“Old…parts of the economy need to disappear so that new…parts can emerge” – Watts Up With That?
Essay by Eric Worrall
“Transformation means change. Change often means consolidation. Companies need to downsize to be able to invest and develop new technologies,”
More job cuts to come as German economy struggles to recover
Via Liv Stroud
Posted on 09/06/2024 – 14:10 GMT+2•Updated 14:55
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“German companies have moved a large part of their production to China, India and elsewhere and this will continue,” said Fratzscher.
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Can the German government help?
Fratzscher said he doesn’t think the government should intervene to keep workers employed.
“Transformation means change. Change often means consolidation. Companies need to downsize to be able to invest and develop new technologies,” he said.
Fratzscher also noted that government efforts to maintain old structures in large companies are not limited to Germany but are a general European phenomenon.
“Often, old, redundant parts of the economy need to disappear so that new parts can emerge and re-emerge or be developed,” he added, arguing that these crises have no short-term solutions.
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“Fratzscher” is Marcel Fratzcher is a manPresident of German Institute for Economic Research (DIW).
Marcel Fratzscher, despite his impressive economic qualifications, misunderstood the situation.
German companies are not “disappearing” redundant parts of their businesses, they are moving them to Asia. If those businesses are really no longer useful, they will disappear all over the world.
When Kerosene replaced whale oil for heating and lighting in the 1860s.Companies that didn’t move their whaling industries to other countries to cut costs went into the mineral oil business – or were quickly wiped out by others.
The only thing preventing automakers and other energy-intensive businesses from thriving in Germany is German politicians. German companies have no problem regaining at least some measure of economic competitiveness after moving to countries with cheaper energy.
As for Fratzscher’s prediction that the German economy will recover in a few years, why should the German economy recover? A store that charges too much and refuses to accept the direction of the free market has no hope of achieving prosperity in the future.
There is no chance of green energy being competitive, no economically viable means of converting unreliable green energy into dispatchable energy, which is what a modern economy needs. The German economy will continue to decline until the politicians who have set this disastrous economic course are replaced by politicians who are less ignorant of real-world economics.
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