Adam Tooze

If we limit this claim to _just_ German manufacturing competitiveness (which is often synonymous with "European manufacturing" in the context of these discussions -- and I will assume this is true of your comment as well, given the nuclear energy remark), this really isn't true.

What changed my view on this was one of Adam Tooze's newsletters from last year.[1] The relevant points here are:

- Germany manufacturing is less gas-intensive than the global average.

- Energy costs only constitute a small and decreasing share of total industrial costs -- about 5.8% for the German manufacturing industry as a whole, and 3% for leading export sectors (namely the auto industry).

- Most German manufacturing -- and this is true of European manufacturing more broadly -- is primarily in high-margin, value-added sectors where quality, rather than cost, are the competitive factor.

Another important detail lost in the invocation of "cheap gas" is that Europe as a whole, and German in particular, has never had particularly "cheap gas." European natural gas prices have long been well above those in the US, and Germany's have been above the European average for the last 15 years or so.

I agree with both Tooze and the majority view that, notwithstanding the above points, Germany's post-war energy policy has been a catastrophe. It has certainly limited its manufacturing potential. But the effect of the Ukrainian war on its _already_ limited manufacturing sector, due to _already_ not-so-cheap…

It's not even clear in retrospect; the minutes of the Imperial war cabinet show they were confused as to what was going on after the first bomb.

Note that there was a third bomb scheduled and in preparation and it was decommissioned and returned to Los Alamos.

Also note that the conventional bombing of Tokyo just a few months prior caused greater destruction and loss of life.

Evaluations have to be made in context, which is very hard. There was a lot of anger and pain on both sides, which lead to irrational "momentum" in prosecution of war. Also there is the logic of industrial warfare: look at Europe: many smaller German cities were bombed for the first time just in the the last month of that war, because a huge machine had been switched on that just kept emitting planeloads of bombs which had to be dropped somewhere.

There is a thoughtful discussion of this topic by Tooze from just a few days ago: https://adamtooze.substack.com/p/chartbook-230-burning-hamburg-1943

Assuming US can print any value of USD out of thin existence as they have done multiple times in last 20yrs, it doesn’t matter for them whether they later buy in the oil to fill the reserve back at 40$ or 400$.

Key issue here is that we are seeing hard assets especially commodities being repriced in USD after a steep cycle. The winner here, as always are gulf countries flushing with cash as they are the real owners of the hard commodity assets. And the losers are developing and emerging market economies with poor FX reserves (as we have seen with Sri Lanka, Argentina etc). Pakistan could save 2.26B rupees since last April by trading oil in rupees instead of dollar [1]. The real monopoly in this world is USD hegemony and it’s once again developing economies who will bail out the monopoly paying steep prices for import.

[1] https://adamtooze.substack.com/p/chartbook-153-the-south-asian-polycrisis

Why? Because Oil Companies are lobbying for inefficient hydrogen to delay a green revolution:

https://adamtooze.substack.com/p/carbon-notes-5-green-hydrogen-the

> The members of the hydrogen coalition are all obviously incumbent fossil fuel and petrochemical interests looking for a bridge to the new era. If realized, their ambitious hydrogen projects may overload the available supply of green power, for little real benefit. By diverting badly needed clean power, green hydrogen vanity projects may even slow down the energy transition. And the subsidy regimes that are being put in place could become self-perpetuating. As Gernot Wagner and Danny Cullenward recently warned, “hydrogen could become the next corn ethanol”, a ruinously inefficient and environmentally damaging creature of subsidies that are too big to kill.

Markets have been trained to expect easy money from central banks, he said, and the “perverse effect” of that has been for “a significant chunk of global financial activity” to flood into asset management, private equity and hedge funds, among other less-regulated entities. The gyrations in markets since the easy money era ended this year can be understood as that significant chunk looking for a new home, investment-wise.

It also links to Adam Tooze's article coining "polycrisis". https://adamtooze.substack.com/p/chartbook-130-defining-polycrisis