German economy recovers

Both the 'New York Times' and the 'Guardian' are reporting that the German economy grew by 2.2% between April and June. However, while both newspapers would appear to attribute this "unexpected" growth at least in part to the strong foreign demand for German goods, the 'New York Times' would appear to credit German workers and companies willingness to make the short-term sacrifices necessary for long-term success as the most imporant factor in this success.

Certainly, common sense might dictate that scaling back benefits, easing the rules on hiring and firing and introducing engendering a climate where workers and management cooperate to ensure that wages don't spiral out of control would have to be central to any success. However, while they do, no doubt, play a very important role, this is to miss or at least marginalise a very important point. Namely, the Germans actually make products that are worth buying and if the Anglo-Saxons want to analyse the real reason for their failure to turn things round, and indeed for them causing the financial crisis in the first place, they need look no further than the fact that they don't make very much of substance that is worth having. In realising this they might justifiably suspect that in the in the longer term the planet might no longer be prepared to buy into fictitious capital and those illusionary castles in the air, which the masters of spin want to fob off on us. Of course, very possibly, wishful thinking and for my part I suspect that Wall Street and the City will continue to wreak havoc for some time to come.