How the German Economy Became a Model By Thomas Schulz

By Thomas Schulz in New York

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It wasn't so long ago that many viewed Germany's economic model as outdated and the country as the "sick man of Europe." These days, however, even the Americans have come to praise parts of it, though they still doubt whether they would be able -- or willing -- to adopt it wholesale.

The entryway to the neoclassical mansion on New York's Upper East Side betrays not a single indication of its inhabitant's name. A security gate is waiting behind the heavy metal door. Inside, one can see dark wood, marble and valuable paintings. From this base, Steven Rattner manages the private fortune of Michael Bloomberg. New York's mayor has entrusted his billions to Rattner because there are few as adept as him at multiplying money.

Rattner previously served as an economic adviser to President Bill Clinton. Barack Obama had been intending to make him a secretary in his administration, but then he assigned him the job of rescuing the American auto industry during the financial crisis. People in Washington are listening to what Rattner has to say on how things should go forward with the rest of America's stagnating economy. And Rattner is saying: "Germany is a model for the United States."

By now, Rattner has become quite knowledgeable about the issue, as well. He calls the German idea of Kurzarbeit "a model," referring to the "short-time work" program that the German government used during the crisis to avoid layoffs by encouraging companies to reduce workers' hours while making up for some of the workers' lost salaries and benefits itself. Likewise, he says that Germany's system for training skilled workers is a "clear role model for us or any other country" and that its intelligent industrial policies are also worthy of being imitated by Americans.

He also expressly praises the creative approaches of Germany's "Agenda 2010" program, the painful and unpopular reforms to the country's social-welfare system and labor market, and the achievements of Gerhard Schröder, the man who ushered in these reforms as Germany's chancellor between 1998 and 2005. Rattner says Schröder figured out how to steer Germany in the right direction so that a "developed contry could remain competitive even in a world where new economic giants, such as China, India and others, are emerging."

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