Germany gets it right

During the boom years Germany was derided by the British and America for being far too unadventurous. Germany had the strongest economy in Europe until the financial world figured out how to really grow the economy. While manufacturing in America and Britain declined to about 10% of the economy as outsourcing became the trend the Germans plodded along, relatively doing things the old fashioned way.

But then, Germans have something to honk about. Germany's economy is the strongest in the world. Its trade balance - the value of its exports over its imports - is second only to China's, which is all the more remarkable since Germany is home to just 82 million people. Its 7.5 percent unemployment rate - two percentage points below ours - is lower than at any time since right after reunification. Growth is robust, and real wages are rising.

It's quite a turnabout for an economy that American and British bankers and economists derided for years as the sick man of Europe. German banks, they insisted, were too cautious and locally focused, while the German economy needed to slim down its manufacturing sector and beef up finance.

Even Germany's largest companies are investing far more of their money than large American companies who are sitting on record amounts of cash and now record profits, based more on cutting costs than growing and investing. That can only yield short term results until deman increases significantly and that is a lot less likely with the Republicans blocking any rational economic policies.

In large part, that's due to Germany's system of co-determination, which places an equal number of union and management members on corporate boards. The German metal workers union, IG Metall, has been working with automakers to train workers, for instance, to mass-produce electric cars. "Our goal is to really retain high-value-added manufacturing in Germany," says Martin Allespach, the union's policy director. It's hard to identify any group with real input into corporate conduct that's pursuing such a goal in the United States.

All Republicans and even many Democrats would have a heart attack at the prospect of running a large corporation in that manner. Here Unions need to be crushed and corporations need to operate with as few regulations as possible. Look where it's got us.