USA! USA! USA? Deutschland, Deutschland über alles.
January 22, 2012 11:28 AM Subscribe
Germany has the economic strengths America once boasted. 'Germany with its manufacturing base and export prowess is the U.S. of yesteryear, an economic power unlike any of its European neighbors. As the world's fourth-largest economy, it has thrived on principles America seems to have lost.' 'Germany's economy looks like that of the U.S. a generation ago. In 1975, manufacturing accounted for about 20% of the United States' economic output, or gross domestic product, about the same as in Germany today. Since then, U.S. manufacturing's share of GDP has slid to about 12%.'
'In 1975, the U.S. budget deficit was a manageable 1% of the economy, about the same as Germany's now. Last year, the U.S. deficit was about 10%.
American families in the 1970s and early '80s typically saved about 10% of their take-home pay, about the same as in Germany today. The U.S. savings rate these days is in the low single digits.'
'The nation's jobless rate fell last month to a two-decade low of 6.8%, considerably lower than in much of Europe and the U.S.
And though its industrial production is starting to soften, Germany so far has maintained an impressive trade surplus with the rest of the world, including China.'
Many 'attribute part of the lower unemployment rate to the German work ethic. Yet Germans, on average, work far fewer hours a year than Americans, thanks partly to five or six weeks of vacation.'
'Still, Germany has its share of challenges.
Income inequality, while less pronounced than in the U.S., is rising. Most workers, have seen little or no real wage gains in recent years. And the nation's population is declining.
And now, with Europe on the ropes, Germany faces both a declining market for its exports and the prospect of having to cough up tens of billions of dollars more to help bail out profligate Eurozone neighbors.'
'In 1975, the U.S. budget deficit was a manageable 1% of the economy, about the same as Germany's now. Last year, the U.S. deficit was about 10%.
American families in the 1970s and early '80s typically saved about 10% of their take-home pay, about the same as in Germany today. The U.S. savings rate these days is in the low single digits.'
'The nation's jobless rate fell last month to a two-decade low of 6.8%, considerably lower than in much of Europe and the U.S.
And though its industrial production is starting to soften, Germany so far has maintained an impressive trade surplus with the rest of the world, including China.'
Many 'attribute part of the lower unemployment rate to the German work ethic. Yet Germans, on average, work far fewer hours a year than Americans, thanks partly to five or six weeks of vacation.'
'Still, Germany has its share of challenges.
Income inequality, while less pronounced than in the U.S., is rising. Most workers, have seen little or no real wage gains in recent years. And the nation's population is declining.
And now, with Europe on the ropes, Germany faces both a declining market for its exports and the prospect of having to cough up tens of billions of dollars more to help bail out profligate Eurozone neighbors.'
This makes a good companion piece: How U.S. Lost Out on iPhone Work (NYTimes, Jan 21, 2012)
posted by Auden at 11:36 AM on January 22, 2012
posted by Auden at 11:36 AM on January 22, 2012
“formerly rich world” (as a Brazilian minister described Europe and the US, during a recent seminar at IDS.
This phrase is being tweeted and retweeted but I can't find any further citations of this having been said in any other form of online media.
posted by infini at 11:44 AM on January 22, 2012
This phrase is being tweeted and retweeted but I can't find any further citations of this having been said in any other form of online media.
posted by infini at 11:44 AM on January 22, 2012
When I hear from financial libertarians about how we need to cut taxes, repeal regulations, and end entitlements and hope of future entitlements in education and healthcare, in order to have economic growth and a booming economy, it's good to just point to Germany.
posted by Miko at 11:44 AM on January 22, 2012 [9 favorites]
posted by Miko at 11:44 AM on January 22, 2012 [9 favorites]
Not a single mention of minimum wage, or it's general absence in Germany. Seems like the obvious answer to both rising inequality and low unemployment.
Because that onesie that fits a baby is sure to fit that morbidly obese woman because the fabric is obviously stretchy. You can't compare a strong union, strong welfare based system with a weak union, weak welfare based system like that.
Stripping minimum wage protections from US workers would effectively put a bullet in the back of the head of the underclass.
posted by Talez at 11:49 AM on January 22, 2012 [37 favorites]
Because that onesie that fits a baby is sure to fit that morbidly obese woman because the fabric is obviously stretchy. You can't compare a strong union, strong welfare based system with a weak union, weak welfare based system like that.
Stripping minimum wage protections from US workers would effectively put a bullet in the back of the head of the underclass.
posted by Talez at 11:49 AM on January 22, 2012 [37 favorites]
Institutionalized vocational training in the educational system for engineering and manufacturing, value of skilled labor in manufacturing, and a national identity for quality manufacturing which justifies its costs over that of unskilled laborers in developing countries. Yeah, Germany kind of knows what it's doing there. Really, I think it's that last part - the reputation for building a product worth the cost of its construction - which will be the hardest for the U.S. to get back, but I might just be cynical.
posted by Navelgazer at 11:55 AM on January 22, 2012 [4 favorites]
posted by Navelgazer at 11:55 AM on January 22, 2012 [4 favorites]
Not a single mention of minimum wage, or it's general absence in Germany. Seems like the obvious answer to both rising inequality and low unemployment.
The implication doesn't follow. It's like the paragraphs in the article devoted to the lack of credit cards in Germany. It's more likely just a German quirk that doesn't say anything about economic policy. (I believe Germany was one of few countries that lobbied for the 500 Euro note when the Euro was introduced because normal, non-criminal, people actually have use for them, like paying cash at IKEA.)
posted by hoyland at 11:56 AM on January 22, 2012
The implication doesn't follow. It's like the paragraphs in the article devoted to the lack of credit cards in Germany. It's more likely just a German quirk that doesn't say anything about economic policy. (I believe Germany was one of few countries that lobbied for the 500 Euro note when the Euro was introduced because normal, non-criminal, people actually have use for them, like paying cash at IKEA.)
posted by hoyland at 11:56 AM on January 22, 2012
One big difference to wage earners in most of Europe vs US is the lack of tipping culture - primarily because even waitrons tend to be paid regular wages (if they are fulltime) and have the social state benefits, ergo the lack of 'minimum wage' requirement (in lieu of many other requirements that fulltime employees are granted by the law)
posted by infini at 11:56 AM on January 22, 2012 [4 favorites]
posted by infini at 11:56 AM on January 22, 2012 [4 favorites]
Not a single mention of minimum wage, or it's general absence in Germany. Seems like the obvious answer to both rising inequality and low unemployment.
I thought low unemployment was the answer.
posted by biffa at 11:57 AM on January 22, 2012 [3 favorites]
I thought low unemployment was the answer.
posted by biffa at 11:57 AM on January 22, 2012 [3 favorites]
We're too smart by half for doing it Germany's way. Why go to all that trouble? There's much easier ways to make money.
Why employ people? We can just make our customers unpaid employees. We can fire the bank tellers, make the customer become their own unpaid teller at a machine. We can save the tellers' wages and benefits and, get this, we can charge the customers fees on top of all that. Hey, and we can get rid of cashiers and make our customers check themselves out and bag their own shit.
We don't have to actually make stuff. We can shuffle paper and just charge fees for every fucking thing under the sun. Easy.
Just remember:
cooperation=socialism
unions=socialism
universal health care=socialism
unemployment benefits=socialism
having any issueswith the way we wanna do it=socialism
And socialism is bad.
posted by Benny Andajetz at 12:08 PM on January 22, 2012 [37 favorites]
Why employ people? We can just make our customers unpaid employees. We can fire the bank tellers, make the customer become their own unpaid teller at a machine. We can save the tellers' wages and benefits and, get this, we can charge the customers fees on top of all that. Hey, and we can get rid of cashiers and make our customers check themselves out and bag their own shit.
We don't have to actually make stuff. We can shuffle paper and just charge fees for every fucking thing under the sun. Easy.
Just remember:
cooperation=socialism
unions=socialism
universal health care=socialism
unemployment benefits=socialism
having any issueswith the way we wanna do it=socialism
And socialism is bad.
posted by Benny Andajetz at 12:08 PM on January 22, 2012 [37 favorites]
The US has many things that Germany does not have
* innovative and competitive financial markets
* High Tech Industry, especially Biotech, Internet (Amazon, ebay, Google) and semiconductors are be much bigger in the US
* Entertainment (music, film) industry (Yes, I know that you have seen Lola runs)
"manufacturing accounted for about 20% of the United States"
The US has lost its manufacturing base due to different reasons. Most of the things that are lost were commodities. Cell phone, entertainment electronics, textiles etc. Germany has not kept this either. But Germany has a few things that are different, compared to the US:
1. An Engineering degree is prestigious in Germany. There is the saying: If you tell somebody that you are an engineer, a German will show you his daughter, an American will show you his broken washing machine...
2. B2B with highly customized features. Printing machines (Heidelberger Druck), Pharmaceutical fillings (Optima), car suppliers, chemical suppliers (Heraeus, Evonik). Many of these companies are world leaders in their niche, yet you have never heard of them.
So while this sound impressive but it isn't. Most of the stuff is low margin business compared to US companies like Apple, IBM, Google etc. There has been a terrible stagnation or even decline in salaries. If your parents don't work for a big company then your chances to get a decent job are incredibly low. The salaries are a joke. I get offered salaries here in Germany as an engineer with a PhD that I earned many years ago when I was working as a pupil during school vacations.
Germany so far has maintained an impressive trade surplus with the rest of the world, including China.
Germany takes proud in being the "World Champion of Exports". And actually it never has been the "World Champion of Exports" it was the "World Champion in Exports of GOODS" (excluding services) and has now fallen in 2nd place after China. Germany exports both, goods AND capital. Basically it is exporting itself to death and taking proud in it. They export goods, BMWs and technology and what do they get in exchange? Lehman Certificates and Greek Government debt. This system is not sustainable. They just don't know it yet.
posted by yoyo_nyc at 12:22 PM on January 22, 2012 [16 favorites]
* innovative and competitive financial markets
* High Tech Industry, especially Biotech, Internet (Amazon, ebay, Google) and semiconductors are be much bigger in the US
* Entertainment (music, film) industry (Yes, I know that you have seen Lola runs)
"manufacturing accounted for about 20% of the United States"
The US has lost its manufacturing base due to different reasons. Most of the things that are lost were commodities. Cell phone, entertainment electronics, textiles etc. Germany has not kept this either. But Germany has a few things that are different, compared to the US:
1. An Engineering degree is prestigious in Germany. There is the saying: If you tell somebody that you are an engineer, a German will show you his daughter, an American will show you his broken washing machine...
2. B2B with highly customized features. Printing machines (Heidelberger Druck), Pharmaceutical fillings (Optima), car suppliers, chemical suppliers (Heraeus, Evonik). Many of these companies are world leaders in their niche, yet you have never heard of them.
So while this sound impressive but it isn't. Most of the stuff is low margin business compared to US companies like Apple, IBM, Google etc. There has been a terrible stagnation or even decline in salaries. If your parents don't work for a big company then your chances to get a decent job are incredibly low. The salaries are a joke. I get offered salaries here in Germany as an engineer with a PhD that I earned many years ago when I was working as a pupil during school vacations.
Germany so far has maintained an impressive trade surplus with the rest of the world, including China.
Germany takes proud in being the "World Champion of Exports". And actually it never has been the "World Champion of Exports" it was the "World Champion in Exports of GOODS" (excluding services) and has now fallen in 2nd place after China. Germany exports both, goods AND capital. Basically it is exporting itself to death and taking proud in it. They export goods, BMWs and technology and what do they get in exchange? Lehman Certificates and Greek Government debt. This system is not sustainable. They just don't know it yet.
posted by yoyo_nyc at 12:22 PM on January 22, 2012 [16 favorites]
I think yoyo_nyc is right, doubly so if they kill the Euro. Also, the manufacturing base of today is the rustbelt of tomorrow.
The percentage of US GDP that is manufacturing went down because the other stuff went up. Manufacturing in the US is still strong, we are just more diversified now.
posted by gjc at 12:31 PM on January 22, 2012
The percentage of US GDP that is manufacturing went down because the other stuff went up. Manufacturing in the US is still strong, we are just more diversified now.
posted by gjc at 12:31 PM on January 22, 2012
The US has many things that Germany does not have
* innovative and competitive financial markets
Thank you for giving a German perspective, but I choked a bit on that one.
posted by benito.strauss at 12:38 PM on January 22, 2012 [7 favorites]
* innovative and competitive financial markets
Thank you for giving a German perspective, but I choked a bit on that one.
posted by benito.strauss at 12:38 PM on January 22, 2012 [7 favorites]
* Innovative and competitive ways to make others pay for their wrong bets, almost destroying a country in the process
posted by elpapacito at 12:44 PM on January 22, 2012 [11 favorites]
Most of the stuff is low margin business compared to US companies like Apple, IBM, Google etc.
It's low margin because most of the income goes to paying the workforce, rather than into profits.
And what makes Apple or Google "US companies"? They hardly employ anybody in the US, pay very little taxes there, and their shareholders are from all over the globe. Who gets the profits from their high margins? The shareholders, including quite a few Germans...
In a world with globalized capital, concentrating on high-margin businesses is not necessarily the smartest move for a nation.
This said, I agree that not everything is perfect in the German model. It's worthwhile to remember that less than one decade ago, it was widely derided. It's also, after the Hartz reforms, a lot harsher with the poor and weak than it once was. But there is an awful lot to learn from Germany.
posted by Skeptic at 12:46 PM on January 22, 2012 [8 favorites]
It's low margin because most of the income goes to paying the workforce, rather than into profits.
And what makes Apple or Google "US companies"? They hardly employ anybody in the US, pay very little taxes there, and their shareholders are from all over the globe. Who gets the profits from their high margins? The shareholders, including quite a few Germans...
In a world with globalized capital, concentrating on high-margin businesses is not necessarily the smartest move for a nation.
This said, I agree that not everything is perfect in the German model. It's worthwhile to remember that less than one decade ago, it was widely derided. It's also, after the Hartz reforms, a lot harsher with the poor and weak than it once was. But there is an awful lot to learn from Germany.
posted by Skeptic at 12:46 PM on January 22, 2012 [8 favorites]
Funny how good your economy can get when you're not paying all that much in national defense. What's that, Japan? You're good, too? You're goddamn welcome.
posted by Cool Papa Bell at 12:48 PM on January 22, 2012 [5 favorites]
posted by Cool Papa Bell at 12:48 PM on January 22, 2012 [5 favorites]
"innovative and competitive financial markets"
Well, try to get some VC in Germany. VC in Germany is run by the scumbags of the earth. The access to capital in the US was just much better. This build the silicon valley. Germany has no silicon valley and it never will have one.
posted by yoyo_nyc at 12:50 PM on January 22, 2012 [2 favorites]
Well, try to get some VC in Germany. VC in Germany is run by the scumbags of the earth. The access to capital in the US was just much better. This build the silicon valley. Germany has no silicon valley and it never will have one.
posted by yoyo_nyc at 12:50 PM on January 22, 2012 [2 favorites]
The percentage of US GDP that is manufacturing went down because the other stuff went up. Manufacturing in the US is still strong, we are just more diversified now.
There's some truth to that, but it's not the whole story. We've lost plenty of lucrative, job- producing manufacturing.
We don't make furniture, anymore. We don't make textiles or apparel anymore. We don't make shoes anymore. We don't make steel anymore. We don't make tools (and more worrisome, machine tools) anymore. Appliance manufacturing is all but dead. Etc. Etc. Etc.
These are not dead industries. They are thriving and we still heavily need those products.
It's wonderful to appreciate and worship efficiency. But if efficiency is all that counts, if employment is not a heavily-weighted component, and we refuse to do anything constructive to remedy unemployment, how can things end well?
posted by Benny Andajetz at 12:51 PM on January 22, 2012 [6 favorites]
There's some truth to that, but it's not the whole story. We've lost plenty of lucrative, job- producing manufacturing.
We don't make furniture, anymore. We don't make textiles or apparel anymore. We don't make shoes anymore. We don't make steel anymore. We don't make tools (and more worrisome, machine tools) anymore. Appliance manufacturing is all but dead. Etc. Etc. Etc.
These are not dead industries. They are thriving and we still heavily need those products.
It's wonderful to appreciate and worship efficiency. But if efficiency is all that counts, if employment is not a heavily-weighted component, and we refuse to do anything constructive to remedy unemployment, how can things end well?
posted by Benny Andajetz at 12:51 PM on January 22, 2012 [6 favorites]
Funny how good your economy can get when you're not paying all that much in national defense. What's that, Japan? You're good, too? You're goddamn welcome.
Christ, I hate this sort of attitude.
In absolute terms (ie, total budget), Japan has something like the 3rd or 4th-largest defense budget in the world.
What's that? The US can't live without its bases in Japan? You're goddamn welcome, America.
Just because your economy is based on spending more money on the military than the rest of the world combined does not give you the right to complain about how other countries are forced to conform to your imperialistic hegemony.
posted by KokuRyu at 12:52 PM on January 22, 2012 [35 favorites]
Christ, I hate this sort of attitude.
In absolute terms (ie, total budget), Japan has something like the 3rd or 4th-largest defense budget in the world.
What's that? The US can't live without its bases in Japan? You're goddamn welcome, America.
Just because your economy is based on spending more money on the military than the rest of the world combined does not give you the right to complain about how other countries are forced to conform to your imperialistic hegemony.
posted by KokuRyu at 12:52 PM on January 22, 2012 [35 favorites]
universal health care=socialism
Wikipedia on Otto von Bismarck:
"Germany had a tradition of welfare programs in Prussia and Saxony that began as early as the 1840s. In the 1880s his social insurance programs were the first in the world and became the model for other countries and the basis of the modern welfare state.[37] Bismarck introduced old age pensions, accident insurance, medical care and unemployment insurance. He won conservative support by promising to undercut the appeal of Socialists—the Socialists always voted against his proposals, fearing they would reduce the grievances of the industrial workers. His paternalistic programs won the support of German industry because its goals were to win the support of the working classes for the Empire and reduce the outflow of immigrants to America, where wages were higher but welfare did not exist."
posted by iviken at 12:54 PM on January 22, 2012 [3 favorites]
Wikipedia on Otto von Bismarck:
"Germany had a tradition of welfare programs in Prussia and Saxony that began as early as the 1840s. In the 1880s his social insurance programs were the first in the world and became the model for other countries and the basis of the modern welfare state.[37] Bismarck introduced old age pensions, accident insurance, medical care and unemployment insurance. He won conservative support by promising to undercut the appeal of Socialists—the Socialists always voted against his proposals, fearing they would reduce the grievances of the industrial workers. His paternalistic programs won the support of German industry because its goals were to win the support of the working classes for the Empire and reduce the outflow of immigrants to America, where wages were higher but welfare did not exist."
posted by iviken at 12:54 PM on January 22, 2012 [3 favorites]
I don't think you can count IT as a purely US-centric strength when the 3rd largest software company in the world (behind MSFT and Oracle) is SAP AG, headquartered in Heidelberg.
posted by PenDevil at 12:55 PM on January 22, 2012 [4 favorites]
posted by PenDevil at 12:55 PM on January 22, 2012 [4 favorites]
I might add that Japan (not sure about Germany) actually pays the United States for the privilege of hosting American troops on its soil. So it ain't all freeloading. Besides, the American presence, as I implied in my previous comment, suits American interests, as well as Japanese interests. It's a partnership.
posted by KokuRyu at 1:00 PM on January 22, 2012
posted by KokuRyu at 1:00 PM on January 22, 2012
One thing Germany has that the USA is missing to some extent is the Mittelstand, a fair number of high-tech niche companies that are privately held, quite conservative and exceedingly capable. It's not to say there are none of these outfits in the US, it's simply that almost any recent enterprise in the US has an "exit strategy" as part of its make-up.
posted by jet_silver at 1:10 PM on January 22, 2012 [1 favorite]
posted by jet_silver at 1:10 PM on January 22, 2012 [1 favorite]
I wonder sometimes how easy it is to truly and fairly compare a country with less than 1/3 of the population packed into a space the size of the state of New Mexico with the US. There are things which can be accomplished much more easily with that kind of population in such a space which simply are impossible with a place as vast as the contiguous US.
posted by hippybear at 1:17 PM on January 22, 2012 [1 favorite]
posted by hippybear at 1:17 PM on January 22, 2012 [1 favorite]
it's simply that almost any recent enterprise in the US has an "exit strategy" as part of its make-up.
This is also a problem that Canada's knowledge economy/tech sector has as well. People don't want to build world-beating companies. Instead, the cultural wisdom states that you have to sell after you reach a certain size. This is a problem particularly in Vancouver, which really has a lot of the same characteristics of the Wizard in the Wizard of Oz.
posted by KokuRyu at 1:17 PM on January 22, 2012
This is also a problem that Canada's knowledge economy/tech sector has as well. People don't want to build world-beating companies. Instead, the cultural wisdom states that you have to sell after you reach a certain size. This is a problem particularly in Vancouver, which really has a lot of the same characteristics of the Wizard in the Wizard of Oz.
posted by KokuRyu at 1:17 PM on January 22, 2012
too bad it's achieving greatness by sucking the wealth out of the rest of Europe, and now using it's power in the EU to push disastrous economic policies so that it's "investments" in the sovereign, euro-denominated bonds of those same countries won't go bad.
A bit from Krugman
The fact that these countries now need to pay Germany back, using Euros would be like if the U.S national debt was denominated in Yuan or something.
They want the countries to engage in the same kind of austerity that they did, but if they do that there will be no one to trade with (other then outside of the euro-zone, i.e. with the U.S or Asia).
Since it's unlikely that will happen, Krugman (as far as I can tell from reading his blog) actually thinks the Euro is doomed, because people will associate it with tough austerity measures crammed down their throats in an un-democratic way, and vote against it when they get a chance.
Obviously we'll have to see what happens.
---
posted by delmoi at 1:22 PM on January 22, 2012 [6 favorites]
A bit from Krugman
The Times has an article today about Germany’s faith in austerity as the answer to depression. It’s sad reading for anyone hoping that Europe will get its act together; it’s especially galling that Germans remain so committed to belief in expansionary austerity, despite the thorough empirical debunking the notion has been given over the past year and a half (see, e.g., this IMF working paper (pdf)).Basically, Germany engaged in Austerity, and cut labor costs, etc. But what that meant was that money pored in from other EU countries -- which Germany lent back to them at low rates (Just like with China and the U.S, but actually to a much greater extent, at least % wise)
But the Germans believe that their own experience shows that austerity works: they went through some tough times a decade ago, but they tightened their belts, and all was well in the end.
...
Why? Because the key to German economic affairs this past decade has been a truly massive shift from current account deficit to surplus [chart]
Now, other countries within Europe could emulate Germany’s past if Germany herself were willing to let its current account surplus vanish. But it isn’t, of course. So the German demand is that everyone run a current account surplus, just like they do — something that would only be possible if we can find someone or something else to buy our exports.
The fact that these countries now need to pay Germany back, using Euros would be like if the U.S national debt was denominated in Yuan or something.
They want the countries to engage in the same kind of austerity that they did, but if they do that there will be no one to trade with (other then outside of the euro-zone, i.e. with the U.S or Asia).
Since it's unlikely that will happen, Krugman (as far as I can tell from reading his blog) actually thinks the Euro is doomed, because people will associate it with tough austerity measures crammed down their throats in an un-democratic way, and vote against it when they get a chance.
Obviously we'll have to see what happens.
---
The US has many things that Germany does not haveHAHAHAHAHA Seriously compare the damage caused by the last financial crisis by our "innovative, competitive" financial markets to what happened to Germany (basically nothing. Only the slow bubbling problems of other Euro countries is a problem, one that still hasn't manifested itself)
* innovative and competitive financial markets
Well, try to get some VC in Germany. VC in Germany is run by the scumbags of the earth. The access to capital in the US was just much better. This build the silicon valley. Germany has no silicon valley and it never will have one.The Silicon Valley VC industry is quite separate from "Wallstreet" (it's all the way across the country!). And what they do, in terms of finance isn't really that 'innovative'. They just give money to people who they think have good ideas, it's pretty standard. There is certainly a lot of VC money in Silicon Valley, maybe more then in Germany, but I don't see it as a very "innovative" field compared with the crazy "innovation" they have on wallstreet.
And what makes Apple or Google "US companies"? They hardly employ anybody in the US, pay very little taxes there, and their shareholders are from all over the globe. Who gets the profits from their high margins? The shareholders, including quite a few Germans...Google is still mostly a software company, most of their employees are in the U.S, as far as I know. Also, Apple has all those apple stores. Obviously if the deal with Motorola goes through they'll be in the hardware business as well.
posted by delmoi at 1:22 PM on January 22, 2012 [6 favorites]
Germany's currency should have increased in value relative to its trading partners, but it hasn't because of the Euro. This has meant that German goods have been cheaper than they should have been, which has helped their exports at the expense of other countries in the Eurozone. This is very different to the USA, with the dollar as the world reserve currency and China manipulating its currency relative to it.
Don't get me wrong, Germany's good education, high skills, and excellence in niches of importance to the developing BRIC countries are great, and we can all learn from her. But the macroeconomic system has been of huge importance.
tl;dr: Comparing the USA And Germany isn't that informative.
posted by alasdair at 1:26 PM on January 22, 2012 [1 favorite]
Don't get me wrong, Germany's good education, high skills, and excellence in niches of importance to the developing BRIC countries are great, and we can all learn from her. But the macroeconomic system has been of huge importance.
tl;dr: Comparing the USA And Germany isn't that informative.
posted by alasdair at 1:26 PM on January 22, 2012 [1 favorite]
The Silicon Valley attitude: A million dollars isn't cool...it's simply that almost any recent enterprise in the US has an "exit strategy" as part of its make-up.This is also a problem that Canada's knowledge economy/tech sector has as well. People don't want to build world-beating companies. Instead, the cultural wisdom states that you have to sell after you reach a certain size.
posted by delmoi at 1:26 PM on January 22, 2012
Germany's currency should have increased in value relative to its trading partners, but it hasn't because of the Euro. This has meant that German goods have been cheaper than they should have been, which has helped their exports at the expense of other countries in the Eurozone. This is very different to the USA, with the dollar as the world reserve currency and China manipulating its currency relative to it.And in the U.S, people can move freely without learning a new language, and if states out-compete eachother they'll end up paying more in federal taxes while the poor states pay less. If you take NY, NY and CA and compare it to Mississippi and West Virginia you'll find that those wealthy states pay a huge amount of cash into those poor states in terms of federal services (healthcare, roads, jobs with the millitary-industrial complex)
Don't get me wrong, Germany's good education, high skills, and excellence in niches of importance to the developing BRIC countries are great, and we can all learn from her. But the macroeconomic system has been of huge importance.
There's nothing like that in the Eurozone (as far as I know).
posted by delmoi at 1:29 PM on January 22, 2012
It seems like one of the biggest problems in the US is the dogma, believed seemingly by both liberals and conservatives that the only reason we've lost our manufacturing base is because other countries have cheaper labor. The NYTimes article linked above, and another article about the battery industry that I've been unable to find highlight this. In actuality, wages are only part of the reason we've lost so much of our manufacturing base. According to those articles, a bigger reason is that American workers aren't skilled in making high-tech goods, and American companies don't have the expertise to design, build, and run those types of factories.
It seems like you really need skilled manufacturing jobs that can pay reasonably well to have an equitable society. The reality is that no matter what, not everyone can be an engineer, doctor, lawyer, or quantitative trader.
posted by !Jim at 1:30 PM on January 22, 2012 [3 favorites]
It seems like you really need skilled manufacturing jobs that can pay reasonably well to have an equitable society. The reality is that no matter what, not everyone can be an engineer, doctor, lawyer, or quantitative trader.
posted by !Jim at 1:30 PM on January 22, 2012 [3 favorites]
I really wish we could avoid the type of discourse we laugh at each other's arguments. I think the rest of your points are reasonable, but starting it off this way is insulting and dismissive.The US has many things that Germany does not haveHAHAHAHAHA
* innovative and competitive financial markets
posted by !Jim at 1:31 PM on January 22, 2012 [1 favorite]
Christ, I hate this sort of attitude.
And I hate people that simply don't face facts. Germany and Japan have greater social services and better infrastructure because, in part, they're simply not spending as much on defense as they otherwise would because a) America told them not to, and b) they didn't have to, because America was picking up the tab.
Or did you think that, lacking an American backer, the German reaction to a possible Soviet invasion as recently as the 80s would have been ... What? Just a collective shrug? They would have been OK with it?
You're full of shit.
For FY 1986 through FY 1990, defense's share of the general budget was around 6.5 %, compared with approximately 28 % for the United States.
A difference of about 22 percent buys a lot of health care that American businesses have to pay for.
posted by Cool Papa Bell at 1:38 PM on January 22, 2012 [2 favorites]
And I hate people that simply don't face facts. Germany and Japan have greater social services and better infrastructure because, in part, they're simply not spending as much on defense as they otherwise would because a) America told them not to, and b) they didn't have to, because America was picking up the tab.
Or did you think that, lacking an American backer, the German reaction to a possible Soviet invasion as recently as the 80s would have been ... What? Just a collective shrug? They would have been OK with it?
You're full of shit.
For FY 1986 through FY 1990, defense's share of the general budget was around 6.5 %, compared with approximately 28 % for the United States.
A difference of about 22 percent buys a lot of health care that American businesses have to pay for.
posted by Cool Papa Bell at 1:38 PM on January 22, 2012 [2 favorites]
You're full of shit.
How am I supposed to react to a statement like that?
posted by KokuRyu at 1:39 PM on January 22, 2012 [3 favorites]
How am I supposed to react to a statement like that?
posted by KokuRyu at 1:39 PM on January 22, 2012 [3 favorites]
Acceptance? ;-)
posted by Cool Papa Bell at 1:42 PM on January 22, 2012 [1 favorite]
posted by Cool Papa Bell at 1:42 PM on January 22, 2012 [1 favorite]
If your parents don't work for a big company then your chances to get a decent job are incredibly low.
No.
The salaries are a joke. I get offered salaries here in Germany as an engineer with a PhD that I earned many years ago when I was working as a pupil during school vacations.
I don't know about engineering but people with computer science PhDs start out with on average 50k Euro a year, enough to live a pretty comfortable life. Salaries at that level of education really aren't the problem.
posted by snownoid at 1:42 PM on January 22, 2012 [2 favorites]
No.
The salaries are a joke. I get offered salaries here in Germany as an engineer with a PhD that I earned many years ago when I was working as a pupil during school vacations.
I don't know about engineering but people with computer science PhDs start out with on average 50k Euro a year, enough to live a pretty comfortable life. Salaries at that level of education really aren't the problem.
posted by snownoid at 1:42 PM on January 22, 2012 [2 favorites]
For FY 1986 through FY 1990, defense's share of the general budget was around 6.5 %, compared with approximately 28 % for the United States.
Anyway, I am not full of shit. I'll just stick to the argument at hand, rather than ad hominem attacks.
For one thing, just because the American military budget was 28% or whatever, does not make it normal. OECD countries are generally expected to, by convention (I seem to recall this is part of the NATO treaty), spend between 3-5% on national defense.
The US can do whatever it wants, but to claim that it was spending 28% of its budget on defense because no one else wanted to pick up the tab is, frankly speaking, an imperialistic way to view the world. Spend what you want, but I don't see why the rest of us have to (and if we don't spend money on defense, we're freeloaders).
posted by KokuRyu at 1:43 PM on January 22, 2012 [10 favorites]
Anyway, I am not full of shit. I'll just stick to the argument at hand, rather than ad hominem attacks.
For one thing, just because the American military budget was 28% or whatever, does not make it normal. OECD countries are generally expected to, by convention (I seem to recall this is part of the NATO treaty), spend between 3-5% on national defense.
The US can do whatever it wants, but to claim that it was spending 28% of its budget on defense because no one else wanted to pick up the tab is, frankly speaking, an imperialistic way to view the world. Spend what you want, but I don't see why the rest of us have to (and if we don't spend money on defense, we're freeloaders).
posted by KokuRyu at 1:43 PM on January 22, 2012 [10 favorites]
You're full of shit.
How am I supposed to react to a statement like that?
Contact form.
posted by T.D. Strange at 1:44 PM on January 22, 2012 [3 favorites]
How am I supposed to react to a statement like that?
Contact form.
posted by T.D. Strange at 1:44 PM on January 22, 2012 [3 favorites]
Acceptance? ;-)
Let me guess, the bad man from Canada said something you disagreed with.
posted by KokuRyu at 1:45 PM on January 22, 2012 [2 favorites]
Let me guess, the bad man from Canada said something you disagreed with.
posted by KokuRyu at 1:45 PM on January 22, 2012 [2 favorites]
In absolute terms (ie, total budget), Japan has something like the 3rd or 4th-largest defense budget in the world.
6th largest spending amounting to 1% of GDP. It's low compared to other nations in its league, even compared to Germany. I don't think the point of the comment was to start nationalist bickering, but to argue that high defense spending is a drain on national economies. I don't know that this is always true, but Japan's history certainly doesn't refute it. During the post-war period Japan's meager military spending is often cited as having been a boon that allowed the "economic miracle" to occur without distraction by major security concerns or politicians demanding expensive defense projects.
Japan isn't considered a high growth economy recently though.
posted by Winnemac at 1:46 PM on January 22, 2012
6th largest spending amounting to 1% of GDP. It's low compared to other nations in its league, even compared to Germany. I don't think the point of the comment was to start nationalist bickering, but to argue that high defense spending is a drain on national economies. I don't know that this is always true, but Japan's history certainly doesn't refute it. During the post-war period Japan's meager military spending is often cited as having been a boon that allowed the "economic miracle" to occur without distraction by major security concerns or politicians demanding expensive defense projects.
Japan isn't considered a high growth economy recently though.
posted by Winnemac at 1:46 PM on January 22, 2012
How dare I, as a Canadian, even question the magnificent benevolence of the American military. Fine, go invade Iraq.
posted by KokuRyu at 1:46 PM on January 22, 2012 [4 favorites]
posted by KokuRyu at 1:46 PM on January 22, 2012 [4 favorites]
For FY 1986 through FY 1990, defense's share of the general budget was around 6.5 %, compared with approximately 28 % for the United States.
How does all this spending translate into other value for the US economy though? What does it mean in terms of exporting within the defence industry? What does it mean in terms of influence on trading and on the US ability to influence others in supporting efforts which benefit US trade?
posted by biffa at 1:46 PM on January 22, 2012
How does all this spending translate into other value for the US economy though? What does it mean in terms of exporting within the defence industry? What does it mean in terms of influence on trading and on the US ability to influence others in supporting efforts which benefit US trade?
posted by biffa at 1:46 PM on January 22, 2012
I really wish we could avoid the type of discourse we laugh at each other's arguments. I think the rest of your points are reasonable, but starting it off this way is insulting and dismissive.I didn't intend to 'dismiss' the poster, but rather point out how out of step that was with how Americans perceive our financial sector.
posted by delmoi at 1:49 PM on January 22, 2012 [1 favorite]
28 % for the United States.
This number is obvious nonsense. The military spending of the US - measured in percent of GDP - peaked during WW2 and basically has been declining since.
posted by yoyo_nyc at 1:49 PM on January 22, 2012 [3 favorites]
This number is obvious nonsense. The military spending of the US - measured in percent of GDP - peaked during WW2 and basically has been declining since.
posted by yoyo_nyc at 1:49 PM on January 22, 2012 [3 favorites]
Could the massive US defense budget be considered a social safety net? I mean it's keeping how many millions of people employed in a sector that really does not contribute much (although there is crossover, would Boeing be able to build civilian jets without it's massive defense contracts?) to the non-defense economy?
posted by PenDevil at 1:53 PM on January 22, 2012 [2 favorites]
posted by PenDevil at 1:53 PM on January 22, 2012 [2 favorites]
Do you want a European Silicon Valley, yoyo_nyc? I'll offer you a bad idea and a good idea.
Bad idea : You could radically alter the mentality of Europe's monied class, making them more competitive and fearless. There are all manor of right wingers claiming this'll happen if we just erode the rights of labor enough, but they are all self-interested buffoons who're basically lying. It ain't labor miss-treatment that build Silicon Valley. And you won't change an old guys investment practices by reducing his taxes. Ain't happening this way man.
Good idea : You could simply pay people for starting new companies. Reduce your agricultural/industrial subsidies just a smidgen. And spend that money offering grants to start ups. A startup grant consists of 5 to 10 years of 2000-3000 euros per month for a handful of core employees who split the stock ownership equally according to their duration in the company. All start up grant proposals are reviewed and evaluated by committees consisting of industry professionals and relevant academics.
I'll promise you that if give good engineers with good ideas a reasonable shot at starting his dream company, then you'll steam roll over Silicon Valley fairly quickly. And you don't need to change your short sighted paranoid rich people to do so.
posted by jeffburdges at 1:53 PM on January 22, 2012 [2 favorites]
Bad idea : You could radically alter the mentality of Europe's monied class, making them more competitive and fearless. There are all manor of right wingers claiming this'll happen if we just erode the rights of labor enough, but they are all self-interested buffoons who're basically lying. It ain't labor miss-treatment that build Silicon Valley. And you won't change an old guys investment practices by reducing his taxes. Ain't happening this way man.
Good idea : You could simply pay people for starting new companies. Reduce your agricultural/industrial subsidies just a smidgen. And spend that money offering grants to start ups. A startup grant consists of 5 to 10 years of 2000-3000 euros per month for a handful of core employees who split the stock ownership equally according to their duration in the company. All start up grant proposals are reviewed and evaluated by committees consisting of industry professionals and relevant academics.
I'll promise you that if give good engineers with good ideas a reasonable shot at starting his dream company, then you'll steam roll over Silicon Valley fairly quickly. And you don't need to change your short sighted paranoid rich people to do so.
posted by jeffburdges at 1:53 PM on January 22, 2012 [2 favorites]
And in the U.S, people can move freely without learning a new language, and if states out-compete eachother they'll end up paying more in federal taxes while the poor states pay less. If you take NY, NY and CA and compare it to Mississippi and West Virginia you'll find that those wealthy states pay a huge amount of cash into those poor states in terms of federal services (healthcare, roads, jobs with the millitary-industrial complex)
I agree this is a real problem with balancing the EU's economy. Labor is lawfully entitled to move, but language makes it more difficult. If the unemployed of Greece could up sticks and flit to Germany as easy as US workers shift state, it would act like a budget transfer and ease the crisis. There's no good solution though, as learning one additional language is no help if you need to move again, and too much cultural attachment to the adoption of a common language. The same problem affects the formation of a common identity and real cultural mixing, making it a big flaw in Europe.
posted by Jehan at 1:56 PM on January 22, 2012
I agree this is a real problem with balancing the EU's economy. Labor is lawfully entitled to move, but language makes it more difficult. If the unemployed of Greece could up sticks and flit to Germany as easy as US workers shift state, it would act like a budget transfer and ease the crisis. There's no good solution though, as learning one additional language is no help if you need to move again, and too much cultural attachment to the adoption of a common language. The same problem affects the formation of a common identity and real cultural mixing, making it a big flaw in Europe.
posted by Jehan at 1:56 PM on January 22, 2012
28 % for the United States.
This number is obvious nonsense. The military spending of the US - measured in percent of GDP - peaked during WW2 and basically has been declining since.
I don't know what the number is off the top of my head, but 28% seems about right for that time period. It's measuring military expenditure as a percentage of government spending, not GDP.
posted by Winnemac at 2:01 PM on January 22, 2012
This number is obvious nonsense. The military spending of the US - measured in percent of GDP - peaked during WW2 and basically has been declining since.
I don't know what the number is off the top of my head, but 28% seems about right for that time period. It's measuring military expenditure as a percentage of government spending, not GDP.
posted by Winnemac at 2:01 PM on January 22, 2012
I'll promise you that if give good engineers with good ideas a reasonable shot at starting his dream company, then you'll steam roll over Silicon Valley fairly quickly.
A far as I'm aware the main problem isn't solely one of funding. American bankruptcy laws allow for much greater risk-taking. Couple that with tax incentives for investors, a large concentration of highly-educated tech-savvy people in a small region [Silicon Valley], and a relatively bureaucracy-free process to start up a new company, and you've got practically every other country beaten.
posted by xqwzts at 2:03 PM on January 22, 2012
A far as I'm aware the main problem isn't solely one of funding. American bankruptcy laws allow for much greater risk-taking. Couple that with tax incentives for investors, a large concentration of highly-educated tech-savvy people in a small region [Silicon Valley], and a relatively bureaucracy-free process to start up a new company, and you've got practically every other country beaten.
posted by xqwzts at 2:03 PM on January 22, 2012
It´s all about the interaction of individual and collective wealth. US$20K per year will not get you very far in the USA, because you have to provide for your and your family´s own health care, periods of unemployment, transport, housing, etc (and you will likely have to go into debt to achieve this); a lot of that stuff, Germans (and Australians, and Scandinavians) basically get free, or heavily subsidised, and this is especially the case for the poor. A lot of those subsidies, while effective, are not individually desirable; once a person in poverty has resumed a middle-class existence, they tend to want to move out of government housing, for example. (And income testing will eventually force them out.)
When you´re getting what amounts to an extra US$20K per year in social services, US$20K per year can generate a great deal more upward economic mobility. The proportion of it that can be spent on employability improvement is much greater. As a general rule the German poor are supported through their periods of poverty and floated back up into the middle classes; the American poor are left to drown.
posted by aeschenkarnos at 2:03 PM on January 22, 2012 [7 favorites]
When you´re getting what amounts to an extra US$20K per year in social services, US$20K per year can generate a great deal more upward economic mobility. The proportion of it that can be spent on employability improvement is much greater. As a general rule the German poor are supported through their periods of poverty and floated back up into the middle classes; the American poor are left to drown.
posted by aeschenkarnos at 2:03 PM on January 22, 2012 [7 favorites]
Acceptance? ;-)Cool Papa Bell, you've really been on a run of making innacurate statements, and then mocking people who are correct lately. For example. I mean, for example here you claimed that Wallmart and Newscorp were "family owned" business. Then you called me a "nimrod" because I knew you were wrong.
then here you dismissed Slavoj Žižek for being aware, unlike yourself, of the fact that Microsoft was illegal monopoly, at least according to the US Court system, or at least the DOJ.
Now, as it comes to Japan spend about about 1% of it's GDP on their self defense force, which actually makes them sixth in the world -- Compared to the U.S's 4.7%. It's pretty unlikely that 1/5th of our military expenditures go to defending Japan, so the idea that the U.S is paying for Japan's defense is completely ridiculous.
In the future, if you want to be smug, you should also be correct.
posted by delmoi at 2:04 PM on January 22, 2012 [15 favorites]
"It seems like you really need skilled manufacturing jobs that can pay reasonably well to have an equitable society. The reality is that no matter what, not everyone can be an engineer, doctor, lawyer, or quantitative trader."
Exactly! Although I'd amend your list to read: lawyer, quantitative trader, waiter (or waitress) and Walmart greeter. It's like there's this drift, with the well educated going into the fields they think will be most lucrative, and everyone else falling to the bottom as semi or unskilled labor. The number of doctors, scientists and technicians is declining, and that's a big part of the problem. Germany still seems to have a lot of blue collar workers who are highly trained and skilled.
posted by Kevin Street at 2:04 PM on January 22, 2012
Exactly! Although I'd amend your list to read: lawyer, quantitative trader, waiter (or waitress) and Walmart greeter. It's like there's this drift, with the well educated going into the fields they think will be most lucrative, and everyone else falling to the bottom as semi or unskilled labor. The number of doctors, scientists and technicians is declining, and that's a big part of the problem. Germany still seems to have a lot of blue collar workers who are highly trained and skilled.
posted by Kevin Street at 2:04 PM on January 22, 2012
Look, I've worked with and for a number of Americans over the years, and it's the one thing I miss most about returning to Canada. However, the idea that the US somehow footed the defense bill for [insert country name here] is something I've heard many, many times, and it's such an arrogant, uninformed, and uneducated thing to say. The US did what it needed to in order to win the Cold War. It wasn't altruism, and, in the case of Germany and Japan, there were specific treaties following WWII that forbade each country to build up a standing army (yet Japan did anyway).
But for Cool Papa Bell to come out and say that Japan and Germany weren't pulling their weight, when in reality the US was spending a lot of money on MX missiles and aircraft carriers and long-range bombers (and forcing Japan and Germany to purchase American military material), it just sounds arrogant, and not a little naive. The US does whatever suits its needs. Period.
posted by KokuRyu at 2:08 PM on January 22, 2012 [9 favorites]
But for Cool Papa Bell to come out and say that Japan and Germany weren't pulling their weight, when in reality the US was spending a lot of money on MX missiles and aircraft carriers and long-range bombers (and forcing Japan and Germany to purchase American military material), it just sounds arrogant, and not a little naive. The US does whatever suits its needs. Period.
posted by KokuRyu at 2:08 PM on January 22, 2012 [9 favorites]
PenDevil Could the massive US defense budget be considered a social safety net? I mean it's keeping how many millions of people employed in a sector that really does not contribute much
The US Army is to a large extent an absorber of people who would otherwise be unemployed as there is no useful employment for them at all in the US economy. However there is a much higher minimum physical fitness requirement, and a fairly restricting personality type requirement for participation in it; it is definitely not the sort of social safety net that protects all members of society. Also, the range of skills with which soldiers are equipped during their service is limited and often focussed on activities, like killing people, that are distinctly socially undesirable for persons outside of a military structure to actually have. Because in the absence of other options, they might be tempted to use them.
The "economic conscript" army is just another time bomb.
xqwzts American bankruptcy laws allow for much greater risk-taking.
American bankruptcy laws no longer allow the voiding of student loan debt and due to legislative capture by the credit industry, are significantly worse than before the tech boom. The current plan is that once you´re fucked, you stay fucked forever.
posted by aeschenkarnos at 2:14 PM on January 22, 2012 [1 favorite]
The US Army is to a large extent an absorber of people who would otherwise be unemployed as there is no useful employment for them at all in the US economy. However there is a much higher minimum physical fitness requirement, and a fairly restricting personality type requirement for participation in it; it is definitely not the sort of social safety net that protects all members of society. Also, the range of skills with which soldiers are equipped during their service is limited and often focussed on activities, like killing people, that are distinctly socially undesirable for persons outside of a military structure to actually have. Because in the absence of other options, they might be tempted to use them.
The "economic conscript" army is just another time bomb.
xqwzts American bankruptcy laws allow for much greater risk-taking.
American bankruptcy laws no longer allow the voiding of student loan debt and due to legislative capture by the credit industry, are significantly worse than before the tech boom. The current plan is that once you´re fucked, you stay fucked forever.
posted by aeschenkarnos at 2:14 PM on January 22, 2012 [1 favorite]
Could the massive US defense budget be considered a social safety net
Absolutely. Americans horrified by the specter of "socialism" carry this strange blind spot about their own state-sponsored industry. It's just spent on relatively inefficient production of goods for the comparatively smaller global military market (~$2 trillion) rather than the much-larger and more competitive consumer market (~$30 trillion).
But to each their own.
posted by ead at 2:16 PM on January 22, 2012 [2 favorites]
Absolutely. Americans horrified by the specter of "socialism" carry this strange blind spot about their own state-sponsored industry. It's just spent on relatively inefficient production of goods for the comparatively smaller global military market (~$2 trillion) rather than the much-larger and more competitive consumer market (~$30 trillion).
But to each their own.
posted by ead at 2:16 PM on January 22, 2012 [2 favorites]
One useful thing about armies is that they'll take young people from the poorest backgrounds and give them training and experience that they'd never get otherwise. (And not just in killing people, there's massive amounts of bureaucracy and moving stuff around, repairing things and so on.) But if there are no positions available in the civilian economy for highly trained, but non college educated applicants, then the uplift effect from the army isn't going to do much good. Guys who operated multi-million dollar weapons systems and made life or death decisions on a regular basis are forced to work at McDonalds, and so on.
posted by Kevin Street at 2:22 PM on January 22, 2012 [1 favorite]
posted by Kevin Street at 2:22 PM on January 22, 2012 [1 favorite]
One useful thing about armies is that they'll take young people from the poorest backgrounds and give them training and experience that they'd never get otherwise.Well in a lot of European countries this is typically done by 1) Having a functioning k-12 system, even in "poor" neighborhoods and 2) free college.
posted by delmoi at 2:30 PM on January 22, 2012 [10 favorites]
If the unemployed of Greece could up sticks and flit to Germany as easy as US workers shift state
Economic migrants do shift around Europe all the time. In the days before the EU the Turks did it, so I'm not sure why you think the Greeks couldn't.
posted by Summer at 2:40 PM on January 22, 2012
Economic migrants do shift around Europe all the time. In the days before the EU the Turks did it, so I'm not sure why you think the Greeks couldn't.
posted by Summer at 2:40 PM on January 22, 2012
If you want a primer on the wonderful world of economic migration within the EU, check out It's a Free World.
posted by KokuRyu at 2:43 PM on January 22, 2012
posted by KokuRyu at 2:43 PM on January 22, 2012
One useful thing about armies is that they'll take young people from the poorest backgrounds and give them training and experience that they'd never get otherwise
I'm not trying to come down purely in favour of state-run anything -- they can surely be as muddled as any other sort of enterprise -- but you ought to grasp that the exact same policy-effect can be achieved through any state-run industry, even discounting state-sponsored postsecondary education. Cycling your public monies through assembly lines putting together dish washers and cordless drills also gives you a workforce with a pile of training and experience in mechanical work, factory-running, bureaucracy, etc. etc. The difference is that in the military case the "product" you need to find markets for is ultimately weapons and war, whereas in other industries you (might) find better outlets for your (over)production. Assuming you consider consumerism better than war. Which is straight neoclassical feedback-maximization theory, anyway, via the higher likelihood of spillover between consumer technology and production technology (relative to war technology). You might also have the sort of soft heart that prefers rubbish heaps to cluster bombs.
Also, capitalism creates unemployment. OMG it's the 19th century again. News at 11.
posted by ead at 2:44 PM on January 22, 2012 [2 favorites]
I'm not trying to come down purely in favour of state-run anything -- they can surely be as muddled as any other sort of enterprise -- but you ought to grasp that the exact same policy-effect can be achieved through any state-run industry, even discounting state-sponsored postsecondary education. Cycling your public monies through assembly lines putting together dish washers and cordless drills also gives you a workforce with a pile of training and experience in mechanical work, factory-running, bureaucracy, etc. etc. The difference is that in the military case the "product" you need to find markets for is ultimately weapons and war, whereas in other industries you (might) find better outlets for your (over)production. Assuming you consider consumerism better than war. Which is straight neoclassical feedback-maximization theory, anyway, via the higher likelihood of spillover between consumer technology and production technology (relative to war technology). You might also have the sort of soft heart that prefers rubbish heaps to cluster bombs.
Also, capitalism creates unemployment. OMG it's the 19th century again. News at 11.
posted by ead at 2:44 PM on January 22, 2012 [2 favorites]
And in the U.S, people can move freely without learning a new language, and if states out-compete eachother they'll end up paying more in federal taxes while the poor states pay less. If you take NY, NY and CA and compare it to Mississippi and West Virginia you'll find that those wealthy states pay a huge amount of cash into those poor states in terms of federal services (healthcare, roads, jobs with the millitary-industrial complex)
You don't redistribute money in the Eurozone, as far as I know, but Germany has this same thing going on, where rich states subsidise the poor states. Bayern is the only state that has ever moved from being a net taker-in of tax money to a net giver of tax money. It's probably just how federal systems work.
posted by hoyland at 2:55 PM on January 22, 2012
You don't redistribute money in the Eurozone, as far as I know, but Germany has this same thing going on, where rich states subsidise the poor states. Bayern is the only state that has ever moved from being a net taker-in of tax money to a net giver of tax money. It's probably just how federal systems work.
posted by hoyland at 2:55 PM on January 22, 2012
For FY 1986 through FY 1990, defense's share of the general budget was around 6.5 %, compared with approximately 28 % for the United States.
Comparing spending between a unitary country and one layer of a federative country isn't a smart comparison. Part of why the federal government spends a lot on defense and a little on education is that the federal government does defense and states, mostly, do education.
You'd want to compare straight-up percent GDP. The difference in that case is a couple of percentage points -- notable, but hardly enough to run a nationalized health care system on.
posted by ROU_Xenophobe at 3:13 PM on January 22, 2012
Comparing spending between a unitary country and one layer of a federative country isn't a smart comparison. Part of why the federal government spends a lot on defense and a little on education is that the federal government does defense and states, mostly, do education.
You'd want to compare straight-up percent GDP. The difference in that case is a couple of percentage points -- notable, but hardly enough to run a nationalized health care system on.
posted by ROU_Xenophobe at 3:13 PM on January 22, 2012
However, the idea that the US somehow footed the defense bill for [insert country name here] is something I've heard many, many times, and it's such an arrogant, uninformed, and uneducated thing to say. The US did what it needed to in order to win the Cold War. It wasn't altruism.
Altruism isn't required for beneficial results. Japan is a good example of this because the US government sought to influence the creation of a strong and prosperous nation based on democratic government that would be an ally and a bulwark against communism. The Marshall plan had similar goals. Whether these are altruistic policies doesn't take away from their actual effects. No one should be so committed to the idea of the US government as an object of scorn that they are unwilling to consider the possibility of mutual benefit.
posted by Winnemac at 3:30 PM on January 22, 2012
Altruism isn't required for beneficial results. Japan is a good example of this because the US government sought to influence the creation of a strong and prosperous nation based on democratic government that would be an ally and a bulwark against communism. The Marshall plan had similar goals. Whether these are altruistic policies doesn't take away from their actual effects. No one should be so committed to the idea of the US government as an object of scorn that they are unwilling to consider the possibility of mutual benefit.
posted by Winnemac at 3:30 PM on January 22, 2012
Economic migrants do shift around Europe all the time. In the days before the EU the Turks did it, so I'm not sure why you think the Greeks couldn't.Yeah, but it's not really even remotely comparable. A Turk in Germany or France isn't really considered to be German or French, they aren't integrated entirely into society, seen as equals or a complete substitute for a German or French worker. On the other hand, someone moves from Alabama or Georgia to NY or California they're indistinguishable from any other person from NY or California, aside from the accent. If they move from the Midwest, they won't even have different regional accent (Or in the case of an NY, a Midwestern accent is actually considered more educated/middle class then, say, a long island accent). Everyone is an "American" and the state you come from is mostly just considered like an administrative region. Someone could move from New Mexico to NY or CT and get a job at a hedge fund or be elected governor. Can you say the same thing about someone from Turkey or Romania in Germany or France?
This isn't to say everyone from every state has equal opportunity, poor states often have crappy educational systems, so someone who goes to school in NY will probably have been given a better education then someone who goes to school in Texas.
You don't redistribute money in the Eurozone, as far as I know, but Germany has this same thing going on, where rich states subsidise the poor states. Bayern is the only state that has ever moved from being a net taker-in of tax money to a net giver of tax money. It's probably just how federal systems work.Right in Germany But the problem is you have the whole eurozone using the same currency, like the U.S, but unlike the U.S. cash does not flow from rich areas to poor areas.
How would it look if people used dollars without the cash flows? Well, look what happened to Argentina when it tried to peg it's currency to the Dollar.
posted by delmoi at 3:43 PM on January 22, 2012
Altruism isn't required for beneficial results. Japan is a good example of this because the US government sought to influence the creation of a strong and prosperous nation based on democratic government that would be an ally and a bulwark against communism. The Marshall plan had similar goals. Whether these are altruistic policies doesn't take away from their actual effects. No one should be so committed to the idea of the US government as an object of scorn that they are unwilling to consider the possibility of mutual benefit.The problem is that the cold war is over. Who exactly are we protecting Japan from? China? Who are we protecting Germany from? Are angry Greeks going to invade?
So saying "The U.S pays for country X's defense!" today makes no sense.
posted by delmoi at 3:46 PM on January 22, 2012 [3 favorites]
So saying "The U.S pays for country X's defense!" today makes no sense.
It's much less important now than it was historically, yes. Still, there's plenty of people in Japan that worry about China/North Korea in "what if" predictions and want to keep a deterrent force around for that. Germany seems to be doing alright as far as I know and uses their money on other things which I think is the whole point of this tangent.
posted by Winnemac at 4:07 PM on January 22, 2012
It's much less important now than it was historically, yes. Still, there's plenty of people in Japan that worry about China/North Korea in "what if" predictions and want to keep a deterrent force around for that. Germany seems to be doing alright as far as I know and uses their money on other things which I think is the whole point of this tangent.
posted by Winnemac at 4:07 PM on January 22, 2012
The defense issue is a red herring, and the Euro, mentioned just briefly, is what needs to be focused on here.
Germany gets an absolutely freaking sweet deal here. The vast majority of their exports are to other Euro-zone countries, most of which are financing that spending by loans denominated in Euros. They wouldn't be able to do that if they had to use their own currencies, as the Mark would be a lot more expensive than whatever they'd be using, e.g. the lira, drachma, peso, whatever. That'd be a massive downward pressure on German exports.
So really, they're doing really well because other countries are borrowing a lot of money. Which makes a certain amount of sense, when you think about it. If person A borrows money, that money is usually spent on something. What? Well, German exports, in the case of a huge amount of Euro loans. So a whole bunch of European debt is actually just a transfer of wealth to Germany.
One might ask who has provided from the US borrowing its trillions of dollars. Unfortunately, while one can point to the defense industry as one significant benefactor, that doesn't account for the majority. We've poured most of that right down death's gullet, spending untold billions in the frantic attempt to prolong senior citizens' lives a few extra months. At least Germany got a nice-looking economy. All we got is a big military and a bloated, over-priced health care system.
posted by valkyryn at 4:37 PM on January 22, 2012 [3 favorites]
Germany gets an absolutely freaking sweet deal here. The vast majority of their exports are to other Euro-zone countries, most of which are financing that spending by loans denominated in Euros. They wouldn't be able to do that if they had to use their own currencies, as the Mark would be a lot more expensive than whatever they'd be using, e.g. the lira, drachma, peso, whatever. That'd be a massive downward pressure on German exports.
So really, they're doing really well because other countries are borrowing a lot of money. Which makes a certain amount of sense, when you think about it. If person A borrows money, that money is usually spent on something. What? Well, German exports, in the case of a huge amount of Euro loans. So a whole bunch of European debt is actually just a transfer of wealth to Germany.
One might ask who has provided from the US borrowing its trillions of dollars. Unfortunately, while one can point to the defense industry as one significant benefactor, that doesn't account for the majority. We've poured most of that right down death's gullet, spending untold billions in the frantic attempt to prolong senior citizens' lives a few extra months. At least Germany got a nice-looking economy. All we got is a big military and a bloated, over-priced health care system.
posted by valkyryn at 4:37 PM on January 22, 2012 [3 favorites]
I like Krugman's pithy summary of the U.S. federal budget:
"The key thing to remember, always, is what the federal government does: it is basically an insurance company for old people that also has an army. Look at a normal year, like 2007 (things are distorted right now by the cost of safety net programs.) What you’ll find is that about half of total spending was on programs for seniors: Social Security, Medicare, much of Medicaid, and other retirement and disability programs. Half the rest is defense."
posted by Mei's lost sandal at 5:43 PM on January 22, 2012 [8 favorites]
"The key thing to remember, always, is what the federal government does: it is basically an insurance company for old people that also has an army. Look at a normal year, like 2007 (things are distorted right now by the cost of safety net programs.) What you’ll find is that about half of total spending was on programs for seniors: Social Security, Medicare, much of Medicaid, and other retirement and disability programs. Half the rest is defense."
posted by Mei's lost sandal at 5:43 PM on January 22, 2012 [8 favorites]
So a whole bunch of European debt is actually just a transfer of wealth to Germany.
Only if you believe the things they're spending those loans on are worthless. I mean, presumably the Germans gave something in return, so it's really a transfer of wealth from future generations of Italians, Greeks and Spaniards to the current generation. A transfer greased, perhaps, by excess worldwide savings (including Germany) and/or creative contracts by US investment banks.
I don't really appreciate the exports vs currency equilibrium argument either. It's probably valid macroeconomics, but devaluing your currency looks to me like just a backdoor wage cut. I figure if everyone had perfect information, workers would perfectly negotiate for changes in inflation and forex, wages would go up to compensate, and adjust export prices proportionally. Only if you assume wages don't track valuation do you get any boost, if you can call it that.
It kinda looks like a reduction in wages and benefits is what needs to happen, regardless of whether denominated in drachma or Euros.
posted by pwnguin at 6:17 PM on January 22, 2012
Only if you believe the things they're spending those loans on are worthless. I mean, presumably the Germans gave something in return, so it's really a transfer of wealth from future generations of Italians, Greeks and Spaniards to the current generation. A transfer greased, perhaps, by excess worldwide savings (including Germany) and/or creative contracts by US investment banks.
I don't really appreciate the exports vs currency equilibrium argument either. It's probably valid macroeconomics, but devaluing your currency looks to me like just a backdoor wage cut. I figure if everyone had perfect information, workers would perfectly negotiate for changes in inflation and forex, wages would go up to compensate, and adjust export prices proportionally. Only if you assume wages don't track valuation do you get any boost, if you can call it that.
It kinda looks like a reduction in wages and benefits is what needs to happen, regardless of whether denominated in drachma or Euros.
posted by pwnguin at 6:17 PM on January 22, 2012
Just because your economy is based on spending more money on the military than the rest of the world combined does not give you the right to complain about how other countries are forced to conform to your imperialistic hegemony.
Well said, Sir.
posted by sgt.serenity at 6:28 PM on January 22, 2012 [2 favorites]
Well said, Sir.
posted by sgt.serenity at 6:28 PM on January 22, 2012 [2 favorites]
Only if you believe the things they're spending those loans on are worthless. I mean, presumably the Germans gave something in return, so it's really a transfer of wealth from future generations of Italians, Greeks and Spaniards to the current generation. A transfer greased, perhaps, by excess worldwide savings (including Germany) and/or creative contracts by US investment banks.You realize there's a "wealth transfer" of, like, everything ever created from current generations to future generations, right? In the U.S. right there are supposedly about $188 trillion in assets. All of those are getting transferred to future generations.
posted by delmoi at 6:44 PM on January 22, 2012
Germany is strong because we did a lot of the heavy lifting when it came to their national defense during the cold war. Ditto Japan. They have reaped their peace dividend wisely. We'd be in much better shape if we didn't shit a bunch of money down the toilet in Iraq and Afghanistan.
posted by Renoroc at 7:09 PM on January 22, 2012
posted by Renoroc at 7:09 PM on January 22, 2012
Yeah, but it's not really even remotely comparable. A Turk in Germany or France isn't really considered to be German or French, they aren't integrated entirely into society, seen as equals or a complete substitute for a German or French worker. On the other hand, someone moves from Alabama or Georgia to NY or California they're indistinguishable from any other person from NY or California, aside from the accent.
The European Union member states (and also Switzerland, Norway, Iceland and Liechtenstein) guarantees freedom of movement (both for travel and for work) for all citizens between each and every other country within the area (although restrictions can and usually do apply for a few years after a new country joins, so currently Romanians and Bulgarians don't have complete freedom of movement for work, and nor will Croatians whenever their membership is finally agreed).
This includes entitlement to benefits as if you're a citizen of that country (here for example is a list of the eligibility for benefits in the UK for non-nationals - EEA national exercising Treaty rights, for example a worker or self-employed person you are eligible to access benefits on the same basis as UK citizens, provided you meet the relevant eligibility criteria for those benefits.).
There is fairly large amounts of internal migration within the EU, although presumably not as much as between different states in America. In 2010, 4% of the UK's population were people that had been born in a different EU country.
I think the main reason people don't move about a huge amount is we all hate every other country in the union even more than we hate our own (previous generalisation may only apply to the British).
posted by dng at 7:23 PM on January 22, 2012
The European Union member states (and also Switzerland, Norway, Iceland and Liechtenstein) guarantees freedom of movement (both for travel and for work) for all citizens between each and every other country within the area (although restrictions can and usually do apply for a few years after a new country joins, so currently Romanians and Bulgarians don't have complete freedom of movement for work, and nor will Croatians whenever their membership is finally agreed).
This includes entitlement to benefits as if you're a citizen of that country (here for example is a list of the eligibility for benefits in the UK for non-nationals - EEA national exercising Treaty rights, for example a worker or self-employed person you are eligible to access benefits on the same basis as UK citizens, provided you meet the relevant eligibility criteria for those benefits.).
There is fairly large amounts of internal migration within the EU, although presumably not as much as between different states in America. In 2010, 4% of the UK's population were people that had been born in a different EU country.
I think the main reason people don't move about a huge amount is we all hate every other country in the union even more than we hate our own (previous generalisation may only apply to the British).
posted by dng at 7:23 PM on January 22, 2012
I'm reminded of some old ideas for the U.S. Economy which I'd long forgotten, but which I feel anew are worth looking into. And they can work in glorious tandem, even!
1. Mandatory 2-year civil employment. Like the Israeli mandatory military service, but in this case, the military is but one option among many. Discover people's aptitudes and interests and place them into a 24-month program either immediately following high school, or with a possible college deferment if needs persist. Preferably in another part of the country than where they are from, but again, with accommodations made if need be. Pay a decent salary, probably based on a military scale in order to keep things equitable, but with possibilities such as working on urban planning initiatives, or high-speed rail construction, or what have you. Vocational training would be a priority.
2. Tax-Incentive Races. Basically, let's say the government wants better standards on some part of industry, and that industry is loathe to change the way they are doing things. Set up a tax-scheme on that industry which not only gives incentives to those who meet the guidelines in the timeframe desired (and perhaps punishes those who don't) but also gives GREATER incentives to those who manage to meet the parameters first, with the trade-off that their methods for doing so become non-patentable industry standards. Similar breaks/bidding for those who figure out the best ways to manage federal projects (like the aformentioned high-speed rail or what have you.)
posted by Navelgazer at 7:24 PM on January 22, 2012
1. Mandatory 2-year civil employment. Like the Israeli mandatory military service, but in this case, the military is but one option among many. Discover people's aptitudes and interests and place them into a 24-month program either immediately following high school, or with a possible college deferment if needs persist. Preferably in another part of the country than where they are from, but again, with accommodations made if need be. Pay a decent salary, probably based on a military scale in order to keep things equitable, but with possibilities such as working on urban planning initiatives, or high-speed rail construction, or what have you. Vocational training would be a priority.
2. Tax-Incentive Races. Basically, let's say the government wants better standards on some part of industry, and that industry is loathe to change the way they are doing things. Set up a tax-scheme on that industry which not only gives incentives to those who meet the guidelines in the timeframe desired (and perhaps punishes those who don't) but also gives GREATER incentives to those who manage to meet the parameters first, with the trade-off that their methods for doing so become non-patentable industry standards. Similar breaks/bidding for those who figure out the best ways to manage federal projects (like the aformentioned high-speed rail or what have you.)
posted by Navelgazer at 7:24 PM on January 22, 2012
delmoi: "All of those are getting transferred to future generations"
For a moment, I thought I stated it backwards. I'm guessing your point is there's enough assets in the world to cover government debt. How does that look right now for Greece or Italy?
posted by pwnguin at 7:25 PM on January 22, 2012
For a moment, I thought I stated it backwards. I'm guessing your point is there's enough assets in the world to cover government debt. How does that look right now for Greece or Italy?
posted by pwnguin at 7:25 PM on January 22, 2012
For a moment, I thought I stated it backwards. I'm guessing your point is there's enough assets in the world to cover government debt. How does that look right now for Greece or Italy?A lot worse then the U.S, UK or Japan, which have similar debt/GDP levels, but who's debts are denominated in their own currencies.
posted by delmoi at 7:31 PM on January 22, 2012
'Germany's economy looks like that of the U.S. a generation ago. In 1975, manufacturing accounted for about 20% of the United States' economic output, or gross domestic product, about the same as in Germany today.
Should be interesting to see, in 36 years, if they go down the same greed-fueled rathole as the U.S. History having such a penchant for repetition and all
posted by Redhush at 8:54 PM on January 22, 2012
Should be interesting to see, in 36 years, if they go down the same greed-fueled rathole as the U.S. History having such a penchant for repetition and all
posted by Redhush at 8:54 PM on January 22, 2012
Germany has no silicon valley and it never will have one.
You could say this with a straight face 10 years ago, but it's definitely not true anymore. I've been interviewing for jobs in the last few months, and even though my region has only a fraction of the number of startups that larger cities like Berlin, Hamburg and Munich have, most of my interviews have been with German-founded-and-funded startups.
posted by cmonkey at 9:47 PM on January 22, 2012 [1 favorite]
You could say this with a straight face 10 years ago, but it's definitely not true anymore. I've been interviewing for jobs in the last few months, and even though my region has only a fraction of the number of startups that larger cities like Berlin, Hamburg and Munich have, most of my interviews have been with German-founded-and-funded startups.
posted by cmonkey at 9:47 PM on January 22, 2012 [1 favorite]
You don't redistribute money in the Eurozone
There's actually a lot of money being redistributed in the EU, although it's not specifically in the Eurozone. Bulgaria has received something like €20 billion in the last few years in development funds, for example.
posted by cmonkey at 9:59 PM on January 22, 2012
There's actually a lot of money being redistributed in the EU, although it's not specifically in the Eurozone. Bulgaria has received something like €20 billion in the last few years in development funds, for example.
posted by cmonkey at 9:59 PM on January 22, 2012
I can't help but think that a lot of Germany's success is due to America providing military protection for the past 65 years, so the German government was free to use the funds that would have gone to the military instead were put to social programs, etc. Imagine if America somehow managed to put the same emphasis on and funding for social programs and societal improvement that it does on profit and benefits for the elite.
No, wait...I can't imagine that either.
posted by motown missile at 10:32 PM on January 22, 2012
No, wait...I can't imagine that either.
posted by motown missile at 10:32 PM on January 22, 2012
US Report Sees Perils To America's Tech FutureTL;DR: Pfizer's patents are expiring.
posted by delmoi at 12:32 AM on January 23, 2012 [1 favorite]
1. (As said above) The social safety net in Germany means that 20K a year is t a paycheck to paycheck waking nightmare. This is very important and easy to lose sight of once you escape that.
2. One of the first and most striking things to me as a foreigner arriving in Germany was that the building trades were manned by Germans. In the US the incomprehensible diminishment of the importance/value of trade schools has meant smart, able bodied people who don't have the drive or desire to start their own business end up underemployed, dreaming of landing a spot on some reality tv show or winning the lottery. This is incomprehensible to me, the squandering of this resource.
3. The Marshall Plan (which I believe helped provide for 'defense' also) was fucking genius because it benefitted both the 'Axis' powers and the US.
3A. The US' economic woes and Germany's perceived economic triumphs of today have a much shorter root, based in Reaganomics reforming of the income tax code the recent (mind-boggling) repeal of Glass-Seagal and the Euro's establishment. Ten years ago, as the article mentions, Germany was in the economic doghouse. And the former DDR is still way behind the former west... It's a work in progress that right now is working.
posted by From Bklyn at 12:40 AM on January 23, 2012
2. One of the first and most striking things to me as a foreigner arriving in Germany was that the building trades were manned by Germans. In the US the incomprehensible diminishment of the importance/value of trade schools has meant smart, able bodied people who don't have the drive or desire to start their own business end up underemployed, dreaming of landing a spot on some reality tv show or winning the lottery. This is incomprehensible to me, the squandering of this resource.
3. The Marshall Plan (which I believe helped provide for 'defense' also) was fucking genius because it benefitted both the 'Axis' powers and the US.
3A. The US' economic woes and Germany's perceived economic triumphs of today have a much shorter root, based in Reaganomics reforming of the income tax code the recent (mind-boggling) repeal of Glass-Seagal and the Euro's establishment. Ten years ago, as the article mentions, Germany was in the economic doghouse. And the former DDR is still way behind the former west... It's a work in progress that right now is working.
posted by From Bklyn at 12:40 AM on January 23, 2012
The top comment in the reddit thread re: same article makes the most sense to me thus far.
posted by The ____ of Justice at 2:27 AM on January 23, 2012
posted by The ____ of Justice at 2:27 AM on January 23, 2012
We've poured most of that right down death's gullet, spending untold billions in the frantic attempt to prolong senior citizens' lives a few extra months.
AND
I like Krugman's pithy summary of the U.S. federal budget:
"The key thing to remember, always, is what the federal government does: it is basically an insurance company for old people that also has an army. Look at a normal year, like 2007 (things are distorted right now by the cost of safety net programs.) What you’ll find is that about half of total spending was on programs for seniors: Social Security, Medicare, much of Medicaid, and other retirement and disability programs. Half the rest is defense."
A lot of the problems in the news at the moment strike me as inter-generational. An older generation has benefited from the shenanigans of the financial sector, and the long boom between the mid-1990s and 2008 - a boom fuelled by speculation, which turned out to be borrowing from the future.
Under this analysis, the unworkable nutty fantasy-land religion that is neoliberal economics, into whose hands the boomer generation delivered America, looks less like a reasonable way to manage an economy (since it has an abysmal track record) and more like a way of protecting existing claims to property - however bad the long-term effects those claims will have. Hence the sudden shift right-wards in ideology by both the Democrats in America and the Labour party in Britain in the 1990s. They were property owners now, they had power - so they wanted to defend it.
At the same time, younger people no longer have the opportunities they once did: income mobility has certainly shrunk a great deal in the US and, I suspect, elsewhere as well. The cost of higher education has ballooned to ridiculous levels. I know that in London it is now completely impossible to buy the kind of decent-size family house that would have been well within the means of the "Boomer" generation. Instead, those who bought twenty years ago have profited enormously from purchases ultimately fuelled by speculation - either those buying to let, developers or people working in the financial industry using their higher pay to drive up prices in affluent areas.
A whole generation - several generations, really - is getting the shaft while their parents profit from investments that their children can no longer make. Yet the parental generation continues to obstruct the passage of morally basic, obvious reforms. It's quite disgusting to watch.
None of this should be taken to apply to particular boomers, parents etc. There are quite a few who are moral, decent people who have just gotten very, very lucky. But there are also rather a lot who just don't notice the massive privileges they were handed and which they have done far too little to nurture or protect or hand on to their children.
I am not sure to what extent this intergenerational divide is replicated in Germany or Europe generally. Possibly it is less acute. I gather that in Germany, renting is much more common, for example.
posted by lucien_reeve at 5:35 AM on January 23, 2012 [1 favorite]
AND
I like Krugman's pithy summary of the U.S. federal budget:
"The key thing to remember, always, is what the federal government does: it is basically an insurance company for old people that also has an army. Look at a normal year, like 2007 (things are distorted right now by the cost of safety net programs.) What you’ll find is that about half of total spending was on programs for seniors: Social Security, Medicare, much of Medicaid, and other retirement and disability programs. Half the rest is defense."
A lot of the problems in the news at the moment strike me as inter-generational. An older generation has benefited from the shenanigans of the financial sector, and the long boom between the mid-1990s and 2008 - a boom fuelled by speculation, which turned out to be borrowing from the future.
Under this analysis, the unworkable nutty fantasy-land religion that is neoliberal economics, into whose hands the boomer generation delivered America, looks less like a reasonable way to manage an economy (since it has an abysmal track record) and more like a way of protecting existing claims to property - however bad the long-term effects those claims will have. Hence the sudden shift right-wards in ideology by both the Democrats in America and the Labour party in Britain in the 1990s. They were property owners now, they had power - so they wanted to defend it.
At the same time, younger people no longer have the opportunities they once did: income mobility has certainly shrunk a great deal in the US and, I suspect, elsewhere as well. The cost of higher education has ballooned to ridiculous levels. I know that in London it is now completely impossible to buy the kind of decent-size family house that would have been well within the means of the "Boomer" generation. Instead, those who bought twenty years ago have profited enormously from purchases ultimately fuelled by speculation - either those buying to let, developers or people working in the financial industry using their higher pay to drive up prices in affluent areas.
A whole generation - several generations, really - is getting the shaft while their parents profit from investments that their children can no longer make. Yet the parental generation continues to obstruct the passage of morally basic, obvious reforms. It's quite disgusting to watch.
None of this should be taken to apply to particular boomers, parents etc. There are quite a few who are moral, decent people who have just gotten very, very lucky. But there are also rather a lot who just don't notice the massive privileges they were handed and which they have done far too little to nurture or protect or hand on to their children.
I am not sure to what extent this intergenerational divide is replicated in Germany or Europe generally. Possibly it is less acute. I gather that in Germany, renting is much more common, for example.
posted by lucien_reeve at 5:35 AM on January 23, 2012 [1 favorite]
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Many 'attribute part of the lower unemployment rate to the German work ethic. Yet Germans, on average, work far fewer hours a year than Americans, thanks partly to five or six weeks of vacation.'
Not a single mention of minimum wage, or it's general absence in Germany. Seems like the obvious answer to both rising inequality and low unemployment.
posted by pwnguin at 11:33 AM on January 22, 2012 [2 favorites]