Posted by Charleston Voice, 06.13.12
The
poorer countries of Europe have become a huge drag on the richer
nations and only a true political union will resolve the economic
crisis, says a former U.S. Federal Reserve chairman.
"The only solution to this is the political consolidation of Europe," he said in a panel discussion after his speech.
Expectations that the countries of southern Europe would fall into line and become more like the northern nations have not been met because they have not shown the required productivity, he said.
"Culture really matters," he said.
Continued funding of these countries' deficits can't continue, said Mr. Greenspan, who was Fed chairman from 1987 to 2006.
The key difference between north and south is productivity, he said.
Addressing the economic difficulties and tentative recovery in the United States, Mr. Greenspan said in his presentation that a cloud of uncertainty continues to hang over the country as to what the future holds.
“There is a level of uncertainty of the far distant future which is unprecedented,” he said.
“We will not come out of this extraordinary situation unless we can find a way of resolving the uncertainty and allowing investment to go forward,” he said.
Production of assets with a lifespan of less than 20 years as well as consumption are doing relatively well. The losses are in long-term assets such as real estate, which has caused a major shortfall in construction, he said.
Businesses are not investing in these longer-term assets, he said.
But there is “no viable consensus of what we ought to do in the United States,” he added.
Events in Europe aren’t helping matters, he said.
“We would be doing far better if we didn’t have the pall of Europe hanging over us. Frankly, it’s going to get worse before it gets better.”
Mr. Greenspan came under fire after the 2008 financial meltdown, with some critics contending that the easy money policies of the Fed led directly to the subprime mortgage crisis.
Earlier, another participant at the forum, Dominic Barton, global managing director at McKinsey and Co., said companies need to think more about the broader societal issues at play and less about shareholder value as powerful forces reshape the world.
"Business is going to have to broaden out," he said.
Governments no longer have adequate resources to deal with such major problems as unemployment and poverty, so the corporate sector is going to have to do more, he said.
"Fifty per cent youth unemployment in Spain is not just a social problem. It's a business problem," he said.
He quoted one client who told him: "It's very difficult to have a healthy company in an unhealthy city."
Companies need to shift from a focus on shareholder-value creation to a greater concern with stakeholder value, he said.
Warning: We have been saying all along that a 'political compact' would eventually be pronounced as "necessary for the good of Europe". This will be the final surrender of individual sovereignty for our American heritage countries.
Now Greenspan, the decrepit Keynesian fraud, is setting before us the toxic poison of joining the sovereigns' heritage with the failing monetary union.
Don't be deceitful with yourself either in thinking your leaders don't know what they're going to put you through because they know exactly what concoction they're cooking for you because you're the main course.
Any political union forced upon the European people will be fatal pulling down the political and monetary schemes as one and leaving our friends in a pitiful heap of despair not seen since the Dark Ages.
MONTREAL — The Globe and Mail
Published
The
poorer countries of Europe have become a huge drag on the richer
nations and only a true political union will resolve the economic
crisis, says a former U.S. Federal Reserve chairman.
"What [the poorer countries] are
doing is borrowing money on northern Europe's credit card," Mr.
Greenspan said in a presentation Wednesday to the International Forum of
the Americas.
Expectations that the countries of southern Europe would fall into line and become more like the northern nations have not been met because they have not shown the required productivity, he said.
"Culture really matters," he said.
Continued funding of these countries' deficits can't continue, said Mr. Greenspan, who was Fed chairman from 1987 to 2006.
The key difference between north and south is productivity, he said.
Addressing the economic difficulties and tentative recovery in the United States, Mr. Greenspan said in his presentation that a cloud of uncertainty continues to hang over the country as to what the future holds.
“There is a level of uncertainty of the far distant future which is unprecedented,” he said.
“We will not come out of this extraordinary situation unless we can find a way of resolving the uncertainty and allowing investment to go forward,” he said.
Production of assets with a lifespan of less than 20 years as well as consumption are doing relatively well. The losses are in long-term assets such as real estate, which has caused a major shortfall in construction, he said.
Businesses are not investing in these longer-term assets, he said.
But there is “no viable consensus of what we ought to do in the United States,” he added.
Events in Europe aren’t helping matters, he said.
“We would be doing far better if we didn’t have the pall of Europe hanging over us. Frankly, it’s going to get worse before it gets better.”
Mr. Greenspan came under fire after the 2008 financial meltdown, with some critics contending that the easy money policies of the Fed led directly to the subprime mortgage crisis.
Earlier, another participant at the forum, Dominic Barton, global managing director at McKinsey and Co., said companies need to think more about the broader societal issues at play and less about shareholder value as powerful forces reshape the world.
"Business is going to have to broaden out," he said.
Governments no longer have adequate resources to deal with such major problems as unemployment and poverty, so the corporate sector is going to have to do more, he said.
"Fifty per cent youth unemployment in Spain is not just a social problem. It's a business problem," he said.
He quoted one client who told him: "It's very difficult to have a healthy company in an unhealthy city."
Companies need to shift from a focus on shareholder-value creation to a greater concern with stakeholder value, he said.
Companies are also too short-term focused and need to take a longer-term approach, said Mr. Barton. Source @Globe and Mail
