Why Germany Still Has So Many Middle-Class Manufacturing Jobs
He missed the main reason: currency suppression.<p>Germany has managed to suppress the value of its currency over the years to make its exports artificially cheap, which encouraged growth, creating manufacturing jobs.<p>It did this firstly through reunification (dragging down the value of the DM) and subsequently by joining the Euro (Southern Europe had the value of their currencies pegged higher than their &#x27;natural&#x27; value, Germany&#x27;s was pegged lower).<p>Germany&#x27;s export boom after joining the Euro would have been short lived if they reverted back to the DM as the value of their currency would have risen in value, pushing up the cost of exports, ending the boom. Instead it continued unabated.<p>China also achieved the same thing largely by buying foreign debt (mostly US treasuries). As did Singapore, Taiwan, Hong Kong and Japan, all of which achieved similar results. There&#x27;s no magic sauce, it&#x27;s just a question of whether industry takes political precedence over banking (which likes an overvalued currency).