If you’re a large, modern economy, watching your Gross Domestic Product take a hit like this is enough to make you pine for the old days—unless you’re Germany, of course:
Germany’s economy stagnated at the end of 2009, after contracting by 5 per cent in the year as a whole – its worst recession in post-war history, according to the country’s statistical office.
The unexpected weakness of Europe’s largest economy in the three months to December dashes hopes that the recovery might have gathered speed and helped lift economic prospects across continental Europe.
Unveiling full-year gross domestic product data, the Wiesbaden-based federal statistics office gave no official fourth-quarter figure but said growth had “stagnated”.
Full-year figures for German goods exports are also likely to confirm that the country ceded to China its title as world export champion.
Germany’s export-dependent economy was among the worst affected by the collapse in global confidence after the failure of Lehman Brothers investment bank in September 2008, but it recovered quickly and exited recession in the second quarter. German GDP then expanded by 0.7 per cent in the third quarter.
Now, this refutes some of my bullshit about how wonderful it is to be a country that makes things. Germany is engaged in some fairly easy to comprehend economic behavior of a positive nature. It makes things people want to buy. Right now, nobody can buy enough of what Germany is selling. It exports a great deal through Hamburg. And yet, because no one out there is buying what they have to sell, the Germans are seeing their GDP shrink and their export business go in the tank.
Perhaps this explains some of the problems of Germany’s export economy:
During recent decades, most European river-port cities and also many seaport cities have undergone a major transition towards a service-centred, rather than industrially-based metropolis, offering a high quality urban environment with a revitalised waterfront. Hamburg is one of the few river-port cities that have chosen the course of port expansion instead. This paper discusses the consequences of current global technological, organisational and economic developments for the port. Changing requirements imply rising monetary and land-use costs and environmental and social impacts, and also entail the risk that the port may not be able to fulfil new requirements and could thus lose market shares to coastal competitors. More importantly, the world-wide economic shift towards the service sector has affected port-dependent jobs in two ways: Directly port-dependent jobs have been reduced to a fraction, while many indirectly port-dependent jobs no longer require physical proximity of the port. Those benefits that continue to arise tend to spread over a much larger geographical region, while the port’s costs remain locally concentrated. Given the increasing competition between world-wide metropolitan regions that seek to establish themselves in new sectors and attract a qualified workforce, it is particularly relevant for Hamburg to account for these changes and to incorporate an assessment of the port’s changing costs and benefits into planning processes. To date, this task has received little attention from the city.
In this country, our lack of exports have left us with ports that are taking in a great number of products. I don’t think we have the capacity to expand them to accommodate exports, however. Our ports have traditionally functioned as the injection point for cheap products we don’t really need. Our highways, bridges, and transportation infrastructure needs to be improved if we are to start sending things out while we’re pulling things in.
So, when I say we need to get back to making things, understanding what is wrong with our infrastructure and how it works as a place to send things outas opposed to being one that receives products has to be taken into account. I have to read up on this, and I’ve been ignoring the Financial Times lately because I just can’t be bothered. This highlights a lack of reading on my part. It’s the New Year—I have to correct that. I just can’t say one thing while ignoring the reality of what needs to be in place before we start trying to tap into the world markets for products. You know, all of those emerging economies out there have to have money to buy things, too. You’re setting yourself up for failure if you think economic ruin and financial collapse elsewhere is a good recipe for our own desire to sell widgets abroad. I have to get savvier about this German example of what can happen due to a dependence on exports.