This chart makes it easy to see how Europe has been the laggard in the global recovery from the Panic Collapse of 2008. This continues a long tradition in which the European economies prove to be less volatile but also chronically less dynamic than those of the U.S. and the Asia-Pacific region. Big Government is one big reason for this; a case in point would be that since European companies find it much harder to fire people, they are also much less likely to hire them in the first place, thus explaining why German and French unemployment rates have been generally much higher than in the U.S.
In any event, U.S. industrial production has been rising now for seven straight months, at an annualized rate of about 10%. That counts as at least a moderate V-shaped recovery, as there's a whole lot of improvement still needed just to get back to where we were in early 2008.
Mr. Grannis:
ReplyDeleteYou mentioned the following in your post:
“Big Government is one big reason for this; a case in point would be that since European companies find it much harder to fire people, they are also much less likely to hire them in the first place, thus explaining why German and French unemployment rates have been generally much higher than in the U.S.”
Taking this same Big Government argument mentioned above, you find the reverse relationship in the public sector in the U.S. Federal, state and local governments have been very likely to hire in the last 15 years. The inability to fire such public sector workers has caused their unemployment rate to be very low.
Any attempt to reduce size and scope of government is going to be a long and laborious exercise due to the unionization of public sector workers and the notoriously difficult rules and procedures to fire a government worker. In other words, what does up very quickly comes down very slowly.
Scott,
ReplyDeleteWhat percentage of the increase in industrial production do you attribute to Obama's deficit spending and stimulous?
How much more money do you think we have left to borrow as the appetite for US Bonds seems to be declining as of the most recent report?
WEH: Excellent points.
ReplyDeletealsty: I think the stimulus package passed one year ago contributed almost nothing to the economy's recovery. Indeed, I think the economy would have been stronger today without the stimulus.
ReplyDeleteWhat about the deficit spending....Obama spent a ridiculous $1.4 Trillion more than he brought in.....
ReplyDeleteadmittedly, even though such spending is reckless, it must have contributed signifncantly to production in some form or another.
After all, if that money was simply saved in our retirement accounts, it would have sat there and not contributed much.