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Mole's Progressive Democrat

The Progressive Democrat Newsletter grew out of the frustration of the 2004 election. Originally intended for New York City progressives, its readership is now national. For anyone who wants to be alerted by email whenever this newsletter is updated (usually weekly), please send your email address and let me know what state you live in (so I can keep track of my readership).

Location: Brooklyn, New York, United States

I am a research biologist in NYC. Married with two kids living in Brooklyn.

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  • Thursday, December 02, 2010

    The Great Bush Recession: Germany did it right

    When I was in Germany this past summer I was surpised at several things. First was the amount of construction going on, even in small villages. It as clear that Germany was doing better than America, where new home construction had ground to a halt. I also noticed that despite Germany being a somewhat cloudy, dreary nation, many homes had solar panels. Many more than you see even in sunny parts of America. I was also struck by the extent of their rail system. I did go places out of reach of that rail system, but by and large it served me well, with buses filling in many places trains didn't quite reach. I will say that contrary to the stereotype, trains did NOT run on time in Germany...but of course they don't in NYC either.

    All in all it was clear that Germany was more prosperous and greener than the United States. I commented on this to some of my hosts and they told me that Germany, when faced with the same economic crisis America was (what I think of as the Great Bush Recession), they approached it very differently.

    America under Bush let unemployment spiral out of control, which meant people could no longer afford their houses, no longer buy things, no longer survive. Obama has tried reversing this with things like the auto industry bailout (which have been shown to have saved 1.4 million jobs!), as well as some infrastructure and green energy investments (not as much as I think he should have, but it still will create jobs). Germany recognized that this was a recipe for disaster, and took a very different approach than Bush.

    The German government, according to my hosts, cooperated with businesses to prevent outright layoffs and instead maintained payrolls, with reduced hours and with government and businesses maintaining people on at least partial salaries. This meant far fewer people completely lost their income, and so people could still maintain their homes and could still buy what they needed...which kept their economy from collapsing as badly, kept tax revenues from drying up, and speeded up their recovery. When I was in Germany, this was still seen as a gamble, but now it is a proven strategy.

    This is from BBC News:

    Germany's economy minister Rainer Bruederle has given an upbeat assessment of his country's recovery, including the assertion that "full employment will soon be possible".

    He said that Germans were "doing well and spending again", and that domestic consumption was strong.

    Data released this week showed German business confidence at a 20-year high.

    While we are still stagnating, Germany is nearing full employment and business confidence is at a 20-year high.

    America did it wrong. Germany did it right. Focusing on keeping people employed, even if it means using taxpayer dollars, rescued their economy while Republican policies of cutting everything while giving tax cuts to the rich (the long-discredited "trickle-down" approach) failed YET AGAIN.

    This is one more example of how the social democracies of Western Europe do things smarter than Republican-dominated America. Conservative economic theories fail, while more liberal policies do better. I have previously explained this for healthcare. Americans pay MORE, both out of pocket and through tax dollars, for a quality of care that is on par with nations like Slovenia, Portugal, etc. Meanwhile, Sweden, Norway, Britain, Canada, the Netherlands, etc., all with more socialized medicine, spend LESS money (both out of pocket and thruogh tax dollars) AND get BETTER medical outcomes. Even Switzerland has a more socialized system than we do, and get better outcomes for less money. Their systems provide better healthcare for less money, and yet Republicans refuse to learn from it. Germany refused to take a trickle down approach to economic recovery, and they recovered far faster than we did.

    Republicans, plain and simple, are dead wrong on pretty much everything. They mess up our economy every time they are in power. Yet we have models of what really does work, but we refuse to learn from them. I say it is way past time for America to stop listening to right wing extremists and to start learning what works from other Western democracies.



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