Economy: unemployment in Germany on a 5 year low.

[Ecthy]

Originally posted by ElTigre
Sure, we're happy to trade bureaucrats for cold cash. Let's say another 2 Billion Euros, okay?

None of that.

[BeBMan]

Klinsi.

[ElTigre]

In other news...

Lack of Women in Eastern Germany Feeds Neo-Nazis

[Harovan]

Originally posted by DanS
It works. Schroeder's reforms were so minor that it seems dubious to attach any significance to them.

I don't deny that they came late. They had a rough birth, because they were very, very unpopular. Some say they finally cost him his office (not his bad relations to America - they were very popular). And his reforms were seriously weakened before they could pass the Bundesrat (chamber of federal states, where the CDU had the say). So really it may be too little, too late. But compared to Merkels measures so far they were gigantic.

[DanS]

Originally posted by Sir Ralph
Merkel didn't do it either. "Being not Schröder" is a bit weak as explanation for such a massive economical improvement, and so far you didn't deliver anything more.

Who did it?

The situation is what it is. I have no need to defend it against alternative descriptions.

From an interested outsider's perspective, it seems clear that Schroeder preferred the status quo that was no longer putting ever-increasing amounts of bread on the table. Through the recessions, German business had no occasion to develop confidence in Schroeder's programs on the economy.

In business, there's a maxim that you can't go wrong by replacing bad management. That's precisely the time when you invest in a company. I hypothesize that German businesses embraced the new government in like manner and perceived that this change was good for them. Sentiment can have a great deal of impact on economic performance -- at least in the short term -- and this is what seems to have happened in Germany.

I readily admit that this view is somewhat mystical. But on the other hand, it seems to fit the facts.

[DanS]

Originally posted by Sir Ralph
So really it may be too little, too late. But compared to Merkels measures so far they were gigantic.

Basically, you're backed into the corner of arguing that a few milquetoast reforms, done half-heartedly, had more economic impact than did improved business sentiment.

[BeBMan]

Monocausal explanations to complex matters

[DanS]

Until and if the herr doktor professors join the discussion, that's all you got.

[BeBMan]

OK

[Harovan]

Originally posted by DanS
I readily admit that this view is somewhat mystical. But on the other hand, it seems to fit the facts.

Which unfortunately is irrelevant - since "post hoc ergo propter hoc" is still a logical fallacy.

Basically, you're backed into the corner of arguing that a few milquetoast reforms, done half-heartedly, had more economic impact than did improved business sentiment.

Not at all. Here's the economical, educational and employment-wise subject of Schröder's Agenda 2010. I apologize for the poor translation.

- Boosting middle-sized businesses by lowering bureaucracy and no longer demanding a master craftsman diploma (that sounds not much, but is a great help for a starting business, because this diploma cost a lot of time and money)

- significantly lowering lay-off protection

- moving a part of the ancillary labour costs from the employer to the employee - who has to shoulder future increases to 100% instead of only 50% as it was

- allowing the training of apprentices to senior journeymen (so far a master was required)

- lowering income tax rates from 26..53% to 15%..42% (that should be a biggie)

- increasing tax-free income to 7664 Euros (that too)

- increasing spendings for education by 25% in 5 years (and thus giving the businesses better educated people at taxpayer's cost)

- significantly lowering unemployment benefits and the time you can get them.

- reforming the "reasonability clause" (sorry, that's my take on translation), means if you are unemployed and there is a job you can do, you have to do it, no matter if you are overqualified or lose a lot in wages. Formerly you could deny a job if you were overqualified for it and/or your salary would be significantly less than what you got in your last job.

- a lot of changes in the social security network (both health and retirement) to lower the employer's part of the ancillary costs.

Mind you that a lot of these points were weakened in the Bundesrat, because the CDU blocked them. That blockade was catering both to your "too little" and "too late" complaints.

That's what Schröder has on the table. I certainly had hoped it came earlier and wasn't so much and so long talked down by opposition and public resistance, but it finally passed and was generally considered a good thing.

According to you, Merkel is

- not Schröder
- and has spread good mood in some mystical way

That's all. Sounds poor, but you claim to be the expert, so my response is, whatever.

[Ecthy]

People like DanS give relatively low-developed sciences like economics / political science / history a bad name.

Ther's nothing mystical to interhuman action.

[Dinner]

Originally posted by ElTigre
In other news...

Lack of Women in Eastern Germany Feeds Neo-Nazis

Tell them there are loads of eastern European women begging to get to the west.

[Harovan]

Well that's exactly where they go. The west.

[DanS]

Originally posted by Ecthy
People like DanS give relatively low-developed sciences like economics / political science / history a bad name.

On the contrary, economists know that business sentiment is important to determining economic performance, even if they don't understand clearly all that goes into the measurement (the "mystical" part). That's why they collect the data. Quite a few steps above hocus pocus.

[BeBMan]

And now explain how this makes business sentiment the major reason for the current situation....or how business sentiment is mainly a result of Merkel being chancellor.