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 ...
Yes, the good ol USA is on the trash heap, isn't it? (yawn)
America is finished and the Washington Post is elated.
Yep, once again the WAPOO (oh, excuse me for adding the extra O) proves that Europe is better than America.
I wonder when they’re all moving to Fraannhce?
Fine by me that Europe’s strong, the US does so much better with competition.
The stock market is in 14,000 plus territory. LOL
I'm not convinved the mortgage crisis is all that bad. Just months ago we were being told by everyone who was someone, that we wouldn't survive until November. Guess what...
Wringing their hands... Investors have pushed the DOW up over 14,000. Look what's between their hands WP, it's greenbacks.
Yep, China is sure the place I'd put my investments. A few more lead paint, dog food and other scandles, and we'll see who's economy is rosey.
It's election time again. Hillary is here to rescue us and the WP has to make sure there's something for her to rescue us from. As if she'd have a clue if there were.
The author, Steven Hill, is a liberal Democrat.
You can check out some of his columns at the link below:
http://www.newamerica.net/people/steven_hill
Yes, is there any doubt that the MSM is in "Talk Down the Economy" mode?
“may be surprised to learn how our estranged transatlantic partner has been faring during these roller-coaster times “
I guess those collapses of german and british banks recently was just a mirage. A figment of my imagination.
1. They are interested in providing detailed unbiased reports with the goal of informing the knowledge of U.S. citizens
2. They have no political favorites honest
3. They never suppress information that could provide a more balanced view of their ideological opponents
4. They care about our troops, or specifically care if our troops die as a result of information they publish
5. They would rather see our nation's well being protected, than see a Republican president's policies proven wrong
6. They want the United States to continue to exist in it's present form / and would hate to see a Marxist collectivist system replace what we have
Not at our house. (:->)=
The guy does make some very salient points.
First, Europe is an attractive investment for a number of reasons, the least of which isn’t the fact that their rates of corporate taxation are far less than what we have in the US, which are some of the most stifling in the world. (*ahem* Mitt Romney is the only one talking about it *cough*)
Second, their workforce is on the whole more educated and producing more professionals to drive their economies. We don’t produce enough engineers, for instance, to drive our economy, and we’re depending on bringing in foreign workers to drive the engine.
Part of the reason that the European economy has been able to keep abreast with the US’ is our trade deficit, which has sent the dollar downward. I guess that’s good for Boeing, but not a fabulous trend, frankly.
There is some absolute nonsense in it, though. Take this quotation:
>>> “Europe doesn’t so much have a welfare society as a comprehensive system of institutions geared toward keeping everyone healthy and working.” <<<
That statement is absolute trash. Europeans call in sick FAR more than Americans do. Scandinavians are the absolute worst. Freaking slugs at times. The average Swede takes 32 days of sick leave per year. The average Norwegian takes a comparable number of days.
Of course, part of this has to do with a higher percentage of smokers in Europe. But the numbers are pretty ridiculous:
>>>On an average day, about 25 percent of Norway’s workers are absent from work, either because they have called in sick, are undergoing rehabilitation or are on long-term disability. The rate is especially high among government employees, who account for half the work force.
The average amount of time people were absent from work in Norway in 2002, not including vacations, was 4.8 weeks. Sweden, its closest competitor, totaled 4.2 weeks, while Italy came in at 1.8 weeks and Portugal at 1.5 weeks, according to the Organization for Economic Cooperation and Development. <<<
There’s a reason that output per capita in Europe is only about 68% of what it is in the US.
As a socialist (read the article, it’s clear), the author is naturally trying to spin the socialist welfare states of old Europe as thriving success stories rather than the depressed mediocrities that in reality they are.
And, of course, the United States is no good at all.
In one article (there’s a link in post #7 above; scroll down to a list of the author’s columns) Hill even laments the election of “conservative” Sarkozy in France.
(cough) No he's not. (cough)
June 7, 2007
Mr. THOMPSON: We have, you know—if you include state taxes—the highest corporate tax rate in the world. That makes us less competitive. All those things have to be looked at. And all those—especially as far as the corporate tax rate is concerned, need to be clearly reduced, I think.
from an interview with Larry Kudlow
http://blog.nam.org/archives/2007/06/has_fred_thomps.php
Fred Thompson called for an extension of President Bush's tax cuts and a large reduction in the corporate tax rate at a speech today to a conservative group.
http://www.crosstabs.org/stories/elections/2008/fred_thompsons_speech_to_the_dad_summit_a_revisit
Thompson said he accepted Dell's invitation to talk about manufacturing "and what we might do in terms of policies in this country, tax policies and things like that, to make it easier for companies to keep their business here, to do their manufacturing here instead of taking it other places." Thompson was told by a Dell vice president that the U.S. has the second-highest corporate tax rate in the world, behind Japan, Dell spokeswoman Colleen Ryan said. He was also urged to consider how heavily the government taxes income earned in foreign countries, she said.
http://www.statesman.com/news/content/news/stories/local/09/20/0920thompson.html
Saturday, 10/06/07 Fred Thompson calls for corporate tax cuts
WASHINGTON — More tax cuts are needed to stimulate the U.S. economy, Republican presidential candidate Fred Thompson told a meeting of economic conservatives Friday. At a summit of the Americans for Prosperity Foundation, Thompson called for extension of the tax cuts championed by President Bush and said the country's corporate tax rate should be cut from its current 34 percent to at least 28 percent.
http://tennessean.com/apps/pbcs.dll/article?AID=/20071006/NEWS0206/710060390/1016/NEWS02
And if the Huffington Post doesn't like him, he can't be too bad on corporate taxes:
http://www.huffingtonpost.com/david-sirota/fred-thompson-k-street_b_51415.html
Stop reading right here and declare a huge bias in opinion piece, because this is not reporting.
Stock market, after months of declining because of expectations of war with Iraq, took off immediately after Operation Iraqi Freedom started and haven't yet looked back, though market at its record highs looks overextended. Obviously, whatever jitters there are in the market, they are absolutely not due to Iraq.
There is no mortgage crisis, anybody who wants to can get a loan, but many wait for a huge housing bubble (mostly in 5 states) to settle down and prices to come down before buying and that created a problem for few banks involved in poor lending practices, and some real estate companies, home builders and mortgage lending shops who now see a steep decline in business. This is cyclical and predictable, and though painful for these industries, is not a mortgage crisis.
Huge budget and trade deficits have been with us for a long time, and while need attending by limiting spending and bad legislations that make us less competitive with other countries (e.g. Sarbanes-Oxley, minimum wage raise, various states' global warming initiatives, higher taxes, corn ethanol initiatives, not passing oil and gas production in ANWR and coastal areas, etc.) those same countries have similar problems, some due to particularly relatively strong euro / currency.
We may have started to see declining growth in productivity recently after years of high growth of productivity, but it's still a growth, and some of it is due to the same bad legislations mentioned above, yet the productivity in Europe is nowhere near ours. There was an article recently in WSJ that Mexicans working in USA are 5 times more productive than same workers doing the same kind of work in Mexico.
And, finally, why would "investors" worry about state of economy, when they can invest in so many places around the globe, or even bet / "invest" against the economy or dollar through different instruments including various derivatives. Some of hedge funds went bust recently, while some others made money off of their loss. Investment opportunity is generally divorced from state or direction of the economy, and the economy (strangely) is still quite healthy so far, even with all the attempts by Democrats to kill it in time for 2008 election.
Author is either completely incompetent in financial and economic matters, or is completely biased and issues his opinions in place of reporting, or is both incompetent and biased. Case closed.
“I’m not convinved the mortgage crisis is all that bad. Just months ago we were being told by everyone who was someone, that we wouldn’t survive until November. Guess what...”
It ain’t November yet. But I’m not saying we won’t survive until then. But, could you name me just one person who is “someone” outside of the MSM that said that?
Of course you’re not convinced the mortgage crisis is all that bad. How much have you read about it outside of the MSM? The whole world got the hershey squirts from it a month or so back so how bad could it be? What does the world know that you don’t?
But I’m just a doom and gloomer so no need to even listen to me. Right? I think there is a 30 to 40% chance the DOW will hit 15,000. I know exactly why I think that it might.
And let’s not forget the high unemployment rates compared to the USA.
“Second, their workforce is on the whole more educated and producing more professionals to drive their economies.”
My European friends tell me that unless one is born into the right family, those great Euro educations are wasted. That’s why many with an entrepreneurial bent move to the USA.
Simply look at productivity per worker and the standard of living in each place.
Case closed.
My European friends tell me that unless one is born into the right family, those great Euro educations are wasted. That’s why many with an entrepreneurial bent move to the USA.I don't think that's true. I've worked with a few french and northern european engineers and they are doing quite well for themselves in their home countries. That's because they were *good at their jobs*. If you want to be incompetent and get a good job, the family connections are all important. But that's the same anywhere. I've seen countless examples of nepotism in the US and abroad.
The facts in the article are true. The European economy is doing fine in the moment although we still face some big problems of course. Nevertheless the propaganda bubble about the sure downfall of Europe is complete BS. Neither America nor Europe will vanish into thin air, but both are facing major changes.
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.
It's just "Campaign 2008" work. The Dems need to convince everyone that the economy under the Republicans is awful.
Germany trade surplus = €169 billion
It’s the secondhand smoke.
Wait and see who Europe comes running to (again) when Fascism once again rears it's ugly head. When Iranian nuke tipped missiles start flying towards European cities in a few years, suddenly, the USA will be their best friend (again).....
Journalism 101:
When you are writing an article challenging a set of myths, don't start your article by promoting other myths.
I can certainly vouch for that.
The number of times I have seen employers take on complete deadbeats ; subsequently to find out that they went to the right Public School , spoke with the right accent , or their father - in - law was in the same golf club as Earl of Wherever.
People don’t believe me . I sometimes wonder how our economy ticks over .
Re. #10, great post!
“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.”
Why do you think trade deficits are “bad”? In our history, we have had the most economic growth when we had trade deficits. The definition of a trade deficit is so artifical that it means little in the big picture, although it does seem to have a rough correlation to economic growth.
If the dollar becomes cheap compared to the euro, it only means that we buy less from europe and they buy more from us. That serves to lessen the trade deficit.
As you think trade deficits are bad things, why would you think that would be a bad thing?
The US of A!
It’s also nice to have customers that have money.
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