Saturday, January 29, 2011

Grey rule

In the article In Japan, Young Face Generational Roadblocks it is discussed how in Japan the older generation enjoys many benefits whle many of the young have to do with marginal jobs. It is a direct consequence of the large number of older voters and even trade union members. By defending the rights of the older they implicitly undermine the rights of the young. The article blames Japan's economic stagnation partly on this rule of the old.

I think the problem plays in the whole Western world. The refusal to let the banks pay for their losses was and the socializaton of those losses instead was partly a concession to people who wanted to protect their retirement rights.

In the West much losses still have to be taken: our houses are overvalued, China is taking our jobs and exposing how overpaid we are, in Eastern and Southern Europe the currencies are overvalued and our banks are generally believed to still hide many losses. The wise thing would be to take those losses as soon as possible so that our financial systems become healthy again. Instead we try to keep those bubbles from popping - at a huge price - or - like the Irish - we socialize the losses, letting future generations pay for the present one and the poor for the rich.

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