A German Official Talks Like Jimmy Carter—and That’s Good

By Joseph C. Sternberg. Excerpts:

"Mr. Klingbeil [German Finance Minister Lars Klingbeil, co-leader of the center-left Social Democratic Party] last week delivered an agenda-setting speech titled “Reforms for a Strong Germany”"

"His central observation is that Berlin must break its habit of responding to serial crises by doling out subsidies and amping up regulations. Resilience is born of strong labor and capital markets, and building that strength requires better incentives to work and invest."

He "would encourage Germans to work longer into their lives. This would entail a combination of tax reforms to allow older workers to retain more of their earnings and benefits and reforms that improve incentives to work longer before claiming Germany’s equivalent of American Social Security."

"Nearly half of working women in Germany work only part-time"

"A sharply progressive tax code coupled with the withdrawal of generous means-tested benefits as incomes rise creates steep cliff-edges in household budgets."

"Mr. Klingbeil wants to make it easier for companies to hire. One of his more intriguing ideas is to allow companies greater flexibility to hire new employees on contracts that make them easier to fire."

"His better ideas [business investment] on concern deregulation and streamlining bureaucracy" 

"Jimmy Carter started deregulation in the U.S., and Gerhard Schröder overhauled German labor law 20 years ago. Mr. Klingbeil now is signaling that he’s willing to try, too."