Apologies for this being in English, but this is a reaction to another post written in English --- the multiple translations necessary are too much for me;
So;
Edward Hugh writes a pro pos Japan's economic malaise that this is in part because of the low fertility rate this country has; ignoring his reasoning why and how this link works (by the way, I find his argument to be very cogent), his idea why some countries (i.e. Japan, Germany, Italy) have so low fertility rate is ... well ... omigod ...
Once again, this can be found here;
So, but what would be a good explanation?
Assumption:
People can choose whether to have children or not (by using contraceptives, being catholic priests, or gay or, presentably both)
Definition:
The amount of children born (in any particular period of time) is:
cb = uwp + wp
children born = unwanted preganacies + wanted preganancies
The potential amount is:
pcb = uwp + wp + ap
where ap ... avoided pregnancies.
now it should be obvious that an increase in cb has to mean a decrease in avoided pregnancies. That is so, because of medicine; modern medicine allows a lot more women than previously the be pregnant, and as decreased their and their children health care rise immensely. In other words, the problem is not biological fertility, it is not wanting to become pregnant.
That is to say: +d(cb) ---> +d(uwp)g; +(wp); -d(ap) (d as in delta, mathematical way of saying change)
Additional thought: Most of today's pregnancies are wanted (i.e. wp > uwp); that is to say planned, which is he magic word; planned; people are basing this decisions on their plans. On special plans: having a child (+ education) takes ... say twenty years, sometimes more. So people have to plan twenty years ahead, and they will become pregnant (the women, obviously) only if they can expect, with a reasonable degree of security, that they can ... let´s say sustain a child for twenty years.
Now for some economic developments:
--- The distribution of income has changed over the last twenty years; put simply the poor have gotten poorer, the rich richer, in other words a lot of people are not as well of a they used to be. (Better: A lot of peoples income has not risen in line with what they consider to be an acceptable standard of living.)
--- There is increased labour market flexibility. (It´s easier to fire you, more people (have to) change their jobs.)
It should be obvious that this is poison for the wp vs ap distribution.
Additionally their is ... our all time favourite: the conservative ideology: Women should stay home with their children, be a good housewife and mother. That is to say, they should not work. This idea is detrimental to the +d(cb) i.e. more births because
--- people - most of them - cannot as a three person household live of one wage earner.
--- women (at last some of them do want to make a carrier.
--- That is not helped by the absence of early child care facilities.
--- prolonged stays at home create difficulties at re entering the jobs market creating future insecurities and thereby another argument against having a child.
--- The possibility of divorce is another problem. Even so women get alimentation mostly this leads to a steep decline in their (and their ex husbands) social status. (Once more Three persons, one of them a wage earner is not a good combination.)
This are (by no means) the only, but nonetheless crucial problems.
And they sound entirely rational, don't they?

Ok. Lots of people going insane. In the US. Since similar arguments are made in Europe, we call upon Bradford, as usual, to restore sanity.


null

Oh boy, ...
Since neithe Hungary, nor Spain, nor Ireland can devalue their currency, they have obviousley decided to

1. Adopt an austerity programm
2. Cutting their budet in the midsd of a recession
3. Cutting civil service wages.
4. IN THE MIDDLE OF A RECESSION

Why oh why do I have to live in this times? Why oh why is everyone suddenly acting so stupid. Precipitatin a return to sanity, everyone needs to read John Maynard Keynes The General Theory of Employment, Interest and Money, Book V Money-Wages and Prices, Chapter 19. Changes in Money-Wages.
Or die.
This is a desaster.
Keynes talks about the macroeconomic effet of wage cuts; they do depress to nobodisy suprise demand, an hence lead the economy in ever deeper crisis. Furthermore Keynes tries (and obviously has not succeded) to explain, that cutting wage will not have the desired effect. The desired effect is to increase the amount of money in the economy (putting it roughly) by inducing deflation. (If the same amount of money is around, and everything is cheaper the consequence will be that there is more monyey - relative to what was ther before. The nominal amount of money stays the same, everything is cheaper and - bingo - there is more money.

Now the problem is that outside a totalitarian system a wage cut of this magnitue is at the very best difficult to achive. Everybodys wage have to go down. (Try to explain that to frustrated Pensionsts, Labor Unions etc. because as Keynes says there is no justice in all of this.

And the consequences of this will be dire. People will stop spending, and will stop spending now and very thoroughly. Really. And as a consequence the demand for goods will go down, and therfore industrial production will go down, and the recession will deepen and deepen. And deepen and deepen.

So we need to read Keynes; what he suggests is instead to increase gouverment spending and increase the supply of money. Increasing he supply for money will have the same effect as decreasing the waes. And will be much more easily to engineer. And faster. After all the central bank will just print mor money.

That is it.

We need to read Keynes.

You need to read Keynes.

NOW

To the ground that is.
Ok, here is the chart of doom and gloom

Russian GDP (Gross domestic product)



Not good, and - lest I forget - curtesy Edward Hugh - who has a lot mor on this.

This is actually a estimated proxy, no an official result, which will be availiable only month after the fact;

---

Ok now the bonus question: WHO IS NOT SCARED?

Der Standard berichtet:

12. Jänner 2009, 19:40
Der Rubel rollt rasant nach unten
Die russische Zentralbank hat den Rubel erneut abgewertet - zum 14. Mal in den vergangenen acht Wochen

Die russische Zentralbank hat den Rubel erneut abgewertet - zum 14. Mal in den vergangenen acht Wochen. Die gesunkenen Ölpreise belasten Russlands Wirtschaft, die Arbeitslosenzahl könnte massiv steigen.

Das könnten gute Neuigkeiten sein, weil es heißt, dass die Russen Geld brauchen; und uns wieder Gas verkaufen müssen

http://derstandard.at/?id=1231151674695http://derstandard.at/?id=1231151674695

16. Jänner 2009, 18:22
Europas Gasspeicher sind halb leer
Füllstand nächste Woche großteils unter 50 Prozent - OMV: Österreichs Gasversorgung bis April gesichert

Brüssel/Berlin/Wien - Die seit voriger Woche unterbrochenen Gaslieferungen aus Russland durch die Ukraine in die Europäische Union lassen die Gasvorräte rascher als erwartet schrumpfen. Am vergangenen Montag waren die Speicher nach Angaben der Brüsseler Gasspeicher-Organisation Gas Storage Europe im Durchschnitt zu 59 Prozent gefüllt - nach 69 Prozent sieben Tage zuvor. Übers Wochenende sollte der Füllstand auf unter 50 Prozent sinken. Deutschland und Österreich haben die größten Speicherkapazitäten.

Edward Hugh, usually in the business of writing scary articels about some place else, is writing about us:

Austrian Banks The Most Exposed To Eastern Europe Forex Lending
by Edward Hugh

Bloomberg are reporting (via Der Standard) that Austrian banks have the biggest exposure to Forex lending in Eastern Europe. This is hardly breaking news, and I have had working notes for a post on this lying around for months (here, please excuse the mess, I will append some of this to this post if time permits at the weekend). The issue is simply finding the time to do everything. Basically I would say that all this business about not devaluing currencies (and hence imposing wage cuts) in Eastern Europe is to do with this issue (also highly exposed are the Swedish banks, and Italy’s Unicredit). Der Standard cite an as yet unpublished International Monetary Fund report to the effect that Austrian banks have loans outstanding in Eastern Europe equal to about 70 percent of the country’s gross domestic product, a higher percentage exposure than any other country.

If you are in the business of liking scary quotes, you could try this one (which comes from the king of scary quotes and dreaded anthropologist’s grandson - Ambrose Evans Pritchard - but that doesn’t make it any less scary:

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon. Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.

Hangover theorists (Paul Krugman, as always)

Gedanken über Friedrich von Hayek

Folgendes kann auf P. Krugman´s Blog gefunden werden:


Tja; was soll man da noch sagen? Vielleicht das Folgende: Die FED (FED eral Reserve Bank of the United States of America) hat beschlossen, dass sie willens und bereit ist, das finanzielle System der USA zu ...
... übernehmen. Das heißt: Normalerweise kauft eine Notenbank Staatsanleihen, mit Geld, dass Sie gedruckt hat; dies vermehrt die Geldmange, und dann fließt dass durch die Wirtschaft, und der Rest ist wirklich kompliziert;
dass nennt man eine Expansion, i.e. Vermehrung der Geldmenge; und wenn die Notenbank Staatsschulden --- Schuldscheine --- verkauft, dann wird dass eine Kontraktion; i.e. eine Verminderung der Geldmenge genannt;
na gut;
Was die US. Notenbank gemacht hat ist das folgende: Sie hat begonnen den Banken Geld gegen alles Mögliche zu leihen; alles Möglich ist alles, was nicht eine Staatsschuldverschreibung ist;
Was das nebenstehende Bild lustig macht
--- und ich finde es ist lustig ---
und anzeigt, wie ernst die Glauben, dass das Leben ist.
Sehr ernst;
Wie die dieses Bolg lesenden wissen befinden wir uns in der größten Wirtschaftskrise seit der großen Depression.
Und, was sollen wir jetzt sagen;
das Bild ist lustig, weil es einen Sachverhalt adeqaut wiedergibt,
oder schreckeinjagend weil dieser Sachverhalt schreckeinjagend ist,
oder aufbauend, weil diesmla zumindest jemand verstanden hat, dass wir was tun müssen?

So was brauchen wir auch zulande;

Volume 55, Number 20 · December 18, 2008
What to Do
By Paul Krugman

What the world needs right now is a rescue operation. The global credit system is in a state of paralysis, and a global slump is building momentum as I write this. Reform of the weaknesses that made this crisis possible is essential, but it can wait a little while. First, we need to deal with the clear and present danger. To do this, policymakers around the world need to do two things: get credit flowing again and prop up spending.

The first task is the harder of the two, but it must be done, and soon. Hardly a day goes by without news of some further disaster wreaked by the freezing up of credit. As I was writing this, for example, reports were coming in of the collapse of letters of credit, the key financing method for world trade. Suddenly, buyers of imports, especially in developing countries, can't carry through on their deals, and ships are standing idle: the Baltic Dry Index, a widely used measure of shipping costs, has fallen 89 percent this year.

What lies behind the credit squeeze is the combination of reduced trust in and decimated capital at financial institutions. People and institutions, including the financial institutions, don't want to deal with anyone unless they have substantial capital to back up their promises, yet the crisis has depleted capital across the board.

The obvious solution is to put in more capital. In fact, that's a standard response in financial crises. In 1933 the Roosevelt administration used the Reconstruction Finance Corporation to recapitalize banks by buying preferred stock—stock that had priority over common stock in terms of its claims on profits. When Sweden experienced a financial crisis in the early 1990s, the government stepped in and provided the banks with additional capital equal to 4 percent of the country's GDP—the equivalent of about $600 billion for the United States today—in return for a partial ownership. When Japan moved to rescue its banks in 1998, it purchased more than $500 billion in preferred stock, the equivalent relative to GDP of around a $2 trillion capital injection in the United States. In each case, the provision of capital helped restore the ability of banks to lend, and unfroze the credit markets.

Weiterlesen kann wer klicken tut.

^So:Hier die Kollumne zum Tag:

European Crass Warfare

By PAUL KRUGMAN
Published: December 15, 2008

So here’s the situation: the economy is facing its worst slump in decades. The usual response to an economic downturn, cutting interest rates, isn’t working. Large-scale government aid looks like the only way to end the economic nosedive.

But there’s a problem: conservative politicians, clinging to an out-of-date ideology — and, perhaps, betting (wrongly) that their constituents are relatively well positioned to ride out the storm — are standing in the way of action.

...

I am, ..., talking about Angela Merkel, the German chancellor, and her economic officials, who have become the biggest obstacles to a much-needed European rescue plan.

...

The most acute problems are on Europe’s periphery, where many smaller economies are experiencing crises strongly reminiscent of past crises in Latin America and Asia: Latvia is the new Argentina; Ukraine is the new Indonesia. But the pain has also reached the big economies of Western Europe: Britain, France, Italy and, the biggest of all, Germany.

As in the United States, monetary policy — cutting interest rates in an effort to perk up the economy — is rapidly reaching its limit. That leaves, as the only way to avert the worst slump since the Great Depression, the aggressive use of fiscal policy: increasing spending or cutting taxes to boost demand. Right now everyone sees the need for a large, pan-European fiscal stimulus.

Everyone, that is, except the Germans. Mrs. Merkel has become Frau Nein: if there is to be a rescue of the European economy, she wants no part of it, telling a party meeting that “we’re not going to participate in this senseless race for billions.”

Last week Peer Steinbrück, Mrs. Merkel’s finance minister, went even further. Not content with refusing to develop a serious stimulus plan for his own country, he denounced the plans of other European nations. He accused Britain, in particular, of engaging in “crass Keynesianism.”

Germany’s leaders seem to believe that their own economy is in good shape, and in no need of major help. They’re almost certainly wrong about that. The really bad thing, however, isn’t their misjudgment of their own situation; it’s the way Germany’s opposition is preventing a common European approach to the economic crisis.

To understand the problem, think of what would happen if, say, New Jersey were to attempt to boost its economy through tax cuts or public works, without this state-level stimulus being part of a nationwide program. Clearly, much of the stimulus would “leak” away to neighboring states, so that New Jersey would end up with all of the debt while other states got many if not most of the jobs.

Individual European countries are in much the same situation. Any one government acting unilaterally faces the strong possibility that it will run up a lot of debt without creating much domestic employment.

For the European economy as a whole, however, this kind of leakage is much less of a problem: two-thirds of the average European Union member’s imports come from other European nations, so that the continent as a whole is no more import-dependent than the United States. This means that a coordinated stimulus effort, in which each country counts on its neighbors to match its own efforts, would offer much more bang for the euro than individual, uncoordinated efforts.

But you can’t have a coordinated European effort if Europe’s biggest economy not only refuses to go along, but heaps scorn on its neighbors’ attempts to contain the crisis.

Germany’s big Nein won’t last forever. Last week Ifo, a highly respected research institute, warned that Germany will soon be facing its worst economic crisis since the 1940s. If and when this happens, Mrs. Merkel and her ministers will surely reconsider their position.

But in Europe, as in the United States, the issue is time. Across the world, economies are sinking fast, while we wait for someone, anyone, to offer an effective policy response. How much damage will be done before that response finally comes?