Obama’s Failed Business Policies Slow Recovery

Tuesday, 24 May 2011 07:00 AM

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The recent surge in economic growth in the euro zone’s two largest economies, Germany and France, is proof that adhering to rigorous policies battling recession can boost a nation’s recovery.

Unlike the United States, Germany has a healthy trade surplus — exporting much more than importing. President Barack Obama seems to have missed the fast track to recovery by failing to realize the importance of investing in export industries, training apprentices, and cultivating government and union partnerships with private industries in times of recession.

While America has experienced large layoffs, there were no such cases in Germany. By supporting manufacturing industries such as the auto sector — a generous “cash for clunkers” program and part-time wage subsidies — workers and capacity were kept in place for a future recovery.

Not only was capacity kept in place but European companies, and their suppliers, used this quiet period to train and develop their work force. New and creative practices were put in place to eliminate waste and reduce costs. As a result, European industries, unlike their U.S. counterparts, were ready to take full advantage of the recovering demand.

Germany and France’s export industries are on the rise again and so is their domestic demand. Consumers are gaining confidence as unemployment rates are falling, especially in Germany. The European economy, very much like the United States, is caught up in a sluggish recovery.

However, Europeans seem more prepared for the rebound by enabling industries to respond quicker to any resurfacing demand and by taking advantage of the slowdown in other parts of the world.

As a result, French and German companies quoted in the U.S. stock markets seem to offer higher dividends than many U.S. companies.

Given the potential for increased exports to Asia and other thriving emerging economies, I expect many other European companies to offer higher-than-average dividends and even raise them more in the foreseeable future.

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