Monday, May 27, 2013

Krugman Wins (for Now) as German Chancellor Merkel's Government Switching to Stimulus instead of Austerity: Why Germany Dominates the European Economy

Cowboys on the Rhine?

Make sure you read that article to find out why the American employee system of master-servant is inferior to the German system of master-apprentice, at least in Germany.

I am not German, so I feel free to write this as my honest opinion.

Paul Krugman, who has been the loudest and most consistent economic voice of rank against German austerity must be dancing in the street today in view of the report by Sven Böll and Christian Reiermann in today's SPIEGEL ONLINE titled:

Austerity About-Face: German Government to Gamble on Stimulus

Apparently, German Chancellor Angela "Angie" Merkel's government has decided to open some of Germany's vast financial resources to help get Europe's stagnant economy back on track.

Mere money, in our opinion, however, may not be enough long-term to solve some of Europe's most vexing structural economic problems, as many of Europe's "traditionally-oriented" nations ("backward" may be a better term) must start considering modern economic entry into the 21st century, rather than living on the glories of nostalgic histories long past.

Why is the rest of Europe behind Germany economically?

Well, I live here, and I can give you a personal insight as to why it is so.

Consider the following true story:

A number of years ago I worked for a large German conglomerate that had invited a number of young whiz kids from the British Isles to work on liquid crystal displays in the early days of that technology.

A young Englishman from Poole of that group, with whom I became friends in the course of time, confided to me his astonishment at the great number of people who started work at 6:30 a.m. in the German company, an early working start to the day enabled by "flexitime".

"It is really quite astonishing," he said, "at the same hour when Germans are on their way to work here in the morning, in London not even the streetcars are running."

Similar true stories can be related about the United States. I have known German workers in the building professions who have gone to America on vacation and marveled at American inefficiency:

"what they do in 5 days, I do in 3".

Well that is what I have been told.
I can not vouch for its truth. It might be true in some industries.

People in America and elsewhere who envy the Germans their 6 weeks of paid vacation a year, should rather take a look at what the Germans do the REST of the time. I know of no harder-working, more efficient people, as a whole.

Germany's economic dominance in Europe is a product many things, but one of the main factors is simply that they are a very hard-working people, and they often do that work with near exemplary efficiency, and intelligence.

"Hype" does not run an economy. Performance does.

Germany is not the only example for that economic truth.

Look at China or South Korea.

The breathtaking advance forward of these nations should be no surprise to those who have looked more carefully at their peoples.

When I worked in New York City in my early legal days many years ago, I had my shirts and suits cleaned regularly at one of the near Chinese laundries in Manhattan. I brought the clothes early in the morning and picked them up late in the evening, ALWAYS on the same day. Everything was cleaned and ironed perfectly. An entire larger family worked in that Chinese business.

I marveled then at the tremendous work ethic that Chinese laundries demonstrated and wondered way back then what would happen if then Red China decided to join the capitalist world.

Well, today we know.

An America that for several hundred years has touted the benefits of hard work must now face the fact that most of the world's products, including their own, are often made overseas, in places like China, or in South Korea, etc. Others are working HARDER.

But of course, the American way of economic life has not thereby failed.

Quite the contrary, it has been successfully exported and other nations and peoples are IMPROVING upon it.

Just look at the battles between the company Apple in the USA and Samsung in South Korea. Frankly, in my opinion Apple has no sustainable competitive chance of survival in the long-term. They manufacture virtually nothing themselves and most of their product components are made in Asia. A company or nation can not live simply from patent-trolling.

The hard American lesson of hordes of lost industries overseas also applies to the countries of Europe envious of Germany's modern economic successes.

There is no alternative to growth, and, in the long term, there is no substitute for hard work, done efficiently, and intelligently.

The core idea of capitalism is competition. That competition is not only between individuals, and not only between companies. It is a competition also being waged between states, nations and systems.

Who is winning?
Well, what do YOU think?


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