Posted on 10/07/2007 10:40:57 PM PDT by srotaG adirolF
In the global economy, today's winners can become tomorrow's losers in a twinkling, and vice versa. Not so long ago, American pundits and economic analysts were snidely touting U.S. economic superiority to the "sick old man" of Europe. What a difference a few months can make. Today, with the stock market jittery over Iraq, the mortgage crisis, huge budget and trade deficits, and declining growth in productivity, investors are wringing their hands about the U.S. economy. Meanwhile, analysts point to the roaring economies of China and India as the only bright spots on the global horizon. But what about Europe? You may be surprised to learn how our estranged transatlantic partner has been faring during these roller-coaster times -- and how successfully it has been knocking down the Europessimist myths about it.
(Excerpt) Read more at washingtonpost.com ...
Most the world’s substantial economic growth isn’t in Europe at all today. It’s in Asia. Parts of Europe will grow rapidly, like Poland, but other parts have been and remain stagnant. Their problems are structural in nature, and are not being dealt with neither fiscally or with social reforms. There is complacency with the status quo, and the high unemployment, low growth rates; modest gains in productivity etc. are no new phenomena to a nation like Germany which has been in this lingering stagnating rut for over a DECADE. (For example: http://www.spiegel.de/img/0,1020,498041,00.gif – not a good source but something I could find in a quick search)
In fact, the only thing that even drove their economy to this modest upward trend is a booming economy in the US, S. Korea, Japan, and Australia, where demand for German import products are high. God help them if this export bubble busts because their internal market is as broke as ever.
Let's think about this: as the German economy plummets and the French are not to far behind, the rest of the world hardly even takes notice anymore and keeps moving up. What does that tell you about their relative importance on the world stage economically?
Thanks for your additional comments. Some of the articles being publish today, are very poorly written. I do think there might be some room for some reasoned concerns, but this guy is so over the top that the paper should have to declare this article a contribution to the democrat party.
All your major forecasts (guys that do this for a living) are at best indicating modest growth rates in Germany, France etc. You’re real growth in Europe is in places like Poland, Hungary, Czech Rep. In case this genius hasn’t noticed, 2% and less growth is hardly something amazing and that’s what they are proud of because at least it isn’t .2 like a few years past (with a decimal in front of the two).
Most the world’s substantial economic growth isn’t in Europe at all today. It’s in Asia. Parts of Europe will grow rapidly, like Poland, but other parts have been and remain stagnant. Their problems are structural in nature, and are not being dealt with neither fiscally or with social reforms. There is complacency with the status quo, and the high unemployment, low growth rates; modest gains in productivity etc. are no new phenomena to a nation like Germany which has been in this lingering stagnating rut for over a DECADE. (For example: http://www.spiegel.de/img/0,1020,498041,00.gif – not a good source but something I could find in a quick search)
In fact, the only thing that even drove their economy to this modest upward trend is a booming economy in the US, S. Korea, Japan, and Australia, where demand for German import products are high. God help them if this export bubble busts because their internal market is as broke as ever.
Let’s think about this: as the German economy plummets and the French are not to far behind, the rest of the world hardly even takes notice anymore and keeps moving up. What does that tell you about their relative importance on the world stage economically?
This guy is mumble jumbeling stuff together- France and Germany still have huge unemployment rates, and they’ve had them for a long time. Moreover, they are not going away. You’ve got to love idiots like this though. Let’s take the economic growth rate of Poland, the per capita income of Switzerland, the life expectancy of Norway, and what do you get? Utopia for the American socialist. That isn’t reality. Reality is that not only France has over 8% unemployment, so do Germany and Germany is 80 million people, the most populous in Europe: http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Graphics/LabourMarket/Diagrams/ErwerbErwerbslos,templateId=renderPrint.psml
Whatever -
More MSM garbage for the masses.
You have nailed it my friend.
I don’t like the gigantic trade deficits we run today. I don’t like the ever increasing national debt either.
I’ve spoken out against these two things for a long time. The budget deficits are something I’ve never approved of, so it’s been decades that I’ve been talking that down.
It’s only been about two decades since I’ve been talking down trade deficits.
So far, neither of these things has hurt us as badly as I thought they would. Sadly, if they should begin to hurt us, it is my belief that it would then be too late to do much about it, and it could be very serious.
Frankly, I’d rather be wrong than see myself proven right at our nation’s expense.
Thank you.
LLS
What amazed me here (read the entire Washington Post article) is Europe doesn't run a trade deficit. I was so shocked I had to verify and it is true LINK
So very roughly the EU has same size economy and same population as the United States but we run an 850 billion dollar trade deficit (2006) and EU is in trade balance. No wonder the € is rising and the $ is sinking.
At one point about six years ago, I read an article that mentioned that the United States was the only nation running trade deficits with China. What a hoot. If it was such a great idea, you’d think at least one other nation would have been running them.
It was also rather stranget to see the United States warn off European nations from running large trade numbers with China a few years back. Hell, we sell our soul to China, but don’t suggest anyone else do it. Why the hell not?
I agree with your comments BTW. I think you’re right on target there.
I’m too lazy to re-read this PDF but I believe the EU is running China trade deficits but is making it up in other ways. The EU is exporting plenty to Russia which is a major energy supplier.
Energy imports are ruling our trade deficit these days. Not the Chinese crap we buy
This is probably the truest statement I have ever read on FR.
The mortgage crisis isn’t so bad because the downturn was not a sudden collapse across the entire US, but realtively gradual downturns over the course of years that varied in different markets. If you’re going to have to live with a bad real estate market, it is better to have the one we are getting, than the one where it crashes like a house of cards.
Anyone who is isn’t watching and ruing our trade deficits is simply asleep at the wheel. But you know what a major prop to our dollar is? Our military. One thing it does is protect Japan and Korea. They understand that they must hold US dollars to repay this favor. They will not be dumping dollars. Add Taiwan to this list
All three Asian nations of course have enviable trade surpluses. So does Russia,. Canada and Australia are in trade balance mostly due to energy and commodities exports
I would agree. I would also remind folks that market naturally fluctuate. While I do believe there is some cause for concern, the regional market fluctuations you mention are simply a normal process, somewhat enhance this time due to certain poor lending practices.
I agree. I would also state that if we put our minds to it, we could certainly balance our trade withing ten years. This issue is treated like a subject of humor most of the time, so it doesn’t receive the level of attention it should. One day we will pay for this IMO.
The major way we get trade imbalance is to dig up clean Western coal and burn it cleanly for electricity all over the USA. No more bullshit where we import natural gas to burn for electricity like y’all do in California. Then we -Federal Government- start major test projects to convert coal to
JET FUEL
DIESEL
HOME HEATING OIL
Our automobile fleet will have to gradually switch to diesel.
Add some nuclear power and that’s how we get rid of the Arabs. Only problem is the environmental traitors will block this plan at every turn
I heard on the BBC just an hour or so ago (yea, yea, I know that a chorus here will ridicule the messenger and discredit the message) that Germany recently displaced the U.S. as the world's largest exporter. None of this makes me want to embrace Eurosocialism, though.
There is a sad take-home message in all of this: The U.S. no longer stands astride the world like an economic collossus (if you will forgive a flamboyant cliché). No amount of flag waving indignation can change this reality.
Buyin' the Kool-Aid, eh? I'm a smoker and haven't taken a sick day in two years. It's the non-smokers who call in. All the freakin' time.
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