Germany s Psychosis of Defeat A long time admirer tells how Germany like the United States in the 1970s faces a profound crisis of confidence B Y R I C H A R D W F I S H E R C an Germany hold its own in the new world of a reconfigured Europe an ascendant China and a 21st century America Is German economic decline exaggerated Or inevitable These were questions I addressed recently at a meeting of AtlantikBr cke the German American friendship organization The answer to the first two questions is no Unless it rapidly changes course Germany cannot hold its own in the present world of a newly configured Europe a rapacious China and a flexible highly adaptive American economy German economic decline is if anything understated rather than exaggerated And the decline of Germany s economy and Germany s role in the world is all but inevitable unless dramatic reforms are taken very soon How is that for a happy beginning POINT OF VIEW THE MAGAZINE OF INTERNATIONAL ECONOMIC POLICY 2099 Pennsylvania Avenue N W Suite 950 Washington D C 20006 Phone 202 861 0791 Fax 202 861 0790 www international economy com 66 THE INTERNATIONAL ECONOMY FALL 2004 I am a Texan As you have seen from the actions of two Texan presidents Lyndon Johnson and George W Bush we are blunt people But unlike my far more distinguished and accomplished brethren I have a long involvement with and genuine love for Germany To frame what follows permit me a little personal history I was introduced to Germany by John McCloy When I graduated from Stanford Business School in 1975 I was taken on as the assistant to Robert Roosa at Brown Brothers Harriman the great private bank Roosa was a giant of a man in international finance he was also a generous man As his assistant I was immediately swept into his considerable circle of what we referred to then as his world beater friends McCloy was one of them Over lunches with Bob and the other partners at the bank Richard W Fisher is Vice Chairman of Kissinger McLarty Associates FISHER German economic decline is if anything understated rather than exaggerated Jack McCloy would describe his work as High Commissioner after the War and his admiration for Konrad Adenauer and for the many successors he had known every chancellor right up to Helmut Schmidt who was in power at the time McCloy told us Germany is the heart of Europe It is the backbone of the European economy No country in Europe is more important to the United States And he said Our alliance with Germany needs close attention nurturing and vigilance because its strength embodies profound advantages while its weakness could involve far reaching dangers and risks Otto Graf Lambsdorff Germany s then economics minister and the other German leaders whom I met through Roosa were impressive men they were indeed world beaters and through them I came to understand how Germany had been able to claw its way back from the utter destruction of World War II to become what we considered to be the paradigm of industrial efficiency a locomotive of global economic growth a formidable member of the G6 we only had six then and a stout and fearless ally of the United States during the Cold War It was Roosa who sent me to Washington to be Mike Blumenthal s assistant at the U S Treasury Department and through Blumenthal I was selected to participate in the American Council on Germany Atlantik Br cke Young Leaders conference in 1977 in Berlin I remember two things about that introduction to Berlin almost three decades ago The first was the elevator in Axel Springer Haus nothing more than a vertical conveyor belt and riders risked life or at least limb if they did not jump off quickly on whatever floor they wanted The other was a dinner with Richard von Weizs cker who would later become first president of a reunified Germany He took me on a tour of his office and into the corner nook that jutted over the Berlin Wall Standing here I hope you will understand the anguish that we Germans live with every day he said We will never be a great nation again until we are united with our families in the East Indeed I was there on the steps of the Reichstag as the clock struck midnight between October 2 3 1990 when unification was celebrated The delirious crowds bore torches and waved the German flag celebrating what many had never dreamed would happen in their lifetimes Over the years and along the way I had the privilege of meeting Chancellor Helmut Schmidt and watching him work both in Washington and Bonn and at the G7 summits with President Carter Karl Carstens was a guest in my home when he came to celebrate the sesquicentennial of German immigration to Texas in 1986 On trips to Bonn I was the beneficiary of a few one on one blistering tutorials on German foreign policy pre Croatia by Foreign Minister Hans Dietrich Genscher I sat in Chancellor Kohl s inner office in Bonn heard the recitations of Hoover Soup and other deprivations and images he experienced after the war and sensed first hand his abiding passion for international affairs and specifically for Europe The Germany I remember and the Germany I come back to are different places This Germany is no longer a world beater no longer a land of giants It is a place so weakened economically and so riddled with outdated operating methods that it threatens the prosperity of Europe the Euro Atlantic alliance and the global balance of economic power Absent change Germany most certainly cannot hold its own in the new world of a reconfigured Europe an ascendant China and 21st century America Data tell us why Here are excerpts from a superb report prepared last year by Professor Stephen Silvia for the American Institute for Contemporary German Studies German economic growth is anemic It has languished behind its competitors not just recently and not This Germany is no longer a world beater no longer a land of giants It is a place so weakened economically and so riddled with outdated operating methods that it threatens the prosperity of Europe FALL 2004 THE INTERNATIONAL ECONOMY 67 FISHER Up the Ladder or inspiration read Winston Churchill s speeches of 1905 and 1906 He speaks of the super fine processes In response to those who wanted to protect England from competition by restricting trade flows he brilliantly suggested that England should let other governments have their taxpayers subsidize with their tax money not ours the production of cheap goods And then England would import them and refine them and use them to
View Full Document
Unlocking...