February 28, 2008

German Unemployment Dips ... To 8.6%

While Democrats fan out to talk about the misery of our economy and how the government has to do more to control it, the news out of Europe seems brighter. The Germans and their more-controlled economy has begun improving. In fact, their unemployment rate has dropped all the way to 8.6%:

Germany's unemployment rate dipped to 8.6 percent in February as a relatively mild winter added to momentum from the country's economic upswing, government figures showed Thursday.

The number of people without a job in Germany, Europe's biggest economy, fell 42,000 from January to 3.617 million, and 630,000 lower than in February last year, the Federal Labor Agency said.

The unadjusted jobless rate was down from 8.7 percent in January. Last February, that rate was 10.1 percent.

"Unemployment continues to fall," Labor Agency chief Frank-Juergen Weise said. "Companies' demand for labor remains at a very high level."

The bad news? The improvement is likely overstated, according to a UniCredit economist in Munich. The German government's short-term winter benefit for construction workers masked what will soon become a significant drop in work. Major companies plan cuts as they forsee a cooling economy, although the government insists that unemployment will continue to decline.

Europe, with its heavy-handed economic regulation, struggles to keep itself out of Jimmy Carter-era unemployment. They celebrate 8.6% unemployment. Meanwhile, the Democrats claim that 5% unemployment here requires the exact same kind of solutions that brought Germany their current economic "success".

Lest anyone think that this problem is confined to Germany, take a look at this report from last February. The "Eurozone" celebrated its best unemployment rate ever -- at 7.4%. Three weeks ago, they announced a further improvement -- to 7.2%. Either of these numbers would have Americans screaming in the streets for new leadership, and yet those who claim to represent that new leadership want to take the US down the same statist path where 7.2% is a "record low".

We need market solutions, not government-controlled economic plans that send capital to Capitol Hill instead of the engines of economic growth. We don't need to duplicate the European debacle.

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