Posted by: Dirk | August 5, 2009

Die Arbeit von Morgen

‘The work of tomorrow’ is a proposal published on Monday by the candidate of the Social-democrats of Germany (SPD). The 52 pages are filled with ideas showing what the economic consequences of Mr Steinmeier would look like. The text is a bit of a patchwork and repeats certain points quite often, so that I have decided to cherry-pick the relevant issues that are connected to the two important topics: financial crisis and global imbalances.

What about the financial crisis?

A bit surprisingly, the lessons of the crisis have been relegated to the back of the paper (p. 48-52). The cause of the crisis is found in the malfunctions of the financial system, which has stopped channeling money from savers to investors and instead built a huge system for gambling with other people’s money. In consequence, more transparency and more regulation is needed concerning actors on financial markets. This includes hedge funds and rating agencies among others.

What about global/European economic imbalances?

The middle part of the paper (p. 26-29) deals with the Exportweltmeisterschaft. It is accepted that the focus on exports makes Germany more dependent on the world economy then other countries, and that it was hurt badly by the crisis. As a solution, more demand is needed from inside the country. The paper boasts that the SPD has helped to achieve this already by expanding government expenditure in infrastructure and education, and also by introducing a minimum wage. This would be continued. The money would come from higher taxes for the rich.

So much for Mr Steinmeier, as soon as there is a Merkel Manifesto I will summarize that as well and discuss/compare the two. (Sorry for neglecting all other parties, but I don’t find the time to do this.)

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