LyrArc Article Gist
The Japanese economy went through asevere contraction in the first quarter 2009, declining 15% on an annualized basis. But Japan's unemployment rate in April was 4.8%, compared with much higher rates in EUrope and even higher rates in the USA. France and Germany have social democratic states that protect workers jobs, and Germany even after the Harz reforms continues to help workers deal with unemployment making it least painful as possible with government help. Japan takes this astep further. The law in Japan requires that even though companies can cut worker's hours, they must pay at least 60% of their hourly wages during that time. THe government provides help. It has budgeted $624 million this year to reimburse companies for half of these payments. In March 48,000 companies got subsidies for 2.38 million employees according to government figures. This includes large companies like NEC Electronics and Nissan Motor. THey have to find things for the workers to do, community service like keeping the area clean, vegetable gardens, handicrafts shop, anything that helps the communities. A recent survey by the Nikkei financial daily, shows zero percent of large business owners said they had plans to layoff permanent staff members, compared with 39% in South Korea. WIthout this the unemployment rate, say experts, would be 2 percentage points higher....

LyrArc Article Gist
The strong showing by National Front leader Marie Le Pen and her focus on the economy in France, and the lack of growth with austerity measures, is likely to change the way the eurozone countries respond to the deficits and German insistence on austerity cuts. Marie Le Pen's economic positions for more government spending to reduce unemployment and provide additional benefits is closer to Socialist candidate Hollande's position. The right wing party in Holland also voiced the same concern recently- that it did not want to hurt Dutch pensioners with austerity cuts- when it refused to support the Dutch government leading to its collapse and new elections.

LyrArc Article Gist
Ford's European operations- which make the Fiesta and Focus models at plants in Belgium, Spain, and Germany- are suffering from the slowdown in automobile sales in Europe. Ford's European sales for vehicles sold declined by 7.3% in the first quarter of 2012. Analysts estimate a loss of $199 million in the first quarter, after a $190 million loss in the fourth quarter of 2011. This is expected to reduce global profits by 50% to $1.34 billion. Fiat Renault has responded to the economic anxiety of buyers at a time of high unemployment by appealing to cost conscious buyers with its lower cost Logan models. Ford's models appeal to middle clas buyers, which are harder to sell in countries like Spain where unemployment exceeds 20%.

LyrArc Article Gist
Christian Ude, the mayor of Munich from the Social Democrats party, says the Christian Social Union's (CSU) hold on power in Bavaria is likely to be challenged in coming elections. One of the reasons for this is that people are moving to Munich from all over Germany because many companies are hiring. Siemens, Audi, BMW and many Mittelstand companies are based in Munich, and unemployment is the lowest in Germany. The CSU, a partner in Merkel's coalition government, is particularly critical of measures to aid Greece, and steps taken by the ECB to buy the bonds of Spain and Italy to reduce borrowing costs, making it difficult for Merkel to provide flexibility in her negotiations with other eurozone countries.

LyrArc Article Gist
Nobel laureate Michael Spence says the structural problems in the U.S. economy will require structural solutions where government, business and labor come up with collective efforts to restore economic growth. This might take some time says Spence. Short term fiscal spending alone is not the answer for jobs growth. And it will take a joint concerted effort of government, business and labor. Part of the effort might include a period in which there is lower income growth to regain competitiveness. This would be similiar to what Germany accomplished in the last decade in which it faced high unemployment. The German government, labor unions and business forged a consensus which included wage restraint, changes in the labor market. This would have to be combined with government-business partnership to make investments in advanced manufacturing technology and other innovations to improve competitive position. Educational standards and productive skill development issues would have to be addressed to create new advantage for the U.S., just as emerging market economies are making new strides of their own....

LyrArc Article Gist
Little towns onthe Baltic coast like Wismar and Upahl have done well after the building of the new autobahn running through the state of Meklenburg-Pomerania in Germany. Its in the eastern part of the country that previously had only small country roads from there through towns to further east towards the Polish border. The 120 autobahn runs from its western end at Lubeck 35 miles east of Hamburg to the Polish border, Major German bakeries, dairies, automakers and some startups, and smaller companies from other European countries have lifted the economic prospects of ZGermany's poorest region which has seen unemployment at 30% and growth of only 1.5% which now has been raised to the national level of about 2.5%.

LyrArc Article Gist
Italy's South is its poorest region, with scarce job opportunities. It has not recovered fully from the economic crisis of 2009. The Five Star movement in the current centre right governing coalition has many of its voters in the south of Italy. The government is fighting to save a Arcelor steel plant in the coastal city of Taranto. The state is working to prevent other factories from closing. The Italian north industrialized early being closer to France and Germany, the southern region remained agricultural with immigration as a way out of poverty. The government supported jobs in the south and industrial development after 1945, and expanded public sector jobs. Regional progress in the south stalled since 2000. Today per capita gross domestic product in the north is 35,000 euros compared to 19,000 euros in the south of Italy, according to Eurostat. Unemployment in some southern towns is 20%, compared to less than 10% average in the north. The answer says prime minister Giuseppe Conte, is to "have a sort of bank of the South for investments." The opposition party far right Northern League led by Matteo Salvini is popular and is also pushing for supporting southern regions with extra funding. ...

LyrArc Article Gist
Elected to the Politburo in 1980, Gorbachev became president of USSR in 1985. In the six year period to 1991 he launched a movement to free the USSR from the rigid constraints of communist party rule called Perestroika to improve productivity, freedoms and quality of life. He came from a peasant family with Ukrainian origins and was born in 1931 during the period of upheaval in Russia. The rapid removal of Soviet rule was something Russia was not able to adapt to in the early years with no experience in democratic process. By 2000 after drop in life expectancy and fall in the standard of living Mr. Putin emerged as president.  Russia's economy recovered under Putin's three terms till the miscalculations in the invasion of Ukraine in 2022, that were itself a result of a sense that Russia had lost something with the fall of the Soviet Union and the advancement of NATO and the European Union. Gorbachev's sense in his memoirs was that Russia would do best under democracy. Even in 2017 he wrote that Russia and its people were "ready for a real multiparty system, fair elections and a regular rotation of government." Yet he was too much of an optimist and not enough hands on to grasp that Russia was a large economy and safeguards had to be put in place for the rule of law to prevent lawless elements that could control companies, safeguards for the vulnerable sections of society such as pensioners and older people, and limited self government through elected assemblies and parliaments were needed for a decade before democracy to take roots. Gorbachev's knowledge of American and British democracies, constitutions and parliaments and their evolution over centuries was non existent, with little contact and education of this sort under the Czar or Soviets. The democracies in Germany and Japan were established with American power and extensive education, the Marshall Plan, and unlimited imports by the US from Japan to prevent economic catastrophes of the kind experienced by the Weimar Republic in Germany in the 1920's. No plan from western aid and assistance, limited self government of the people was introduced as training ground as in India. In India the British introduced limited self-government or Swaraj in the 1930's with elected assemblies in Indian states, in the pattern of Dominion states such as Canada and Australia. Mohandas Gandhi negotiated the rights of indentured Indians in South Africa in this arrangement and studied British law and constitutions. This led to the catastrophic failure of the rule of law in Russia after 1979, lawless elements emerging under Yeltsin  that controlled companies and the state, high unemployment, failure of the economy, and drop in life expectancy between 1979 and 2005. How this led to the Putin years and now led to the war in Ukraine is covered in more detail under the Lyrarc article on Gorbachev and how he is seen in Germany. ...

LyrArc Article Gist
Wessel describes the changes in American manufacturing as it goes through some of the same changes that happened in Germany in the years after reunification. With high unemployment German manufacturing companies worked with unions and the government for wage restraint over the last decade, resulting in wages barely keeping up with inflation. The increase in productivity and wage restraint helped Germany become more competitive with factories in Asia and Eastern Europe. Wages are now increasing with larger wage increase negotiated by the unions in Germany, as skilled labor is becoming scarce. In the U.S. Labor Department figures show an increase in output per hour in American manufacturing of 13% in the last 5 years and 21% in the five years before that. Typical of the wage changes in manufacturing- American Axle & Manufacturing plant in Three Rivers, Michigan hires assembly workers at $10 per hour, with older "legacy workers" making $18 per hour. General Electric brought back manufacturing work from Mexico paying workers $13 per hour for new hires, compared to to $21- $23 in prior years. At GM, Ford and Chrysler workers make $16-$19 per hour in base pay compared to older workers with legacy rates of $29-$33. The Bureau of Labor Statistics shows earnings for production workers in manufacturing averaging $19.15 per hour in April, which is where they were in 2000 adjusted for inflation. The impact of this large increase in productivity with new machinery and production methods, and the wage reductions in manufacturing, is a return of offshored jobs. Wages increased in China and Mexico in the last decade. After a 35% decrease in the number of manufacturing jobs in the U.S. from 1998-2010, the number of jobs has increased by 4.3% to 11.9 million in April 2012, according to the Labor Department....

LyrArc Article Gist
The new cabinet of prime minister Valls in France includes Segolene Royal as Ecology minister. Michel Sapin, labor minister in the outgoing cabinet, becomes finance minister. Sapin was finance minister under the Mitterand government in the 1990's. A critic of austerity policies Industry Minister Arnaud Montebourg, continues in this position with a wider role. After losing badly in local elections in March 2014, president Hollande has asked the new cabinet to combine planned tax cuts for businesses with efforts to increase spending power of households. Finance Minister Sapin faces the task of convincing the EU and Germany that France should have more leeway in plans for deficit reduction to boost its economy and especially reduce unemployment. Unemployment is at a high of 11%. Sapin is seasoned in the ways of operating in EU circles. In his role as finance minister in the Mitterand administration he pushed for the passing of the French referendum on the Maastricht Treaty that laid the baiss for the euro currency....

LyrArc Article Gist
Unemployment in France for the 1st quarter of 2012 increased to 9.6%, an increase from 9.3% in the last quarter of 2011, according to Insee, France's statistics agency.

LyrArc Article Gist
China's slowdown may be much worse than is generally thought. Germany went through this thinking that it was relatively safe as it had no housing bubble and no consumer debt like the US and the UK. But the drop in demand from China and other countries has led already to a contraction in the German economy by 0.5% in the third quarter of 2008, expected to worsen to 0.8% in 2009. China's National Statistics Bureau announced a 4% decline in electricity output inOctober from a year earlier. This is a result partly of factories manufacturing for export cutting back as their orders decline. There was a 17 drop in production of pig iron and crude steel in October and a 0.7% fall in output in the output sector. From all this it appears that even without the beggar thy neigbor policies of the 1930's, even without the protectionism of that period and even with the global coordination of the G20 and the G7 countries, its hard not to see the impact in one place flowing through to other places. The loss of export markets in the USA for Chinese export factories leads to this slowdown in China which in turn now needs much fewer machinery imports from Germany leading to a contraction in Germany. See the link to German economy in WSJ November 14, 2008. These effects show up in an exaggerated manner with economic contraction because of the heavy dependence on exports in Germany to China, and heavy dependence on exports in China to the USA, and the heavy consumption of Chinese exports in the USA, all ocurring in an exaggerated unsustainable way considering the American spending binge and the zero savings rate in the USA, the pressures on the environment with runaway growth in China, and the lack of any domestic led consumption in Germany. China's infrastructure spending can provide some growth along with the stimulus spending but much of the export led growth may disappear. The stimulus spending could help prevent a contraction in the Chinese economy but may deliver only a few points of growth, way off from the runaway over 10% growth of two decades which was heavily dependent on manufacturing exports. How badly Chinese exports are affected depends on how badly the US market is affected for Chinese imports. Higher unemployment in the US if the auto industry sees a collapse in its market in 2009, would lead to lower consumption in the US as laid off workers cut their purchases at Walmarts and Targets and at other retailers, and this would drive imports from China to even lower levels, wiping off a couple of percentage points of China's GDP growth rate. ...

LyrArc Article Gist
The German Chambers of Commerce and Industry President Heinrich Driftmann told reporters in Berlin that the new government should overhaul the tax code and improve credit access for companies. The German chamber wants to see changes to the corporate and inheritance taxes. He said that even if it was considered taboo companies needed more flexibility in the labor market. Merkel has promised labor unions that keeping social protections will be a priority in her administration. Economists say it will be difficult to cut taxes because unemployment will rise to 11% in 2011 as Germany's economy contracts 5% this year, and this will mean less tax revenues and increasing costs for social spending.

LyrArc Article Gist
The 50th anniversary of the Elysee Treay between Germany and France. Konrad Adenauer and Charles de Gaulle signed the treaty in 1963.

LyrArc Article Gist
How temp services companies such as Kelly Girl and Manpower were started in the post war period. What this means in today's economy with the increase in temp and part-time workers without worker protections and benefits. The trend to temp workers without contracts or protection is seen in Germany, Spain, Japan and other countries. Hatton cites Census Bureau statistics showing one third of adults experiencing poverty are working, one fourth of jobs in America pay less than the federal poverty line of $23,050. In the U.S., Europe and Japan it is not only the jobs that matter but the kind of jobs. Even in countries such as Germany that reduced the unemployment rate this came with a downside in the higher number of lower paying jobs. Temporary workers almost doubled in two decades in Japan to 33% of workers by 2007. Some of the difficult work after the nuclear accident in Japan was performed by temporary workers.

LyrArc Article Gist
Krugman says the European Union countries were not ready for the euro and the current crisis shows this. Spain with its peseta could have regained its competitiveness with a 20% devaluation, after years of inflation as money flowed into Spain from other countries including Germany and fueled the housing boom. Or Spain would have received stimulus funds from the central government, if it was an American state like Florida. Instead Spain now has to work through this crisis with high unemployment and painful deflation. Greece faces severe austerity measures and is more to blame for its mess, because of faulty accounting to cover up its problems.

LyrArc Article Gist
France's manufacturing production level index declined to 92.1 in March 2012. Bank of France information shows zero growth in GDP for the first half of 2012.