West Germany is model for prosperity


The U.S. economy is not doing well.

In 1948 in West Germany, things were far worse. Having lost the war the country had been occupied by the victorious powers. They printed the German currency, the Reich mark, and gave a set of plates to the Russians, who, following communist dogma, churned them out in huge quantities in order to debase the currency, which Marx believed would lead to revolution.

To prevent inflation, the Western allies imposed wage and price controls and food rationing. The average German lived on 1,500 calories a day, and life was miserable.

When West Germany became independent, Chancellor Konrad Adenauer made Ludwig Erhard his economics minister.

The British had just nationalized their own coal mines, and were urging him to do the same. Erhard rejected their advice, abolished the controls, introduced a new currency, the Deutschmark, and a regressive tax system favoring investors.

Set free, the economy prospered in what became known as the German economic miracle. Living standards rose markedly.

Until the introduction of the euro, the Deutschmark was the strongest currency in Europe. Today the European countries that have lurched too far to the left look to Germany to bail them out.

In the United States, politicians pay lip service to the middle class, while pursuing policies that put the economy in a regulatory straitjacket. The tax system seems deliberately designed to discourage investment.

The large banks are under assault from three sides, from the Department of Justice, the regulatory agencies and state attorneys general. The energy industry is pilloried by the EPA.

It is impossible to imagine a German government in which Erhard served treating Deutsche Bank the way the Obama administration treated J.P. Morgan.

The middle class shrinks, not by its members moving into the upper class, the traditional American way, but by their falling below it. The incomes of those remaining in it stagnate.

If we ever needed an American version of Ludwig Erhard, the time is now.

Gordon Philpot

Walla Walla



Igor says...

Excellent letter and I agree with all you say. The sad thing is we can see exactly what European socialism leads to because we have countries like Greece, Spain and Portugal to observe that are imploding right before our eyes. Yet our leftist politicians keep marching us down the very same road that has led to the destruction of the economies of these countries.

You hit the nail right on the head with your “regulatory straightjacket” observation. Our government’s penchant for over regulation is in large part of what has led to our economic stagnation. This is especially true in the environmental area. Government is continually promulgating new regulations designed to tighten emission and discharge standards which serve no useful purpose. Regulation was needed 40 years ago to clean up our dirty air and water. But today it’s impossible to do much more than what has been accomplished already. In fact, there is no incremental benefit to be derived from many new regulations on the books or now pending.

The whole scam is designed to placate the environmental organizations on the left that must have a continuing crisis if they are to maintain donations. These huckster outfits rake in billions every year. Leftist politicians and our leftist media support them by constantly spewing the myth that “the Republicans want our children to breathe dirty air and drink dirty water.” A good book exposing the racket is “Regulators Gone Wild: How the EPA is Ruining American Industry.”

Posted 27 October 2013, 11:27 a.m. Suggest removal

downhillracer says...

Nice cut-and-paste job! - I just read the exact same story on 'Conspiracy Nut Jobs dot com'! Thanks for sharing!

Posted 27 October 2013, 11:43 a.m. Suggest removal

barracuda says...

Welcome back Downhiller... It is more exciting reading with your comments.

Posted 27 October 2013, 1:13 p.m. Suggest removal

Iopine says...

It showed itself in the shutdown when 93% of the EPA was furloughed! This bloated government needs to trim some heavy duty obesity. Maybe Mischelle Obama could take her "Move It" into the government entity where the weight really needs to be shed.

Posted 27 October 2013, 3:13 p.m. Suggest removal

downhillracer says...

What I don't understand is the growing list of policies the Republicans were for, before they were against them. Just think how far along we might be if only reasonable minds prevailed in the spirit of compromise and progress for "the people", and not the corporate oligarchy now in place.

Everything from Cap & Trade to immigration, deficit spending and the individual insurance mandate. Didn't Richard M. Nixon bring us the EPA (which deserves our support)? And the DEA, too. No, that agency hasn't cost much..

Posted 27 October 2013, 9:39 p.m. Suggest removal

PearlY says...

I doubt you want to understand, but let me try to explain:

Some ideas sound good until you try them out and see how they are implemented in practice. The EPA, for instance, was created to address real environmental problems in a fairly sensible way, but through mission creep and litigation and failures to correct the effects of these legislatively and the development of special interest groups who make a ton of money off of it, it has become a monstrosity.

The individual insurance mandate would be a pretty decent idea if it were implemented rationally. But instead of mandating a basic package designed strictly to prevent catastrophic financial effects of a health crisis (the way some states mandate basic liability coverage for auto insurance), Obamacare has mandated that EVERYONE buy a plan that is Cadillac at the low end of financial effects (mandating coverage for all kinds of predictable expenses) and worse at the catastrophic end (raising deductibles and maximum out-of-pocket). The result is being seen now in the individual health care markets all over the country, with millions of policy cancelations and doubling of premiums and millions of Obamacare supporters finding out there's no free lunch - they're actually going to have to pay for what they supported. It will be seen down the road, too, as the cost of subsidies soars and becomes yet another out-of-control entitlement program dependent on the Chinese continuing to lend us money.

Posted 28 October 2013, 10:29 a.m. Suggest removal

Iopine says...

Thank you PearlY - effectively stated but your first sentence said it all.

Posted 28 October 2013, 12:35 p.m. Suggest removal

downhillracer says...

Yeah, it make sense for your little mutual admiration society. I'll be so glad when the last of the Tea-hadists are swept from office.

Posted 28 October 2013, 2:03 p.m. Suggest removal

downhillracer says...

You provide such nonsencical commentary as your opinion - note: opinion - of the "mission creep" of the EPA, as it is based on your own narrow and obviously biased perceptions and views, versus a fact-based set of arguments.

As are your perceptions of the implementaton of the ACA, and deficit spending. This whole concept of thinking there is a "we want a free lunch all the time" class is so insane, it defies objective debate. PS, the Chinese aren't the only investors in this country. If we taxed corporations and the very wealthy the way we a) used to, and b) need to, perhaps we wouldn't need to 'borrow' so much.

Posted 28 October 2013, 10:57 a.m. Suggest removal

jubilado says...

Gordon--Don't forget the Marshall Plan. It wasn't all Germany pulling themselves up by their bootstraps.

Posted 31 October 2013, 1:31 p.m. Suggest removal

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