I've always been a strong opponent of the bailout initiatives, especially the US one. I also belief that all the support funds of the American and British government to massively financially support tech startups will fail to make any difference. Contrary to Bart Becks I don't believe that our priorities are now to give every kid access to the Internet or have our governments dig more debts to allow would-be-entrepeneurs to play instead of work. Despite the efforts of a decade, the tech startup market hasn't really yet contributed to substantial job creation; the kind of job creation that can offset the job losses ahead.
Our priority is productivity. And in Europa productivity is dropping and dropping. Read: we need to create an output of a higher value at a lower cost. Unfortunately today in Europe the input is increasing and the outpit decreasing.
Last Tuesday, in French Rousillon, the last Paracetamol factory of Europe closed. Paracetamol is the basic ingredient of the painkillers that we all use (Dafalgan, Panadol, Perdolan, Tylenol,...). This basically means that the paracetamol of all the pills that we each have in our houses is... imported from outside of Europe (mainly China, and to a lesser extent India and Brazil). Yes, Europe did all kind of legal tricks since 2000 to prevent this from happening, alas the market won. On my Brazilian Tylenol (which is by the way a brand from Janssen-Cilag) tablets there's written "Ind. Bras.": Industria Brasileira. Meaning that the product and its components were manufacturered in Brazil; why doesn't Europe have the force to make Paracetamol cheaper than India or China? The only thing we can apparently do is consume the Paracetamol for our increasing amounts of headaches.
Americans are still not getting it. For months I've been writing that the dollar will eventually fall (hard again) and slowly the signs are supporting my statements. As Peter Schiff wrote in this excellent Wall Street Journal Article of last weekend:
"The good news is that economics is not all that complicated. The bad news is that our economy is broken and there is nothing the government can do to fix it. However, the free market does have a cure: it's called a recession, and it's not fun, easy or quick. But if we put our faith in the power of government to make the pain go away, we will live with the consequences for generations."
By the way: the current outstanding debt per America household is 400.000 US$. Unfortunately against this debt there's no house or car as a security, it's just a hole of 400.000 US$ that every American family has towards other countries.
