I present to you Exhibit 1 titled: “EFFECT”
And, now I present to you Exhibit 2 titled: “CAUSE”
Sorry in advance for the small font size on the images. These two news clippings, from Tuesday 5/5/09 of the Wall St. Journal show something that struck me as very funny and very sad. Same paper, same day. Unbelievable.
You may dispute this ‘causal’ determination - that spending nearly half the day eating and sleeping lead to economic decline and stagnation. But, you can’t help but wonder if all the people in the unemployment line take their customary breaks for napping and eating.
One of my favorite authors, Dan Kennedy, once said:
“most people are running around with their umbilical cords in their hands looking for another place to plug it in.”
Kennedy was referring to a marketing more effectively to consumers. But to me, this perfectly sums up the mass amounts of people in developed nations across the globe that are lining up for a pull on the public teet.
At present, no place on earth exemplifies sucking on the government teet more than the countries of Western Europe. God bless their food, art and rich culture of chain smoking - but take another gander at the first clipping. If you can’t read it, here are some highlights:
- it is anticipated that the EU economy will shrink by 4% in 2009
- Fiscal deficits (large ones) for member nations
- Unemployment is at 17% in Spain (the picture is of an unemployment line in Spain)
Scroll to the next clipping above (Sleeping Giant) and some of the gems you will find are as follows:
- The French sleep more on average than any other nation - 530 minutes per day (8.83 hours)
- Americans sleep for 518 minutes per day on average (8.63 hours)
- Koreans sleep for 469 minutes per day on average (7.8 hours)
- The French spend 2 hours and 15 minutes per day eating and drinking, Italians spend 1:54 and Spain 1:46 the U.S. spends 1:14 on average
- France has mandatory 30 paid vacation days (government required) per year
Ok. Let’s put this in the form of a game show question just for fun:
Q: The European Union is shrinking in terms of output and population and the best response to this ____?
A) Sleep more than anybody else in the world
B) Spend more time eating and drinking than anybody else in the world
C) A and B
D) Neither A nor B
5 seconds to buzz in…..3….2…1……if you said “C”give yourself a big pat on the back, you have just passed the qualifying exam to become a government official in France, Spain or Italy.
Now, I am all for balancing out your work with your personal life - I don’t take that away from anybody. But this is taking it to the extreme. Kinda like the ‘no kid gets cut from the soccer team and everyone gets a trophy’ mindset that has gripped America in recent years.
What’s funny and sad about what these two short articles is that they unintentionally capture a culture in a few words that is quickly becoming accepted in a country you know…the USA.
In my previous post, I mentioned some of the Q/A session from the 2009 Berkshire Hathaway Annual Shareholder meeting. During the meeting, Vice Chairman Charlie Munger said that he thought that American health care was going to eventually become very similar to that of Western Europe. My view is that more things are going to be similar to Western Europe than just health care.
For those of you that haven’t noticed, the government bailout line that everyone from banks to auto companies is standing in looks a lot like the Spanish unemployment line from the WSJ article.
I fear that we will increasing live in a world where non-producers will live off of the productive work of others - invariably creating a negative economic effect that could lead to serious problems damaging living standards and retracting many years of productive capital and labor. It will be very hard to tear people’s umbilical cords away from the mother ship they are plugging them into when the ship runs dry.
Another sobering post, Adam.
Unfortunately, I fear you are right.
Especially the last paragraph. The productive class will only take so much before they take their capital and flee to someplace else that doesn’t view them as just another teat to suckle on.
I recently started a blog. I only have one post, but I needed to start one to get this sort of thing off my chest as well. It’s important to spotlight the insanity going on around us.
We may be free market/entrepreneurial types, but there’s no doubt that we all have a huge stake in this collective endeavor we call society.
Regards,
Dan
Dan,
My question is: where are the capitalists to go?
Today I was reading an article about how the U.S. is putting huge diplomatic pressures on Singapore to get them to give up their long-standing position as an international financial center based on bank secrecy and financial confidentiality. And, the witch hunt is still heating up.
Be sure to send me an email with your blog URL. I will finally be able to dish it back!!!
Adam,
I didn’t read the thing about Singapore, but not surprised to hear it. Jim Rogers is going to blow his top. Where will he hide now?
I’m not saying I agree with tax evasion, but who is going to trust Swiss Banks anymore if that was their big enticement for the wealthy?
Capital will always go to where it’s protected/appreciated.
Depending on how bad things get here in the US, I expect to see the Obama administration possibly implement capital flight controls down the line…i.e., you can’t take your money and leave.
I’m sure some people would laugh at me just for suggesting this as a possibility but I don’t see it far-fetched at all.
I also one day in the next 8 years seeing the possibility of the US government making the private possession of gold illegal again like FDR did in 1933.
As for the question where capitalists will go? That’s a good one.
I know one individual who was from Canada now he lives in a Caribbean island with zero income taxes. He has houses in the US and Canada too. Brilliant guy.
In his own words, he has the best of both worlds. Governments do not confiscate his wealth and he gets to enjoy the lifestyle afforded by those countries. (Of course, he has to pay things like property taxes, etc., but those are a pittance compared to what guys like you and I get clobbered on via income taxes on top).
I think more capital will flee to China, especially as the United States becomes more socialist. The opportunity cost will increase.
Certain businesses, of course, will find it harder to extricate themselves. It’s not so easy to just pick up manufacturing plants and employees and transplant them in other part of the world. But if you make it bad enough, they certainly will.
We’ll see how it all plays out….start buying kruggerands!
Regards,
Dan
Oh, by the way, Adam, my blog is now linked to my name.
http://www.entrepreneurashero.com
Don’t expect anything much. There’s only one post. I’ve been too busy to rant much at all. (Maybe that’s a good thing for the world!)
However, if someone has busy as you can make the time to intermittently churn out quality posts here, I really have no excuse.
Regards,
Dan
Adam,
Great post. Just what we were talking about. Unfortunately, change will probably not come from within. The downward slide is probably unstoppable due to the heart of man, unless we have a war that requires new advancements in technology, energy, transportation, etc.. and the demand for these things creates jobs. Of course enough people could be killed so that unemployment is eliminated, too. The producers will produce in an increasingly hostile and punitive environment until they decide not to play anymore. Where do the capitalists go? Where did John Galt go? The producers stopped enabling the system, the politicians’ teet ran dry, umbilical corded ones rebelled and destroyed society and lawlessness flourishes. The top meets the bottom and Atlas Shrugged, baby! Thank God that is not our end!
Have a great night!
Steve,
Wow, thanks for commenting.
I, too, I am doubtful about significant change from within in the capacity needed to reverse this tide.
Adam
Ну как же только так? Ищу, как можно уточнить данную тему.