The shocks that remade German politics

Adam Tooze has an excellent post. Some teasers. He starts off with an excerpt from The Economist.

In a recent piece in the Economist Jeremy Cliffe put it well: 

Why, then, is Germany less mighty than it looks? First, its size can be a weakness … too small to dominate Europe (proportionally it is about as big in population terms as California in America) but big enough that others feel daunted and seek to contain it … Second, Germany’s establishment is different. America has a powerful executive, Britain has a high degree of centralisation and France has both, but in Germany power is diffuse and plural. Opinion is more diverse than the notion of a monolithic German interest and outlook allows … So multilayered and multifaceted are German politics and public life that the country can be in fact frustratingly introverted. Even at the peak of her powers, Mrs Merkel was more a crisis manager than a visionary leader.”

He then addresses Germany's climate/energy policy that is high on aims but rather low on promised results before he then turns to Germany's real problem, the connection between inequality and macroeconomic imbalance and shows an IMF flowchart.

Today, Germany runs a trade surplus which, in proportion to GDP, is far in excess of the levels achieved during the golden age of the “economic miracle”. 

Here are Germany’s figures in European comparison from an excellent recent report by the IMK, the macroeconomic research institute of the German trade union movement, now headed by Sebastian Dullien.

He then turns to Germany's main problem, weak consumption and high income inequality. Coincidentally, the FAZ shitpaper today runs an article "Rich as never before" which regurgitates a Bundesbank publication.

Do read the full post. Lots of good graphs.