Shocking News: Socialism Doesn't Work

Here is an excellent article about the Socialist darling of American Liberals -- Germany.

Germany's economic woes make ours pale by comparison

By Daniel Howes / The Detroit News

FRANKFURT, Germany -- Our presidential campaign banter about how bad (or good) the U.S. economy is sounds downright trivial compared with what’s passing for one in Germany these days.

Europe’s largest economy is a mess. Growth is almost nil. New jobs aren’t being created. The CEOs of Germany’s two most powerful companies — Deutsche Bank and DaimlerChrysler AG — are mired in legal trouble, and the central bank chief is caught in an ethics scandal.

There’s more. A new report released last week says the $1.5 trillion — yes, trillion — Germany collected from West German taxpayers since 1990 to revive the former East Germany failed to achieve its goal.

One response was a government plan to establish lower wage zones in the east, where the unemployment rate runs north of 18 percent, to help create jobs and keep citizens off welfare. Germany’s powerful labor unions torpedoed the idea almost immediately, despite what is just weeks away.

On May 1, 10 more countries — most of them in Eastern Europe — will join the European Union, meaning such EU stalwarts as Germany are likely to be flooded with cheaper workers seeking comparatively higher wages in the west.

Or, alternatively, German companies burdened by high wages, restrictive labor laws, short work weeks and a tax-and-benefits regime that eats more cash per employee than salaries will rush east, as some already have.

All of this, reinforced during a 10-day return visit to Germany and France, is a cautionary tale for those American voices who see an answer to our economic woes in the cozy, controlling and romanticized ways of Western Europe.

On closer inspection, things are not so pretty.

In Germany, at least, the established alliance between Big Government, Big Business and Big Labor makes it difficult to lose jobs and economically unattractive to create them. So nothing happens, the politicians make promises they can’t keep and smart German business owners do what they need to do to survive.

One close friend, Kirsten Schoder-Steinmueller, runs a family-owned engraving business near Frankfurt. Instead of adding workers as sales more than tripled over the past decade, she invested heavily in new technology to compete for new business.

Sound familiar?

The numbers for the Christmas bonuses she paid last year are enlightening: She says more money, per employee, went to government-mandated employee costs — taxes, pensions, health-care and other payments — than to her workers.

It doesn’t take an economist to understand that a system like that is not sustainable, particularly when it creates more retirees than jobs amid strict immigration policies.

Another friend, Ingo Koenig, and his Michigan-born wife are entrepreneurs, a comparative rarity in Germany. His take: Real change won’t come until things get much worse.

My guess is they won’t have to wait long for that. Europe as we know it is poised for big change, foreign competition is pressuring German business like never before and the social welfare system is stretched to the breaking point.

Remedies for what ails our economy aren’t “Made in Germany.”