Thursday, October 31, 2013

Hate To Say I Told You So

Well, that did not take long. The answers to the US criticism on the German export dependence are in and they are exactly the ones which could have been expected.

According to Spiegel, the "Bundesverband der Deutschen Industrie"said (my translation):

 The export strength of Germany is the result of innovative products, which are favored and bought in the whole world.
Well, DUH! The head of the of largest trade organisation Anton Börner (BGA) made a similar but even less relevant statement by proclaiming:
 We have a surplus because we are so good.
Tea partyCSU politician Ilse Aigner also said, well, something:
We are a strong export nation and proud of it.
So, as has happened before, the criticism wasn't even understood. Only SPD politician Hubertus Heil actually got that higher domestic demand can be achieved through higher wages.

Clearly there is enough room to at least get real wages back to 1992 levels. In the second quarter of 2013 the real wages were at the same level as 2012 and therefore still around 1.6 percent below the pay TWENTY YEARS ago. Since the productivity per worker has in the same time frame incrased by almost 19 percent there is actually more room to manouver.

It should also be made clear that the "solution" offered by German politicians, ISN'T. CDU politician Kampeter described it thusly:

True is, that we are urging on an European and global level that those countries, that lament about imbalances, do their part though higher competitiveness, so that the eurozone as a whole becomes more competitive and that the global economic development goes better.
 Real wages are not only been anemic in Germany, they have been stagnating in the US for more than 40 years now, while productivity has increased significantly. We cannot all become exporters through lowering the real wages as has happened in Germany around 2003. Beggar thy neughbour only functions for a few countries and if everybody attemps it then the world will not be better off but much, much worse. As can be seen in the "success" this "solution" is having in the periphery.

German workers are worse off than they should be. Any argument about German imbalances should be about that and that only. Talking about increasing demand only results in the above complete nonsense answers: Exporting GOOOD!

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