Pravda notices the German economy

The Germans and the Americans largely industrialized using the same playbook.  After WW II, the team of American economists who supervised the reconstruction of Germany and administered the Marshall Plan were thoroughly conversant with the principles of Industrial (Producer Class) capitalism.  So in spite of 35 years of neoliberal triumphs worldwide, the flicker of the industrial thinking still burns in Germany.  Here in USA, it has been so thoroughly extinguished that something like this Washington Post opinion piece is almost shocking.

Using German ingenuity to fix our economy

By Harold Meyerson, Published: June 15

A heretical idea has entered the national discourse: Maybe some other nations handle their economies better than we do. Some nations, after all, are growing like gangbusters. Some nations have retained manufacturing — even high-wage manufacturing — in the face of low-wage competition. And in some nations, ordinary people actually share in the proceeds from globalization that in this nation flow only to the rich.

This "heresy" that the USA may not be #1 will be a hard sell in D.C.  After all, We're #1 is all most of the denizens of that city know.  USA! USA!

The June 9 issue of Bloomberg-Businessweek, to take just one example, included the article “Fixing America’s Economy: Nine Ideas from Around the World.” Looking at Germany, China, Turkey, Singapore and five other places, the magazine recommended stiffening qualifications for getting a mortgage, mandating corporate retraining of employees and imposing a national sales tax.

Oh isn't this sweet.  Two of these three suggestions are so far down the list of important Producer strategies as to be almost irrelevant.  Mortgages are hard enough to get--or they were when I was rehabbing in St. Paul.  And VAT?  Seems like cities and states already do that.  No folks, you are going to have to dig deeper.

American exceptionalism, apparently, has its limits.

Really?  Have you heard a politician recently.  The Ugly American is still alive and well.

Of course, if you listened to the Republican presidential candidates’ debate this week, you’d conclude that the way to revive the economy generally and manufacturing particularly is simply to deregulate business and eliminate its taxes. (This is also the Republican remedy for measles and gout.) Throw in the defunding of the National Labor Relations Board, which Newt Gingrich advocated, and you’d get an economy that competed with Asia’s low-wage manufacturing regions. They’d pass us on their way up; we’d pass them on our way down.

Fortunately, that’s not the only economic model out there. For a growing number of economists, pundits and even the occasional CEO, Germany offers lessons in how an advanced economy can compete globally and actually raise, not lower, its living standards.

In a March paper for the Council on Foreign Relations, Nobel laureate economist Michael Spence and New York University researcher Sandile Hlatshwayo argue that Germany’s success at building a booming manufacturing sector that constitutes almost twice the share of the economy that ours does is largely the result of “a broad agreement among business, labor and government” to keep wages competitive and high-value-added production at home. 

Leslie Gelb, former president of the Council on Foreign Relations, also attributes Germany’s overwhelmingly positive trade balance and comparatively low unemployment rate (7 percent) to that tripartite system. David Leonhardt, the New York Times economics columnist, wrote last week that Germany owed its edge in global competitiveness to a range of policies that could not be more different than ours: limiting homeownership, improving education (including vocational and technical education) and keeping unions strong — which is why “middle-class pay,” he noted, “has risen at roughly the same rate as top incomes.” more

Gee--is Leslie Gelb still with us?  And Leonhardt?  Good grief, these two have been pushing the most hideous forms of neoliberalism for decades.  What the hell do they know about creating a manufacturing economy?  We are in deep shit if these two are examples of our wise men.

On a lighter note.  In case anyone believes that human flight is anything except a manifestation of the age of petroleum, note the pathetic attempts to build flying machines that don't use petroleum fuels.  We are all REALLY going to miss oil but aviation will miss it the most.  I am not sure any amount of ingenuity will keep folks in the air.  Oh, and just wait until the hungry of the world discover how many soybeans to takes to fly a Gulfstream from New York to Honolulu using biofuels.

Solar plane and biofuel jet engines on display at the Paris Air Show

The annual Paris Air Show opens on Monday when the world's oldest and largest display of cutting-edge aircraft will feature a solar plane, biofuel jet engines and other new, environmentally friendly models.

AP - Airlines will be seeking a cleaner, cheaper way to fly and planemakers will be angling for billions in new contracts Monday at the Paris Air Show, which stars a solar plane, biofuel jet engines and the Boeing-Airbus rivalry.

The search for more environmentally friendly aircraft is shaping up as one of the major themes of this year’s Paris Air Show, the world’s largest and oldest aviation showcase.

The show comes amid skyrocketing fuel costs and bleak forecasts for the international air transport market.

The International Air Transport Association last month warned that natural disasters in Japan, unrest in the Middle East and rising fuel prices would cause airline industry profits to collapse only a year after they’d begun to recover from the global economic crisis.

More than 2,100 exhibitors from 45 countries have signed up to take part in the weeklong event showcasing both commercial and defense aircraft.

Airbus expects to bag bountiful orders for a new, more fuel-efficient version of its workhorse A320 shorthaul jet, while Boeing is spotlighting its new mid-range 787 Dreamliner and 747-8 intercontinental passenger jets.

Gallois said the air show, at Le Bourget airport outside Paris, “will confirm the success of the A320neo,” a revamped version of the standard A320 reengineered to be 15 percent more fuel efficient.

Airbus has booked more than 330 orders and committments for the A320neo since its commercial launch last December, including from airlines IndiGo, Virgin American, Brazil’s TAM and airplane leasing company ILFC.

Airlines squeezed by higher fuel prices are rushing to order the jet, which isn’t scheduled to come into service until late 2015. Boeing hasn’t yet chosen how it will respond, but top marketing executive Randy Tinseth said last week it would decide in the coming months whether to upgrade its existing 737 model or design a whole new plane, which wouldn’t be in the air until the end of the decade.

Boeing and Honeywell are both boasting of having the first biofuel-powered trans-Atlantic flight, with Boeing flying in its 747-8 freighter from Seattle on a mix of biofuel and jet fuel, while Honeywell touts the « green jet fuel » it developed to power a Gulfstream business jet on its way from New Jersey to Le Bourget just in time for the air show kickoff. more