AI
Saturday, June 23, 2012 9:03:58 PM
The Euro Is Flat
June 22, 2012, 1:05 pm 70 Comments
Still limited blogging. But I thought I’d post about something that sort of surprised me.
As we contemplate the euro mess, there’s a strong tendency to think of it as having a lot to do with the fundamental inequalities in overall productivity and economic development between euro members — backward, semi-developed countries like Greece or Portugal (not my view, but what you often hear) awkwardly tied to powerhouses like Germany.
So it comes as something of a shock to look at Eurostat data (pdf) .. http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-20062012-AP/EN/2-20062012-AP-EN.PDF .. on real GDP per capita (or productivity, which look similar). Sure, Greece and Portugal are relatively poor, with GDP per capita of 82 and 77 percent, respectively, of the EU average; this means roughly 76 and 71 percent of the eurozone average, since the euro countries are a bit richer than the EU as a whole. Meanwhile, Germany is at 120 percent of the EU, or 112 percent of the EZ.
But it’s no different, really, than the US situation .. http://bea.gov/iTable/iTable.cfm?ReqID=99&step=1 .. (look under per capita GDP). Alabama is at 74 percent of the US average, Mississippi at 67, with New England and the Middle Atlantic states at 118 and 116.
In other words, as far as underlying economic inequalities are concerned, the EZ is no worse than the US.
The difference, mainly, is that we think of ourselves as a nation, and blithely accept fiscal measures that routinely transfer large sums to the poorer states without even thinking of it as a regional issue — in fact, the states that are effectively on the dole tend to vote Republican and imagine themselves deeply self-reliant.
The thing is, we didn’t always think of ourselves as a nation, either. Before the Civil War,
people talked about “these United States”; it was only after the war that “these” became “the”.
So the key to the success of the dollar zone may be summed up in three words: William Tecumseh
Sherman.http://krugman.blogs.nytimes.com/2012/06/22/the-euro-is-flat/
========
http://en.wikipedia.org/wiki/William_Tecumseh_Sherman
That's why the eurozone set-up will inexorably head toward an
economic and financial set-up closer akin to that of the USA.
June 22, 2012, 1:05 pm 70 Comments
Still limited blogging. But I thought I’d post about something that sort of surprised me.
As we contemplate the euro mess, there’s a strong tendency to think of it as having a lot to do with the fundamental inequalities in overall productivity and economic development between euro members — backward, semi-developed countries like Greece or Portugal (not my view, but what you often hear) awkwardly tied to powerhouses like Germany.
So it comes as something of a shock to look at Eurostat data (pdf) .. http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-20062012-AP/EN/2-20062012-AP-EN.PDF .. on real GDP per capita (or productivity, which look similar). Sure, Greece and Portugal are relatively poor, with GDP per capita of 82 and 77 percent, respectively, of the EU average; this means roughly 76 and 71 percent of the eurozone average, since the euro countries are a bit richer than the EU as a whole. Meanwhile, Germany is at 120 percent of the EU, or 112 percent of the EZ.
But it’s no different, really, than the US situation .. http://bea.gov/iTable/iTable.cfm?ReqID=99&step=1 .. (look under per capita GDP). Alabama is at 74 percent of the US average, Mississippi at 67, with New England and the Middle Atlantic states at 118 and 116.
In other words, as far as underlying economic inequalities are concerned, the EZ is no worse than the US.
The difference, mainly, is that we think of ourselves as a nation, and blithely accept fiscal measures that routinely transfer large sums to the poorer states without even thinking of it as a regional issue — in fact, the states that are effectively on the dole tend to vote Republican and imagine themselves deeply self-reliant.
The thing is, we didn’t always think of ourselves as a nation, either. Before the Civil War,
people talked about “these United States”; it was only after the war that “these” became “the”.
So the key to the success of the dollar zone may be summed up in three words: William Tecumseh
Sherman.http://krugman.blogs.nytimes.com/2012/06/22/the-euro-is-flat/
========
http://en.wikipedia.org/wiki/William_Tecumseh_Sherman
That's why the eurozone set-up will inexorably head toward an
economic and financial set-up closer akin to that of the USA.
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
Discover What Traders Are Watching
Explore small cap ideas before they hit the headlines.
