Sunday, August 15, 2010

Wirtshaftwunder came from exporting the New Deal

One of history's great ironies is that the economic regimes we imposed on the defeated Japanese and Germans following WW II were designed by the furthest left, most progressive, of the New Dealers who were losing their influence at home.

Pacifist constitutions forced the Germans and Japanese to concentrate on non-military production.  Not surprisingly, since both countries boasted advanced industrialization before the War, the institutional arrangements made rebuilding their economies to master the production of civilian goods almost certain once that strategy had become a mandate from the occupation forces.

But it was more than that.  German industry had to accept works councils.  Old right-winger Douglas MacArthur forced land reform (the great promise of the Communists) on Japan.  Many folks from USA at the time thought a bunch of lefty ideas would make them too weak to fight wars.  They were correct.  What they probably didn't foresee is that economic "soft" power would be MUCH more powerful than an ability to fight wars.

The German economy was called Wirtschaftwunder (economic miracle.)  And while this wonder has taken a beating in the world where neoliberals still rule the debate, it still remains and has created the most powerful economy in Europe and it can be argued, the world.

By contrast, when the neoliberals went to Russia in the 1990s to "help" with their conversion to a "market" (Predator) economy, they created such a disaster that life-expectancy actually nose-dived.  Let's see--mixed economy New Dealers, Wirtschaftwunder.  Neoliberal free marketeers--chaos and disaster.  Pretty much sums up everything important one needs to know about economics.
German economy surges ahead at record pace
• Germany's 2.2% growth helps eurozone to outpace US
• Every eurozone country except Greece now out of recession
• Euro strengthens, with potential threat to Europe's competitiveness 
Julia Kollewe, Friday 13 August 2010 11.16 BST
The German economy grew at its fastest pace since the country was reunified in the second quarter, helping the eurozone to outstrip growth in the US.
Europe's largest economy powered ahead between April and June, growing by 2.2%, thanks to a recovery in construction and strong foreign demand for German goods, the federal statistical office, reported today. This was well above market expectations of 1.4% growth. Growth in the first quarter was revised higher to 0.5% from 0.2%.
Germany's performance helped the 16-member eurozone grow by 1% in the second quarter, the strongest growth rate since the first quarter of 2008 and a strong improvement on the 0.2% recorded for the first three months of this year. It was also stronger than the US economy's growth of 0.6% in the second quarter, but not as good as Britain's 1.1%. more
And the TINY possibility is raised the we in USA could learn something useful from the "student" who became the master at Industrial Capitalism.  Good idea.  Fat chance of succeeding.
FDL Book Salon Welcomes Thomas Geoghegan
Saturday, August 14, 2010 1:55 pm Pacific time
Welcome lawyer / author, Thomas Geoghegan, and Host Masaccio.
Were You Born On the Wrong Continent?: How the European Model Can Help You Get A Life
Thomas Geoghegan has written a book that captures the focus of the progressive movement: how does the Middle Class survive the predatory capitalism practiced in the United States and the United Kingdom? His answer is the German version of capitalism, where the interests of the workers are just as important as the voice of the capitalists.
He begins by pointing out all the ways people live better in the European Union. They don’t have to worry about the Big Five: retirement, health care, education, transportation and childcare. The government sees to all of these. Since it buys in bulk, it gets great prices, and people don’t have to spend their time worrying about any of those things. Just think how great your life would be if you didn’t have to think about where you send your kids to school, or health insurance, or how long your commute is. And think how much better off you would be in this miserable economy if you didn’t have to worry about the losses in your 401(k) plan (if you had one), and how you would pay for health care if you have to pay COBRA on the paltry unemployment benefits you get if you got fired.
But there is more. In Europe, cities are livable. There are parks, beautiful buildings, wonderful museums, ancient churches, free or cheap concerts, festivals, open-air markets, functional subways, buses and trains, and street-cleaners. Geoghegan references the lovely public spaces with his comment on the banks of violets he saw in Zurich. There is café life, which is a gracious way to live, indeed. In Paris, the cafés are filled with people of all ages, sitting out at all times of the year drinking coffee and talking to each other, not immersed in private thoughts in front of a laptop or staring blankly at the third football game of a Sunday.
They can live this way because they aren’t working themselves to death. They get real vacations, tons of days off which create lots of three and four day weekends, and their daily work hours typically aren’t as long as ours. more

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