By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience, who writes at Testosterone Pit.
As some readers have pointed out, there was a major problem in my last post, Deep Trouble at the Core of the Eurozone. I thank all commenters who criticized or defended my post, and I apologize for the errors it contained.
On March 1, I was working on a post on the hard-hit French auto industry and the deal between GM and PSA Peugeot Citroën when I came across an article in a German paper about a 30% drop in registrations in February in Germany. Surprised and shocked that sales would fall off a cliff like that, I checked www.KBA.de, the German federal office for motor vehicles, which publishes the vehicle registration numbers every month. But it didn’t have the February numbers yet.
That should have been a warning. Why would a newspaper reporter get the numbers before the government publishes them? But the decline was so sudden that I threw caution into the wind and changed the focus of my story. I was overly eager to be out in front of what seemed to be a significant development—without getting confirmation. A big and stupid mistake. I posted it on my blog on March 1.
The actual figures (PDF), when they were released on March 2, were flat for February year over year, and showed a 0.2% decline year to date. These numbers match the mildly mixed German economic data that has emerged recently. Overall, given the registrations so far this year, I don’t envision a major up or down move in Germany in the near term. In other EU countries, the recent and sometimes steep declines may continue for a while. Industry sales for the EU are expected to decline this year.
German automakers may be able to overcome any weakness in the EU with strong sales in the US and Asia (but sales in China, after years of phenomenal growth, are at risk of a setback).
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You stand corrected and did your reputation a big favour with this post.
Thank you for the correction! As somebody who was pretty harsh with your previous article I appreciate it (and the new sources).
Wow. Error correction. Thank you.
It is refreshing to see a straight up “I made a mistake”, not even a “OK, I was a little wrong, but the other guy is worse” kind of thing.
I just finished David Deutsch’s Beginning of Infinity. He makes a convincing case that error correction is crucial for both science and politics. At least if truth and general well-being are the goals. For most of our institutions and discourse, unfortunately they are not.
Deutsch’s point on the centrality of error correction in science and politics in fact comes via the work of Karl Popper. In “The Logic of Scientific Discovery,” Popper presents the idea of falsification, where scientific theories are continually tested for errors, and it is through this discovery of errors (and the subsequent corrections) that scientific theories are actually improved and advanced.
In “The Open Society and It’s Enemies,” Popper revisits his falsification theme, this time applying it to political systems. Democracy, claims Popper, is the superior political system exactly because it most allows itself to be open to the falsification of current political ideas in favor of newer and more effective ones.
And if you were wondering, yes, George Soros’ Open Society Institute does take it’s name from the Popper book, as OSI’s primary focus is the advancement of democracies (open societies) around the world. In fact, Soros is quite the Popper fan, and his investment philosophy, which he calls reflexivity, is also based on Popper’s concept of falsification. Soros’ successful of course speaks well for the idea of falsification and error correction.
Ok to be human. thank you.
To err is human, to admit it is divine, and to forgive is more divine, Good work bro.
Much appreciated.
Venia!:>)Amen.
Goodness Wolf, do you think that you could spare some of that with the “O” and his minions? We sure could use a lot of that today. Oh, and perhaps with the darlings on Wall Street too.
“sales in China, after years of phenomenal growth, are at risk of a setback”
Well, German car makers expect the market as such to grow by 30-50% ’til 2020 (50% for premium models).
After a record year in 2011, new deliveries in January and February 2012 are again up 8% yoy for e.g. Audi.
http://www.tagblatt.de/Home/nachrichten/wirtschaft/ueberregionale-wirtschaft_artikel,-China-ist-der-wichtigste-Exportmarkt-_arid,165361.html
while Audis new sales in China are up 67% (no typo) yoy in February, which is why Audi is increasing its production capacities and sales department in China.
http://www.autogazette.de/audi/china/unternehmen/Audi-feiert-Rekord-in-China/356597
Errare humanum est perseverare diabolicum
Quite nice that you admit error in your post (and even more so) in the the comment zone of your previous one.
This blog regularly has its points on a lot of issues. It is also loaded with prejudices, especially when it comes to Germany.
The German Industry and its economy at large – it social fabric and the post-war political constructs that made it possible – are always treated unfairly in this blog.
This bias shows especially from what is supposed to be some kind of “liberal” (libéral à la US) blog.
As a French citizen, our opinion is that one should pay more attention, and respect, to the German way to economic prosperity. And Economics by the way. Who in these circles can spell Roepke properly?
That respect starts with delivering a fair and factual review of their situation and successes.
That starts will latin countries including my own one. But anglo-saxons are not immune, to say the least…
“The German Industry and its economy at large – it social fabric and the post-war political constructs that made it possible – are always treated unfairly in this blog.”
I wouldn’t say that. I am a native, and spent more than 30 years in Germany, and there are many severely critical things to be said about Germany’s social fabric and those post-war constructs. I’d say that there is a lot of flyover commentary here on NC (and moreso elsewhere) that isn’t really well informed with respect to the flaws (and accomplishments, there are those) of Germany’s “made to order democracy” and its social compromises (and the compromised society that results). I would venture that, no matter how screwed up Germany might be these days – haven’t lived there in a decade – it can’t hold a candle to the rolling cluster-fu that defines the US of A these days. A lot of wasted potential and opportunity on both sides of the pond, and way too much stupid greed.
Honestly, you Germans who comment on NC seem 1. terribly thin skinned and 2. not to pay much attention to our US coverage. What this blog says about the US is at least 10x as bad as what it says about Germany. And you seem to miss that NC has said quite a lot of positive things about the German social contract. It’s Germany’s stance towards the eurozone that we dump on.
And I have to say, we got similar comments from readers in Spain and Portugal when we talked about their ability to carry their debt loads, and some of them have since conceded we were right.
Fair enough, though you yourself reacted rather thin-skinned to my criticism about Mr. Richter’s article by trotting out an appeal to authority, which I found particularly disappointing, considering that I was right.
That being said, here’s why I am thin-skinned about some of criticism leveled against Germany:
Throughout the 1990s, Germany was dubbed “Europe’s sick man” and there was no shortage of criticism and condescending advise gushing forth from the Anglo media and Ivy League educated experts on how to fix our economy, which now, from hindsight, would have boiled down to switching to a consumer spending fueled bubble economy, i.e. the US/UK economic model.
Fast forward a decade. Painful sacrifices were made. Real wages remained virtually stagnant. We now have to work until 67. Lay-off protection has been weakened substantially in order to make the labour market more flexible. Welfare has been cut and unemployment benefits restricted. In addition to that, wage earners are crushed by some of Europe’s highest tax rates.
The payoff has been a stronger economy, less unemployment and a sustainable fiscal deficit. Our house is in order now.
And what is the result? We went from being “Europe’s Sick Man” to being the “Fourth Reich waging Economic Total War” on our less successful neighbours.
Splendid.
Some have argued that Germany putting its house in order came at expense of and was alleviated by beggaring its southern Eurozone partners.
Prompt error correction with meaningful clarification. Something the New York Times should adopt.
Mr. Richter, the bright side is that, had the official figures confirmed your incautious assumption, it would have made you a far less dependable analyst.
Amazing and thank you for admitting it. Good work.
This post and its repsonses are why I like this site so much.
Thank you all for your understanding and kind comments. I certainly have learned a lesson.
Thank’s for the good info!