Comments on: Europe Is in Bigger Trouble than the U.S.

By: Random Links IV « Random Musings of a Deranged Mind

Random Links IV « Random Musings of a Deranged Mind — Fri, 06 Mar 2009 21:14:44 +0000

[...] http://baselinescenario.com/2009/02/12/europe-is-in-bigger-trouble-than-the-us/ [...]

By: EclecticLip » Those (not-so) crazy gold bugs…

EclecticLip » Those (not-so) crazy gold bugs… — Thu, 19 Feb 2009 03:38:05 +0000

[...] are in even worse shape than their American counterparts (the housing bubbles were bigger over [...]

By: Links 18/02/09 « Bounded Rationality

Links 18/02/09 « Bounded Rationality — Wed, 18 Feb 2009 21:20:13 +0000

[...] Europe is in Bigger Trouble than the US [...]

By: Closer To The Ideal » Blog Archive » America more firmly at the center of the world economy than ever

Wed, 18 Feb 2009 04:27:59 +0000

[...] Consider: Europe Is in Bigger Trouble than the U.S. [...]

By: Europa i trøbbel | indregard.no

Europa i trøbbel | indregard.no — Tue, 17 Feb 2009 11:10:03 +0000

[...] James Kwak (glimrende blogg, forresten) argumenterer for at europeiske land er i dypere trøbbel enn…. Argumentene er disse: [...]

By: Anarchistas » Domino kaladėlė Lietuva

Anarchistas » Domino kaladėlė Lietuva — Tue, 17 Feb 2009 10:23:30 +0000

[...] kurios likimas sprendžiamas ne Vilniuje, ne Stokholme, ir ko gero net ne Briuselyje. Mat Vakarų Europos bankų sektorius visiškai susimovė investuodamas. Ne konkrečiai į Lietuvą, bet į visą Centrinės-Rytų Europos šalių bloką, besivystančias [...]

By: James Kwak

James Kwak — Mon, 16 Feb 2009 14:40:17 +0000

I meant to say that emerging markets were hit harder than advanced economies, and within emerging markets European banks are highly exposed to Eastern Europe and Latin America. It’s true that emerging markets as a whole have higher projected growth rates than advanced economies, but that’s because they were much higher to begin with. If you look at the difference between the IMF’s November and January forecasts, advanced economy forecasts for 2009 and 2010 are down 1.7 and 0.8 percentage points. Emerging and developing economies overall are down 1.8 and 1.2 percentage points. Within that, as one commenter pointed out, Eastern Europe is doing badly, Latin America relatively well. Projections for Central and Eastern Europe are down 2.6 and 1.3 percentage points, Latin America down 1.4 and 1.0 percentage points.

By: Grigou

Grigou — Mon, 16 Feb 2009 14:03:44 +0000

Color me skeptical. I don’t know, but the arguments presented here don’t seem very solid:
- no control over the currency: that’s probably the best argument though it should really be restated as ‘not as much control on the currency’. But maybe that’s a good thing, after all the extremely low rates decided by the federal reserve in the last decade are a big part of the problem today.
- eastern europe and latin america more hit than the rest of world. Really ? Where did you see that ? I’d be curious to see some hard data.

I personally think the US is in a worse shape than Europe (with the possible exception of the UK) simply because the level of personal debt there is much higher, the US economy also needs more credit to function properly than european economies and last but not least: social safety nets will absorb part of the shock and will auto stabilize the economy.

Oh and I wouldn’t put too much stock in that reserve currency idea. That may also be a thing of the past.

By: Jim

Jim — Mon, 16 Feb 2009 09:10:31 +0000

Mike’s right, I think. As well, Europe in general, excepting the UK, still has three great assets that the US lacks:
—a culture of popular protest that is still healthy, and

—- The institutions of the social safety net that will soon be needed more than ever have been partially dismantled, but still live in popular awareness and in the institutional structure, so they can be reconstituted, I think. And finally,

—— Slogans or labels as a replacement for thought has not penetrated as far into the popular psyche here as it has in the US. As a result, labeling something— “socialist”, for example, is not automatically the kiss of death.

By: Weekend Read-Up (15 Feb 2009)

Weekend Read-Up (15 Feb 2009) — Sun, 15 Feb 2009 16:59:43 +0000

[...] especially Ireland, is in bigger troubles than the [...]

By: Roman Stanek

Roman Stanek — Sun, 15 Feb 2009 08:12:46 +0000

Eastern Europe (Czech R., Poland, Hungary, Baltics, Balkans..) has the same uniformity as North America (Mexico, USA, Canada).

By: mike

mike — Sun, 15 Feb 2009 02:29:27 +0000

I have to disagree that Europe is in bigger trouble than the US. The EU has major economic problems, but at least it still has functioning political systems. In the US, the economic problems are just a reflection of a much more major problem, the breakdown of the political system, which is facing a collapse comparable to that of the Soviet Union, if not worse. The 18th century framework has finally broken down, and the federal government is no longer capable of acting in an effective manner. It can go through the motions, but there’s no way it can respond to this crisis. So while the EU countries will eventually be able to deal with and cope with this crisis (except maybe the UK, whose government is even more obsolete than the US’s), in the US the solutions will have to wait for whatever arises to replace the old 18th century system, which could be quite a while.

By: Moue Magazine » Blog Archive » Friday Link Roundup

Moue Magazine » Blog Archive » Friday Link Roundup — Fri, 13 Feb 2009 21:13:33 +0000

[...] More Screwed Than U.S.: Um…yay? Baseline Scenario breaks down why the economic situation in Europe is worse than it is here. Arnold Kling pops in to [...]

By: Brian Butler

Brian Butler — Fri, 13 Feb 2009 17:21:18 +0000

You said “…Latin America, which have been harder hit by this crisis than anyone else.”

I agreed with you about E. Europe, but not sure if Lat Am has been “harder hit than anyone else”.

Sure, Mexico has worrying signals, but having hedged oil futures, and with reserve stockpiles, they should be ok through 2009. Brazil is doing fine, so far (relatively speaking), with its stock market actually up so far this year.

Argentina may be a mess, but those trouble existed way before the onslaught of the credit crisis. And, while nationalization of the pension system was not popular, it probably pushed back talk of default till 2010+.

Ecuador defaulted, but chose to do so, and was not forced.

There may be worrying signs on the horizon for Latin America (falling production, exports, etc)

But for now, I would argue that the region is doing surprisingly better than other parts.

By: Nick Rowe

Nick Rowe — Fri, 13 Feb 2009 12:19:27 +0000

“For countries that use the euro, no control over monetary policy.”
Another way to think about that last point is that the Eurozone is like the US or Canada would be, if there were no Federal government, and only state/provincial governments.

I made that argument here: http://worthwhile.typepad.com/worthwhile_canadian_initi/2009/01/canada-and-the-eurozone-a-comparison.html