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April 10, 2005

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kuch

David
Where does one start with your "Cultural Class" commentary? First of all, you are talking about Vancouver, Canada right? Is this not the city where Heroin is given free of charge to the local addicts?

I suppose your hypothesis is that the so-called exodus of this particular social class has been caused by the Bush administration's embracing of faith based science. Is this your conclusion, or is it that of Mr. Florida? You aptly fail to advertise that this author is a "Heinz Professor." Could this be connected to the famous Heinz foundation and the Teresa Heinz wing of the Democratic party? I could be making a leap here, but this sounds quite intellectually dishonest to me.


Furthermore, your assertions about the dated nature of the data with respect to Germany is somewhat inconsistent with what I have read elsewhere. Deutsche Welle reported just last summer (http://www.dw-world.de/dw/article/0,1564,1350999,00.html) about the attempts by Germany to bring back what they term the "best and brightest" of your Scientists and academics. Do you include this group of intellectuals in your "cultural creative class?" Or do these scientists and academics not properly qualify as knowledge-based professionals? The report futher concluded: "in November of 2003, the European Commission reported that 75 percent of EU citizens who obtained a doctorate in the United States had no plans to return to Europe."

You also make reference to all of these wonderful products which are made in Europe and not in the US. Tell me again, what is the unemployment rate in Germany? And what is it in the US?

David

Kuch -
Every city has problems, but I am certain that most US cities would love to have Vancouver's crime statistics. I personally saw far fewer homeless people on the streets of Vancouver that I see in New York, San Francisco or Washington DC - three US cities where I spend a great deal of time.

In terms of unemployment, the cultural creative class alone cannot solve Germany's structural employment problems. On the other hand, Ireland - #1 in Florida's Creative Index - has virtually elimianted unemployment in just one generation. In Boston we are seeing a reverse migration of Irish - these are the risk-takers who came to the US in search of better lives - back to Ireland.
-David

denkpass

Think whatever you like, kuch, but the fact that America has a lower unemployment rate has not much to do where the beautiful products are made. Germany makes beautiful products, the US too. But in the US, people and politicians understand the value of a strong domestic market. In Germany not everyone does. So the government is not forcing it.

To achieve low unemployment rates, you need to have four things:

- competitive companies
- a strong domestic market
- skilled workers and great engineers and managers
- good infrastructure

German companies export more goods than the companies of any other country. So they are competitiv. You find highly skilled workers here and the engineers are famous. You also have outstanding infrastructure.

What you don´t have is a growing domestic market. Politicians always whine about Germany (I don´t know why) and their decisions are against forcing the domestic market (they did it in the 50s and 60s, by the way). And that´s the reason why there is such a high unemployment rate.

Kuch

denkpass
Your comments are well-taken, and I'm sure that you are probably more familiar with the German economy than I am, as my understanding comes only from afar.

I have a friend from a town near Koblenz whose family business was essentially forced to close because of governmental regulations that make it extremely difficult for businesses in Germany to make market-adjustments to their workforces. I suppose the government has good intentions here, but they are not very business-friendly. And afterall, it is the business sector who creates jobs; not the government.

From an American perspective you also need one additional factor to achieve lower unemployment: Lower taxes. Is the highest tax rate in Germany 65%? Lower taxes would give more people in Germany more of their own money to invest in new job-creating business ventures. Of course, this would also assist in improving consumer confidence and your domestic markets.

My comment about unemployment was more of notion about the fact that the US is still a very desireable market for any professional to work in, and that there is no marked exodus of knowledge-base professionals from the US.

Thanks for your comments, as I agee with the premise of this site, and better relations through dialogue.

denkpass

Actually, taxes are quite low in germany. I think they are higher than US or Japan taxes, but not by much. They are lower than most west european countries.

Whats driving up costs of labor is social costs. These are the highest in the world probably and together with low taxes they make labor so expansive in germany. However, german workers are quite efficient - so the companies can still be competitive.

The entire problem is a weak domestic market that needs impulses from the government and private households. If thats fixed, you can talk about reducing social costs (pension insurance, unemployment insurance, health insurance, social insurance and additional costs). However, you could help the first task when you fix the second one. You´ll need additional steps as well, but getting social costs down would be a step.

And after that, you can talk about establishing a tax system thats NOT offering breaks only for big companies and high salaries but for everyone in the same amount.

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