76-10-B3
- Main Page \ Reagan Radio Commentaries \ 1977
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Germany[edit]
Transcript[edit]A nationally syndicated columnist, Lawrence Fertig, back in 1961 wrote a column that became front page news in some papers. Among other things, he told of an economic report written in 1951 which had been classified "Secret" for ten years. It was the report of a group of American economists who in 1947 and '48 were in Germany to tell that defeated, war-devastated country how to get back on its feet. Many of these economists were advisers to our own government and, indeed have continued to influence policy over the years even to the present. When the report was declassified, Mr. Fertig revealed that our traveling think-tank had told German Finance Minister Erhard in 1948 that he had "an excessive concern for price stability"; that Germany should go in for deliberate planned inflation and easy (meaning printing press) money. Minister Erhard was also told that interest rates high enough to encourage personal savings were bad and would limit investment. When the Germans allowed fast depreciation of capital investment and tax breaks to business and industry to increase their investment in new equipment and plants, the Americans said it was "an expenditure of tax funds the government should collect instead". Most significantly, the Germans were literally told that capitalism as we have known it here in our country - capital investment in industry - was no longer the modern way. Always the Americans urged that government should be dominant in the economy. Well the American economists, having imparted their wisdom, returned to America and West Germany became the economic miracle of our time. Never had a nation so totally destroyed, recovered so quickly and become so prosperous. And for about ten years people kept asking, "What is their secret? How did they do it"? Mr. Fertig made their secret public with the publishing of the report. Once Germany was back on it's feet, Finance Minister Erhard revealed that his government had listened to all the economic advice from the American experts and then taken an opposite course. They maintained a sound currency, a balanced budget, eliminated all price controls, provided, as I've said, strong incentives to business and individuals to save and invest; in short they rejected a government-directed economy and encouraged private enterprise. Now - as to learning from history, it seems the latest American official visit to Germany may have attempted to repeat some economic advice similar to the kind given in 1948. At any rate, the West German Prime Minister made a polite statement which indicated Germany would continue on it's own course. As I've said, some of those economists who were proven so wrong are still advising our government to do the things Germany refused to do. Germany, it's great cities bombed into rubble, it's industrial capacity at near zero, came back to be one of the most stable, prosperous nations in the world. The United States, victorious, it's industrial capacity untouched, took the advice the Germans rejected and now has economic problems, inflation, unemployment and a national debt of incomprehensible size. Worst of all, Washington still turns to those same economists for advice. This is Ronald Reagan. Thanks for listening. |
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