Unemployment in Germany is now lower than it was when the crisis began

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The German economy grew ... an annualised rate of close to 9% in the three months to the end of June, well above even the most optimistic forecasts. The German figures, the best since reunification almost two decades ago, meant that the euro-area economy had a good quarter, too. GDP in the 16-country block rose at an annualised rate of 4%—much faster than in America and only a bit shy of surprisingly strong growth figures in Britain.

...

The success of the euro-area’s largest economy owed a lot to a surge in exports (much of it to emerging markets) and to investment by firms at home looking to upgrade and expand their capital stock to meet that demand. Germany’s talent for bespoke engineering and sleek cars fits well with the needs of fast-industrialising countries and their new middle classes.

...

This surge in new business has been good for jobs. Unemployment in Germany has been steadily falling, in contrast to the trend in the rest of the euro zone—and America. Firms used a short-time working scheme and flexible hours to keep hold of workers when demand was weak. Many of the workers whose hours were cut have been drawn back into full-time work far more quickly than firms had dared hope. Unemployment in Germany is now lower than it was when the crisis began.

http://economist.com/blogs/freeexchange/2010/08/europes_economies?fsrc=scn/fb/wl/bl/turbocharged

[Ban Hammer 14,800]

didn't they also stop throwing stimulus money around too?

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didn't they also stop throwing stimulus money around too?

Your need to fit this story into your own domestic political narrative is understandable, but I'd defer to the Economist on this one.

[Ban Hammer 14,800]

i'll take that as you don't know.

[Mr. Big Dog 10,747]

didn't they also stop throwing stimulus money around too?

No, they actually had a stimulus package that was insuffiecient at first and they came up with a second - almost twice the size of the first - to make sure the economy comes back on it's feet. They would have dione a third if that's what it would take. They are - now that the economy appears to be breathing on it's own - starting to dial back on the stimulus. Not all at once but gradually. The German recovery is the Keneysian success story.

Edited August 13, 2010 by Mr. Big Dog

[Ban Hammer 14,800]

No, they actually had a larger stimulus package than the US (relative to the size of the economy) and are - now that the economy appears to be breathing on it's own - starting to dial back on the stimulus. Not all at once but gradually. The German recovery is the Keneysian success story.

so it's as i thought earlier.

i'd also bet they spent it more wisely than we the usa did.

[Mr. Big Dog 10,747]

so it's as i thought earlier.

i'd also bet they spent it more wisely than we the usa did.

Actually, no. There were a lot of questionable projects that were funded with the stimulus.

By law, recipients of public investments under the second economic stimulus program must be permanent. But according to a previously unpublished report by the German Federal Audit Office, this requirement is often not met. The auditors at the Bonn-based agency identified many measures for which long-term use is questionable at best.

For instance, they wonder whether it truly makes sense to spend €222,000 on the renovation of a cultural center in a neighborhood with only 300 residents. And they question whether it is reasonable to invest in firehouses in regions that have seen population decline for years.

In some cases, local governments are spending stimulus funds to fulfill costly wishes. A government-owned stud farm in the southwestern town of Marbach, which includes a breeding facility for Arabians, is being renovated to the tune of €7.5 million. Schöningen, a town in the northern state of Lower Saxony, has plans to build a €15 million interactive museum for old hunting weapons. The Hamburg zoo is using €7.5 million in government subsidies to build an Arctic Sea habitat that will initially house polar bears, common murres and other animals.

...

Projects like a wall-mounted diaper table for a kindergarten, historical wall charts and the construction of a sandbox are not suited "to achieving the economic goals of the Future Investments Act," the Bonn auditors conclude. In addition, they argue, such "very small projects" are "consumptive in nature."

But rather than the American right wing hysteria that any such assessment would trigger and rather than such assessment driving up orders of chalk for Glenn Beck to play teacher to the unteachable, folks in Germany tend to realize that...

Perhaps they are right, but during the crisis, it was more important to provide companies with orders. No one is more aware of this than Jörg Meseck, who owns an engineering firm in the eastern state of Brandenburg. When the economy declined, Meseck lost about €13 million in orders. Just as he was contemplating having to let some of his employees go, he started receiving new orders funded by the government's second stimulus program.

...

Cases like this lead many economists to conclude that the impact of the bailout programs on the real economy has generally been positive. A lot of money was wasted and many pointless projects were subsidized. Nevertheless, the government stimulus programs helped pull the economy out of the recession.

Edited August 13, 2010 by Mr. Big Dog

[Ban Hammer 14,800]

i'd hate to compare the usa list of disasters to the german list.

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Cases like this lead many economists to conclude that the impact of the bailout programs on the real economy has generally been positive. A lot of money was wasted and many pointless projects were subsidized. Nevertheless, the government stimulus programs helped pull the economy out of the recession.

RWN heads all over America just exploded.

[Mr. Big Dog 10,747]

i'd hate to compare the usa list of disasters to the german list.

You'd be surprised, my friend.

[Ban Hammer 14,800]

You'd be surprised, my friend.

don't destroy my faith in german efficiency.

[Mr. Big Dog 10,747]

don't destroy my faith in german efficiency.

I wouldn't do that. Germans just happen to focus on what matters - getting the economy churning again - rather than being bamboozled by a Glenn Beck and getting all hysterical about the kind of bull he peddles.

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Germans just happen to focus on what matters - getting the economy churning again - rather than being bamboozled by a Glenn Beck and getting all hysterical about the kind of bull he peddles.

You mean contemporary Germans, don't you?

[Mr. Big Dog 10,747]

You mean contemporary Germans, don't you?

???

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???

As in, not Germans of a few decades ago.