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What Germany's Economy Can Teach Obama

Author: Leslie H. Gelb, President Emeritus and Board Senior Fellow
June 5, 2011
Daily Beast


As President Obama decorates German Chancellor Angela Merkel with the Medal of Freedom on Tuesday, he might reflect on her economy, rolling along in ways that shame America's foundering recovery. Obama and non-hallucinatory Republicans might ask her about the solidity of German growth and jobs, despite high taxes, high social-welfare benefits, and high wages, all the things many Americans scorn as business killers. If the scorners would listen for a change, here's what they would hear from Merkel about a successful German economy:

- Exports, especially high-quality manufactured goods, are the driving force of Germany's gains in a global economy. German sales abroad rank second in the world, just behind China, which has 16 times its population, and ahead of the U.S., which has four times its population.

- German business and labor leaders set aside differences to pursue common interests in jobs and profits in the national economic interest.

- German economic policymaking is more pragmatic than partisan. German leaders do not say that the answer can only be this or only be that; they accept the common-sense conclusion that it has to be this and that. Thus they pursue a combination of budget stimulus and austerity, higher taxes to reduce their deficits and maintain welfare benefits, and governmental investments for jobs and future competitiveness.

In other words, U.S. leaders just might learn something from Merkel about how to run a 21st-century industrial economy in a democracy. (If readers aren't interested in how and why this is so, or if they can't count, or just like pontificating without facts, they can skip to the last paragraph.)

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