Hi you Ogre, I agree with some, but not with all.
GermanOgre wrote:Somehow Germany is weathering the current crisis pretty well. Of course long before the boom that started about 5 years ago they took "extreme" austerity measures under Schröder. Being in the Euro zones helps as well. The currency stays low even with huge trading surplus.
Those were courageous measures for a social democrat government, but I wouldn’t call them “extreme.” Schroeder has my respect for putting his job on the line to get the measures through which were necessary to get the country going again (of course with a CV like that you can always find employment in industry.)
> I truly believe Germany has a few long term competitive advantages
>that will help it stay competitive and being able to pay off debts.
Yes, but to stay competitive on the World markets is a struggle that has to be fought each day anew. But most of all, Germany has credibility (as a debtor, as a business partner, as a political partner). People believe that Germans will not renege on their promises.
> 1. A free university system;
It is still cheaper than elsewhere, but not necessarily free. Anyway, that is not so important. Many countries, especially poor countries, have too many academics. In my life, I have seen too many academics driving a taxi cab. The German secrete is a dual education system with an emphasis on practical on-the-job training that is available to almost the entire population. It is the great number of qualified workers, technicians and engineers not the small number of academics that makes the difference.
> 3. Patent per capita similar to the east coast, doesn't reach silicon valley levels,
>but nobody does. And do computer patents help many American jobs anymore?
That is not true. Germany has the highest number of patents per capita in Europe, followed by Finland and the other Nordic countries. In the UK, the numbers are actually falling. Most of the South of Europe has only a fraction of the inventions made in Germany. However, the US has about 50% more and Japan and Korea have 5 times more patents per capita than Germany. The total numbers for China are already considerable, but due to the large population, the per capita figures are still in the medium range. But the growth figures are considerable.
>5. Compact cities; making citizens have to engage with their neighbors.
That’s a funny one. Many neighbors never talk to each other in the cities.
>6. Spending only $625/capita on military spending vs $2150 in the US
I fully approve of this one. Military spending should be reduced.
>7. People who hold their politicians to very high standards
Yes, but they tend to overdo it with a culture of nagging and envy that seems to be spreading the richer people get.
>8. Governmental policies based on facts and science
Well, I don’t know about the science, I would rather call it pragmatism and distaste for abstract theories.
You forgot the “consensus” between employers and employees which has been one of the most important factors in post-war economic development. Unions are quite powerful and can get demands through, but mostly they accept that it is no good to kill the goose that lays the golden eggs. In other words, they generally avoid actions that can seriously cripple German industry.
Regarding low exchange rates for German exports, I disagree with what has been said. Prior to the Euro, Germany has had a trade surplus even though the value of the DM has continually increased. The Euro has actually made Germany poorer and the South of Europe richer. After each of the numerous DM revaluations it was speculated that German exports would be hit, it never happened. German exports have alwasy increased even despite a higher DM. The higher DM reduced the price of imports, lowered inflation and made Germans generally richer. And since German exports contain 40% foreign made components, a higher DM makes German exports more competitive by reducing component cost and energy costs from imported fossil fuels etc.
Germany has closed most low cost manufacturing many years ago. The trend is now towards “knowledge-based” industries, hence the importance of inventions. To compete on low cost products you need to reduce you living standards to below that of China. To maintain a high living standard, you have to produce high-value goods. High value goods are sold more on quality than on price. High value goods can be sold even with a highly valued currency. The more your currency is worth, the more you get for your money.
PS: The monetary policies that resulted in a strong and stable currency have also been important to the economic develpment in Germany. The idea was, that the Euro would do the same for Europe.