Economic Recovery: Follow the German Model?

There is no doubt that Germany's economy has been fairing a lot better than most other countries since the recession. In recent years Germany has emerged as the export juggernaut of Europe in a time when many economies are struggling with vast trade imbalances.

     I had come across a great NY Times article about how German governmental policies reflect this newfound rise in economic power, and how strict regulation helped avoid a major collapse of major markets, including the housing market, for example: German banks demanded a 40% down payment for a new home loan. This would largely avoid any collapse, because with a house already almost half paid, failure to pay the rest is less likely; a risk is largely avoided. Capitalism is a very rewarding economic model, but unregulated, it could have devastating effects when risk on home loans is committed on a large scale.

     Due to the large conservative presence in America, many think that cutting poverty/social security policies from the budget will further plunge us into chaos; to the contrary as proven in Germany. These policies keep the economy flowing by providing consumer markets with income, therefore jobs are kept. The problem isn't social security and unemployment; it is the incentives attached to them. A large part of American unemployment incentives don't encourage returning to work, whereas Germany's entire structure is based on this.

       Germany's economic model isn't conservative nor liberal; its simply practical and encourages incentives of individuals, controls incentives of corporations and industries, and neatly aligns these policies with a common national goal for rapid growth.

Source:

http://www.nytimes.com/2011/06/08/business/economy/08leonhardt.html?_r=1&partner=rss&emc=rss

Long Term Afghanistan Strategy

With the killing of Osama bin Laden, and budgetary concerns mounting at home, the US effort in Afghanistan is facing mounting criticism involving the purpose of continued occupation of the country. Obama, so far, is sticking to his goal of ending combat operations in the country by the end of 2011. This plan could leave devastation in Afghanistan. With no American support and an ill prepared Afghan army, the opportunity for the Taliban to re-emerge as a force in the country is great.
     Some top American officials are offering alternatives; continued talks for a power sharing deal with the Taliban, and withdrawing NATO and American forces, but leaving small regiments specifically for cracking down on terrorists.
     But I think the only concrete goal that Afghanistan should achieve in the long term is simple: money. Many forget that Afghanistan has minerals such as lithium and copper in its grounds that some project to be worth in the trillions of dollars. With direct foreign investment in these areas, and jobs plentiful for Afghan workers, there will be no need for revolution or fundamentalism, and stability can prosper. Until then, a tricky situation remains. China has already capitalized on these opportunities by investing in the country, although the US has done all of the work.
     It will take years for the Afghan mining infrastructure to be built, and even longer for these natural resources to be converted into jobs. However, we can't afford to stay around until these goals materialize. I believe a power sharing deal needs to happen while any defectors to the government remain targets for the US armed forces.