The Commission has taken an interest in the German trade surplus. As you know, Bob, they took an interest in the government deficit in the early 2000s as well. This isn’t mere snark, though. Here’s a really interesting chart from Jared Bernstein‘s blog.
Germans haven’t had much of a pay-rise for years, but neither have Americans. To put it another way, German export success isn’t driven by cheap labour or indeed cheap anything. Bernstein is swinging off a post of Paul Krugman’s about intra-eurozone trade issues, but because he’s a nonrespectable palaeokeynesian like me, he looks at this from an industrial policy point of view.
There ought to be some room for manoeuvre here, and this is the sort of thing that the UK Labour policy community is obsessed with. How does the industrial machine work? If it wasn’t low, low prices, what happened? It’s not an abstract saveyness of pure virtue, either, because savings rates aren’t what you might think they are.
It’s not a timeless truth, either, as Mark Schieritz charts.