Why the German economy is sputtering

The German economy ground to a halt in the fourth quarter of last year.

For most economic observers, this was a startling development. Despite the never-ending economic crises wracking Europe, Germany seemed like a perpetual bright spot, steadily clocking in 2-to-2.5 percent real GDP growth since 2014. But in the last year, Germany’s growth nosedived and officially hit zero in 2018’s final months. If it falls any further, Europe’s biggest economy will be in recession territory.

The story of how this happened begins with a straightforward fact: Exports are nearly half the German economy.

Between 1970 and 1995, exports slowly rose from 15 percent to a little over 20 percent of Germany’s GDP. But from 1995 to today, its exports exploded by another 25 percentage points — and stood at more than 47 percent as of 2017.

An enormous portion of Germany’s workers and businesses rely on foreign consumers to buy their goods and services. In slightly more technical terms, roughly half the German economy relies on demand created in other countries — rather than on demand it creates itself — to keep humming. If those other economies stop providing that demand — either because their own economy tanks, or because they make a policy choice not to — Germany’s economy gets dragged down. And starting last year, that all happened on several fronts.

First there were President Trump’s steel tariffs, which cut into American demand for German steel products. Then there was the slowdown in China’s economy: The Asian behemoth only hit 6.6 percent GDP growth in 2018, its lowest level in roughly 30 years and one that’s still falling. Partially, that’s thanks to Trump once again and his ongoing trade war with the country. But the combination of China’s state-run hybrid capitalism, Beijing’s efforts to lift hundreds of millions of its citizens out of poverty, and the ongoing transition to a modern economy has left long-term structural challenges that are finally beginning to bite.

Germany had nowhere to turn. Outside of the U.S. and China, Europe was already a mess and most big developing economies were already struggling. Meanwhile, China is so big, and its domestic demand has such an outsized impact on the world, that when it slows down even a bit, everyone else tends to slow down too — including all the other countries that might buy German exports.

Thus, bad luck is the first part …read more

Source:: The Week – Business

      

Midwest couple made a sweet deal in Springdale

SPRINGDALE — A little over five years ago, Dave and Kim Watts, as people tend to do when they’re in the middle of their careers, started thinking about their retirement “someday.”

And since both of them are mechanical engineers, they thought about it like engineers.

What would it look like? What would they do? Where would they do it? How would they make it work?

The first step, they decided, was that every year for their vacation they would visit an area of the country they thought might be a great place to retire. They gave themselves 10 years to scope out the country.

Their first trip was to Oregon, where in a little town along the Columbia River Gorge they came across an ice cream parlor that had just been sold. That got them to thinking: running an ice cream shop might be a nice way to ease into the golden years.

Lee Benson

Dave and Kim Watts, proud owners of Springdale Candy Company.

For their next trip they chose Utah. This was in the fall of 2013. In advance of flying into Salt Lake City they Googled “businesses for sale” and up popped — you guessed it — an ice cream and candy shop.

The ad said the store was located right next to Zion National Park. So close you could hit it with a gumball.

Dave and Kim were skeptical. That sounded too good to be true. But what could it hurt to check it out? They called the owner and made arrangements to meet at the store the first day of their vacation.

They drove from Salt Lake City along the I-15 freeway to the Zion turnoff, then made their way the 50 miles toward the park.

In the town of Springdale, a stone’s throw from the park entrance, in the shadow of the Watchman Spire, next to the laundromat on Zion Park Boulevard, there it was: the Springdale Candy Company.

Precisely as advertised.

The owner was eager to sell; he was in his 70s and wanted to retire for real.

Dave and Kim suddenly had a quandary on their hands. They had good-paying jobs as engineers back home in the Midwest. But they worked long hours with long commutes. Each morning he would head off to work 40 miles in one direction while she would drive 60 miles in the other direction. After 12-hour days they barely saw each other. Here was a golden opportunity …read more

Source:: Deseret News – Business News

      

Midwest couple made a sweet deal in Springdale

SPRINGDALE — A little over five years ago, Dave and Kim Watts, as people tend to do when they’re in the middle of their careers, started thinking about their retirement “someday.”

And since both of them are mechanical engineers, they thought about it like engineers.

What would it look like? What would they do? Where would they do it? How would they make it work?

The first step, they decided, was that every year for their vacation they would visit an area of the country they thought might be a great place to retire. They gave themselves 10 years to scope out the country.

Their first trip was to Oregon, where in a little town along the Columbia River Gorge they came across an ice cream parlor that had just been sold. That got them to thinking: running an ice cream shop might be a nice way to ease into the golden years.

Lee Benson

Dave and Kim Watts, proud owners of Springdale Candy Company.

For their next trip they chose Utah. This was in the fall of 2013. In advance of flying into Salt Lake City they Googled “businesses for sale” and up popped — you guessed it — an ice cream and candy shop.

The ad said the store was located right next to Zion National Park. So close you could hit it with a gumball.

Dave and Kim were skeptical. That sounded too good to be true. But what could it hurt to check it out? They called the owner and made arrangements to meet at the store the first day of their vacation.

They drove from Salt Lake City along the I-15 freeway to the Zion turnoff, then made their way the 50 miles toward the park.

In the town of Springdale, a stone’s throw from the park entrance, in the shadow of the Watchman Spire, next to the laundromat on Zion Park Boulevard, there it was: the Springdale Candy Company.

Precisely as advertised.

The owner was eager to sell; he was in his 70s and wanted to retire for real.

Dave and Kim suddenly had a quandary on their hands. They had good-paying jobs as engineers back home in the Midwest. But they worked long hours with long commutes. Each morning he would head off to work 40 miles in one direction while she would drive 60 miles in the other direction. After 12-hour days they barely saw each other. Here was a golden opportunity …read more

Source:: Deseret News – Business News