After America: Get Ready for Armageddon (17 page)

after america

authors will have! These publishing houses are like the tobacco companies: when they booked me and J. K. Rowling and the guy who does those Chicken Soup things and the rest of us on a coast-to-coast media blitz, they knew all about the risks of microphone bacteria, but they went ahead and ruined our life expectancy anyway.

It all sounds great. Who wouldn’t want to be a Greek hairdresser? Alas, being a Greek, period, is now a hazardous profession. An Obamafied America, following California down the Athenian path, is Greecing its own skids.

The EU is now throwing an extra trillion dollars at countries which by any objective measure are insolvent, and are unlikely ever again to be anything but—at least this side of bloody revolution. How do you grow
your economy in an ever shrinking market? Greece is a land of ever fewer customers and fewer workers but ever more retirees and more government.

How do you increase GDP? By export? To where? You’re entirely uncompetitive; you can’t make anything at a price any foreigner would be prepared to pay for it.

When you binge-spend at the Greek level in a democratic state, there aren’t many easy roads back. The government introduced an austerity package to rein in spending.17 In response, Greek tax collectors walked off the job. Read that again slowly: to protest government cuts, striking tax collectors refuse to collect taxes. In a sane world, this would be an hilarious TV

comedy sketch. But most of the western world is no longer sane. It’s tough enough to persuade the town drunk to sober up, but when everyone’s face down in the moonshine, maybe it’s best just to head for the hills—if you can find anywhere to flee.

Let us take it as read that Greece is an outlier. As waggish officials in Brussels and Strasbourg will tell you, it only snuck into the EU due to some sort of clerical error. It’s a cesspit of sloth and corruption even by Mediterranean standards. If you were going to cut one “advanced” social democracy loose and watch it plunge into the abyss
pour encourager les autres
, it would be hard to devise a better candidate than Greece. And yet and yet . . . riot-wracked Athens isn’t
that
much of an outlier. Greece’s 2010 budget deficit the new athens 113

was 12.2 percent of GDP;18 Ireland’s was 14.7.19 Greece’s debt was 125

percent of GDP;20 Italy’s 117 percent. Greece’s 65-plus population will increase from 18 percent in 2005 to 25 percent in 2030;21 Spain’s will increase from 17 percent to 25 percent.

Some of the oldest nations in the world are now in the situation of a homeowner who’s fallen too far behind on the payments and has no prospect of catching up: you might as well just put the door keys in an envelope, shove ’em under the door of the bank, and move on—perhaps to an uninhabited atoll in the South Pacific as yet unspoilt by unsustainable levels of government. At some point, the least worst option becomes armed revolution, civil war, or at least an electro-magnetic pulse attack that conveniently obliterates every single bank account and wipes the slate clean. As lazy, feckless, squalid, corrupt, and vicious as Greece undoubtedly is, it’s not that untypical. It’s where the rest of Europe’s headed—and Japan and North America shortly thereafter.

★ ★ ★ ★ ★

the Greek Bone connected

to the kraut Bone

Greece is broke, and has run out of Greeks. So it’s getting bailed out by Germany. But Germany also has deathbed demographics: as Angela Merkel, the Chancellor, pointed out in 2009, for Germany an Obama-sized stimulus was out of the question simply because its foreign creditors know there are not enough young Germans around ever to repay it.22 Germany has the highest proportion of childless women in Europe: one in three
fräulein
have checked out of the motherhood business entirely.23

Absolved from having to pay for their own defense, Continentals beat their swords into welfare checks, and erected huge cradle-to-grave entitlements. Even under the U.S. security umbrella, they proved unsustainable.

Why? Well, like Keynes said, in the long run we are all dead—so why not bilk the future? We won’t be here, and our creditors won’t have a forwarding 114

after america

address. No one has engaged in transgenerational theft on the scale that Europe has.

And these days Germany has to support a continent. It’s the economic powerhouse that’s supposed to be rescuing the euro and preventing the five soi-disant PIIGS (Portugal, Italy, Ireland, Greece, Spain) from having the Big Bad Wolf of reality blow their house of straw to smithereens. But what happens when your engine room is rusting? “Germany’s working-age population is likely to decrease 30 percent over the next few decades,”

says Steffen Kröhnert of the Berlin Institute for Population Development.

“Rural areas will see a massive population decline and some villages will simply disappear—Germany will become a weak economic power in the future.”24

The EU committed (to borrow from Philip K. Dick) a kind of pre-crime: it mugged the next generation. For the moment, the victims are still walking around, mostly unaware of what they’re in for. For many of them, life is good. Take Marina Casagrande of Bergamo.25 In Italy, a court ordered her father to pay Marina an allowance of 350 euros—approximately $525—

every month. Signor Casagrande was then sixty. His daughter was thirty-two. She was supposed to have graduated with a degree in philosophy eight years earlier but, though her classes ended way back at the beginning of the century, she was still working on her thesis. So Signor Casagrande is obliged to pay up, either in perpetuity or until the completion of Marina’s thesis, whichever comes sooner. Her thesis is about the Holy Grail. Which Marina would have little use for, given that she’s already found a source of miracu-lous life-transforming powers in Papa’s checkbook.

Marina is what they call a “bambocciona,” which translates, roughly, as

“big baby”—the term for the ever-growing number of Italian adults still living at home, in the same bedroom they’ve slept in since they were in diapers. There was, as usual, a momentary spasm of ineffectual outrage over the judge’s decision against Signor Casagrande, whose very name is mocked by this demographic trend: the
casa
would seem much more
grande
if only Junior would move out. But in Italy they rarely do: seven out of ten adults the new athens 115

aged 18 to 39 live with their folks.26 Sixtysomething Italians ordered to pay

“child support” to thirtysomething kids might consider moving back in with their nonagenarian parents and suing for a monthly allowance backdated to the early Seventies.

Italy’s
bamboccioni
have their equivalents around the world. In Japan, they’re called
parasaito shinguru
—or “parasite singles,” after the horror film
Parasite Eve
, in which alien spawn grow in human bellies feeding off the host. In Germany, they’re
Nesthockers
with no plans to move out of “Hotel Mama.” In Britain, they’re KIPPERS (Kids In Parents’ Pockets Eroding Retirement Savings). In Canada, by 2006, 31 percent of men aged 25 to 29

were still sleeping in their childhood bedroom each night.27

The economics of demographics used to be relatively simple: in a traditional agricultural society, by the time you got too worn and stooped for clearing and plowing, you hoped to have sired able-bodied 13-year-olds to do it for you. Today, most developed nations have managed to defer adulthood and thus to disincentivize parenthood—quite dramatically so, if the judgment against Signor Casagrande holds. Why blame his daughter? No matter how long you stay in school in Italy, there’s nothing waiting for you when you come out. Francesca Esposito was twenty-nine, spoke five languages, had two degrees, and could land no job other than an unpaid traineeship with a government agency facilitating millions of euros’ worth of false disability claims.28 “I have every possible certificate,” she told the

New York Times
, which, in its poignant profile of Italy’s young, never seemed to consider whether such expensively acquired “certification” is necessary for a government job—or most others. Young(ish) Francesca had a law degree from Italy, a master’s from Germany, and had interned in Luxembourg at the European Court of Justice. A century ago, this leisurely, indulgent saunter through a tri-national varsity would have been the province of bored aristocratic scions with no interest in politics or soldiery, but somehow Europe got the idea to universalize it. Miss Esposito’s father is a fireman, her mother a high school teacher. She is the first in her family to learn a foreign language and graduate from college.

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And she may well be the last. There is absolutely no return on investment, either for her or the Italian taxpayers who funded it. How could there be? A world in which you’re expensively educated till thirty to join a government agency justifying its own expansion by manufacturing welfare fraud is almost too perfect an emblem of the European Union. Francesca will live a worse life than her parents. She will do unpaid traineeships and low-paid short-term contract work because in Europe’s catatonic labor market the young (if one calls twenty-nine “young”) are already paying the price for the lavish salaries and benefits awarded to the unsackable middle-aged. Hence,
bamboccioni
,
Nesthockers
, and KIPPERS. There used to be an English expression,

“kippers and curtains.” In Europe today, it’s KIPPERS—and curtains. “Hope

’n’ change”? To be young in the EU is to live in a land beyond hope.

Debt operates on certain assumptions: if you need $500 and you don’t have it, the bank will lend it to you because they think you’re likely to have 500 bucks in the near future. The older you get, the less likely the bank will assume that. If you’re seventeen and broke, it’s because you haven’t yet got your first foot on the ladder of success. But if you’re sixty-three or seventy-eight and you’re broke, it’s because that’s who you are and you’re never not going to be broke. So why should the bank lend you 500 bucks? Where’s it going to come from?

That’s the question the developed world is facing: Where’s it going to come from? A new tax? There’s nothing left to tax. By 2009, Europe was reduced to considering a levy on bovine flatulence.29 You heard that right—

not a flat tax but a flatulence tax. Ireland was pondering a tax of 13 euros per cow, while in Denmark it was as high as 80 euros per cow. Is a Danish Holstein six times as flatulent as an Irish Hereford? Beats me. But somewhere in Brussels there’s a Director of the European Flatulence Agency of Regulation and Taxation (EuroFart) who’s got all the graphs. Apparently it’s to offset looming penalties each nation faces from EU legislation to combat “global warming.” The
Times
of London reported: “EU member states are obliged to cut the emissions from non-ETS sectors by 10 percent overall by 2020. While Romania and Bulgaria will be allowed to increase the new athens 117

emissions, Ireland and Denmark are each faced with cuts of 20 percent in farming sector emissions.”30

Even allowing for the regulatory yoke Europe’s cowed citizenry labor under, the bureaucratic logic here is hard to follow. Why is some Bulgar’s Holstein allowed to increase his flatulence while the poor Jutlander’s Polled Hereford has to put a stopper in it? Is there a dearth of flatulence in the Balkans but a Code Red alert over the North Sea? Couldn’t the EU introduce flatulence offsets and let the excessively flatulent Irish trade some of their flatulence to the Carpathians?

Go back to medieval times. The gnarled old peasant is in his hovel, and one day a fellow rides up in the full doublet and hose and says he’s come from the palace to collect His Majesty’s bovine flatulence tax. It’s just three groats per cow, a footling sum of no consequence. Even the medieval simpleton rustic would say, “Aaargh, sire, I dunno. The King’s flatulence tax? That don’t sound right. . . . ” When you’re taxing bovine flatulence emissions, there’s nothing left to tax.

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.

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★ ★ ★ ★ ★

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.