Würzburg. Germany is still in an economic crisis and there is no end in sight. The DGB Würzburg invited Heiner Flassbeck as a major critic of German “austerity policy”. The economist spoke to 40 mostly union members in the Würzburg restaurant Blauer Adler.
DGB district chairman Eckhard Beck welcomed Flassbeck: “The DGB in Würzburg has invited a special speaker today” and Flassbeck introduced himself in a similar way: “I differ significantly from other economists, I’ll tell you why so much of what we usually hear is completely wrong is”.
First, Flassbeck showed the collective wage development “there were upswings in the 50s, 60s and 70s, then things systematically went downhill”. Flassbeck criticized the weak wage development in Germany and showed that wages in Germany and around the world fell massively in the 1920s. According to Flassbeck, this led to the economic crisis and unemployment.
In Greece they made the same mistakes and put pressure on wages, which fell by 30 percent. “Wage development must ensure dynamism in the economic system,” said the former State Secretary in the Ministry of Finance.
Germany remained below the wage developments in the eurozone. The same debate about allegedly too high wages in Germany already took place around 2000. Flassbeck criticized the German unions’ wage restraint: “The unions should stick to a simple formula: inflation rate plus increased productivity.” Otherwise the unions would contribute to falling wages.
Germany has reduced much of its unemployment through Agenda 2010, but this has happened at the expense of other European economies. We are currently having conflicts in Europe over debt, and Germany has put pressure on other countries. The German path is causing conflicts within the Eurozone and fueling nationalism.
There is currently no shortage of skilled workers, there is not enough training, there are enough workers, but companies are saving on training. There was a real shortage of skilled workers in the 1970s. “Today we have 3 million unemployed people and 600,000 job vacancies; in the early 1970s we had 100,000 unemployed people and 1 million job vacancies. Anyone who can’t find skilled workers should train them instead of scraping them together all over the world,” criticized Flassbeck and warned: “If you don’t solve the economic problems, it always ends in fascism.”
Flassbeck asked the question why the USA has shown significantly better economic development and why unemployment has fallen massively. “With the black zero, Germany has reduced national debt throughout Europe, while the USA is increasing its national debt in order to stimulate the economy,” explains the economist.
“Everyone sees the state as a corpus with no relationship to the rest of the economy. However, the state is firmly integrated into the entire economy. In the economy there are actors who save, who earn more than they spend, and then there are debtors who spend more than they earn. In an economy there can only be as many savers as there are debtors,” continues Flassbeck. “Savings are the biggest problem in the economy; someone always has to take on debt. Companies and households are no longer saving or spending money. Companies have been savers since around 2000. Now there are only two people who can take on debt: the state or abroad. And what did Germany do? Foreign countries made debtors.”
Under Schäuble’s black zero, Germany reduced public debt, but at the expense of other European countries. “Japan has an even higher national debt than the USA because there is no other economic option,” said the speaker.
Flassbeck criticized shareholder value. As a result, companies are devalued by the financial market if they do not make a profit, although it is completely normal that companies sometimes have to make losses. He also tried to make it clear to the audience that the belief that high national debt would lead to a crash was wrong: “We have to understand that the state plays a different role. The state has a special role.” The idea of the state budget being equated with the saving “Swabian housewife” is fundamentally wrong.
Afterwards, Flassbeck answered the critical questions of the audience in the hall and received great applause for his clear and interesting presentation. We will upload the entire event to our new YouTube channel.
