Re: France and Germany race to the bottom.

packard wrote:

> Uwe Weber wrote:
>
>> Yes, but if you compare market share as in the OECD trade statistics,
>> which factor out exchange rate effects, you can see that Germany's
>> share in global trade is declining since the seventies.
>
> Not true to my knowledge. Germany's share of global trade has been
> rising in the past few years, starting when the dollar was still strong.
> It passed the US' share in 2003 (10.2% vs. 9.9%).

Please have a look at http://www.cesifo-group.de/portal/
page?_pageid=36,530126&_dad=portal&_schema=PORTAL&item
_link=chartsdice-text-export.htm and related information at
this site. Or read Sinn's book "Ist Deutschland noch zu retten?"

As I stated in my previous post: Only comparisons on the basis
of relative purchsing power are meaningful in this regard.

>>>Also, one would think that,
>>>as the weak dollar makes Germany less competitive relative to countries
>>>like the US and China, exports would suffer. But they keep rising.

I have given some reasons, why this might be the case for the short
term. If you disagree and would like to believe that everything is
getting ok or even getting better, you are welcome.

[snip]
> Even if that were true, why does it matter? On the bottomline, it is the
> value of goods that counts, not their volume. And if, as you claim,
> significant parts of Germany's goods are sourced in other countries,
> they will become cheaper with a weaker dollar, offsetting the "value
> effect" that you mentioned.

If you want to say something about the growth of the economy or
exports, informations about quantity relations do of course matter.

[ Cost of reunification ]
> It is a fact that should be taken into consideration when doing
> comparative analyses, and also when looking at the unemployment rates
> (the rate in most parts of eastern Germany is still close to 20%, which
> is of course pulling down the nation-wide figure).

Ok, but how will that help in making things better?

>> It was at 2.5 last month. Not really flat, esp. not, if you consider
>> that short term interest rates are even lower.
>
> It's low, and certainly not rising significantly at the moment, as you
> claimed.

So, you define what is significant and what is not?
Iy you set prices of the year 2000 at 100, the index
is now at 108,7.

[loss of substance]
> Given the numbers that I know, this doesn't add up. Do you have a source
> for this? I would like to know more about this.

Read Sinn or Steingart (who may be more to your liking).
But please clarify wich numbers you know and where you have
got them.

>> Do not take my word for it. Just have a look at our roads or
>> ask any municipal offical about the state of their sewage system.
>
> But above you claimed that public spending was on the rise?

No, I did not claim that (though it is true). But this is easily
explained: If you have to spend more for paying interest on
your debt or employees or pensions for former employees, you can
increase without investing anything.


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