The German Economy Story

In recent days, there's been some business announcements across Germany which detail job cuts. 

Siemens?  3,000 likely to be laid off.

Osram? Around 700 likely to be laid off.

This long discussed merger of Tata and Thyssenkrupp?  Likely to cause 4,000 Germans to be laid off.

These minor cuts are regarded now as potential waves of other companies and maybe a warning a negative period ahead.

Oddly, if you follow the public news sector (ARD, Channel One).....it's triggered a discussion over social responsibility of companies.

ARD ran a piece this morning which talked about the need of companies to....well....just continue running operations, even when profits are less in nature or growing marginal.  Call it social responsibility. 

All of this discussion draws political players into the debate and everyone is sitting there in some daze....trying to rationalize the economy, the German jobs, and how things should just stay the same.

I see a lot missing from this debate. 

First, few people realize that all of these companies are now international in nature....so they cross lines.  You can make X-product for X-amount in a X-country....while the same product can be made for 10-percent less in another.  At some point, reality says that you would concentrate your production in the cheaper country, and lessen employees in the more costly country.  The minute that you got all enthusiastic about global economies and be global in nature....you opened up a door which you have virtually NO control over. 

Second, there is virtually no understanding that each time you added a tax, or a requirement onto the production system which added cost.....you increased x-product.  Maybe it was one-tenth of one-percent....maybe it was one-quarter of one-percent....but you, without thinking....triggered this product within your country to be more expensive to produce.  Go ask the political folks how this works, and watch how they just grin at you because they don't care.

Third, it's a bit funny now.....you can sense this wave coming now in Germany about 'Make Germany great again' (yeah, that stupid Trump label).  Maybe it's five to eight years away, but someone is going to have to go and dump regulations....rebuild confidence.....and give some enthusiasm to German companies.

Fourth and final.....ever noticed that economists don't run companies?  They like to analyze and make judgement calls....but they never seem to go beyond a certain point of actually making decisions and running companies.  Oddly enough, these are the same folks dragged out for public forums on German TV, and spend an hour dumping on such-and-such company because of a perception of wrong-doing. Yet, they never run companies themselves?

Maybe this is the beginning of a dry period in the German economy....but one might sit and ask a few questions to understand how things got dry, and where does this lead onto?