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?


Jordan Crawford said...

From my never-even-been-to-Germany perspective, Germany sounds rather awesome. I am in German 1, and, as in any language class at Creek, we study the culture of the country that speaks our language; in this case Germany. Germany has a strong economy, one of the most interesting stories in the world, and has Mercedes school buses! That's not to mention the hundreds of other amazing advantages awarded to all Germans. There is but one problem: It's really hard to immigrate to Germany.

Anonymous said...

I was going to write something, but Marshall did it for me. The miracle has happened through export and low wages. Could it be ending?

mmazenko said...

Interesting article ... though I don't think it's all about low wages. And, of course, wages can be lower if there is a broader safety net. It's often about the health care.