Monday, December 14, 2009
There have been a number of widely circulated excerpts from the Der Spiegel interview with former Fed Chairman (the good one) Paul Volcker, but this was the part that struck me - not only for what Volcker had to say, but for comments made by the interviewer:
Volcker: I think there are a lot of opportunities in the so-called green economy for taking leadership. On the technical side, I mean technology development, research development, the US is doing ok, but when it comes to manufacturing some of this stuff, somehow the Germans do it all!Why is it that you don't seem to hear this kind of stuff about this country in this country?
SPIEGEL: And a lot of Americans try to blame the Germans for this, saying that we are depending too heavily on the export industry.
Volcker: I must say, I admire Germany in this situation even with its high costs. In some ways, I think the labor cost is higher in Germany than it is in the United States but you can somehow maintain that export edge. You are dedicated to exporting, we are dedicated to financial engineering and it hasn't worked out too well. I wish we had fewer financial engineers and more mechanical engineers. Tell me the secret of how the Germans keep this going.
SPIEGEL: Maybe the reason is that the Germans don't trust the American boom and bust economy with its dedication to fast money.
Probably because policymakers are hellbent on getting the old system propped back up and "working" again to worry about whether or not it's sustainable.