Melanie Sturm: Think Again
September 1, 2011
“They tried to make me go to rehab but I said no, no, no,” British singer-sensation Amy Winehouse sang before joining Jim Morrison, Jimi Hendrix and Janis Joplin in the “Dead at 27” Club. Seeing the media atwitter over the “Euro Crisis” makes me think Winehouse’s unfortunate demise is a metaphor for what ails Europe.
Winehouse thought she didn’t need treatment; similarly the new head of the International Monetary Fund, Christine Largarde, fears “policy makers do not have the conviction” to “go to rehab” at this “dangerous new phase of the debt crisis.” Yet with such high stakes, European politicians must Think Again, as should Americans whose aim is to “Europeanize” America.
Like Winehouse, the eurozone (comprising 17 out of 27 European Union countries now sharing a common currency and mutual economic guarantees) is severely depressed, both economically and socially. It suffers from out-of-control addictions to big government and borrowing, has existential doubts about whether so many dissimilar countries share enough interests to fit into an economic straitjacket, and lacks the political will to address its dysfunction. More ominously, unlike the suicidal Winehouse, Europe’s financial crisis threatens to pull down others like a nuclear-armed suicide bomber.
Trend-spotting soothsayers who used to boast that the Eurozone would “end American supremacy” and “run the 21st century” now seem delusional. EU policies actually impede economic growth and vitality, rendering Europe less competitive.
In the second quarter, the eurozone grew 0.7 percent, while Germany (Europe’s engine) grew only 0.5 percent. Plunging business and consumer confidence further undermine growth prospects for a region desperate to ease debt burdens in the “PIIGS” countries (Portugal, Ireland, Italy, Greece and Spain). However, despite talk to control spending and balance budgets (mostly through tax increases), nobody in Europe has a genuine growth agenda.
It’s hard for Europe to grow when nearly half of Europeans are officially “dependents” and only 64 percent of working-age citizens work. Even worse, Europeans aren’t having babies (European fertility rates are one-third lower than both the replacement rate and the U.S. rate), so the ratio of European workers to retirees is expected to collapse from 7-to-1 in 1960 to one-to-one by 2040. With so many 30-year-old students and 50-year-old retirees, it’s no wonder the European welfare state is running out of other people’s money – because it has run out of people, to paraphrase Margaret Thatcher.
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Furthermore, European welfare states not only use taxpayers’ money to give “free” benefits to particular groups, they require employers do the same. Not surprisingly, faced with higher labor costs, employers hire fewer workers in Europe.
The New York Times captured the crux of the crisis: Because Europeans “translated higher taxes into a cradle-to-grave safety net … governments with big budgets, falling tax revenues and aging populations are experiencing rising deficits, with more bad news ahead.” Consequently, ballooning unemployment, stagnant economies, catastrophic debt and demographic collapse threaten the European economic model.
Meanwhile, European politicians take piecemeal steps to respond to bond markets and political pressures from those who don’t want to bail out their neighbors’ excesses. Former German foreign minister Joschka Fischer argued, “You can’t have a pension at 67 here and 55 in Greece.” Luckily, his remarks weren’t made in Greece, where protesters defending their “rights” killed innocents.
Czech President Vaclav Klaus, whose country joined the EU but did not adopt the Euro, despairs that Europe’s real problem is that Europeans don’t value economic freedom. Rather, they “prefer leisure to work, security to risk-taking, paternalism to free markets, group entitlements to individualism and don’t understand that their current behavior undermines the very institutions that made past successes possible.”
This is the existential question: When the social institutions (family, vocation, community and faith) that drive human productivity and satisfaction become less vital, from what will life’s purpose and meaning come? Not government security. A 2001 University of Michigan study (among others) showed that public-support recipients are twice as likely to feel hopeless or worthless.
It’s not too late for America: We appreciate that work, parenting and community engagement, while often challenging, give our lives meaning, accomplishment, satisfaction, a sense of control and pride – necessary elements for happiness.
In 2005, after pancreatic cancer treatment, college dropout Steve Jobs addressed Stanford graduates offering advice that reflects this quintessentially American credo about work and happiness. He told them to stay hungry and to find and follow their passions because “the only way to be truly satisfied in life is to do great work, and the only way to do great work is to love what you do.” Despite failing health, Jobs is happy (as are Apple customers, employees and investors) having created the world’s most innovative and valuable company, spawning industries in his wake.
If rehab could cure Jobs’ illness, he would go. As America slouches toward Europe, we should Think Again and go, too.