GERMAN ECONOMIC SUCCESS – AT 6:07 A.M. ET:  Reader Tino Manus alerts us to stories about the new German economic success.  Germany is defying the trendiness of Europe, and is getting results.  From The New York Times:

BERLIN — Germany has sparred with its European partners over how to respond to the financial crisis, argued with the United States over the benefits of stimulus versus austerity, and defiantly pursued its own vision of how to keep its economy strong.

Statistics released Friday buttress Germany’s view that it had the formula right all along. The government on Friday announced quarter-on-quarter economic growth of 2.2 percent, Germany’s best performance since reunification 20 years ago — and equivalent to a nearly 9 percent annual rate if growth were that robust all year.

The strong growth figures will also bolster the conviction here that German workers and companies in recent years made the short-term sacrifices necessary for long-term success that Germany’s European partners did not...

...A vast expansion of a program paying to keep workers employed, rather than dealing with them once they lost their jobs, was the most direct step taken in the heat of the crisis.

And...

By paring unemployment benefits, easing rules for hiring and firing, and management and labor’s working together to keep a lid on wages, Germany ensured that it could again export its way to growth with competitive, nimble companies producing the cars and machine tools the world’s economies — emerging and developed alike — demanded.

Germans steered clear of the debt-fueled consumption boom that many believe contributed to the financial crisis. During the recession, Chancellor Angela Merkel resisted the palliative of government spending that the United States and some European partners felt was crucial to restoring growth.

COMMENT:  Okay, okay.  Message received.  We should study what Germany has done, but we should study it with care.  Remember, it wasn't many years ago that Americans thought the Japanese economy would take over the world.  It did not.  It became something of a basket case because of a number of factors, cultural and economic.

Germany has apparently done some good things.  But always look at economies over the long term.  Will the German economic success last, or will it founder on a lack of imagination and a shortage of the dreamers and innovators that have often kept America strong?

Let's not repeat the mistake we made in thinking the Japanese were nine feet tall.  We can learn from others, but never sell Americans short.  Some boys fooling around with computer parts in California garages during the 1970s changed the world.  So far, German economic decisions have changed only Germany.

August 14, 2010