N.C. State University economist Mike Walden spent a recent vacation with his wife, Mary, in Germany. As an economist, what did he observe?
“Well three things: First of all, the massive, absolutely massive rebuilding that we saw in the former East Berlin. Of course, people know that East Berlin was surrounded by a wall for about 40 years. The wall finally came down about 20 years ago, and it’s just amazing to look at all the building that’s occurred. You see cranes everywhere. And what that tells me is there was a lot of economic uncertainty when the wall was up, and once that wall came down and especially once Germany was reunified, that uncertainty went away and we’ve seen a big influx of building and really a push upward of standards of living. So that was one thing.
“Another thing was a very somewhat odd fact that Germans are very, very close observers of rules. We saw this, for example, when we went on subways and you get a ticket, you’re supposed to get a ticket but no one checks your ticket. No stern style. No kind of electronic checking. But there are roving detectives who will randomly ask to see tickets. And if you don’t have a ticket, you get a big fine. So, it’s very interesting to see how they handle that.
“And then lastly the German economy: The German economy did suffer through the recession just like most other economies. But they have come roaring back. In fact, their unemployment rate now is lower than it was prior to the recession. And it’s really been fueled by export growth. Now they’re not a cheap country. They don’t have the lowest cost of labor. But what they have done is continue to emphasize quality with their product. And this shows that you can be a higher-cost country, but if you make up for that in higher quality of your products, you’ll do well.”