Friday, November 26, 2010
The German Job Machine
As Ireland spirals into financial disaster, Dubai struggles with a $100 billion in debt, and the United States economy sluggishly drags itself back to life with the albatross of a 9.5% unemployment rate weighing on it, the German state has sprung to life with factories churning out products and the chancellor talking about the potential for full employment.
How has this German miracle happened, amidst a world economy in disarray? The reality is an effective blend of public and private investment, committed to building the whole economy. Many of the more astute pundits - such as David Brooks - have been pointing to the German model for years on everything from industrial policy to health care reform. And with good reason. The German government and people have made rational, at times tough, decisions concerning public investment and social welfare programs while trying to jump start the economy. And it appears to be working.
Of course, the most significant benefit of the Germans has been their ability to handle health care. Some American critics might like to credit the German turnaround with the Merkle government making painful cuts to "welfare." Yet the factor remains that German companies and German workers are not burdened with health care and insurance costs as a result of the most effective blend of national health care.
Good for the Germans. Any chance we'll ever learn?