Dear Uncle Sam,
Your criticisms hit home with us. First, your Treasury secretary wrote that, simply, “Germany was hampering economic stability in Europe and hurting the global economy.” Then Paul Krugman and his buddies piled on, followed by top economist Adam Posen who — in all seriousness — called Germany a “low-wage” country.
But you have to understand: Exports are our pride and joy! The Brazilians have their soccer teams, the Russians their space rockets and we have our snazzy export goods — printing presses from Heidelberg, for example, or racy sports cars from Stuttgart. Whether you believe it or not, the workers employed by our exporting factories earn really good wages! Every one of your burger flippers would turn green with envy if they ever heard what a Porsche assembly line worker is paid.
But putting emotions aside for the moment, what angers us is that your criticism is actually right on target. With our permanently high foreign trade surplus numbers, we're mainly hurting ourselves in the long run. But nobody over here wants to hear that.
Year after year we sell more goods abroad than we import into Germany. Shiny Mercedes and technically sophisticated drill presses flow out to the world. In return, we only amass financial debt from those countries least able to afford it. Unfortunately, these financial obligations carry with them a significant risk of loss. The money winds up, for example, in Greek government bonds or the U.S. mortgage market. When a nation such as Greece buys more foreign goods than it sells in export goods, it eventually ends up unable to pay its bills. Thus, permanent surpluses are a serious problem.
How do we get out of this dilemma? Not by harming our export trade. There is a better way, and it entails more investment and more imports.
Our economy is suffering from weak investment: Many roads and schools are deteriorating. If we did more in those areas, that would also help imports. So, dear Uncle Sam, let's begin by signing a free trade agreement. Sell us more iPhones, Hollywood movies and soft drinks. But please, forget the hormone-infested meat and genetically altered tomatoes.
Warmest greetings from Düsseldorf!