THE GREEK BONE CONNECTED TO THE KRAUT BONE
GERMANY CHILDLESS
Greece is broke, and has run out of Greeks. So it's getting bailed out by Germany. But Germany also has deathbed demographics: as Angela Merkel, the Chancellor, pointed out in 2009, for Germany an Obama-sized stimulus was out of the question simply because its foreign creditors know there are not enough young Germans around ever to repay it. Germany has the highest proportion of childless women in Europe: one in three fraulein have checked out of the motherhood business entirely.
EUROPE DEBT
Absolved from having to pay for their own defense, Continentals beat their swords into welfare checks, and erected huge cradle-to-grave entitlements. Even under the U.S. security umbrella, they proved unsustainable. Why? Well, like Keynes said, in the long run we are all dead - so why not bilk the future? We won't be here, and our creditors won't have a forwarding address. No one has engaged in transgenerational theft on the scale that Europe has.
GERMANY DOWN
And these days Germany has to support a continent. It's the economic powerhouse that's supposed to be rescuing the euro and preventing the five soi-disant PIIGS (Portugal, Italy, Ireland, Greece, Spain) from having the Big Bad Wolf of reality blow their house of straw to smithereens. But what happens when your engine room is rusting? "Germany's workingage population is likely to decrease 30 percent over the next few decades," says Steffen Krohnert of the Berlin Institute for Population Development. "Rural areas will see a massive population decline and some villages will simply disappear-Germany will become a weak economic power in the future."
SILLY ITALY
The EU committed (to borrow from Philip K. Dick) a kind of precrime: it mugged the next generation. For the moment, the victims are still walking around, mostly unaware of what they're in for. For many of them, life is good. Take Marina Casagrande of Bergamo. In Italy, a court ordered her father to pay Marina an allowance of 350 euros-approximately $525 every month. Signor Casagrande was then sixty. His daughter was thirtytwo. She was supposed to have graduated with a degree in philosophy eight years earlier but, though her classes ended way back at the beginning of the century, she was still working on her thesis. So Signor Casagrande is obliged to pay up, either in perpetuity or until the completion of Marina's thesis, whichever comes sooner. Her thesis is about the Holy Grail. Which Marina would have little use for, given that she's already found a source of miraculous life-transforming powers in Papa's checkbook.
Marina is what they call a "bambocciona," which translates, roughly, as "big baby" - the term for the ever-growing number of Italian adults still living at home, in the same bedroom they've slept in since they were in diapers. There was, as usual, a momentary spasm of ineffectual outrage over the judge's decision against Signor Casagrande, whose very name is mocked by this demographic trend: the case would seem much more grande if only Junior would move out. But in Italy they rarely do: seven out of ten adults aged 18 to 39 live with their folks. Sixtysomething Italians ordered to pay "child support" to thirtysomething kids might consider moving back in with their nonagenarian parents and suing for a monthly allowance backdated to the early Seventies.
SILLY OTHER NATIONS
Italy's bamboccioni have their equivalents around the world. In Japan, they're called parasaito shinguru-or "parasite singles," after the horror film Parasite Eve, in which alien spawn grow in human bellies feeding off the host. In Germany, they're Nesthockers with no plans to move out of "Hotel Mama." In Britain, they're KIPPERS (Kids In Parents' Pockets Eroding Retirement Savings). In Canada, by 2006, 31 percent of men aged 25 to 29 were still sleeping in their childhood bedroom each night.
NO JOBS
The economics of demographics used to be relatively simple: in a traditional agricultural society, by the time you got too worn and stooped for clearing and plowing, you hoped to have sired able-bodied 13-year-olds to do it for you. Today, most developed nations have managed to defer adulthood and thus to disincentivize parenthood - quite dramatically so, if the judgment against Signor Casagrande holds. Why blame his daughter? No matter how long you stay in school in Italy, there's nothing waiting for you when you come out. Francesca Esposito was twenty-nine, spoke five languages, had two degrees, and could land no job other than an unpaid traineeship with a government agency facilitating millions of euros' worth of false disability claims. "I have every possible certificate," she told the New York Times, which, in its poignant profile of Italy's young, never seemed to consider whether such expensively acquired "certification" is necessary for a government job - or most others. Young(ish) Francesca had a law degree from Italy, a master's from Germany, and had interned in Luxembourg at the European Court of Justice. A century ago, this leisurely, indulgent saunter through a tri-national varsity would have been the province of bored aristocratic scions with no interest in politics or soldiery, but somehow Europe got the idea to universalize it. Miss Esposito's father is a fireman, her mother a high school teacher. She is the first in her family to learn a foreign language and graduate from college......
THE KRAUT BONE CONNECTED TO THE YANK BONE
WEST IS CHILDLESS
American admirers often talk about the European lifestyle. Alas, it's all style and no life....
Which is the situation much of the West is facing. A bank is a kind of demographic exchange, by which old people with capital lend to young people with ambition and ideas. Who are somewhat thin on the ground in modern consumer societies. Japan, Germany, and Russia are already in net population decline. Fifty percent of Japanese women born in the Seventies are childless. Between 1990 and 2000, the percentage of Spanish women childless at the age of thirty almost doubled, from just over 30 percent to just shy of 60 percent. In Sweden, Finland, Austria, Switzerland, the Netherlands, and the United Kingdom, 20 percent of 40-year-old women are childless. In a recent poll, invited to state the "ideal" number of children, 16.6 percent of Germans answered "None."
WHOSE GOING TO PAY
Well, that's a woman's right to choose. But, in the macroeconomic picture, who's going to be around to buy your assets? Mark Twain commended the purchase of land because "they're not making any more of it." But, in the fast depopulating eastern half of Germany, they've made more than anyone's going to need for the foreseeable future. Pace the Fuhrer, no country has ever been less in need of lebensraum. America has a milder case of the same syndrome - the Boomers didn't have enough kids to sustain the mid-twentieth-century entitlement regime-but EU governments are now frantically hurling natalist benefits at a shrinking base of fecund womanhood.
TROUBLE
Now look at it from a business point of view. In the United States, depending on what line of work you're in, your sales territory may be your town or your state or the whole of America. But for Germany, Italy, and Japan, their only viable sales territory is the world. When your median age is forty-three and rising, any economic growth is down to exports. Wall Street experts talk about restoring "consumer confidence," but in much of Europe they won't restore "confidence" until they restore consumers - that is, figure out a way to generate sufficient numbers of them. Until then, the domestic market is too old and too small (or "inert," to reprise Martin Wolf's line) to support economic revival.
If you're a German bank, to whom do you lend money? With age distribution on your home turf heading north relentlessly, you don't have enough young people to grow your business. So you lend farther and farther afield. Not crazy farther, not Sudan or Rwanda. But far enough that you're operating in markets where your traditional forms of risk analysis don't apply, even if you were minded to apply them. To western bankers, Eastern Europe didn't seem that different or dangerous, if you steered clear of the more psychoticoligarchs. Unfortunately, the post-Soviet east is even further down the demographic death spiral than you are. America? By some estimates, Germany's Landesbanken could have to write off a trillion bucks' worth of subprime crud from the U.S.
So, from the individual homeowner with no one to sell his home to, and the business that's run out of domestic market, and the bank frantically loaning to jurisdictions it barely comprehends, nudge it up one last stage to the state. In recessions, government is enjoined to spend-to go into deficit, ramp up the national debt in order to "stimulate" the economy. Adding to the national debt presupposes that there'll be someone to pay it off. But what if there isn't? And do the Chinese and the Saudis already know the answer to that question? The failures of British and German Treasury auctions (not to mention near misses in the U.S. prevented only by the Fed buying up Treasury securities) prefigure a world with too much debt and too few sugar daddies willing to cover it.....
STATE SPENDING AND WALES
It's interesting that it never occurred to the IMF that anyone would be loopy enough to try their study the other way around-to examine the impact on America of Europeanization. For that, we had to wait for the election of Barack Obama. You've probably heard liberal academics on NPR and the like drooling about "the European model," and carelessly assumed they were referring to Carla Bruni. If only. Under the European model, state spending accounts for roughly 50 percent of GDP. Under the Swedish model, which isn't half as much fun as it sounds, state spending accounts for 54 percent of GDP. In the United States, it's already over 40 percent. Ten years ago, it was 34 percent. So we're trending very Swede-like. And why stop there? In Wales, government spending accounts for just under 72 percent of the economy. Fortunately for what's left of America's private sector, "the Welsh model" doesn't have quite the same beguiling ring as "the Swedish model." But, even so, if Scandinavia really is the natural condition of an advanced democracy, then we're all doomed.
EUROPE BOASTING
"Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism...'The Europe that protects' is a slogan of the European Union." 42
EUROPE NEEDS PROTECTION
Protects from what? Right now, Europe mostly needs protection from itself and its worst inclinations: "With low growth, low birth rates and longer life expectancies, Europe can no longer afford its comfortable lifestyle."
AMERICA PAID EUROPE DEFENSE
Even in its heyday - the Sixties and Seventies - the good times in Europe were underwritten by the American security guarantee: the only reason why France could get away with being France, Belgium with being Belgium, Sweden with being Sweden is because America was America. For over sixty years America has paid for Europe's defense. And because the United States Army lives in Germany, that frees up Germany to spend its defense budget on government health care and all the rest. In essence, American taxpayers pay for German entitlements.....
About half of the global economy is living beyond not only its means but its diminished number of children's means. Instead of addressing that, countries with government debt of 125 percent of GDP are being "rescued" by countries with government debt of 80 percent of GDP. Good luck with that.
....................
The West is in a HUGE mess. Europe may well have to RESTRUCTURE itself, and North America may never get back to where it was in the world's economy, new players in the East are taking over. About 3 years ago I was in Branson, MO. for the Feast of Tabernacles. I was in a "leather shop" and shooting the breeze with the owner for about 20 minutes; we talked about the USA economy going bust and all the people out of work. And everything being made in China. As I was leaving there was this "Indian/Cowboy" jacket hanging by the door - those with all the fringes and bead work, fully lined and made of the best leather - one of those jackets people turn around and look at twice. You hardly ever see them in North America today, you did about 30 years ago, but not today. For curiosity I asked him the price, thinking he'd say about $500. With a smile he replied it was $149 made in CHINA! I said well for that price I'll buy it.
Many kinds of people comment on my jacket here in Calgary when I walk around wearing it. It really is an eye catcher - I often tell them the story I've just told you .... yes MADE IN CHINA!!
One man told me some Indian group in B.C. makes them, but they want anywhere from $500 to $700 for a jacket like mine. Yes, even CHINA have the market on leather beaded/fringed Indian/Cowboy jackets.
The West has got serious competition in EVERYTHING from CHINA!
The West has got SERIOUS problems PERIOD!
Out of it all Europe will RESTRUCTURE itself and will eventually become the BABYLON BEAST of the book of Revelation, that will, with a great "church" power resurrect the Holy Roman Empire for one more last time, and will say it must rule the Western world and the East, to bring the Kingdom of God to a crazy world going out of control. Most of the West is going to believe it is the savior of the planet, and will back its political/religious plan for the world.
..........
No comments:
Post a Comment