German Elections -- Results

[Bereta_Eder]

well holland said no to eurocon
same as france
and now germans say no to violent reform

one could say it is clear that europe has no conscunus for doing the alterations DanS prohpesizes.

[DanS]

Originally posted by Colon


Are you holding Schröder accountable for the lack of rising real estate prices?

Oh, you're being coy. You're so cute.

How about answering the question? Is 0.8% and 1.2% growth acceptable for Germany?

[chequita guevara]

Apparently it is, DanS. Mostly I think German voters want someone who'll stop big industry from cutting their vacation and forcing a 15% pay cut down their throats. I can't understand why anyone would ever think that decreasing the amount of money circulating in your economy is a good thing, but conservatives in the U.S. and Germany seem to think that screqwing the poor and middle classes will somehow benefit everyone. What's even more amazing is the number of stupid people that fall for it.

[Colon™]

Originally posted by DanS


Oh, you're being coy. You're so cute.

How about answering the question? Is 0.8% and 1.2% growth acceptable for Germany?

I was posing a question that's actually meaningful. I don't call that coy.

[lord of the mark]

Originally posted by chegitz guevara
Apparently it is, DanS. Mostly I think German voters want someone who'll stop big industry from cutting their vacation and forcing a 15% pay cut down their throats. I can't understand why anyone would ever think that decreasing the amount of money circulating in your economy is a good thing, but conservatives in the U.S. and Germany seem to think that screqwing the poor and middle classes will somehow benefit everyone. What's even more amazing is the number of stupid people that fall for it.

there are two questions Guev. One is whether fiscal stimulus is desirable, and would raise wage levels. Thats essentially academic as long as Germany is in the Euro zone, and its fiscal policy is constrained. Given that constraint, and the overall market situation that Germany faces, the question is whether their current wage levels, benefits, etc are compatible with increasing economic growth and reducing unemployment. There seems to be a broad consensus that they are not. There remain the questions of how to get to change, and how far to go.


Micha - IF changing technologies, outsourcing, etc lead to a decline in the demand for labor (which is itself a matter of disagreement) it doesnt necessarily mean a rise in unemployment - the market would "naturally"" respond to a decline in demand for labor for lowering wages until "full" employment is reached. For a variety of reasons, it has been argued, wages are "sticky" downward, and govt policies such as nationwide collective bargaining in Germany probably add to that. It is to be noted that the US, UK, and other industrial countries faced the same technological and trade changes, but without the persistent high unemployment, and with arguable impacts on wages.

[Ted Striker]

Originally posted by chegitz guevara
Apparently it is, DanS. Mostly I think German voters want someone who'll stop big industry from cutting their vacation and forcing a 15% pay cut down their throats. I can't understand why anyone would ever think that decreasing the amount of money circulating in your economy is a good thing, but conservatives in the U.S. and Germany seem to think that screqwing the poor and middle classes will somehow benefit everyone. What's even more amazing is the number of stupid people that fall for it.

Word

Tell 'em Commie.

[lord of the mark]

I would suggest that Germany could do worse than a "Jamaican" coalition - CD-FDP-Green. Which would moderate the market reforms to some degree, but be more proreform than any other likely coalition. I would hope the Greens and FDP could work through their disagreements on environmental issues.

[lord of the mark]

The other problem, AFAICT, was Kohls decision way back when Germany was reunified, to attempt to do so on the basis of making East German wage levels match Western ones. East Germany simply didnt have the human or physical capital to support such wage levels, and the result has been persistent unemployment. The other former communist satellites - Poland, Czech, Hungary, have had far different experiences, as they used low wage levels to give themselves comparative advantage in attracting industry.

Economically speaking, Germany would have been far better off letting the East remain independent. This would have forced them to adopt the kinds of economic approaches that have led to growth in east central europe.

[lord of the mark]

Originally posted by chegitz guevara
. I can't understand why anyone would ever think that decreasing the amount of money circulating in your economy is a good thing,

1. Increasing fiscal stimulus doens increase the amount of money in circulation - though it may, arguably, increase the velocity of circulation.

2. Whether increasing the money supply can increase real levels of economic well being is a matter of some debate among economists.

3. Even among those economists most in favor of fiscal and monetary stimulus, this is only up to a point - traditionally called "full employment" after which further stimulus only leads to inflation.

[Colon™]

Originally posted by lord of the mark
East Germany simply didnt have the human or physical capital to support such wage levels, and the result has been persistent unemployment.

That's something I've been trying to hammer down people's brain for a while already as well. Unemployment in West Germany is fair, which suggests the labour market isn't all that restrictive. It just is for a developing country like East Germany.

[chequita guevara]

There is no good reason why country after country needs to surrender to the liberals. It's a stupid Hobson's choice, the prisoner's dilema. If one country sticks its ass in the air for capital, and the rest don't, then that country benefits, and the rest are hurt. If all countries stick their asses in the air, they are all hurt, but not as much as if they didn't. If no country stuck its ass in the air, we'd all be better off.

The German standard of living is what we should all aspire to have. We shouldn't cheer from the sidelines as the best labor conditions in the world are destroyed. That only means it's allowable for them to get worse here, and they will.

Germany is not as bad off as conservatives say, and at least the unemployed in Germany are treated better than the working poor in America, let alone the American unemployed.

Germany needs to go forward, not backwards.

[lord of the mark]

Originally posted by chegitz guevara
There is no good reason why country after country needs to surrender to the liberals. It's a stupid Hobson's choice, the prisoner's dilema. If one country sticks its ass in the air for capital, and the rest don't, then that country benefits, and the rest are hurt. If all countries stick their asses in the air, they are all hurt, but not as much as if they didn't. If no country stuck its ass in the air, we'd all be better off..

No even in a closed economy, thered be a level at which raising wages would lead to a loss in well being.

[BeBMan]

Well, wages aren't on the same level in the east. There was some movement towards same wages during the last years ( and it still is -- related to development of prices), but it isn't general standard, and certainly wasn't when the unification was made.

What Kohl did, and what has been often criticized since then was to change most saves of Eastern Germans 1 to 1 from their former Eastern German "DDR-Mark" to the West-German "D-Mark" (actually it was more complicated, a part was converted 1 to 1, the rest 2 to 1 IIRC) although most experts said this did not reflect the real value of the East German money.

Even more serious was his decision to finance all the costs of the unification via money from social systems, not via taxes or anything else. As an result work and jobs became much more loaded with costs, since here in Germany employers and workers pay a certain amount into those social security systems. Kohl hoped that a growing economy would be able to deal with this easily and made some great promises about "prospering landscapes" in the east.

But reality was different -- the (West-)German economy already had structural problems, their negative effects were only delayed a bit by the unification, because many Western companies were quick to gain new markets in Eastern Germany. OTOH most former state-owned Eastern "companies" broke down completely, some because they simply coulnd't survive the now much harder competition, others because of mismanagement later after the unification. Unemployment became higher and higher in the east, and due to the general weak performance of the economy later in the West too. The truth is that Kohl did hardly anything to reform the country, even when confronted with those problems. That has only started with Schroeder, although it is debatable how successful it was, and what future steps are needed, and if he's the right guy for this.

However, I think any government now has to continue with reforms, I don't think we can afford another leadership doing nothing for years. Of course without a clear mandate for any of the major parties it will be difficult.

[lord of the mark]

Originally posted by chegitz guevara
and at least the unemployed in Germany are treated better than the working poor in America, let alone the American unemployed.

yes, at the expense of the employed in Germany, which is why so many in Germany WANT to move in the direction of the market.

Look at the votes - LaFontaine left the SPD cause he opposed the reforms - what did the Linke get overall, about 10%?

The SPD was still pro reform. The total vote for at least SOME economic reform, in a market direction, includes the votes for CD, FD, SDP, AND many of the Greens.

[lord of the mark]

Originally posted by BeBro
Well, wages aren't on the same level in the east. There was some movement towards same wages during the last years ( and it still is -- related to development of prices), but it isn't general standard, and certainly wasn't when the unification was made.

What Kohl did, and what has been often criticized since then was to change most saves of Eastern Germans 1 to 1 from their former Eastern German "DDR-Mark" to the West-German "D-Mark" (actually it was more complicated, a part was converted 1 to 1, the rest 2 to 1 IIRC) although most experts said this did not reflect the real value of the East German money. .

But didnt that mean existing wages at the time were effectively converted to unrealistic levels?

How does nationwide collective bargaining impact relative wage levels - can a company establish different wage levels in the east than in the West, or do the labor agreements prevent that?