Deutsche Bank Leads the Way

Mark Landler has an uncritical, admiring profile of Deutsche Bank CEO Josef Ackermann in today's New York Times. The essence of the article is contained in the headline (in the print version only):"The Chief of Deutsche Bank Wants US-Sytle Capitalism In Germany." Ackermann sees Deutsche Bank as a poster-child for the neo-liberal direction that the German economy on the whole must take:

In many ways, he says, Deutsche Bank's struggle to remake itself mirrors that of Germany as a whole.

"People are more open to reforms now because they know things have to change," he said. "They feel that if we don't change, we're going to lose, and no one likes to lose. Germans like to win."

Mr. Ackermann's sense that his views are becoming more mainstream also stems from polls that show voters appear ready to push out the Social Democratic government of Chancellor Gerhard Schröder in favor of his conservative challenger, Angela Merkel.

What the US-style reforms really mean are already apparent from the bank's actions over the last months:

The bank has not waited for Berlin to act. Since Mr. Ackermann took over in 2002, it has shrunk its payroll to 63,000 from 90,000. The latest layoffs, which affect 1,900 jobs in Germany, were announced early this year, not long after Deutsche Bank's profits jumped 87 percent and the number of jobless people in Germany rose above five million.

[...] To Mr. Ackermann, however, the cutbacks were necessary to make Deutsche Bank competitive with Goldman Sachs, Merrill Lynch and other peers. He is not shy about saying that Germany's leaders should borrow from his playbook in preparing their country for the global economy.

"I hope that Deutsche Bank can prove that if you do certain things the way that modern companies are doing them, it could be a little bit of a role model for what can be done macroeconomically," he said.

Part of being a role model means accepting a compensation package that is on par with his American friends: Ackermann earned $12 million in 2004. 

Hermann Abs - the architect of the post-war Deutsche Bank as well as the social market economy (Soziale Marktwirtschaft) who died in 1994 - must be spinning in his grave.

Comments

[Joe N.]

No, the American thing to do is to let liberalism make the economy healthy as it has, to dunk unemployment to less than half of Germany's, which would ENLARGE the workforce, not shrink it.

How do you account for the low unemployment rate? Magical pixie dust and miscellaneous hobby horses like pillaging indian reservations or something?

[David]

We've seen the result of the low-wage/low-tax economy this week in the US: millions of Americans with jobs are living below the poverty threshold. Your neo-liberal/neo-conservative utopia has turned out to be a real nightmare.