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(… I have 21 minutes of general discussion on the PSB – Structural Budget Plan. I'll leave some data here that I would like to comment on …)

They told us that we had to do the Eurozone of the currency because China was "outside". Those who are telling us that China is bringing them home with "green" policies, and this is the most eloquent sign of the ideological transition from a left that is a friend of Marx to a left that is an enemy of Aristotle. But the question is: did it work? The answer is in the numbers: no!

China's share of world GDP expanded by 17 points from 1975 to 2023, and of these 3 were left to it by Japan, four by the United States, and 11 by the Eurozone. Since 1999 the decline has almost doubled: between 1975 and 1999 the points lost were 4, between 1999 and 2023 they were 7.

One piece of this suicide is the absurd response to the global financial crisis:

The Eurozone, which in the 1980s had an investment flow completely comparable to that of the USA, responded to this crisis by decreasing the investment flow, rather than boosting it like in the USA, or at least supporting it like in Japan. The dynamics is more evident if it is analyzed as a percentage of global gross fixed investments:

Austerity policies are clearly legible. They resulted in cutting the investments of those who made them, and who made them, contrary to the story that has been told to us for years, was not Germany. Between 2008 (beginning of the crisis) and 2014 (the year in which European GDP recovered the 2018 level) the dynamics of investments in the four main countries was this:

and requires no further comment for those familiar with the topic: we see how Germany has traditionally underinvested, and how it has committed suicide on the continent by forcing investment cuts everywhere. But in this madness there was a method: the mercantilist method. Everyone now knows and says that the public debt problem is a growth problem, and if this had been the problem, the answer would have been more investment. But the problem was dramatically different: it was the accumulation of foreign debt caused by Germany's mercantilist approach, of a country incapable of surviving without practicing some form of dumping , without cheating the cards, a necessary (but not sufficient, as the facts show) to make a living on the money of those who buy your products.

These were the notes for this speech:

Tomorrow I'm at Sky Agenda, and I'm taking more notes:

(source Eurostat), where it is clear how Germany was in difficulty in the 1990s and managed to take off only after the reform of the labor market, i.e. its internal devaluation, and how within the monetary union shocks such as the financial crisis have caused a divergence of real economies.

However, we can zoom in post-Dieselgate (i.e. after the Americans took the Germans to task, tired of the competitive devaluations of the euro engineered to hold the pieces together…). Based on the first quarter of 2016, things look a little different:

and naturally this is also reflected in the GDP.

The latest figure reported by Eurostat for Italy (455.4 million) is higher than the level of the third quarter of 2007 (453.1 million), although lower than the historical maximum of 456.8 million reached in the first quarter of 2008 :

(… now I'll sleep on it, you do the same …)


This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2024/10/appunti.html on Fri, 18 Oct 2024 21:32:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.