The Dividend Economy Needs Cheap Labor So The Wealthy Can Survive!
Americans be like
Not to be That Guy because British exceptionalism (especially English exceptionalism) is very real, but I do wish Americans would stop commenting on this blog’s posts about Boris Johnson, just to lament the fact that they think Trump is worse.
Trump is not the standard to which everything (or indeed anything) should be held, and we’re not in competition to determine which world leader is the worst. Saying “well at least s/he’s not Trump” normalises other world leaders being inadequate and delegitimises the genuine suffering and problems that other countries might be facing.
So no, Boris Johnson isn’t Donald Trump. I don’t want to speculate about whether he’s better or worse because that’s really not the point. He’s being judged in British terms because culture and context matter so stop using Trump as a comparison point or a parallel or an analogy because it simply doesn’t work!
No hair and no tan trump would look much more leadery!
BIG MAN PUTIN meets the LITTLE BIG MAN TRUMP!
Some news outlets spin this as the US being against a joint EU military cooperation.
In reality, the US doesn’t want to see its arms manufacturers excluded from supplying any potential EU defence pact and threads to exclude European manufacturers from US contracts.
I found the perfect example to explain the difference between “GDP per capita” and “GDP per capita, PPP”.
Denmark vs Germany
We all know that Denmark has some of the highest salaries in the EU. But, as everybody who ever been there will be able to tell you, living there is also really expensive.
Within the EU: Luxembourg, Denmark and Ireland have some of the highest salaries. But what does that actually buy you? This is what PPP (Purchasing Power Parity) tries to answer.
But first, let me go one step back and quickly point out the obvious. Comparing the GDP (Gross Domestic Product) as a total over nations, especially with very different population numbers, isn’t going to be that useful in most of the cases. data source
The obvious solution is “GDP per Capita”, where one simply divide the GDP of a nation by the amount of people living there. This gives a very different picture indeed. data source
That doesn’t necessarily translates directly to salaries, but gives a very good example of what people there earn. It also does not say anything about how well that wealth is distribute between poor and rich, this is another topic for another day.
But have a look how far apart Denmark with a GDP per capita of $56k is from Germany with $44k.
But Denmark isn’t part of the EuroZone and, as mentioned, living there is noticeably more expensive.
What purchasing power parity does, is to look at how expensive some products are compared in $ USD to find out how much that money actually buys you. So what do you think, Germans or the Danish, who will get more for their salary? data source
Despite a 20% difference in salary, Germany and Denmark are almost identical.
So if you want to save a lot of money, Luxembourg and Ireland look a lot more attractive.
Money isn’t everything.
Despite that, Denmark and Germany usually ranks as one of the best places to live in the world. Typically ahead of both Luxembourg and Ireland.
See ONI Quality of Nationality Index
So what does that tell you?
If the accumulation of money is more important to you than the quality of life, you need to look at how much the cost of living is and not just the size of your pay-cheque.
Happiness isn’t about money or how expensive life is. It is a question of what you get for it. Not enough will guarantee misery, true. But after a certain threshold other factors start to become more important. Things like personal safety, a clean environment and being surrounded by other happy people is much more important than how big the balance on your current account is at the end of the month.
Global market size in GDP:
The US has a smaller population, so GDP PPP is noticeably higher. China is the opposite. What is worth mentioning is that this doesn’t give any indication how the wealth is distributed among the population. Rich US citizens are a lot richer than in the EU, but how about the average citizen?
Debt in % of GDP:
How much does each block pay for healthcare in % of GDP:
Interesting that US citizens, with the worst healthcare plan, pay the most.
A clear winner, or looser here. Positive side node, the EU actually managed to reduce CO2 emissions in the last 20 years. Just. Because what the graph doesn’t show is that they increased again after 2012, and are almost back to where they were.