August 31, 2002

TURNING JAPANESE (via The Edge of England's Sword):

EU's recovery may have been washed away (Anatole Kaletsky, August 29, 2002, Times of London)
[W]hile Britain has been saved from the euro, at least for the time being, by the operation of democracy and the good sense of voters, the rest of Europe is looking less and less fortunate on both counts. Europe is bouncing along the bottom of a deep economic slump and can no longer hope to export its way out of trouble by selling luxury goods to a super-charged American economy. Meanwhile, Germany, which is now perennially Europe’s weakest, as well as its largest, economy, is being sucked into a deflationary whirlpool similar to the one that drowned the postwar economic miracle in Japan.

Yet there seems to be little hope that either democracy or good sense will come to the rescue. To understand this grim diagnosis, we must focus on Germany, whose dysfunctions and blunders have been primarily responsible for Europe’s economic woes since the late 1980s. [...]

Europe will need some much more decisive economic leadership if it is to avert long-term stagnation and quite possibly a Japanese-style crisis. Nobody in Germany seems fit to provide it.

The analysis here is of a kind with much of the European coverage of their economic and social situation, which is to say it gnoores most of the real problems because the solutions are too distasteful to discuss in polite society. Forget the Eu, the euro, monetary policy, etc., etc., etc, and consider these questions : has there even been a case of a nation or group of nations sustaining a rising economy at the same time as its population was both in real decline and relatively aging? Between the lack of young workers, the rising demand for government services by a graying population, and a continent wide move towards a large centralized bureaucratic state, is there any reason to believe that Europes economies can do anything but decline?
Posted by Orrin Judd at August 31, 2002 11:15 PM
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