Socialism having a tough Time

[Punkbuster]

If the Euro's are always so much more enlightened than us Dumbed down Americans, then why is this a CHRONIC problem with them?:

EU Joblessness Is Poised to Worsen
Unemployment May Reach
Highest Level Since 1999,
Raising Heat on Politicians

By G. THOMAS SIMS
Staff Reporter of THE WALL STREET JOURNAL
July 5, 2005

FRANKFURT -- Despite a few encouraging signs, the job situation in the euro zone is poised to deteriorate further this year, possibly bringing the unemployment rate to its worst level since the late 1990s, when it hovered above 9%.

The reasons are numerous. Oil prices are close to records, siphoning corporate profits that otherwise could be used to pay new salaries. Growth slowed sharply in the first half of this year, which economists say will keep companies cautious about hiring. Wages are on the rise. Competition from low-cost countries is adding to pressure on employers to limit spending. And, many corporations still feel the need to become more productive with fewer people.

Chronic unemployment is putting the heat on politicians, particularly in Germany, where unemployment is among the highest in the European Union at 11.7% and an increasingly unpopular government faces elections this fall. In its election platform, Gerhard Schröder's Social Democratic Party pledged to focus on reducing unemployment, which it described as Germany's "gravest and most painful" problem, and on creating jobs.

In France, the new prime minister, Dominique de Villepin, has pledged to devote all his energy to fighting unemployment. Last week, he said that he will increase public spending for job-creation programs by 10% in next year's budget.

The unemployment outlook also is increasing pressure on the European Central Bank to cut interest rates at its monthly meeting Thursday. But ECB President Jean-Claude Trichet yesterday suggested that is unlikely. Mr. Trichet warned of "upside risks" to the bank's inflation projections, according to the text of a speech he prepared for the European Parliament. He also stressed that rates in Europe already are at their lowest level in 100 years and giving "considerable" support to the economy.

Unemployment in the 12-nation euro zone was 8.8% in May, according to figures published last week, higher than 5.1% in the U.S. and 4.4% in Japan. It was a slight improvement from 8.9% in the previous month, but economists said that was more a statistical fluke than a change in the trend.

And it is even more essential in EU to have jobless rate small since they have such a HUGE social safety net.
Mr. Schroeder was over here last week pimpin Germany again as a great palce for US to invest capital. With such stringent tax, enviornmental and labor laws, Europe is in a slow death spiral that will be hard to get out of.

[Matt W]

Europe is in a slow death spiral that will be hard to get out of.

Interesting take on the situation. We've had this argument again and again and again...and we have new markets & increasing growth in the 'new' countries who've joined, so the situation hasn't exactly stabilised yet. Definately a 'wait & see' situation.

[Mr.Vicchio]

Europe has to change and start realizing the "welfare" states are going to drag the new countries down hard. And if they ever force the new entries to follow thier model of social benifits and rights (35 hour work week and the like) the economic Pluses of the new countries will be negated rather quickly.)

[Nono]

Jeez, thanks for the prescription, Vic. Much as I hate to disagree with such an augustly disinterested paper of record as the WSJ, however, I don't think that most Europeans will want to take its medicine, especially when they look across the Atlantic at the growing number of working poor in the Land of Winners and Losers.

Unemployment is a tough nut to crack, but you don't do it long-term by joining the ratrace to the bottom of the heap.

[Mr.Vicchio]

Well nono, you need to understand you have no clue what you're talking about when it comes to employment in America. Land of working poor... ROFL. Whatever man. Keep reading the looney sites that tell you America is jsut a poor working country ruled by a few elites. It's better to have a job and earn ones way then have it handed to you by the benevolent "government"

[G. Adams]

Quote by: Mr.Vicchio Well nono, you need to understand you have no clue what you're talking about when it comes to employment in America. Land of working poor... ROFL. Whatever man. Keep reading the looney sites that tell you America is jsut a poor working country ruled by a few elites. It's better to have a job and earn ones way then have it handed to you by the benevolent "government"

Just as you know little about Europe that isn't handed to you by loony sites that thinks all European's are welfare scroungers.

Firstly, the 'EU' isn't socialist, many of it's members are social democratic states to different degrees.

Oh, and although I havn't looked into it from this angle particularly, I dare say you'd find if you remove France and Germany the numbers look a lot better. Germany is poised for reforms shortly and France will do in time.

I agree that changes must be made, and made they will when things get worse. However, we can also point to the UK, which made some sacrifices of it's holy cows, the mines and heavy industry, but in the long run has been able to maintain a social model while thriving. France and Germany will reform and make hard sacrifices like we did, but it certainly does not mean we have to destroy our welfare systems. We simply have to become a little leaner, rather than have critical surgery.

Oh, and a 35hr week is not being imposed, it's a 48hr week that's being opposed, and there are lefties, me included, who oppose such a move. It is well intentioned but mistaken, and will hit many of the workers hard. One of my friends regularly works a 70 week in a car body shop in order to make ends meet, if his hours are cut down he'll either need a second job, a new job or resign himself to living at home.

[Mr.Vicchio]

I didn't say all were. France and Germany have large Socialist/Welfare governments. PArt of the reason they are in such economic peril. They also want to spread thier enlightennment, and don't say they don't.

I know most EU nations aren't as hell bent on self destruction as those two have been, but without reform, and Germany is taking steps, it's not looking pretty.

[G. Adams]

Hmm, Mr Vicchio being reasonable, I never thought I'd see the day, married life is doing you good

In France, I don't see the welfare state as being the problem, but the 'old' socialist relics that hang; the nationalised industries, taxation and regulation. In Germany, I think it is really the fault of integration, although partly the new globalised world that has caused this. The East Germans were used to having worked when work was put their way, or being on welfare when welfare was put their way. They missed the hard work ethic that was fostered in West Germany, and it was the the W. German work ethic that made it possible for them to have such a strong welfare state - there was little abuse as everyone wanted to work rather than scrounge. It maybe tough, but what I think could be done is to create a situation that work ethic again by first telling the German people that there is honestly a economic crisis, not a '29 crash, but a slow death. As hard as it is, Germany must cut some of it's welfare, regulation and taxation, and do what it can to promote new businesses. In the future, when Germany is stronger again, the social model can be re-introduced bit by bit.

My personal worry would be that this wouldn't be seen as a temporary, 20 year solution, that it would open up the country to less than principled businesses, who working with dodgy politicians, make sure that Germany never gets back it's welfare state.

What I don't think should happen is a Thatcherite revolution. Thatcher solved some of the economic problems, but the way it happened caused a lot of social structures to disapear, must notably the community spirit. Germany still has that, I would hate to see the rampant anti-social individualism of Thatcherism destroy it.

[Nono]

Quote by: Mr.V Land of working poor... ROFL. Whatever man. Keep reading the looney sites that tell you America is jsut a poor working country ruled by a few elites.

Wrong, Vic. I know it from personal acquaintance, so don't deny the obvious. Check out -- for example -- this pastoral letter from the Catholic Bishops of New York State which talks of "the growing gap between rich and poor". Helps explain why in international studies the US has such a piss-poor score on many of the fundamental criteria for assessing public well-being.

It's better to have a job and earn ones way then have it handed to you by the benevolent "government"

Didi I say it wasn't? (I think I said something about unemployment being a hard nut to crack, didn't I?) What you have in the States are a crowd of greedy corporate welfare bums. It's the rich sponging off the middle class.

(laughs) If Europeans simply wanted to have everything handed to them by the government, why would unemployment be perceived as such a problem, hmm?

[Nono]

Quote by: G.Adams My personal worry would be that this wouldn't be seen as a temporary, 20 year solution ...

Twenty years is a long time. As Keynes pointed out, in the long run we're all dead.

[Mr.Vicchio]

"the growing gap bewteen rich and poor" on gnoes! Rich people are making money! This is horrid! Take it away from them!

Tired line man. The rich are supposed to get rich. The poo are not "getting poorer" and that Bishop can quit whining up the dead tree.

Ya know why there is a "growing gap" over the last 3-4 years? The tech bubble burst, bringing down the "rich" and now there are new "rich people" making money and guess what? As the economy grows, so does the number of rich people, and the amount of thier wealth! Amazing thing that, economics.

[Nono]

Quote by: Vic Tired line man.

Only cause it's such an old story.

[Mr.Vicchio]

When the economy take a down turn like the Tech Bubble burst the "gap" shrank. When the economy picks up steam it "grows" thats just how it is.

[fedfem]

Unemployment is tracked differently in the US so the numbers are not accurate. Most countries track the number of the labor force unemployed where the US only tracks active unemployment claims. Ours is a lot higher than most think.

[mr.perfecto]

It only makes sense to count people who are looking for work, but can't find it. Is that how the US system work? If its not, how does it work? Please provide official links if you can, I've been trying to figure this out since the election.

[castille]

I have to admit Europe seems to be resorting to some of their 1600s methods in spreading their ideas. Some Europeans I know were "very shocked" to hear about how the barbaric Ukrainians were considering not voting for their pro-European candidate during elections. The horror! How dare those savages not love us!

Socialism in Europe is fine, but there's no need to tell the rest of the world how to live their lives.

[Punkbuster]

Quote by: Nono Jeez, thanks for the prescription, Vic. Much as I hate to disagree with such an augustly disinterested paper of record as the WSJ, however, I don't think that most Europeans will want to take its medicine, especially when they look across the Atlantic at the growing number of working poor in the Land of Winners and Losers. Unemployment is a tough nut to crack, but you don't do it long-term by joining the ratrace to the bottom of the heap.

Nono- the WSJ was just voted the 2nd most trusted paper in the world after the Financial Times

[Punkbuster]

I think that one of the main problems is China- and no I am not against "outsourcing" - the USA benefits from a LOT of insourcing- but to sell in the Chinese market I know personally of MANY USA and German companies (French I am sure also) that are setting up shop in China-but NOT just to sell in China however but to export back to EuroZone and USA. THis I persoanlly rebel against. One of my business sells scales and we sell German and American made scales and lab balances. I have directed my buyers to NOT but the Chinese made German or American units unless we absolutely have to. Scales are such a small product that in no way should they be made in China for export back. I drive a German made BMW and WOULD NOT buy one made in China - even if I saved $10,000 on it!! (Maybe $15,000- uh that was a joke...) It is a personal thing with me- but I will only buy form countries of like competition and wage scale- and principally that means NO CHINA. I am a conservative W Bush supporter and free market capitalist and over time I do believe the market rules- but China simply plays by different rules- at this point at least.