Ever since the unification of Germany in 1870, Germany has stood out as an economic powerhouse. Just prior to World War I, it had surpassed the United Kingdom in several key manufacturing areas and was ready to challenge the United States. By 1914, Germany was producing nearly 50% of the electrical equipment in the world. After the destruction of World War II, the United States realized that the stability of Europe depended not on the victors (the U.K. and France) but on the defeated, Germany. Picking up the pieces, Germany once again stepped up and became the strong core of Europe.
The ability of Germany to take such a dominate role in Europe was based on several factors, including a highly educated, disciplines and homogeneous population, excellent technology, cheap energy, and the luxury of living under the protective umbrella of the United States. When Europe had problems, such as the economic disaster of 2007-8, Germany took a strong lead in insuring stability and continuity in the banking industry. It was Germany, not any of the other Western European states which provided the base for the European type of welfare state. Unfortunately, as history shows, Germany can make many bad decisions for every good one.
One key component of the success of Germany was the access to cheap energy. That cheap energy came from Russia and several years ago, a former German Chancellor became a key player for the Russians as they began to build a pipeline which went around German’s NATO allies on its eastern border. With the invasion of the Ukraine however, the cheap fuel is suddenly not so cheap nor so plentiful with the result of a major disruption of the German economy. For example, Germany has long been known for its successful chemical industry. BASF, one of the world’s largest chemicals companies produces tens of thousands of products in eight countries around the world, but now, it could be forced to close as many as two hundred plants and lay off tens of thousands of employees due to a series of bad decisions over the past twenty years.
Thirty years ago, German leadership decided to go “green.” Germany invested trillions of Euros in wind and solar energy without ever being aware of the German climate. During World War II, the Allied bombing of German industrial sites was a huge investment with not enough to show for the effort. The best estimate was that the U.S. Eighth bomber offensive could only deliver about fifty-five percent of its potential effort due to the weather over Germany. During the winter, there were only one or two clear days of clear skies in Western Europe, and it reached its peak of seven days in June for a grand total of thirty-one days in any given year. Hardly the ideal for a move to solar energy! That made the cost of electricity nearly three times more than in the U.S. with the result of companies moving out of Germany to friendlier areas. Some Germany companies have even taken to generating their own electricity to escape the high taxation but the German version of the I.R.S. has proclaimed that the companies still must pay the same taxes even though they are producing their own power.
German is suddenly stuck between the devil and the deep blue sea; does Germany continue with the movement toward “green” and watch the economy shrink or give into Russian extortion? Perhaps reality is beginning to hit home as Germany is beginning to re-open coal power plants in a desperate gamble to keep the country on an even keel. This will mean more pollution (Germany had never met any of its “green” goals and has had steadily rising increases of pollution after spending trillions on its futile quest into going ”green”). The fact remains that Germany like so much of the West has suffered at the hands of ideological leaders who put momentary popularity against the best interests of its citizens. Let us hope that the leadership in Washington D.C. will come down off its high horse and face the hard lessons of others.
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