly significant skew in sort of a capital picture, you can end up with stuff like this, where your capital class is even more walled off than elsewhere, since you can't build equity in a large portion of their economy even if you wanted to.

imtringued 7y ago

That only explains a small portion of the problems. The reality is that there are governments in the EU that are even more incompetent than Germany's and it hurts them more than some little currency problem. Austerity isn't solution but telling them to stop spending their money carelessly is a step in the right direction.

zozbot234 7y ago

Keeping the wages of workers down is good for workers' incomes if the alternative is high structural unemployment as seen in other Eurozone countries that are not so well managed. The fact that the supply of ready and willing labor has yet to be exhausted (which would ultimately boost wages and plausibly final consumption) is neither here nor there.