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The European Countdown to Poverty

Edward Hugh, the Economist at A Fistful of Euros, is apparently trying to get his readers depressed by posting all these posts yesterday:

• Spain Finally, Finally Makes That Recession To Beat All Recessions "Official"

• Hungary's Second Recession In Two Years Worsens

• Italy's Recession Deepens

• Estonia's Economy Contracts At Record Pace At The End Of 2008

• The Czech Republic Probably Entered Recession At The End Of 2008

• Germany's Incredible Shrinking Economy

The last mentioned post sees Germany at the heart of the bailout requiring support from the rest of the EU, recommends EU bonds, and states that it "its the demography silly" and "Germany needs a demographic fix." What an excellent policy recommendation for Valentine's Day. Now, of you go.

Watch the following videos with more thoughtful policy recommendations:

We need "emergency christmases":
  And we need Obama:

Don't read Edward Hugh's other very recent posts on Latvia's Economy Falls At A 10.5% Rate In Q4 2008, German Exports Drop Again In December, Russia's Finances and Economy Look Nervously Towards The Abyss, Poland Is Now In Talks With The IMF and Italy Needs EU Bonds And It Needs Them Now! and The Second Great Depression Spreads...

And if you do read them, and feel like this is a countdown to poverty in Europe, then cheer up with this video of Europe's The Final Countdown. We survived the fashion of the 80s, so we shall survive this economic meltdown, if we learn from the Sensible Canadians.

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Joerg - Atlantic Review on :

Oh, I guess Robert Kagan was right after all in his Mars-Venus book. ;-) I just realized that Europe is singing about a trip to Venus and wishful thinking: [i]Oh, We're heading for Venus (Venus) and still we stand tall cause maybe they've seen us and welcome us all,[/i]

Pamela on :

Joerg, I've just finished the piece "Germany's incredible shrinking economy" where he says ---------- My view is “its the demography silly”, but then we can’t go back 30 years and change all that with the wave of a wand ---------- But he doesn't explain anything about 'demography'. Do you have any idea what the hell he's talking about?

Edward Hugh on :

Hi Pamela,this is Edward himself here (quickly). "But he doesn't explain anything about 'demography'. Do you have any idea what the hell he's talking about?" Rising median ages Pamela, rising median ages. Basically years of ultra low fertility coupled with relatively unfriendly immigration attitudes means that the median age of the Japanese and German population (at 43) is now the highest on the planet. Previously it was assumed that we wouldn't see much in the way of economic consequences from all this till much later in the century, but now, to me at least, it is obvious those consequences are already here. Basically they reveal themselves in very weak domestic consumption growth, which means that economic growth (which is needed to pay all those pensions and health care costs) is totally dependent on exports, and hence the economic well-being of others. Thus, while both Germany and Japan had no housing bubble, or excessive consumer borrowing (in fact they were huge net savers, running large current account surpluses) their economies have folded much more quickly and much more dramatically than the rest. In addition their banks (and in particularly Germany's) have lost large chunks of those savings financing others housing booms (the US, Spain, Ireland, Eastern Europe etc). This is now the second time this has happened, since we saw a much weaker version of the same phenomenon after the internet bust in 2001. But each cycle this gets worse as the median age steadily rises, and I can't imagine it is exactly pleasant for the Germans and the Japanese who haver to live through it. So before these tow countries finally fall off there perches altogether I suggest it is time to do something, in the short term via encouraging immigration, and in the longer term by fomenting much more child friendly policies, making it much more attractive for those women who want to do so to have children, even if this comes at the cost of the welfare and pensions funding of the elderly. At this stage in the game their societies have precious little choice, and if they do nothing the long term future of these societies is obviously in jeopardy.

Don S on :

There is absolutely no reason for schaudenfreud over Germany's plight. I have been predicting that the exporting countries might feel some of the worst effects of the depression based upon the US experience during the 30's but there is no satisfaction to be found in that insight. Merely the observation that when a nation's prosperity depends in large part on foreign demand, the collapse of that foreign demand can have bad effects. Nations are taking steps to stimulate demand for their domestic firms, but nobody looks out for the exporter's interests. Speaking of such dependencies, have a peek at events in Russia and the other oil patch states, and possibly in China. The Dubai boom appears to be unravelling very quickly as draconian residency laws force foreigners out of the UAE after they lose their jobs. The Dubai airport seems to be littered with abandoned late-model cars, and abandonment of upscale apartments and other real estate seems to be on the rise as well. I'm hearing forecasts that the Japanese economy may be worse off than that of Germany, possibly an annual rate of 12%. Figures coming out of China are murkier, with forecasts of growth dropping to 5%. If that is true it would be a miracle - I expect that the true figures may be worse than Germany or Japan, because China lacks the relatively robust domestic demand of those two countries. But I don't know for certain because there are factors helping China - the fact that they are a low-cost producer of many things, and falling energy and commodity prices will obviously help them.

Edward Hugh on :

Hello Don, "I have been predicting that the exporting countries might feel some of the worst effects of the depression based upon the US experience during the 30's" Very interesting insight. I have been thinking exactly the same thing, namely that Eichengreen overstates the gold standard case and that trade linkages were more important in the 1930s than most recognise. I have even been trying - without much success - to argue this with Krugman, since it has direct bearing on the whole "buy American" argument. On the other hand, if we treat Dubai as a rather separate case, then we can see the four economies you mention are definitely among the worst affected, and then if we look at their demography we can see that in each case they are different, but they have one feature in common: long term low fertility. My argument is a simple one really: after 30 years of below 1.5tfr it is virtually impossible to build an internal demand driven economy, the shape of the population pyramid and a rudimentary reading of Modigliani should make it obvious why not.

Pat Patterson on :

Edward-First thanks for taking the time to comment. My question would be that of the first two examples you cited, Germany and Japan, even with problems in birth rates and ages, neither were especially consumer oriented to begin with. Japan in particular has mentioned to avoid some of the current problems, notice I said some, by increasing domestic consumption. Though long term I agree that they will have problems though inflation could bring some overseas money back into the country. By spending savings, which get a miserable return, the Japanese banks will have to increase interest rates and make Japanese investment more attractive. While I agree that Germany has a much more daunting problem in its low birth rate, miserable return on personal savings and the continued structural bias towards exports but the one thing Germany can do that Japan probably won't is to allow more immigration and loosen the current laws concerning naturalization. It would be exciting as heck for maybe one generation but all one can do is look to the Old Southwest and California to see that, aside from nativists and those that have trouble ordering tacos, the influx has been successful. Though the economy here is a shambles it should be obvious that it is not the fault of the immigrant in an entry level job. So since Germany can react to a decline in population and Japan won't how can either country create enough internal demand to weather the current downturn? Also do you think that the Porsche and Piech families are praying by some miracle that they can figure out a way to get rid of Volkswagen and wishing that they are not introducing the new sedan, the Panamera, at a time when sales are off some 22% in the US?

Don S on :

Hello Edward, and welcome. You have given us a very interesting insight into the possible demographic causes of the collapse of demand in Germany, Japan, Russia, and China. This seems to be more a causal thing than my theory that exporters are hurt in great depressions, because I don't believe the US had a demographic crisis before the 30's although it certainly developed a short term crisis during the depression. What you appear to be saying is that Germany and Japan are enormous exporters because they are rapidly aging. So as domestic demand has dropped off in Germany and Japan, they have exported the difference to other countries, swelling their already large exports. Makes sense to me. The problem probably extends to the rest of the EU except (possibly) parts of Eastern Europe and Greece. In the case of these two countries the effects are multiplied by the fact that they have specialized in high prestige and high quality export goods and in capital equipment, both of which are particularly hard-hit sectors in the global depression. China and Russia are two seperate cases, I would argue, although their demographics obviously contribute to their problems. China remains a poor country, so one could argue that their domestic demand may not be as satisfied as the demand of Japan and Germany. China may also benefit by their position as an exporter of cheap goods. The demographic imbalance of younger Chinese complicates matters and is disquieting. Russia is a potential industrial powerhouse which never developed, very possibly because of a lack of domestic demand. Oil riches have proven to be a curse to Russia in this respect, as they provide a source of funds for the government and their capitalists which have allowed them to virtually ignore building their industry. Russia probably lost at least half of a generation to the German invasion between 1941 and 1945 because young children don't survive very well on a battleground and women don't have many children in war conditions, and those they do bear don't survive very often. I've seen it argued that European Russia never recovered from WWII in this sense. Could a 'baby boom' develop in some or all of these countries? Possibly, but it would require extraordinary conditions. China would need to find enough young women to marry their young men. The Europeans could do it more easily, in theory. But it would require a large transfer of assets from the aging to the married young, and ready availability of very secure and well-paid jobs for the new parents, together with a lot of social support. Admitting immigrants might help, but from where?

Edward Hugh on :

Hi Pam, "So since Germany can react to a decline in population and Japan won't how can either country create enough internal demand to weather the current downturn?" The simple answer is they can't, since the high levels of elderly dependency which are about to arrive, and (in the case of Japan) the already high state indebtedness exclude the kind of "heavy duty" stimulus package that Obama is introducing in the US. Apart from France and the UK most EU countries will struggle with this order of spending, and we haven't got to the second round in the bank bailout yet. So all they can do is grin and bear it, and wait for the global economy to pick up again. And when this is all over, my guess is that a big part of Eastern Europe will have joined then in the same predicament. That is, next time round expect the "global imbalances" to get even bigger. Solutions? I have no solutions. I am simply trying to document things as they happen. If you are inerested in all this then follow the Afoe blog, things are going to get a lot more interesting on the Europe front before they get boring again.

Pat Patterson on :

You quoted from me, Pat not Pam. We are not related except maybe in having prickly dispositions.

Don S on :

"So all they can do is grin and bear it, and wait for the global economy to pick up again. And when this is all over, my guess is that a big part of Eastern Europe will have joined then in the same predicament. That is, next time round expect the "global imbalances" to get even bigger." Possibly, but there is also the 'retirement' factor. Japan is the country most advanced along this trend. I found rthe following on wikipedia: "The U.S. Census Bureau estimates Japan will experience an 18% decrease in its workforce and 8% decrease in its consumer population by 2030." http://en.wikipedia.org/wiki/Aging_of_Japan It is likely that production in aging societies will fall, or at least fail to grow as much as elsewhere. So the problem of the surpluses may ease, relatively speaking. A drop in population and in the working population may change the incentives depressing population growth as well. Labor shortages may develop, bidding up wages for young workers in these societies. More importantly, we can expect housing surpluses to develop in Germany and other rapidly aging countries as owners move to assisted living arrangements in large numbers. When a young family can get a 3-bedroom house at a cost comparable to today's 1-bedroom apartment, we can expect increases in the birth rate. Particularly if wages are rising as well. Finally, globally speaking I would say there is no shortage of demand. Billions of people in Africa, Asia, and Latin America live at levels well below those of the West, and form a huge pool of potential demand. The solution is not as simple as many believe, simply taxing the rich West to subsidize consumption in the 'South' won't work. Most demand must be met within the country or at least the region.

Pamela on :

Hello Edward, It’s very much appreciated that you would visit with us, thank you! “in the short term via encouraging immigration, and in the longer term by fomenting much more child friendly policies,” Regarding immigration; the Japanese are famously xenophobic. Assimilation there, even if one’s family has lived there for generations, is a very hard slog. Although it doesn’t appear to be as uncomfortable a situation for immigrants in Germany, do you really think the Turks have assimilated? All of which is to ask if immigration without assimilation would put more cultural strains on society than any financial gains may be worth? As for childbearing, I’ve read scads of articles that Japanese women are delaying marriage until they’ve sown a few wild oats of their own and can find men who won’t treat them like domestic chattel. I think that’s not going so well. I’m not very conversant with the social impetuses in Germany, but I am fairly certain that the maternity/child care benefits are more that generous. What more should Germany do? “I have even been trying - without much success - to argue this with Krugman, since it has direct bearing on the whole "buy American" argument.” You, sir, are a masochist. The NYT editorial page had to change its corrections policy just for that wanker. Don S. on Russia and China: The Russian demographics are horrific. There are more abortions than live births. Even Pravda has noted that Russia is in danger of becoming majority Muslim. Here are some links. http://english.pravda.ru/russia/history/21-07-2008/105837-russia-islam-0 Here’s a link about the abortion stats. http://larussophobe.wordpress.com/2008/10/06/editorial-russia-and-its-abortion-apocalypse/ China’s demographics are certainly disturbing as decades of the one-child policy have resulted in a bulge of young males who now have fewer prospects for marriage and domestic responsibilities/stability. But before the effects of that start to unwind, I think we’re going to see serious disruptions over natural resources, especially water. They’ve had years of draught in the wheat growing region. The water mismanagement nationally has been frightening. When push comes to shove, I think the gov’t will favor the industrialized cities over the rural agricultural segment in water allocation. That spells social upheaval.

Joe Noory on :

The European secular apostasy is, of course, to mention bad economic data.

Anonymous on :

"We need "emergency christmases":" More to the point, Joerg... We obviously need more cocaine, because cocaine makes you optimistic. So that's why Obama... but let's not go there. Increased cocaine sales will in turn stimulate the economies of Latin America and sales of mirrors, small golden spoons on gold chains, flashy clothes, razor blades, sports cars, and shoes with 8 inch heels. Also medical services, come to think.

Don S on :

Joerg, I'm absolutely shocked that you missed the "Future Shocked" segment of the Daily show a few days before, which covers some 'high tech' approaches to solving the demographic crisis. Go to about 4:10 to see an example of 'Infant 2.0' with a face you can peel right off. http://www.thedailyshow.com/video/index.jhtml?videoId=218357&title=future-shock-roombas-of-doom

Pamela on :

A few more thoughts. Mr. Hugh, I don't know how deep this so-called ethic runs in Europe, but it certainly is something you might want to consider in your analysis. -------------- COUPLES who have more than two children are being “irresponsible” by creating an unbearable burden on the environment, the government’s green adviser has warned. Jonathon Porritt, who chairs the government’s Sustainable Development Commission, says curbing population growth through contraception and abortion must be at the heart of policies to fight global warming. He says political leaders and green campaigners should stop dodging the issue of environmental harm caused by an expanding population http://women.timesonline.co.uk/tol/life_and_style/women/families/article5627634.ece ------------ And besides, food is too cheap. Get this. "It is a familiar foodie's song, blaming the ills of our food economy on the supermarkets. But it is increasingly cogent. As the Chatham House report points out, the power in the system is largely in the hands of the four companies that sell 75% of our food. Their influence on what we eat, the shape of our high streets and, indeed, the way that agriculture functions is enormous. Food waste, poor health and many of the failures of the farming economy share a cause: food is too cheap and for that you have to blame the downward pressure on prices of the supermarkets. We now have the cheapest food in real terms in modern history. That is not necessarily a good thing. Tim Lang, professor of food policy at City University, is an adviser on food security and sustainability to government. He says that attitudes are changing fast from a time, quite recently, when politicians would privately ask if there was any need for farming in the UK at all and food policy was best described as "leave it to Tesco". "But we haven't got a coherent policy. Are we raising production or are we relying on world food markets? Which? Because we've got to get on with it." http://www.guardian.co.uk/commentisfree/2009/feb/08/food-waste-environment-gm-crop -------------- I am well aware that when the only tool in the toolbox is a hammer every problem looks like a nail. But when both economists and the Gaia freaks view human life as 'factors' in their calculated world views - the former as capital for wealth, the latter as polluters of the Earth - I have a problem. Don S. "More importantly, we can expect housing surpluses to develop in Germany and other rapidly aging countries as owners move to assisted living arrangements in large numbers. When a young family can get a 3-bedroom house at a cost comparable to today's 1-bedroom apartment, we can expect increases in the birth rate. Particularly if wages are rising as well." Beware of the facile linear narratives Don. Beware.

Don S on :

"Beware of the facile linear narratives Don. Beware." I'm not sure what your point is here, Pamela. It seems to me that people who assume that the current trend will continue forever without taking account of inflection points are making the mistake. You do make an excellent point that the climate of opinion in most of Europe (and much of the US for that matter) is not sympathetic to children, or at least to normal citizens having many children. Now. I can think of at least one historical example of that changing, however. France had a century-long baby bust, a period when the French population barely rose. To reverse that kind of trend two things need to occur; A change in societal values and an improvement in conditions for young workers. Public attitudes are important, but I think a major factor (perhaps THE major factor) in shrinkng demographics are shifts in power between capital and labor and between older workers and young ones. This was particularly visible when I lived in Italy during the 90's. There it is not unusual for men in their 40's to still be living with the parents, because wages for young workers have not kept up with the cost of living. Many of my married colleagues were living in 1-bedroom apartments even into their 30's. Most of them had no children, which was no coincidence I think. Italy is perhaps the most extreme example of the European baby bust with about 1.2 children per woman of childbearing age. I'm not saying this will reverse, but I suspect my former colleagues would have had more children if wages rose and they could afford more spacious living quarters, because the ones I knew who did have these things usually had children as well.

Pamela on :

Spengler has an interesting piece in Asia Times. http://www.atimes.com/atimes/Global_Economy/KB18Dj05.html ------------ Children are the wealth of nations, provided that their nations can put tools in their hands and the rule of law at their back. Countries that lack children are poor. Aging Germans do not have young people to whom to lend. That is why they lent their savings to Americans, through the subprime market, and why European banks are if anything worse off than American banks. Imagination also fails in the case of China, not because extrapolation of present trends is so frightening, but rather because economic growth cannot possibly continue at the pace of the past 10 years. China is a different country than it was 30 years ago, and it will be a different country in another 30 years. It is in the midst of the largest migration of peoples in the history of the world, the fastest rate of urbanization and the greatest economic expansion of which we know. Its political system and social structure will change so radically that it is impossible to form a clear picture of the country in 2040. Great opportunities are attended by enormous dangers. China has more young people than any other country in the world, more than all of Europe put together, but too many of them are trapped in rural poverty, uneducated and untrained. ------------ It's not all about China - there's lots more

Don S on :

It is good to see overhanging it due to the one-family one-child policy, and also due to the resultant skewing of that generation toward boys and a shortage of girls. I think the worst nightmare possible in the coming years is a Chinese economic collapse. The traditional way of employing masses of young men is to clap them into the armed forces, and what do you do with that? Maybe try to conquer Siberia, or Taiwan, or Japan?.... I don't think it likely, but nobody in 1930 saw WWII coming either. All the time the past few years when Europeans were celebrating the Chunese passing the US, I thought they were dead wrong. The US is going to get passed one day, but the passer is going to be India, because India has good growth and good demographics.

Pat Patterson on :

Well, maybe Churchill and Jack London saw it coming!

Don S on :

Pm has done me a service by pointing us to the Asia Times columnist named Spengler, who is a heterodox and perhaps a truly original thinker. I have never read anything like him before. In the column titled "The Monster and the Sausages" he turns the aubprime mortgage crisis inside-out. He is not gentle on the United states in some of his other columns, analyzing the foolishness and idiocy of the US leadership at considerable length. In fact he appears to think less of Obama's team than he did of Bush, though he sees them as much of a muchness in truth. But he also looks deeply into the reasons why much of the rich world (Europe and Japan) have chosen to commit demographic suicide, and at least the US has not done that. The US has been foolish, but the most foolish thing of all is not to secure your country's future, which Europe has done. He credits Americans like 'hockey mom' Sarah Palin as being the core of America who resists the impulse to national suicide, but at the same time opines that the US may end up serving China because the US learns hockey while the Chinese are learning - piano. He thinks the future lies with three 'empires' with secure borders; China, India, and the US. He eloquently describes some things which I have felt in my git for a long time, that the current strategic situation will make it almost impossible for these powers to fight wars to the death as Europe did in WWI and WWII, because it is simly not possible for the US to fundamentally challenge China in Asia, or China to challenge the US in North America. India and China share a border of course, but that border is the loftiest range of mountains on the planet. Virtually worthless real estate which poses immense and probably insuperable barriers to making war. "The German financial system wanted to consume low-quality American assets, but did not want to look on what it was eating. German banks have written down about US$25 billion in securities derived from low-quality ("subprime") American mortgages, and doubtless will lose a great deal more. But it is silly to blame the sausage-grinder. Why didn't the Germans and all the other overseas investors buy mortgages in their own countries, instead of scraping the bottom of the credit barrel in the United States? It is because there aren't enough Germans, or Italians, or Frenchmen or Japanese starting families and buying homes. There weren't enough Americans, either, and therein lies a tale. " http://www.atimes.com/atimes/others/spengler.html

Pat Patterson on :

A minor quibble in that there were enough Americans to buy the homes but those teaser low rate loans generally starting lapsing in 2007. The homeowners then saw their mortgage payments double and triple in some cases and that same tolling bell also sounded for the speculators, the flippers and dabblers in retail property suddenly found themselves having to pay for million dollar plus properties out of middle class paychecks. But on the other hand, I can quite easily hold contradictory views, Orange County CA, where I live, just published vacancy rates for residential units. Both privately owned and rental and found that unexpectedly rental units were not jammed with modern day versions of the Joad family but were empty at almost twice the rate of owned property. Which might indicate that the argument of a lack of buyers holds some merit and that in certain counties property and rental costs haven't changed much.

Don S on :

Pat, I think Spengler's point is that there aren't enough young Americans with sound finances to lend the world' surplus savings to, so the banks went ahead and extended loans to Americans with unsound finances. And increasingly on assets which were inflated in price beyond the ability of most Americans to buy, in large part because of the tsunami of funds coming to the US from Europe, Japan, and China. That has ended, and with the end we're seeing the saving rate soar in the US while the exporting nations see double-digit declines in US imports. Factory orders in Germany are down 25% year on year, and Chinese exports fell 17% last month. The Chinese trade surplus rose because Chinese imports fell an astounding 43% last month. But the world economy seems to have rested on the bedrock of American consumption to an astounding degree, and when demand in the US collapsed last year the boom in exports and the resulting commodity boom also collapsed. Spengler writes: "The financial crash exposes the fragility of large swaths of the world. The political consequences will be terrible. The worst of it is that America will not be around to moderate the melee, not if Democratic Senator Barack Obama is elected president, that is. Those who objected to America's role as world policeman will get what they wanted, but they won't like it: a religious war reaching from Lebanon to Pakistan, and Colombian-style narco-war spreading to Mexico and Brazil." http://www.atimes.com/atimes/Global_Economy/JJ28Dj07.html Perhaps. I think the US will be chary of the global policeman role, and certinly about extending that role, but I don't think the US will pull out of current committments as Spengler seems to assume, no matter what Obama thinks. I also think he is reading more into Obama's rhetoric than is actually meant. But the US has had it's hands burnt, both by it's enemies and far more disillusioning, by it's friends. Don't expect the US to 'bear any burden' for the next decade, it will be too busy rebuilding it's savings and adjusting to the new world order. Asia and Europe will have to discover new engines for their prosperity.

Pat Patterson on :

I think that Spengler was indeed referring to the number of young houselholds rather than their creditworthiness but I will concede at this point the crash makes the reason moot.

Pamela on :

Oh, I'm glad you like Spengler. For me, he is like chocolate. I'll leave him alone for awhile and then just sit down and gorge. Re: the 'linear narrative' bit above - what I mean is that in order for situations like the one you discribe in Italy to correct, many OTHER - usually unanticipated - factors push their way into the scene - with unhappy results. A thought experiment: What would have to happen in Italy to change the housing situation you describe? Keep in mind the caveat of Thomas Sowell's 'first stage thinking'.

Don S on :

Pamela, Sorry to her about your troubles, you and your husband are in my prayers. I hope you come out ok. You describe one trap, that of assuming that changing conditions will result in similar outcomes in different situations under different cultures. Yet there is an equally seductive trap in assuming that trends continue indefinately, because that clearly is not the case. The problem with the 'baby bust' is that it is a virtually unprecedented event. There have been baby busts before, but almost never in times of peace, except perhaps during the decline of the Roman Empire. The closest parallel in more recent times may be the demographic results of the 30 Years War in Germany and the Hundred Years War in France, and we know that Germany and France eventually recovered. Or perhaps the Great Plague, but again the world eventually recovered, although certain localities never did, relatively speaking. A visit to the once-great city-state of Siena in Tuscany underlies that point, with an still incomplete enormous cathedral and city walls extending far into areas presumably urban then but which now are countryside. But then Siena was conquered by it's great rival Florence soon after it's fall, and presumably Florence had little interest in encouraging recovery there. Florence was also hard hit by the Great Plague and did recover after all. My Yankee optomism encourages me to believe that much of Europe will find a way to rebound from this. I can't believe the whole thing will go under.....

Pamela on :

I've read your post maybe 5 times. I have always wanted to see Italy and you've just made it worse. Thanks. Here is the take-away idea - "There have been baby busts before, but almost never in times of peace" BINGO! Here is what I suspect - a loss of confidence in the culture. It's not the housing situation that you have noted. That is a consequence, not a cause. I recall the Italians I met when I was in Spain - oh, back in the '80s. Glorious people. I could go on about the men. Thanks for your prayers. Prayers are always good things. But for us, may I ask that they be prayers of thanks. Our blessings far outweigh our troubles. And guess what? Neither one of 'em came from the government!

Don S on :

Pamela, I too don't hold a lot of hope for Italy because I know the culture, but if the Italian government were to divert the resources now going into early retirement into subsidizing young families and children - I think they'd get more children. Based upon what I saw there, I really believe that. I am really gone on the place, loved it to death, but the fact is that it's too comfortable for the adults and is not keeping up with technology and not creating new businesses. What could salvage it's economic prospects is a new bunch of affluent Chinese and Indian customers for Italian fashion. Italians do fashion and the arts really well. Perhaps the illegals coming in could give them some vitality - not sure. Italy isn't the whole of Europe, either. I think the French are relatively vital - not as tired as the Italians. I think some of the Eastern Europeans will show some vitality once they get richer. Hard to say, except that cultural suicide is an unnatural thing, so I have to think it won't last. I loved the Spengler advice column where he advised the leader of China to repeal the one-child per couple policy and the new President to give a $20,000 per child tax credit to families, counting against the payroll tax if need be. Great idea, encouraging workers to have more kids. I think a policy like that could really work, even in Europe.....

Marie Claude on :

Don't worry for us , we have the 1rst birth rate rank in EU, actually the same as the US, 2,2% ; some would say, because of our immigrants, que nenni, they only are 1 3 millions over 18 years old, plus those who managed an education don't get more children than the average french family !!! I suspect that in the US, the Blacks and the Mexicans, also the new muslim immigration is for something in the birth rate too, expecially in California :lol:

Pat Patterson on :

I think you have confused birth rate, which is measured, fertility rates which are assumed. The birth rate of France is 12.63 per 1,000 while the US is 14.17 per 1,000. The assumed fertility rate of France is 1.9% while the US has a rate, also assumed, of 2.1% per year. But again remember these are projections and much can happen to either increase or decrease those figures. Fertility rates are an assumption based on how many woman are at child bearing age but there is now way to count as that is an assumption based on a future event. But France has a population growth rate 40% less than the US at .572% vs .883% per year. Plus considering the differences in size that means that France is actually taking in France's population averages three years older and it only takes in immigrants at almost half the rate the US does, 1.48 per 1,000 vs. 2.92 per 1,000. That means the US is increasing its pool of workers and fertile(hopefully)women at a rate nine times greater than France.

Marie Claude on :

All right, I was too entousiastic :lol: http ://www.google.com/hostednews/afp/article/ALeqM5g7DiKvh2mWQrcECyFxCjC8vhkgFw http ://www.indexmundi.com/map/?v=25 OK, but in "infant mortality we have a much better rank : 3,36%, the US 6,30%, I suppose that comparatively, it's better on our place !!! http ://www.indexmundi.com/map/?v=29

Pat Patterson on :

That is one of those suspect arguments as the US derives at those numbers using a different methadology then Europe's reliance on the WHO statistics. But back to fertility rates I need to stress that these are not written in stone. For example in 1945 the fertility rate of the US was assumed to be 1.5 but by 1948 it was doubled due to the staggering increase in family size. And neither the government or the Malthusians had any say in the matter except to realize that they better start underwriting some of the loans for the sharply increased housing demand. France could very well increase immigration from other countries, say by offering a faster route to citizenship for those with college degrees or even limit the number from countries that are seen as problematic. Allowing the economy to expand more rapidly, reduce personal taxation, reduce drastically death taxes(60%), cut the 3% yearly property tax, etc. All of these are much more family friendly than simply holding diaper rallies and raising payments to families with larger families. The French are not stupid and I can see them making these changes much more rapidly than most of the other EU nations, especially the UK and Germany, and demography may be one of the guides but it will not determine France's destiny.

Pamela on :

This is all over the papers today, so I won't belabor the point too much. I post this only to note that it reinforces Spengler's scorn for the idea that the U.S. economic model is worth of derision. http://www.ft.com/cms/s/5c4e2e16-fd25-11dd-a103-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F5c4e2e16-fd25-11dd-a103-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus (gah, I really have to learn BCC code) ------------------ Fears over eastern Europe trigger bond rush By Alan Beattie in Washington, Stefan Wagstyl in London, Aline van Duyn in New York Published: February 17 2009 19:05 | Last updated: February 17 2009 21:26 Fears of banking turmoil in Eastern Europe caused global investors to rush towards safe havens on Tuesday, with warnings about European financial institutions provoking a stampede into the dollar and US bonds. The turmoil was prompted by a report from Moody’s, the credit rating agency, which warned that west European banks with east European subsidiaries were at risk of downgrades. Standard and Poor’s, Moody’s rival, followed later with a similar caution. -------------- Get it? Safe haven? U.S. dollar and bonds?

Marie Claude on :

As far as the Czech republic is quoted : who is afraid of our president ? http ://cryptome.info/0001/vaclav-klaus.htm do you think we can trust him ? http ://www.klaus.cz/klaus2/asp/clanek.asp?id=pwMGFzzPU1MJ Pamela, you're but right ! see the scenario catastrophe here : http ://www.energybulletin.net/node/23259

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