“outdated … components of an financial system should disappear in order that new … components can emerge” – Watts Up With That?
Essay by Eric Worrall
“Transformation means change. Change often means consolidation. Companies have to shrink in order to invest and develop new technologies,”
Further job cuts loom as German economy struggles to recover
From Liv Stroud
Published on 06/09/2024 – 14:10 GMT+2•Updated 14:55
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“German companies have already relocated large parts of their production to China, India and elsewhere, and this trend will continue,” said Fratzscher.
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Can the German government help?
Fratzscher said the government should not interfere to retain workers.
“Transformation means change. Change often means consolidation. Companies have to shrink in order to be able to invest and develop new technologies,” he said.
Fratzscher also noted that the government's attempts to maintain the old structures in large companies are not limited to Germany, but are a European phenomenon.
“Often, old parts, superfluous components of an economy have to disappear so that new parts can emerge, re-emerge or be developed,” he added, suggesting that there are no short-term solutions to these crises.
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Read more: https://www.euronews.com/business/2024/09/06/more-job-cuts-on-the-way-as-german-economy-struggles-to-recover
“Fratzscher” is Marcel Fratzscher, President of the German Institute for Economic Research (DIW).
Marcel Fratzscher, despite his undoubtedly impressive economic qualifications, misjudged the situation.
German companies are not letting superfluous parts of their business activities “disappear” but are moving them to Asia. If these business activities were really no longer useful, they would disappear worldwide.
When kerosene replaced whale oil as a source of heating and lighting in the 1860s, the companies did not move their whaling operations to other countries for cost reasons, but instead entered the petroleum business – or were quickly wiped out by those who did so.
The only thing that prevents car manufacturers and other energy-intensive companies from succeeding in Germany is German politicians. German companies have no problems regaining at least some degree of economic competitiveness after moving their production to countries with cheaper energy.
Fratzscher's prediction that the German economy will recover in a few years raises the question: Why should the German economy ever recover? A business that charges too high prices and refuses to accept the dictates of the free market has no hope of ever being successful again.
There is no chance that green energy will ever be competitive. There is no economically viable means of converting unreliable green energy into the on-demand energy that a modern economy needs. The German economy will continue to shrink until the politicians who set this disastrous economic direction are replaced by politicians who have less of a grasp of the real economy.
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