The Greece bailout is a glaring example of the inefficiencies in the European economy. The socialist mentality has them looking to bailout the weak and cover up holes with duct tape. Greece should be out of the EU and back to the drachma a year ago. I think this is reflected in the Eurostoxx 50 index and its weakness relative to the S&P 500 since March 2009.
Structurally, the European Union has very low population growth, growing number of elderly, uncompetitively high wages, too big of a social safety net that puts a big strain on the labor pool via high taxes. There is no growth in Europe. Anectodotally, I hear stories of the average European getting 8 weeks of vacation a year and working 35 hours a week. The Chinese work 7 days a week and make peanuts by comparison. Yes, some of that is due to it being manual labor/ lower productivity but that gap is shrinking fast.
The Europeans are lazy. Americans not so much. At least the American economy has better demographics and more efficient workers than Europe. Of course much of the gains from that ends in the hands of the quasi oligarchs at the big banks and corporate giants. And HFT bots.
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Not too insightful and I think you're misunderstanding the whole supply:demand thing.
If Americans were to take more holidays and retire earlier, unemployment would go down. This would arguably be better for the economy as you would have happier (= more productive during their work time) people, less people collecting unemployment, less labourers devaluing due to no work and finally less chance of social unrest.
Also I don't know where you got 8 weeks of vacation from, but here's a clue: http://www.nationmaster.com/graph/lab_vac_min_vac_tim_aro_the_wor_leg_req-time-around-world-legally-required
So bottom line is a lot of people want to work but can't because technology and progress have made things so efficient that there is absolutely no reason for everyone to work. The world can provide for its population (until natural resources run out) without a large fraction of that population in the labour pool.
Greece is akin to a society of urban welfare moms who have been given handouts for decades for doing nothing but performing as stage props for tourists. No surprise this ends now.
We should all take 26 weeks vacation and retire at 40 and take unemployment down to zero. Screw it. Let's go for 51 weeks vacation and retire at 30. So we can consume like crazy collecting Social Security for the rest of our lives. Let the Chinese do the dirty work!
The thing is people prefer to do nothing all day in an office and pretending to be useful to society rather than to do nothing all day at home and it's a very unpopular concept that so many people are just "not necessary" and have nothing to contribute
What you say only makes sense in the public sector. In the private sector, if workers are truly unnecessary, they get laid off.
Think tank predicts that by 2030, 75% of US employees will directly or indirectly work for a chinese firm. That's where the next 3 decades of consumption will be
The party's over. People in Europe and US will need to go back to the factories and actually work vs. loophole a spread.
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