After America - Mark Steyn [57]
Greece, wrote Theodore Dalrymple, is “a cradle not only of democracy but of democratic corruption”31—of electorates who give their votes to leaders who bribe them with baubles purchased by borrowing against a future that can never pay it off. The advanced democracies with their mountains of sovereign debt are the equivalent of old people who’ve blown through their capital and are all out of ideas looking for young people flush enough to bail them out. And the idea that it might be time for the spendthrift geezers to change their ways butts up against their indestructible moral vanity. In 2009, President Sarkozy prissily declared that the G20 summit provided “a once-in-a-lifetime opportunity to give capitalism a conscience.”32 European capitalism may have a conscience. It’s not clear it has a pulse. And, actually, when you’re burning Greek bank clerks to death in defense of your benefits, your “conscience” isn’t much in evidence, either.
This is the first crisis of globalization, and it is a far more existential threat than the Depression. In living beyond its means, its times, and its borders, the developed world has run out of places to pass the buck.
THE KRAUT BONE CONNECTED TO THE YANK BONE
American admirers often talk about the European lifestyle. Alas, it’s all style and no life. If the EU’s deathbed demographics are becoming too obvious for even the dopier media outlets to ignore, you can bet the Chinese and other buyers of western debt are way ahead in their analyses. If you’re an investor and you’re not factoring in demography, more fool you. Tracking GDP versus median age in the world’s major economies is the easiest way to figure out where this story’s heading.
Take a “toxic asset.” What would improve its current pitiful value? That’s easy: more demand. Less supply. An asset is only an asset as long as there’s a buyer willing to buy it. If you’ve got 50 houses and 100 would-be homeowners, that’s good for property prices. If you’ve got 100 houses and 50 would-be homeowners, that’s not so rosy.
Which is the situation much of the West is facing. A bank is a kind of demographic exchange, by which old people with capital lend to young people with ambition and ideas. Who are somewhat thin on the ground in modern consumer societies. Japan, Germany, and Russia are already in net population decline.33 Fifty percent of Japanese women born in the Seventies are childless. Between 1990 and 2000, the percentage of Spanish women childless at the age of thirty almost doubled, from just over 30 percent to just shy of 60 percent.34 In Sweden, Finland, Austria, Switzerland, the Netherlands, and the United Kingdom, 20 percent of 40-year-old women are childless.35 In a recent poll, invited to state the “ideal” number of children, 16.6 percent of Germans answered “None.”36
Well, that’s a woman’s right to choose. But, in the macroeconomic picture, who’s going to be around to buy your assets? Mark Twain commended the purchase of land because “they’re not making any more of it.”37 But, in the fast depopulating eastern half of Germany, they’ve made more than anyone’s going to need for the foreseeable future. Pace the Führer, no country has ever been less in need of lebensraum. America has a milder case of the same syndrome—the Boomers didn’t have enough kids to sustain the mid-twentieth-century entitlement regime—but EU governments are now frantically hurling natalist benefits at a shrinking base of fecund womanhood.
Now look at it from a business point of view. In the United States, depending on what line of work you’re in, your sales territory may be your town or your state or the whole of America. But for Germany, Italy, and Japan, their only viable sales territory is the world. When your median age is forty-three and rising, any economic growth is down to exports. Wall Street experts talk about restoring “consumer confidence,