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Just as a plug for German innovation -- consider the 19th century: if you include Austria/ Vienna, people who spoke German (and were often Jewish) basically invented modern thought, ranging from mathematics to chemistry to music to philosophy to psychology etc. England was great in applied physics and math, France in dynamics and biology, but in theoretical math, music, and philosophy Germany TOWERS above anyone in the 19th century.

It all went south with the Kaiser's attempt to imitate Napolean and then National Socialism; but if Germany had avoided militarism and kept the Jews they basically would own Europe by now (they sort of do even with the setbacks of the first half of the twentieth century).

What I meant to say was that any statement saying that Germany is an "uninnovative" country is just hogwash. The downvote -- why? Because you disagree?

I didn't downvote you, and I also didn't say they didn't innovate. Rather, modern German innovation rarely takes the form of transformation, more of incremental innovation.

I can't think of any modern industries revolutionized by German companies. Automotive saw a steady stream of good innovation no doubt, but hardly very transformative.

well, there was MP3 (invented, at least partially, at the Fraunhofer Society).

Depends on where you look at. There are entire industrial niche markets 'owned' by German Mittelstand companies. It is just not in your focus of attention.

Can you give an example of any industry revolutionized by any company?

Exactly... that's where I was getting at. In the mid 1800's, they were bad ass in chemical production and science in general - really many areas. Seemingly, WWII made them a more risk adverse society. Beforehand, the small/mid size businesses were actually very entrepreneurial.

To say that Germans "invented modern thought" is pushing it. Perhaps you can qualify that with an appropriate definition of "modern thought". The first few disciplines were around long before the 19th century.

> To say that Germans "invented modern thought" is pushing it

Kant was German. As was Hegel. And Marx. Maybe it's just me, but I'd say that the history (including that of intellectual thought) of the last 200 years would be completely different if it weren't for these 3 guys.

I think so-called German "miracle" is mostly a journalist and politics invention. What happened in the last few years is basically forced deflation through salary stagnation (even reduction), since you cannot play with you money anymore in the eurozone. This is very good for the companies which export a lot, but is pretty bad for everyone else (including its neighbours).

Economic improvemnts are mainly coming from productivity gains - artificially lowering your costs instead of trying to build more with less is not a sustainable past. But this kind of story is gold for newspapers: export (good !) vs import (bad !), family capitalism (good !) vs shareholders (bad !). All the usual cliches are there.

This story has been told for years in Europe, especially in France, where it is said we should follow the German way. It is very ingrained in the news reporting and the general level of discussions. One striking example is the French left and right discussing about Germany: both will assume that German growth has been better than France, and the left will claim that it shows growths is not well shared, and the right will use it as the proof that salaries are too high in France. Even though until 2008, Germany per year gdp growth has always been lower than France since the reunification.(http://www.wolframalpha.com/input/?i=gdp+growth+france+germa...). The OP article basically tells the same story from an Americain POV, even though the data do not back it up at all.

> What happened in the last few years is basically forced deflation through salary stagnation (even reduction).

As I understand it (which is too say barely), German salaries at the high end are nowhere near the UK or the USA.... Some of us think that might be a good thing, but if that is your metric, yeah, Germany probably sucks.

I am talking about average/median salaries (everyday worker) - high end salaries don't matter much at a country's scale, I think. If neither gdp growth (below other European countries in the same category as Germany) nor median income growth is a good metric, what do you suggest instead to measure German success ?

Your comment made me realize I may have not been very clear - the issue is that Germany's success is measured in terms of exportation as is, which is known to be a common fallacy in economics. If it were because German's products became better at a cheaper price, then it would have been a good thing, but I am arguing it has been mostly through artificial deflation (income stagnation instead of money deflation as this is impossible in the eurozone).

This is not very polemic, btw, and is pretty much agreed upon by quite a few people, independently of their political inclination (see e.g. http://www.nakedcapitalism.com/2010/03/martin-wolf-china-ger... for one reference)

When I was young it was in to drive Jaguar here in Hamburg. Now they are mostly gone...

The UK was strong in manufacturing for a long time, and still is. But the 'masters of the universe' decided it was easier to earn money by selling oil and financial products. The result: the oil runs out and the financial products were ponzi schemes.

On the point of Germans becoming better sales/marketers - it is perhaps interesting to note that one of the most durable company taglines here in the UK is in German:

Vorsprung durch Technik

Back in the 90's there was a song called "Parklife" by "Blur", and in it you can hear actor Phil Daniels reference this expression. I was always puzzled where that came from (had to look up the lyrics though - it's difficult to understand the phrase as pronounced by an Englishman).

Well stated. The US can learn from Germany though. A mild midcourse correction could help.

The US needs to emphasize the value of all stakeholders. With this, the US will have greater growth over the longterm. Its the stable growth economies that grow and prosper over the boom-and-bust economies.

Certainly US system suffers from myopia. Though I'm not sure at what point we stifle the swashbuckling nature that has made us the country of the new in business/tech/research.

I err on the side of increased transparency of financial sector, stronger FTC actions against monopolists, IP reform, etc. than on Germany's more activist bent. Ours is more of an economy of the new, and our Anglo-Saxon nature should be embraced by better regulation - not necessarily more.

I suggest that people don't go too overboard in praising Germany. Their unemployment rate over the past 20 years has been a disgrace and do not forget that though their trade surplus is healthy some consider it also reflects the weakness in German commodity consumption.

Some food for thought (though the later figures don't seem accurate): http://www.wolframalpha.com/input/?i=us+gdp+growth+since+199... http://www.wolframalpha.com/input/?i=us+employment+since+199...

Germany's (previous) economic woes could be reflective of the pain of integrating E. Germany. But then again that illustrates the problem of comparing economies directly. For e.g. could the influx 'cheap' east German labor make the overall German economy more competitive.

Their unemployment is 6.7%, which observing from the US (9% after massive government stimulus), I have a real hard time seeing that as a disgrace.

Remember that in Germany, you are legally unemployed if you earn less than 400 Euros (500-600$) per month. If you are unemployed, you don't have to pay taxes.

This makes most employees of Starbucks, McDonalds etc. count as unemployed.

Which would mean that their unemployment rate is even lower than 6.7%, wouldn't it?

I've also read that they do more accurate accounting of unemployment than the US. Some say the real unemployment rate in the U.S. is around 17%.

http://www.youtube.com/watch?v=QudPK1uJii8

To the contrary, you do not count as unemployed towards the official statistics. You will get benefits in addition to your salary though. Essentially the same manipulations are done to the statistics here as in many countries, they try to remove most unemployed people from the numbers by sending them to training, minimum wage jobs (so called 1 euro jobs). This has gotten a lot worse in the past years and the social divide has become as large as in e.g. The US.

Actually, I am not sure about the statistics. Even though 400E-jobs are considered unemployed legally, they might still include them in the statistics to make them look better.

the social divide has become as large as in e.g. The US.

Not even close.

Gini coefficient of Germany 2005: 0.28. The USA in 2009: 0.46

http://www.eurofound.europa.eu/areas/qualityoflife/eurlife/i... http://www.census.gov/newsroom/releases/archives/income_weal...

Hm, that seems kind of strange to me--while it might legally be considered unemployed, would these employees not have health-insurance paid by their employer and receive retirement compensation?

They do get health insurance. However, it is paid as part of the general German welfare system (hence, tax money) and not by the employer. As far as I know they get the same retirement compensation as if they were unemployed. (Not so sure, there)

Social security benefits however are a rather alien concept to Germans in general. Healthcare and retirement compensation are government regulated, so individual companies do not need to provide special bonuses to make the system worthwhile.

Over the period of time the average unemployment rate in Germany has been notably higher than in the US. It seems unreasonable to compare the performance of economies on spot years. If you want you could compare the 11.5% unemployment in Germany in 2005.

I suggest that criticizing governments who live with long term unemployment is pretty reasonable.

Given that they absorbed the whole of East Germany only 20 years ago, it seems a little unfair to measure their unemployment rate over that period. Today they are doing pretty well - what an amazing achievement that is, given the circumstances.