Follow Paul Gregory by Email

Sunday, May 5, 2013

Why Obama Cannot Match Germany's Jobs Miracle

In 2002, Chancellor Gerhard Schroder appointed a jobs council headed by Volkswagen’s Peter Hartz to solve Germany’s high unemployment. In 2011, President Barack Obama similarly appointed a jobs commission headed by General Electric's Jeffrey Immelt to achieve the same goal.  (At the time, Schroeder headed the SPD, the equivalent of America’s Democratic Party.)

Germany’s labor market turned around in a dramatic fashion after Schroeder implemented the Hartz Commission’s sweeping reforms between 2002 and 2005. In contrast, Obama’s Immelt Council quietly disbanded without making substantive proposals, and America’s worst jobs recovery of the postwar period continued.

Obama cannot duplicate the German reforms. They reject his Keynesian belief that jobs are created by government stimulus.  Instead, the Hartz reforms rest on the common sense notion that people take jobs when work, rather than welfare, pays. Such an approach violates Obama’s core belief that government must make the lives of the unemployed as comfortable as possible. No, the Germans say. If the state gives too much, the unemployed will have no incentive to take jobs, even when they are available.

go to

1 comment:

  1. Wow...I had not heard of this. Of course that is not surprising since our American journalists no longer seek truth.

    This is a timely read for me. Over the weekend I heard that the US now has almost 11 million people on some form of disability! In the late 60's there were 50+ workers for every person on disability. Today there are only 13!

    When will America realize that we are motivating people NOT to work? I really fear for where this country is headed.

    Thanks for the article Mr. Gregory.