- js reader version
- view hidden posts
- tags and related articles
by Lucas Zeise
Sunday, Sep. 14, 2008 at 4:07 AM
In Germany, the competitiveness of businesses is still set above strengthening domestic demand. Therefore Germany could skid into a recession. In the US, trickle-down economics, tax cuts benefiting the top 1% and military Keynesianism make the economic future ominous.
EXCESSES OF SUPPLY THEORY
In Germany the competitiveness of businesses is still set above strengthening domestic demand. Therefore Germany could skid into a recession
By Lucas Zeise
[This article published in: The Financial Times of Germany, 9/2/2008 is translated from the German on the World Wide Web, http://www.ftd.de.]
At the end of August 2008, Ralph Atkins, correspondent of Financial Times in Frankfurt, listed many reasons why the Euro zone will not skid into a recession. His arguments were unsystematic. The argument that French president Nicolas Sarkozy would not allow a recession was particularly strange. A French analyst told him, Atkins said, Sarkozy would send his wife shopping if necessary.
In my opinion, the diversity of Europe underlies his confidence. Because conditions are so different in the countries of Europe, because there is an easily freaked-out president in France, it is unlikely the region will really slide into a complete recession. The different follies of politics in the different countries will neutralize one another.
There aren’t such mitigating circumstances for Germany. Rather folly is raised to a new power in Germany. Bad policy is not thwarted by another bad policy. The second policy is always the same kind as the first: supply side theory as developed in Kiel and with the council of experts in the 1970s as a counter-concept to the ideas of the social-liberal coalition inclined to mild reforms.
DILAPIDATED INFRASTRUCTURE AS MODEL
This supply theory wouldn’t be so bad if it led as its names suggests to strengthening supply (in production factories). But that cannot be claimed. Investment in training workers is cut. Savings are realized here. The infrastructure is privatized or passed off as a public-private partnership according to the model of Great Britain’s dilapidated infrastructure. Unprofitable rail lines are eliminated. More traffic is redirected to the highways. The productivity of the national economy is reduced through constantly growing traffic jams.
German policy means something else with supply in theory and praxis. The production factors themselves are not strengthened. Rather businesses should obtain cheap production factors at garage sale prices. Top-flight reliable workers who cost almost nothing increase the competitiveness of industry abroad and ultimately increase profits, the goal of the increase.
The key economic data for the second quarter of 2008 clearly shows the consequences of this disastrous economic policy. But hardly anyone looks at this data. The growth of the gross domestic product (GDP) was negative at minus 0.5 percent. This was known in advance. All the appeasers had already calmed themselves that this was only an inevitable reaction to the highly distorted growth rate of the first quarter. Hardly anyone is interested that per capital net wages fell one percent compared to 2007 and that the consumption of private households slipped 0.9 percent compared to 2007.
The development since 2000 is even more alarming. On his website (jahnke.net), the economist Joachim Jahnke presents disquieting long-term charts on this theme. Since 2000, the gross wage per worker fell five percent while business- and assets income in the same period skyrocketed 40 percent. The public has accustomed itself to this development. Profits now rise faster than wages and salaries.
AN IRON LAW
This catastrophic development has become an iron law in Germany. This does not hinder some from hoping for a surge in consumption. “Das Kapital” caricatures this attitude with the words “How should domestic demand rise when it has stagnated for eight years? The pent-up demand must have been tremendous” (FTD, August 27, 2008).
Massive pressure on the lowest wage groups, growth of the low wage sector and strangulation of consumption are all extreme in Germany. Therefore this country will be most severely affected by the growth weaknesses of the world economy on account of the constantly miserable domestic demand and skid into the recession when the Euro zone altogether can avoid it.
Compared to the Kohl years, downward wage pressure, the income spread and the other disastrous effects of supply policy intensified with the start of the Red-Green Schroeder government. While social democracy had a certain protective function for dependent employees, Red-Green moved to the employer-camp and is firmly on their side. Privatization of state assets advances unchanged…
From an economic perspective, a breach with the harmful supply policy is urgently necessary…
Report this post as:
GUIDE TO REBEL CITY LOS ANGELES AVAILABLE
lausd whistle blower
Help KCET and UCLA identify 60s-70s Chicano images
UCLA Luskin: Casting Youth Justice in a Different Light
Change Links April 2018
Nuclear Shutdown News March 2018
Join The Protest Rally in Glendale on April 10, 2018!
Join The Protest Rally in Glendale on April 10, 2018!
Spring 2018 National Immigrant Solidarity Network News Alert!
Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A.
Steve Mnuchin video at UCLA released
Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups
After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video
Resolution of the Rent Strike in Boyle Heights
What Big Brother Knows About You and What You Can Do About It
Step Up As LAPD Chief Charlie Beck Steps Down
Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29
Don’t let this LA County Probation Department overhaul proposal sit on the shelf
Echo Park Residents Sue LA Over Controversial Development
Former Signal Hill police officer pleads guilty in road-rage incident in Irvine
Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents
Center for the Study of Political Graphics exhibit on Police Abuse posters
City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre
Professor's Study Highlights Health Risks of Urban Oil Drilling
Claims paid involving Pasadena Police Department 2014 to present
Pasadenans - get your license plate reader records from police
LA Times Homicide Report
More Local News...
Biodiversité ou la nature privatisée
The Market is a Universal Totalitarian Religion
Book Available about Hispanics and US Civil War by National Park Service
The Shortwave Report 04/20/18 Listen Globally!
The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder
Paraphysique de la dictature étatique
Book Review: "The New Bonapartists"
The West Must Take the First Steps to Russia
Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine
The Shortwave Report 04/13/18 Listen Globally!
“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize!
The World Dependent on Central Banks
Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine
March 2018 Honduras Coup Again Update
Apologie du zadisme insurrectionnel
ICE contract with license plate reader company
Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes
Prohibiting Micro-Second Betting on the Exchanges
Prosecutors treat Muslims harsher than non-Muslims for the same crimes
Amy Goodman interview on cell phone safety
Mesa, Arizona police officer kills unarmed white man
Israeli leaders should be prosecuted for war crimes
Paraphysique de l'autorité
Two Podcasts on fbi corruption
Fbi assassins assault & try to kill DAVID ATKINS
EPA Head Scott Pruitt: Of Cages And Sirens
More Breaking News...