Germany's economy continues to sink; will politicians reform?

[Whaleboy]

Do you think the people are stupid?

*Thinks to self*

Yes!

[kronic]

Originally posted by Giancarlo
The German economy is declining (and may tank) because of socialist/left wing mismanagement. They should of took a conservative approach to economic policy, instead of being foolish idiots embracing the values of the left wing.

Despite the fact that the Conservatives (who were long enough in charge) didn't change anything.

A left wing government was needed to even start the reforms you want.

[DanS]

the old benefits were proportional to former wages. So why should people work? These hand-outs are bringing the German economy to a halt, and it is good that they decided to cut them

The fact that unemployment benefits were proportional to wages was a good feature of the system. We have such a system in the US and it helps people cover their large home mortgages, etc. The US has very generous unemployment payments compared to most other developed countries.

However, the thing that was killing them was that unemployment benefits didn't expire. So you could have those proportional payments for a long, long time (forever?). As you say, there is no incentive to work. In the US, the congress usually extends unemployment benefits if there is a recession on, even though unemployment payments are only made for 3 months during OK economic times. So if we had a recession as long as Germany's, we might have been in a similar situation...

In addition, in the US, people tend to hide out in the disability system to make it through tough economic times. Because of such country-specific quarks, I would be hesitant in making such precise comparisons across countries. However, I do think it's clear that Germany has a much worse unemployment picture than a lot of other places, including the US.

[Giancarlo]

As far as I'm concerned, West Germany was doing great before reunification as it was ruled by conservatives and had conservative policies pushed.

Originally posted by kronic

A left wing government was needed to even start the reforms you want.

Nope. The left wing government in power now has done next to nothing right. Just like Zapatero in Spain who is collapsing the economy single handedly there.

[DanS]

As far as I'm concerned, West Germany was doing great before reunification as it was ruled by conservatives and had conservative policies pushed.

Those "conservative" policies weren't really what you should think of as conservative. Even the liberals (in the European sense) seem to me to be socialists.

[Spiffor]

Originally posted by DanS
Even the liberals (in the European sense) seem to me to be socialists.

They pay lip service to the idea of a social safety net, but most are convinced the safety nets must be destroyed. The liberals were the spawning pool, in Europe, of the idea that it's the unemployed's fault for not finding a job, that the safety nets are killing our economies, and that we ought to have a low-wage low-qualification sector. Most liberals have long been outspoken supporters of the privatization of utilities (which is now very advanced in the EU), and they are today outspoken supporters of the privatization of welfare systems.

I don't see how people who actively encourage minimal State could be Socialists. True, they often support the idea of some public aid for the most destitute, but that's a very far cry from "Socialism" as you call it.

[BeBMan]

Originally posted by DanS


Those "conservative" policies weren't really what you should think of as conservative. Even the liberals (in the European sense) seem to me to be socialists.

That they (edit: I mean the conservatives ) are for some sort of social security does not make them socialists, after all the first steps in this direction were taken under Bismarck. I'm not really sure they want to destroy the social safety net completely, as Spiff writes, but simply because they are aware that in Europe the idea of social safety has a long tradition that can't be given up easily, and also it has positive effects on social stability. However, time will tell how much social safety will remain if we are under economic pressure for even more years....

[DanS]

Spiff: I was talking about Germany specifically, not Europe as a whole. AFAIK, the liberals as a voting bloc form a coalition with CSU/CDU. This is similar to the US, where they are part of the Republican Party. But US politics are much to the right of German politics. I wonder about their liberal bona fides if they are OK with CSU/CDU socialist policies.

[Colon™]

Originally posted by Spiffor
...and they are today outspoken supporters of the privatization of welfare systems.

Which liberal party are you referring to? That's certainly not the case in Belgium at least. As a matter of fact, I can't really recall any political party advocating such privatisation. Not wholesale.

[Spiffor]

Originally posted by DanS
I wonder about their liberal bona fides if they are OK with CSU/CDU socialist policies.

I suppose the patient-minded liberals tolerate it, as they know the pull goes in their direction (albeit slowly). And in general, the FDP has always been a party that got power only from coalitions. When you're the small one in a coalition, you bite your lip quite a few times, no matter how you dislike the policies of the big one (I know the feeling to well )

[Spiffor]

Originally posted by Colon
Which liberal party are you referring to? That's certainly not the case in Belgium at least. As a matter of fact, I can't really recall any political party advocating such privatisation. Not wholesale.

It is true they don't advocate wholesale privatization of the welfare systems, but partial ones. They were the spearhead of the idea of opening retirement systems to capitalization (an idea now followed by most parties in Europe), they want to see a competition between public and private organisms in healthcare and oldcare. The French liberals, at least, do, and I expect them to be among the most mellow in Europe (along with Belgium's and Greece's).

[Colon™]

Isn't that just the sensible thing to advocate?

[Drogue]

Originally posted by axi
Do you think the people are stupid? Do you sincerely believe that the working majority would ever concede to lifting restrictions on firing employees, during an economic recession? You don't need to be an economics major to know what your own boss would do if he were free to fire and hire people at will. Most bosses would just take advantage and do layoffs. The incentive for hiring that may come from easier firing can only be considered in times of economic growth, when new jobs are being created, not lost.

But as an economics major, you can see that if layoffs aren't made in an economic downturn, more companies will go out of business, causing job losses. Forcing companies to keep paying employees that are no longer profitable leads to fewer companies and fewer jobs. So yes, during an economic downturn it would make workers jobs less secure, but would also mean there are more jobs in the economy, meaning more people are actually in work.

[Spiffor]

Originally posted by Colon
Isn't that just the sensible thing to advocate?

Edit: what has become of the agressive, evil "tongue" smiley?

[lord of the mark]

Originally posted by axi
Do you think the people are stupid? Do you sincerely believe that the working majority would ever concede to lifting restrictions on firing employees, during an economic recession? You don't need to be an economics major to know what your own boss would do if he were free to fire and hire people at will. Most bosses would just take advantage and do layoffs. The incentive for hiring that may come from easier firing can only be considered in times of economic growth, when new jobs are being created, not lost.

an economic downturn doesnt mean no new jobs are being created, at least over here. There are always some sectors, and firms, that are growing even during a downturn.