Daily News Wire 07/11/12

The global economic crisis is taking a toll on Europe’s already low fertility rates. Like many wealthy countries, the nations of Europe have experienced rapidly aging populations that are putting a strain on their public finances (due to higher social security costs) and their economies (due to fewer young people in the labor force). Things were starting to turn around until recent economic troubles forestalled many couple’s plans to start a family (or to even marry in the first place).

The only countries that have managed to maintain what’s known as replacement fertility – which ensures stable population growth – are Iceland, Ireland, the UK, and France (though others like the Netherlands, Norway, and Sweden come close). With France (so far) being the only large country on the continent that is growing steadily, will the balance of power shift from shrinking (though still dominant) Germany?

And although the US still has a healthy fertility rate, one wonders how long it will last in the face of persistent economic malaise. Will the current crisis lead to a similar plummeting in the birth rate? How will this bode for the future, in which more retirees will put continued pressure on our public finances?

And while we’re on the subject of a recession, what exactly makes a country wealthy? For decades, the gold standard for determining a nation’s prosperity has been Gross Dom estic Product (GDP), which measures the market value of a country’s final goods and services. When in it’s measured in a per-capita basis – in other words, divided by a country’s population – it gives a rough estimation of a given society’s standard of living. Alternative or complementary measurements include the Human Development IndexGross National Income, and the recently developed Better Life Index (none of which I have the time to elaborate on, sadly).

Each of these metrics is imperfect or incomplete in its own way, but they provide the best idea of what a country’s overall wealth and prosperity is. Aside from the technical difficulties in measuring wealth, there’s also the wider philosophical problem of how we define it: is the worth of a country’s goods and products an accurate indicator of its population’s standard of living? Does it accurately convey the resources available to everyone?

The United Nations has recently introduced another metric – inclusive wealth – which measures wealth as a total of three resources: people (namely their education and skills), physical asset (roads, machinery, buildings, etc), and natural resources (land, minerals, and the like). Needless to say, the results are interesting: some countries that rank highly in GDP are much lower in inclusive wealth (although only 20 nations have been studied this far). The same can be said when comparing the other tools listed above: some countries that rank low in GNI nonetheless have a higher rate of human development for example.

I personally prefer to put all these tools side-by-side and compare where a given country lies overall, since the variations are usually not all that drastic. To make things more complicated, there is a nascent movement to measure “Gross National Happiness” – which opens up a whole other can of worms. If we can’t even figure out what makes a nation rich or prosperous, finding an objective and universal marker for happiness will be even more challenging. It’s fitting that figuring out what makes us happy or wealthy is so elusive.

Finally, The Nation challenges the popular notion – resurrected by Mitt Romney’s campaign – that business experience has any bearing on one’s effectiveness as President of the United States. I for one have grown weary of this argument. There’s no doubt that the presidency should (ideally) entail numerous skills and experiences.

But running a business is very different from running a country. It’s tempting to think that ties to the private sector will somehow inform your economic policy, but economics and business are two very different disciplines, and what’s good for businesses may not be good for the average American. After all, most corporations are making record profits, or at the very least performing healthily, but that hasn’t had much effect on our stagnating incomes, anemic job growth, and meager benefits.


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