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Germany lost its edge not because of missing subsidies but because there are too many of them. Germany is taxing companies and people too much (40-50%) so capi

Germany lost its edge not because of missing subsidies but because there are too many of them. Germany is taxing companies and people too much (40-50%) so capital is leaving the country. Actually, the same can be said about most of the western Europe.

kyriee 5y ago
The capital might be the problem.
mattmanser 5y ago
They tried cutting taxes like crazy since Reagan and it's been a complete and utter bust.
- rsj_hn 5y ago
  This is when people get all confused by the difference between "necessary" and "sufficient". You need a lot more than lower taxes to make a business-friendly environment, and in some sense these are fungible. Businesses can pay more taxes in order to get other advantages, like more flexible labor policy, more skilled workers, or more stable regulations. People don't realize that stability of regulations is much more important than the specific content. You don't want some demagogue adding huge costs to you because you don't payoff some politically connected group, and the moment any business gets successful, lots of politically connected groups appear at their door demanding payoffs. The specific problem with chip manufacturing is that this is a dirty business requiring lots of chemicals and lots of water. There is simply no way anything like that can happen in Western Europe now. You will have millions of sanctimonious kids with nothing more meaningful in their lives than marching with signs about saving the ground, etc, and then angry politicians will get on soapboxes and denounce the greedy-ground-polluters in order to win elections, and so Europe will continue to buy their chips from factories located in East Asia or America, where there are jurisdictions in which people have other things to give their life meaning. Manufacturing has been pouring into East Asia not because asians are better at manufacturing, but because they value it enough to make systematic efforts to attract and promote it. It's about values and worldviews much more than a simple thing like tax rates (although East Asia has reasonable business tax rates, they have phenomenally cheap credit for manufacturers, good infrastructure, and very stable regulations.)
  - obscoth 5y ago
    Yeah, why aren’t we destroying the environment in Europe more? This is a great question. Kids these days have it too easy. They barely get any lead in their water.
    - rsj_hn 5y ago
      lol, "destroying the environment". News flash: shifting the environmental costs to China is not "saving the environment", it is just outsourcing the environmental damage to somewhere else, where more likely than not worse damage will occur than if the factory was located in Europe. If there was a general call to not use chips, it would be a different matter. But this is about personal sanctimony, not environmental impact. Moreover the environment is not some fragile thing that is "destroyed" by a chip plant. So here, too, there is a lack of understanding about what is happening so that people can make claims of personal righteousness (and the "environment" is just a place-holder that can and is swapped out for other concerns that yield more self-righteousness credits per unit effort at the drop of a hat).
      - obscoth 5y ago
        Obviously I don’t want industrial chemicals in China’s groundwater, either. You aren’t actually interested in good faith discussion, but you do seem to enjoy being angry, so keep doing that I guess.
    - totalZero 5y ago
      We have the technology to deal with those byproducts. It just costs money and takes energy.
      - nobodyandproud 5y ago
        Then one answer is to impose tariffs on end services and products, on nations that don’t meet the same environmental concerns. The tariffs should match the cost of said overhead.
chmod775 5y ago
With capital leaving the country you clearly can't be speaking of Germany's current account balance, something like low foreign investment or any other metric I can think of. What are you thinking of?

kyriee 5y ago

The capital might be the problem.

mattmanser 5y ago

They tried cutting taxes like crazy since Reagan and it's been a complete and utter bust.

rsj_hn 5y ago
This is when people get all confused by the difference between "necessary" and "sufficient". You need a lot more than lower taxes to make a business-friendly environment, and in some sense these are fungible. Businesses can pay more taxes in order to get other advantages, like more flexible labor policy, more skilled workers, or more stable regulations. People don't realize that stability of regulations is much more important than the specific content. You don't want some demagogue adding huge costs to you because you don't payoff some politically connected group, and the moment any business gets successful, lots of politically connected groups appear at their door demanding payoffs. The specific problem with chip manufacturing is that this is a dirty business requiring lots of chemicals and lots of water. There is simply no way anything like that can happen in Western Europe now. You will have millions of sanctimonious kids with nothing more meaningful in their lives than marching with signs about saving the ground, etc, and then angry politicians will get on soapboxes and denounce the greedy-ground-polluters in order to win elections, and so Europe will continue to buy their chips from factories located in East Asia or America, where there are jurisdictions in which people have other things to give their life meaning. Manufacturing has been pouring into East Asia not because asians are better at manufacturing, but because they value it enough to make systematic efforts to attract and promote it. It's about values and worldviews much more than a simple thing like tax rates (although East Asia has reasonable business tax rates, they have phenomenally cheap credit for manufacturers, good infrastructure, and very stable regulations.)
- obscoth 5y ago
  Yeah, why aren’t we destroying the environment in Europe more? This is a great question. Kids these days have it too easy. They barely get any lead in their water.
  - rsj_hn 5y ago
    lol, "destroying the environment". News flash: shifting the environmental costs to China is not "saving the environment", it is just outsourcing the environmental damage to somewhere else, where more likely than not worse damage will occur than if the factory was located in Europe. If there was a general call to not use chips, it would be a different matter. But this is about personal sanctimony, not environmental impact. Moreover the environment is not some fragile thing that is "destroyed" by a chip plant. So here, too, there is a lack of understanding about what is happening so that people can make claims of personal righteousness (and the "environment" is just a place-holder that can and is swapped out for other concerns that yield more self-righteousness credits per unit effort at the drop of a hat).
    - obscoth 5y ago
      Obviously I don’t want industrial chemicals in China’s groundwater, either. You aren’t actually interested in good faith discussion, but you do seem to enjoy being angry, so keep doing that I guess.
  - totalZero 5y ago
    We have the technology to deal with those byproducts. It just costs money and takes energy.
    - nobodyandproud 5y ago
      Then one answer is to impose tariffs on end services and products, on nations that don’t meet the same environmental concerns. The tariffs should match the cost of said overhead.

chmod775 5y ago

With capital leaving the country you clearly can't be speaking of Germany's current account balance, something like low foreign investment or any other metric I can think of. What are you thinking of?