[Newsbot]

Title: The maintenance of hope: Germany's secret to recovery
Category: Political
Posted By: andyt
Date: 2010-08-02 08:32:51
Canadian

[andyt]

$1:

Yet it seems to have worked, to an amazing degree: Despite suffering an economic contraction of 5 per cent last year – during which unemployment doubled in the United States to 10.1 per cent and approached 20 per cent in Spain and Greece – Germany actually saw its unemployment rate fall to 7 per cent, its lowest point in 17 years.

The system has driven up government debt sharply and means the German recovery won’t have the commensurate boost in consumer spending other countries will see. But German officials believe kurzarbeit has spared their country a far larger catastrophe and has allowed it to experience a boom in the midst of Europe’s slump.

The logic works like this: If Mr. Schieve had been laid off, he and his wife would have been forced out of their three-bedroom rented house. The landlord, facing the depressed housing market of eastern Germany, would likely have defaulted on the mortgage. Meanwhile, the shops and services of Ludwigsfelde, a one-industry town, would have failed due to the layoffs and created their own defaults. Mr. Schieve and his fellow laid-off workers would have gone on welfare, costing the state large sums of money without generating any tax revenue.

The mortgage defaults generated by Mr. Schieve and a million people like him would have driven several banks into insolvency, forcing much more expensive state bailouts. And their mounting social-assistance bill and vanishing income-tax payments would have created a chronic government deficit.

This domino collapse is precisely what has happened in many other European countries, including Greece, Ireland, and Spain. It’s also afflicted the United States. Germany’s economy is hardly perfect, with record levels of debt, but it appears to have avoided the self-destructive vortex of unemployment, housing and banking shocks that have decimated other economies.

$1:

Inside the offices of the Daimler factory, though, another benefit of the kurzarbeit program becomes apparent: It prevented the loss of industrial knowledge that has hurt countries like Britain.

“For automobile producers, it’s very important that you have experienced and highly trained people – especially for Mercedes. If you lay them off, you have lost them forever,” said Bertram Caspari, head of the factory’s personnel department, who was told in 2008 that production would drop by half and that at least a third of the work force would no longer be necessary.

$1:

It shows what Europeans have learned in their struggle with economic collapse: To keep a recession from becoming a catastrophe, the solution is not just in the bank headquarters but on the office floor and the kitchen table.

Which is where I think Obama blew it - he was more focused on just bailing out Wall St. Meanwhile we seem to have slid thru the whole thing 'cause of Paul Martin. Much of the bailout money has come to late to be of use for stimulus, much of it was spend on recreation facilities instead of repairing much needed infrastructure. But because our banks and debt situation were in such good shape, even with an ineffective stimulus we came out alright. Until the US collapses, anyway.

[BartSimpson]

Bailing out Wall Street is far more important that helping regular people because Wall Street people donate to the DNC & the RNC.

[andyt]

BartSimpson BartSimpson:

Bailing out Wall Street is far more important that helping regular people because Wall Street people donate to the DNC & the RNC.

Yep. Watched Capitalism, A Love Story the other day. Of course it's Moore's one sided take on the situation, but I doubt if he makes up facts. He showed how Goldman Sachs people hold/held most of the finance posts in all administrations since Clinto, and they are the biggest contributor to Obama.

The most shocking part, I thought, was the leaked e-mails by Citigroup. It called the US a plutocracy, said that 1% of the population holds 95% of the wealth. It said the only threat to this wonderful system was if people woke up and voted for their own interests - ie democracy rather than plutocracy. That's why the Teabaggers don't seem to be helping any - they're just focused on no taxes, buy all that less regulation is good for the country bullshit. Less regulation is what allows Wall St to loot the pockets of the average person. But everybody in the US is convinced that they're going to be a 1 percenter someday, so they keep voting to cut their own throats.

[Benn]

andyt andyt:

But everybody in the US is convinced that they're going to be a 1 percenter someday, so they keep voting to cut their own throats.

Its the American dream baby! If you think like a defeatist and say you'll never be in that 1% then you never will be. Positive thinking and hope rah rah rah.

Europeans are more realists, most of all Germans, so they are not under this allusion and for the most part they are more content with their station in life. Giving the bail out to the workers, wow, treasonous concept on this side of the pond.

[martin14]

You boys might want to wait a bit before celebrating the German victory.

Those celebrations are always premature.



Seriously, the bit that gets glossed over very much is the amount of money
that these programs cost in terms of debt, and doesnt include servicing that debt.

They have the same program in Italy..cassa integratzione, and they have had it for a while now. It looks ok on the surface, jobs are saved, looks like people have work, and yes even some hope that the people will continue to have a job.

However, the program costs a bundle.. If you like to cry how much the past CDN / US governments liked to spend money.. believe me, you have no idea how they can
blow it over here.

So the Germans will obviously miss their EU deficit targets; of course, since its Germany nothing will happen, but watch what happens if a little country tries that.

Anyone like to remember the nice days when we were paying 75cents of every
tax dollar to pay the interest on our debt ?
Anyone like to remember how good the economy was doing back then ?


And the writer is incorrect about the other countries:

Greece broke down as a result of being unable to finance bond repayments
from 10 or 15 years ago.
Had nothing to do with jobs.
And they are without doubt the laziest and most corrupt motherfuckers in Europe.

Ireland was a tech bubble that went with the US bubble.
No jobs to save.

A huge part of Spain's economy was construction for foreign investment.
Spain was unable to try such a program, because when the construction stopped,
all the jobs that went with it were gone.. no half jobs to try saving.

[BartSimpson]

andyt andyt:

It called the US a plutocracy, said that 1% of the population holds 95% of the wealth.

Wiki (I cite this specifically for their liberal-left bias) says otherwise.

http://en.wikipedia.org/wiki/Distribution_of_wealth

$1:

In the United States at the end of 2001, 10% of the population owned 71% of the wealth and the top 1% owned 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth.

This is frankly far different from the 1800's when Andrew Carnegie alone controlled 5% of America's wealth. It's simply not possible anymore for someone to be so rich.

[andyt]

Yes, you're right. As Saunders says, Germany is in trouble if there is no global recovery this year, ie if we dip again. But so is the US, and what they did there mostly is protect the fat cats. If you're gonna go down, better to do it in an egalitarian fashion.

[BartSimpson]

andyt andyt:

Yes, you're right. As Saunders says, Germany is in trouble if there is no global recovery this year, ie if we dip again. But so is the US, and what they did there mostly is protect the fat cats. If you're gonna go down, better to do it in an egalitarian fashion.

Congress is expected to get just that message in November.

[andyt]

BartSimpson BartSimpson:

andyt andyt:

Yes, you're right. As Saunders says, Germany is in trouble if there is no global recovery this year, ie if we dip again. But so is the US, and what they did there mostly is protect the fat cats. If you're gonna go down, better to do it in an egalitarian fashion.

Congress is expected to get just that message in November.

That's it, voting for teabagger Republicon candidates is voting for egalitarianism.