THE STORY SO FAR: PART 185

HOW IS IT THAT THE GERMANS DO WHAT THEY DO—SO WELL—AND SO CONSISTENTLY?

The Germans hide their expertise in plain sight, yet for some reason we seem incapable of learning from it.

Decades pass, the evidence piles up, and still we seem incapable of learning from what—based on the evidence—is self evident. Their economic system works better than ours. If you don’t accept that argument, let me compromise: Aspects of their economic system deliver measurably superior results.

When I worked in the UK, I couldn’t understand why the British were so reluctant to copy the German economic system, and now it seems that the U.S. has similar reservations.

It is quite baffling because the German business model—which is not that complicated—is quite remarkably successful—and has been so since the end of WW II (and it did rather well before that). In addition, the Germans absorbed East Germany which was, for many years, a huge economic burden in its own right.

Dan Rather has written an excellent piece which appears in the Huffington Post of March 4 2013. The following is an extract from it.

We had just returned from our own tour of Germany's schools and factories and can report that the German model does in fact provide a viable and popular pathway to get young people employed immediately after high school in good paying jobs. Jobs that can turn into careers.

We found a culture where "vocational training" is not a taboo word, where companies invest billions of dollars annually in training young people who have completed tenth grade for apprenticeships in healthcare, information technology, and above all, manufacturing.

The results are hard to dispute: Germany's high school drop-out rate is around 7 percent (compared to the U.S.' dismal 23 percent.) And while 8 percent of Germany's youth population (ages 16-24) is unemployed, our youth unemployment is at 16 percent (for African-American youth, it's a bleaker 38 percent, according to the Department of Labor.)

Germany's highly-skilled workforce helps it create high-end products that the world is hungry for. As a result, Germany exports more products than anywhere else except China, and the country has been a lone beacon of good news while the rest of Europe has been laid low by the financial crisis.

Well, it is not true the rest of Europe has been “laid low” but the countries which are doing well—or well enough—are all really following variations of the German economic model, and are mainly clustered in Northern Europe. Of course, it can be argued that what works in relatively small countries like Sweden cannot work in the U.S., but if you add up the populations and GDPs of Germany, Austria, Switzerland and Scandinavia—all high wage, high added-value economies--the total adds up to a significant percentage of the size of the U.S. economy—and is doing vastly better in terms of the wellbeing of the average citizen.

It would seem no more than good sense to take a closer look.

 

 

A SAD TIME FOR IRELAND & ANOTHER WARNING FOR THE U.S. (WHICH WE ARE LIKELY TO IGNORE)

Cover of James Joyce

JAMES JOYCE IS WIDELY KNOWN
 AS THE MAN WHO INTRODUCED SEX
TO IRELAND. PREVIOUSLY, IT WAS
UNKNOWN THERE.

Department of Hubris , Corruption, Greed, Incompetent Banks, Interchangeable Words & Predictable Outcomes

As I write this, Ireland is frighteningly near being bankrupt – and would be if it hadn’t got the EU to backstop it - a sad fate indeed for a country that had transformed itself from being one of the poorest nations within the EU, as late as the Eighties, to becoming one of the wealthiest by the first decade of this century.

The scale of the catastrophe – an entirely appropriate word in this context – is hard to grasp.

I find it particularly upsetting because I was once heavily involved in trying to reform the Irish economic system – with some success at the time - so now it is particularly galling to see so much of the progress that resulted being destroyed as a consequence of entirely preventable, and reprehensible, behavior.

Department of 'So what happened?' 

I’m going to write about it in detail some other time when I’ve dug a little deeper, but, in broad terms it seems to be a classic example of a nation getting rich too quickly, thoroughly bad political leadership, massive greed at just about every level, a property bubble that reached insane proportions before it burst, and a banking system that performed just about as badly as the U.S. financial sector.  Add in arrogance and corruption in large doses – and stir.

And now the Irish are emigrating once again. Since I devoted over a decade of my life, and all I possessed, to preventing that very thing, my initial reaction was to feel very, very angry. But since I have mellowed with the years – and everything is fodder to a writer – I have moved on to feel more philosophical than irate – and to await ‘The Big Picture’ – the scaled up version of Ireland’s economic collapse where the currency in question is the U.S. dollar.

I have run across two quotes about Ireland that fits the mood. One is the disturbingly accurate classic from James Joyce:

“Ireland is the old sow that eats her farrow.”

The other makes me smile – which is exactly what I need to do right now to counter these bitter developments. It comes from Dave Barry.

“Geographically, Ireland is a medium-sized rural island that is slowly but steadily being consumed by sheep.”

If we don’t change our ways, much the same fate await the U.S. economy – and for much the same reasons; and, as with Ireland, the collapse will come with disturbing speed. As for the sheep, could it be that the American version comes with two legs, is also known as ‘the voter’ and is disturbingly easy to manipulate.

Watch this space.