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Old 11-03-2011, 05:57 AM
dieter dieter is offline
Join Date: Dec 2008
Posts: 237
Default Re: Foreign Policy Rant Edition (Heather Hurlburt & Daniel Drezner)

Originally Posted by Sulla the Dictator View Post
This list seems to contradict your theory about the great sacrifice Germany has made for Europe:

Real wages stagnated and declined. Municipalities can't afford to fix their infrastructure. Pensions and the welfare state have been slashed under the Red-Green coalition.

My sources are Dieter Spethmann (former CEO of Thyssen-Krupp), who wrote a book on the subject, Hans-Olaf Henkel (former head of the industrialists association; pushed Germany into the Euro, has seen the error of his ways), Hans-Werner Sinn (most prominent economist of Germany), prominent economists Wilhelm Hankel, Joachim Starbatty, Wilhelm Nölling...

This is very simple. Exports (producing stuff and shipping it to other countries) only make you rich, if you get valuable imports in return.

The Chinese are suppressing their exchange rate. This means that they are giving us stuff below cost. The burden for this is placed on the Chinese consumer and worker, who can't consume as much for the fruit of his labor, as he otherwise would be with an appreciating currency. This makes sense for China in the long run though, since it allows China to acquire Capital and Know-how quickly.

The Euro has the same effect on German public and private consumption, just without the long term benefit. Germany has capital and Know-how.

Also, as I noted in another post, real interest rates have been higher since the introduction than they would have been, if Germany had kept the Deutschmark.

Last edited by dieter; 11-03-2011 at 06:00 AM..
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