The Unselfish Germans?

Gibberish from the editors of the Washington Post:

Germans are immensely proud of their fiscal rectitude and their manufacturing prowess, as they should be. Their achievements nevertheless constitute too much of a good thing, because Europe’s economy, and the world’s, needs new sources of demand. By limiting its own government expenditure and taxing its people stiffly to pay for what it does spend, Germany leaves the role of consuming the world’s goods and services up to others, including Americans, who may not be able to play it indefinitely. This harms neighbors, such as Greece and Italy, who need more markets to help grow their way out of debt; and at this point, it is harming Germany, which now stands uncomfortably close to recession because of its undue dependence on global export markets — which are plagued by uncertainty amid President Trump’s trade war with China.

Among the many voices calling on Germany to put its balance sheet to work stimulating its economy — tax cuts and infrastructure investment would be especially helpful — are the International Monetary Fund and the European Commission. French President Emmanuel Macron has even said “the German growth model has perhaps run its course,” and he has a right to criticize, because his administration has instituted a number of structural reforms to the sluggish French economy that Berlin has long sought. Berlin certainly disdains the hectoring it gets from Mr. Trump and his threats of auto tariffs; a good way to shut him up, while stimulating growth, would be to spend more on much-needed defense modernization.

However tentatively, Germany is starting to get the message. Household and government consumption rose modestly last year, part of a trend toward slightly greater reliance on those engines of growth. The country’s current account surplus could fall below 7 percent of output by 2020, according to the Bundesbank.

Yet old habits, deep-seated ideological commitments — and the political clout of export industries — die hard. Berlin is on course for another budget surplus this year. Germany needs to move boldly toward growth based more on its own domestic needs. What the world needs now is for Germans be a little more selfish. Actually, it could be the most selfless thing they could possibly do.

Germany’s behavior is already motivated by supreme selfishness. Germany derives almost 50% of its GDP from exports. It’s one thing for tiny Denmark to derive half of its GDP from exports; it’s another for Germany to do so. j China derives 10% of its GDP from exports if you can believe the official statistics. Japan derives less than 20%. The U. S. about 12%.

The story of the last 30 years is not one of a beneficent Germany shipping the product of its labors and frugality to the profligate countries of southern and eastern Europe but of Germany exploiting the hardworking people of undercapitalized eastern and southern European countries to buy their goods, German banks lending them money so they can keep doing so, and then imposing punitive austerity agreements on them to save the reckless German banks. The Germans continue to maintain that they will never be transfer economy but they are already a transfer economy—transfering money from poorer eastern and southern European countries to much richer Germany. German politicians know what they should be doing they just don’t know how they can keep their jobs if they do it. They aren’t motivated by selflessness, either.