Asymmetrical Information

You got it the wrong way round. The government is trying to keep secret it own economists' finding that the Euro is hurting the German economy.

I should think a common currency would be good for Germany - insulate it somewhat from the consequences of big deficits.

What happens if you try to buy milk in Germany after work?

Why anyone ever thought that it would be a good idea for Germany to share a "checking account" with Italy, Spain, Greece, France, etc. is beyond me. Yes, the labour laws in Germany are astounding, and the cultural effects of absorbing the Ossis still multiply, but sharing a common currency with people that do not and will not share a common culture is certainly strange.

Imagine if as part of CAFTA the US were to have to share a common "Nuro" with Mexico, the Central American states and, oh, Colombia? Would it be a stable monetary unit, suitable not only for use as a medium of exchange, but also a store of value?

I like this better than the old strategy, which was to blame the Americans.

yeah, what happens when you try to buy milk?

Yes, please explain the milk thing. Do stores close at 4:00??

No, what actually happened was that some economists (probably those who signed published petitions against the EURO before the introduction in the 1990s) stated at a supposedly internal roundtable that they figured rising growth differentials could become a problem in the future. There is also evidence to the contrary, recently published in the Frankfurter Allgemeine Zeitung. Stern makes this sound like a big deal. It isn't.

Over at http://www.fistfulofeuros.net, we discussed the whoe thing yesterday. Let's not rewarm yesteryear's debates just because some people are feeling it's the right time to bash the EU after the negative outcomes of the referenda in France and the Netherlands.

I like this better than the old strategy, which was to blame the Americans.

Henry, They'll eventually get around to blaming the Euro on Americans, which very nearly spells "Rove" if you rearrange the letters.

C'mon guys, stop pestering her with milk question; it took all of 10 seconds of Googling to find the answer. Here. http://www.exeter.ac.uk/german/abinitio/chap9-16.html

ellipsis - We're closer to that than you recognize. El Salvador is converting their currency to the dollar, and I believe Ecuador already has fully converted. There's been discussions in Panama to do the same; I don't know how far that's gone.

Regarding the milk comments, Germany has ridiculous laws governing when stores are to be open, closed, on what day, on holidays, etc. I believe this is what the writer was going after.

Blogswarm, anyone? Have you guys heard of the downing street minutes ( http://www.downingstreetmemo.com ) and the Big Brass Alliance? ( http://www.bigbrassblog.com/bba.html )

It's beginning to look like Friedman defeats Mundell:

http://www.irpp.org/po/archive/may01/friedman.pdf

"What happens if you try to buy milk in Germany after work?"

The terrorists will win.

In Latin, the U and V are the same letter, so "Euro" is "Rove"... spelled sideways, sort of.

What happens if you try to buy milk in Germany after work?
Germany has FEDERAL LAWS that govern the hours that a baker can make his bread, and the hours that a shop owner can sell it. It's not that bread is a matter of national importance, it's that the unions and lefty gov't have such a stranglehold on business they they can dictate local commerce at the national level, so as not to interfere with working hours or affect the job pool.

the German budget deficit looks much like the American one
The difference being that the US growth rate is roughly the same as the debt, so we can grow out of our debt through just by simple inflation and can beat it with faster growth (and the congressional budget office is predicting that we will be completely out of the red by 2012, after posting surpluses for Q4 '04 and Q1 '05). OTOH, Germany's 5% deficits far outweigh their 1% growth rates, which is pretty bad by itself, but its damn near horrific when you think about their changing demographics.

As to the thrust of the blog post, I'm not sure that the Euro has had much of an effect on Germany's economy. Frankly, we are living in a global economy (regardless of whether the Germans want to or not), and the rigid and statist mindset in Germany is by far their biggest enemy.

Look at Asian growth rates, and look at European decline. Looking at the former, there's no excuse for the latter, other than European socialism as a whole. Sorry.

Yes, the milk crack is about the store opening (or rather closing) hours. Never fear, though, the Germans are capable of change! The Bavarians are considering making it legal to wash a car on a Sunday afternoon.

Chancellor: not the same thing as the Euro, though. You cite a case of a weaker economy voluntarily borrowing into the currency strength of a stronger economy; meanwhile, the US still dictates its own currency policy, and the size of the US economy prevents US dollars used essentially as local currency elsewhere, from having a significant impact here. Otherwise, we ought to be much more scared of Argentina.

El Salvador is converting their currency to the dollar, and I believe Ecuador already has fully converted. There's been discussions in Panama to do the same

I believe Panama is already on the US dollar, and has been for years. The CIA World Factbook lists the US dollar as one of their currencies (and their other currency is tied to the dollar at a 1:1 ratio).

Having worked in Germany I experienced the strange shops hours. Then again when I moved to Chicago in 1976 I was amazed to find I could not buy hamburger after 6PM. Seems the butcher's union had a contract with the supermarkets that required them to have a union butcher on hand and after 6PM they were required to pay time and a half overtime. So instead the supermarkets covered the hamburger and refused to sell it until the next morning. I'm happy to say Chicago has since moved into modern times. Germany, not so much.

'Why would they want to wash their cars on Sunday?

"Why would they want to wash their cars on Sunday?"

Because that is the time they chose too and was convenient for them?

Oscar - Saturday is shopping day, and because of restricted hours, the shops are always packed and purchasing even just a few items can take a long time. Sunday used to be known as FamilienTag (families' day) but there aren't too many kids in Germany anymore. And don't forget, 1pm to 3pm are quiet hours! No car washing, or lawn mowing, then either.

There's been discussions in Panama to do the same; I don't know how far that's gone.

The Panamanian balboa has been tied to the U.S. dollar (which is also legal tender in Panama) at an exchange rate of 1:1 since 1903 (Panama's year of independence from Colombia), and balboas can be exchanged for U.S. dollars in Panama at any time at a 1:1 ratio.

The irony is Buffett, the anti-Bush Soros and all those oil shieks have been trying to push teh dollar down

That was one of my first questions to my first German Girlfriend. Extra taxes to stay open late. I was like WTF. No late night rushes down to the local 7-11. And that hurts unemployment as well. The hourly workers can work at those places and make a little more at night.

Germany was different. Being a fresh 18 year old in the Army also meant it was great. Drinking not just beer but damned good beer.

Of course realizing the girl you have been hitting on has to leave at midnight, at that moment realizing she is under 18 can be disturbing. It only happened to me twice, afterwards I would check ages first thing.

A couple of years ago I was traveling to Germany for work and would spend weekends with my cousin who lives there. After some heavy rains in 2002, some villages were wiped out by flooding rivers. The people in the villages unfortunately lost their homes on a weekend and had no way to purchase new clothes, food and other essentials. The government allowed the stores in the area to remain open after normal hours and throughout the weekend to help. Well after a while, the government wanted the stores to resume regular hours but the stores were very reluctant to go back. Shopping "after hours" turned out to be very popular with people.
When I lived in Germany in the mid-70's, the stores (other than restaurants and gas stations) were open M-F 8am-4pm and Saturdays from 8am-noon. Not a lot of time to shop if you worked. Recently, stores are allowed to stay open later, but some do and some don't.

One final note - I found a small shop in a little village back in 2002 that was open on a (gasp!) Sunday selling Xmas decorations. I guess in out of the way places they don't worry too much about the "store police" shutting them down.

Maybe Germany should do away with its "Church Tax" to get the economy moving again.

>Of course realizing the girl you have been hitting >on has to leave at midnight, at that moment >realizing she is under 18 can be disturbing. It >only happened to me twice, afterwards I would check >ages first thing.

James, no worries ;) the age of consent is 16.

And wtf, most German gas stations are now making more money from selling food after 20h than by selling gas. I've had a harder time finding a 7/11 in San Diego than finding the next Shell station here. Germany *is* overregulated, no doubt. But still... there's no need to keep spreading urban legends.

Tobias - the age of consent in Germany may be 16, but that doesn't matter for a member of the U.S. Armed Forces. God help you if your commander discovers you're dating a 16 or 17 year old. Urban legends indeed!

"Euro" is an anagram of "Rove".

BWAHAHAHAHA

Can a country run with such economic regulation consider itself free?

As a German-American, I should be offended by all the German bashing!! Actually, there is at least one German institution we should import: sports programs for youth aren't part of the public school system. If you want to play, say, soccer,
you join a Sports Association. Where I live (Penna.) the big new high school is debating putting in an Olympic size pool, has set aside some 50 acres for playing fields, etc. etc. but
has cancelled a "gifted student" program for lack of funds.

This German-American finds German socialism far more offensive than any "Germany-bashing" (of which I've seen none in this thread).

Having just been to Salzburg and München last month, I can anecdotally say this: first, our Austrian tour guide was very up front about the move to the Euro making things more expensive for Salzburg, and dryly commented that at the time that a tunnel through a mountain was made, some 800 years earlier, "it was popular for the government to try to make work for the unemployed. Today, it is again popular." Our equally charming guide in München acknowledged without prompting that the German economy is "a disaster." None of us presumed to impose on either of them to explain why they thought these observations might be, but given that these particular individuals are a) working, and b) encounter people from other countries as a matter of course, I suspect that their perspective might be different from that of many other Europeans.

I live in germany and I like the fact they restrict sunday trading. Everyone gets a nice, peaceful day without much traffic, for the cost of having to do slightly more shopping on saturday, which is hardly much of a price. I come from the UK, mind, where we have similar rules (though not as restrictive these days, bit of a shame); and when I first came to Würzburg, I was surprised how many people I saw wandering through the city centre on sunday afternoon/evening doing window-shopping; obviously german Kauflust is strong. (Yes, there's a german word for "craving for shopping.")

Restrictive opening hours on weekdays & saturday are less defensible, and are thankfully being rolled back. It used to be shops opened until 2 pm on saturdays when I got here; which meant if you were partying or coding late into friday night and woke late on saturday, you were somewhat screwed, as you couldn't get any food until monday. Pointlessly inconvenient.

Jeffsters: the Church Tax is optional, so I dunno that it'd make that much difference.

'ever tried to buy milk in Germany after work?'

No, but I bought beer in a McDonalds in Munich.

James A.'s post illustrates quite well differences in European and American culture, and I don't mean that as any criticism; James is perfectly entitled to his preferences. But his underlying assumption either that A) everyone wants a "nice, peaceful, Sunday..", or that B)those who do want it should have the power to impose that preference on everyone else, is very contrary to current American culture. I say get get rid of the immigration regulations between Europe and America, and let those who prefer the European regulatory and tax paradigm live there, and the American regulatory and tax paradigm live here.

"Sclerotic labor market" is right. I am rapidly becoming an expert in what it takes to close a plant in Germany. It is so painful, you would have to be insane to hire anybody there if you could possibly avoid it.

I think the real reason why the welfare states in Western Europe make it so difficult to terminate employees is that Europeans do not think that they should have to move somewhere else to get a job. The entire socialist idea that the "job" is an asset of the "community" is driven by the idea that people should not be expected to move somewhere else if the local jobs vanish.

I've often thought that this philosophical divide was explainable by observing that once the American colonial era was over (and for some in the colonies, even while it was going on), basically everybody who came willingly to the United States was chasing opportunity, or fleeing its utter lack. Many were willing to leave everything except what they could carry, and undertake a dangerous and terribly uncomfortable voyage, to go get a job. If your entire country is built on the backs of such people - and here I think you could include those who came unwillingly, but who had work to do and did it, to our present-day benefit - perhaps you are culturally more likely to take a sanguine view of giving up the "old house" or moving out of your grandparents' town in order to do what you have to do, or what you want to do.

B)those who do want it should have the power to impose that preference on everyone else, is very contrary to current American culture

Oh really? Try buying Beer in CT after 8PM...or on Sunday. I wouldn't go so far as to say "very contrary". We may not be as socialist in the states, but the trend here is certainly increasing socialism, rather than decreasing.

Check out this proud quote from a NYC coucilman:

"We've passed more legislation than any council in history"

HT: The Agitator

Well, MP, perhaps I should have dropped "very", but just try to tell people they can't go to Target or Wal-Mart on Sunday.

MP: We've got too many people in the USA that think it's OK to impose their preference on other people, but they are anything but a solid majority, and certainly there is a difference of degree. Even the most-regulated of American communities have far less intrusive regulation than western Europe. OTOH, I doubt that there are any significant number of Europeans left that would vote for a Sunday Closing law on the grounds that God wants it - but 30 years ago even Michigan had a religiously-motivated Sunday Closing law, and there is still a sizable minority of Americans that will try to impose their God's arbitrary rules upon others.

But the big difference is that there's also a sizable group of Americans that will oppose all such laws, not just because particular laws "go too far" or are poorly thought out, but because they are wrong in principle and Unamerican. The politicians of the Republican and Democratic parties both thrive on over-regulation (what percentage of campaign contributions are actually bribes to twist the regulations to favor one business over another?), and they've gotten far too good at confusing and splitting up the advocates of freedom, but they are out there, and the politicians have to stop far short of European levels of regulation and bureaucracy.

There is nothing wrong with a common currency so long as it is free of significant counterfeiting, whether by individuals or the government.

If the Germans went back to the Mark they could certainly print up more (as they did in the 1920's) but that would not create prosperity only the illusion of it. The result would be a forestalling of the needed structural reforms and the further malinvestment of capital.

I would recommend a review of Austrian Business Cycle Theory.

"I've had a harder time finding a 7/11 in San Diego than finding the next Shell station here."

No kidding! I almost ran out of gas searching for a gas station *anywhere* around San Francisco. But frankly, California's particularly screwed up in that regard. I'm not quite sure why: probably the inefficiency is caused by zoning.

"I guess in out of the way places they don't worry too much about the "store police" shutting them down."

Same in Bergen County, NJ. "Blue laws", but small stores manage to bypass 'em.

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