I hope that the European Union reforms its bankruptcy laws to match those in the US.
Bankruptcy clemency is one of those key advantages the US has to really enable entrepreneurship. Another one in California is no non-competes.
As an American I want to see the EU be economically vibrant!
tfourb · 1h ago
„Higher pay for U.S. executives is another draw. Peter Jackson, the chief executive of Flutter, which owns the betting platform FanDuel, nearly tripled his compensation after the gambling company moved its main stock listing to New York last year from London.“
Well, I think we solved the riddle …
roenxi · 44m ago
The article seems to roughly match the headline - I don't know why we're sourcing the WSJ to comment on Europe's policy with ideas like "emergency" or "wake up call"s. The Europeans are the ones with the opinions that matter on this one, presumably they think this is all acceptable given that they've been heading in this direction for a decade (if not decades), cheerfully willing to bear the consequences of being less business-friendly than the States (to say nothing of China). I'm not even sure we can call this unintended consequences - there seems to be some acceptance that Europe is going to be #3 when it comes to raw economic power.
I can make a forecast - anyone outside the US who lets their policy positions be swayed by the US press is heading for a disaster. Even if the Americans turn out to be accurate in their opinions. Countries need to maintain their own internal dialogue.
It'd be more interesting to be looking at what the British, or even the Germans and French think about the situation. They're the ones with the levers.
LaurensBER · 26m ago
European here.
I feel that our priorities have been on social/climate issues. For a very long time the feeling was that we had enough prosperity and that more was nice but that it was not as important.
There was some serious talk about "de-growth" and the trend (for some groups) was mostly towards working less but maintaining the same standard. Among left political circles it seemed that the focus was on doing the most good, for the most people and this focus often lay outside of Europe. To put this in a historical context, many Europeans (especially Germans) feel that we have historical sins to atone for.
We trusted the US and were happy to see them succeed. To a lesser degree we trusted China and Russia and we figured that they would make (economical) rational choices to codependency was seen as a strength and not a weakness.
It's very clear that we were in some degrees naïve and lazy and wasted opportunities and choices. Europe occasionally needs a good crisis to get going again, I'm glad we're finally getting one.
oytis · 25m ago
I don't think everyone is OK with declining economic power,but rather is too comfortable and helpless at the same time to actually change something.
I think outside perspective is actually useful, because internal dialogue often goes rounds like should do something -> can't do anything -> football -> should do something
chaostheory · 30m ago
Why Germany? Isn’t Germany already in a demographic crisis that’s nearly impossible to recover from?
funny to note how Europe is considered more socialist and America more capitalist, but in America, the public owns the means of production through pension-based stock market ownership, which is one of the core tenets of communism, whereas this article points out European pensions are state-based or through bond investments. Of course, not much power is derived through American ownership of the means of production via the stock market because that power is delegated to the institutions who have the actual control, serving the same role as the politburo, for instance, in more ostensibly communist systems.
dlcarrier · 1h ago
I think what's more important isn't who runs current production, but who can start future production. The people of the US own the means of production because they can legally start their own companies, with relatively low barriers to entry, to replace the ones currently in power.
The US has far more protectionism and other barriers to entry than it did when it seized the means of production from England, through the Boston tea party and the revolution that followed, but it still has enough freedom of business that it easily beats the European Union in pretty much every developing field.
Where the American Revolution differes from communist reviolutions is that, after seizing the means of production from a repressive government, the revolutionaries' new government did not hold onto the means of production through a planned economy, but instead held effectively zero economic oversight, leaving production open to a free market and anyone who wished to participate in it.
motorest · 1h ago
> (...) but in America, the public owns the means of production through pension-based stock market ownership, which is one of the core tenets of communism (...)
Do they own it, though?
Or is the US public relegated to a position of financing investment corporations without any ownership or control in exchange for a fraction of the profits and the bulk of the losses?
If anything, the US public seems to be used as a strategy to lower investment risks of investment firms.
> (...) whereas this article points out European pensions are state-based or through bond investments.
The "state-based" aspect which you are casually glancing over refers to full blown income redistribution schemes, where everyone's paycheck, being rich or poor, is proportionally deducted to finance retirement pensions, unemployment benefits, parental leaves, and even medical leaves.
Do you think that paying a corporation to invest in the stock market is more socialist than this?
luckylion · 1h ago
While the public doesn't have immediate power, it has a lot of freedom. If you manage your retirement fund, you can use it in whatever way you want. Buy a boat. Start a company. Gamble it all away in a week.
A lot of European countries have a much more paternal approach. Citizens can't be trusted to make good decisions, so they only receive part of their salary, and the rest is being managed "for them" - and that's non-negotiable (but there are some exceptions). A lot more stable, but a lot less free because you have a guardian making those decisions for you.
tfourb · 1h ago
This is not what happens. European public pension systems are mostly based on a solidarity system in which current wage earners pay for the pensions of current pensioners.
This system has its problems, mostly demographics with fewer young people entering the workforce and an unwillingness to fill the gap with immigration, but it has nothing to do with not trusting people to make their own decisions. It’s simply a historically grown approach which actually has worked quite well (and better than in the US for a greater share of society) for over a century.
ExoticPearTree · 40m ago
> This is not what happens. European public pension systems are mostly based on a solidarity system in which current wage earners pay for the pensions of current pensioners.
It is a big Ponzi scheme, and now that fewer people are joining the workforce, governments borrow money to pay pensions. And a duscretiinary power to decide how much a retired worker gets. Nothing scremas solidarity more than a bureaucrat deciding that from next month your grandma is only entitled to this much pension because there’s less money for it.
The American way is actually the mote fairer system. Could be even more fair if you did mot have to pay tax on your pension gains from stocks inventments and whatnot.
yo_ean · 33m ago
How would European pensioners in 1950 be paid their pension with the American system? Note all savings they had went to zero in the decades before.
lucketone · 58m ago
Your analysis is fully correct.
I want to add one more aspect to this.
If I gamble my pension away, I have detrimental effect on my neighbours and the rest of society. Sure I could work for a little longer, but not for too long.
One non-exhaustive example: If I don’t die right after my last contract ends, it means I’m consuming food and have some kind of shelter, which is payed by somebody.
crinkly · 1h ago
WSJ are pushing it there. Depends what you mean by dominance. The US market is propped up on hyped big tech investments with little chance of ROI for shareholders other than inflating the valuations. PE ratio is quite frankly bananas too.
At some point it’s going to be absolute carnage. Private investment companies have already seen the end game and from direct observation have been pushing the hype to drive volume so they can shift their holdings on to the bagholders.
Good luck. It’s not a stable market. It’s fucked.
sunshine-o · 1h ago
Yes go most banks in Europe and ask to invest anywhere from 1000 to 1M euros they will sell you mainly two things: European govs debt and bluship US tech stocks. It might be wrapped in all kind product but it is often most of it (MS, Apple, Google, Nvidia, etc.).
I once asked what could be the alternative they literally couldn't answer me.
Virtually every EU citizen with a bit of money has part of their savings invested in the same 5 US big tech companies.
And I am sure it is the same in many parts of the world.
We are very very far from initial role of a bank and you might wonder why Europe has its own banking system in the end.
It also explains why the price of those stocks are so high.
iamacyborg · 47m ago
> Virtually every EU citizen with a bit of money has part of their savings invested in the same 5 US big tech companies. And I am sure it is the same in many parts of the world.
Consolidation of power means that’s just what happens when you chuck money into an index fund, even a global one.
crinkly · 54m ago
That’s idiotic really. I mean I’m not sure why you’d go to a European bank for investment advice other than “bank do money, ug”. There’s a whole advisory market out there which gives you better options based on your attitude to risk profile and goals. Not the usual put it all in a TSLA/NVDA/MSFT ETF and to the moon shit.
I made more out of the tech market in the last 5 years than I would have in it by having sensible advice and a half decent financial model.
sunshine-o · 40m ago
The older generations (Boomers, Gen X) who have most of the money still invest through well known banks and often get advise from the local branch. Their money will either disappear one day or stay there until their death.
crinkly · 36m ago
Looks like we found our bag holders.
Gen X here btw. Some of my age-peers have low financial sense so that figures.
dlcarrier · 1h ago
Multiple branches of the US government regularly go after business for having too high of a profit margin. I really don't blame businesses for holding onto their cash, instead of making stock disbursments, when that's exactly what they are incentivized to do.
devoutsalsa · 29m ago
I really wish they’d ban stock buybacks. When executives get paid in stock options, they want the stock price as high as possible. The easiest way? Buy back shares to make the remaining ones worth more.
But when companies do this while their stock is overpriced, they’re wasting shareholder money on expensive shares. Executives pad their own pockets while shareholders get screwed.
I’d rather see companies pay better dividends or keep the cash. At least then shareholders actually benefit instead of just watching executives get richer.
motorest · 1h ago
I don't know who is downvoting this post. The fact that companies such as Tesla as being featured as meme stocks for years, with valuations that bear no relationship to performance let alone fundamentais, is a clear indicator that the house of cards can tip at any moment.
Bankruptcy clemency is one of those key advantages the US has to really enable entrepreneurship. Another one in California is no non-competes.
As an American I want to see the EU be economically vibrant!
Well, I think we solved the riddle …
I can make a forecast - anyone outside the US who lets their policy positions be swayed by the US press is heading for a disaster. Even if the Americans turn out to be accurate in their opinions. Countries need to maintain their own internal dialogue.
It'd be more interesting to be looking at what the British, or even the Germans and French think about the situation. They're the ones with the levers.
I feel that our priorities have been on social/climate issues. For a very long time the feeling was that we had enough prosperity and that more was nice but that it was not as important.
There was some serious talk about "de-growth" and the trend (for some groups) was mostly towards working less but maintaining the same standard. Among left political circles it seemed that the focus was on doing the most good, for the most people and this focus often lay outside of Europe. To put this in a historical context, many Europeans (especially Germans) feel that we have historical sins to atone for.
We trusted the US and were happy to see them succeed. To a lesser degree we trusted China and Russia and we figured that they would make (economical) rational choices to codependency was seen as a strength and not a weakness.
It's very clear that we were in some degrees naïve and lazy and wasted opportunities and choices. Europe occasionally needs a good crisis to get going again, I'm glad we're finally getting one.
I think outside perspective is actually useful, because internal dialogue often goes rounds like should do something -> can't do anything -> football -> should do something
The US has far more protectionism and other barriers to entry than it did when it seized the means of production from England, through the Boston tea party and the revolution that followed, but it still has enough freedom of business that it easily beats the European Union in pretty much every developing field.
Where the American Revolution differes from communist reviolutions is that, after seizing the means of production from a repressive government, the revolutionaries' new government did not hold onto the means of production through a planned economy, but instead held effectively zero economic oversight, leaving production open to a free market and anyone who wished to participate in it.
Do they own it, though?
Or is the US public relegated to a position of financing investment corporations without any ownership or control in exchange for a fraction of the profits and the bulk of the losses?
If anything, the US public seems to be used as a strategy to lower investment risks of investment firms.
> (...) whereas this article points out European pensions are state-based or through bond investments.
The "state-based" aspect which you are casually glancing over refers to full blown income redistribution schemes, where everyone's paycheck, being rich or poor, is proportionally deducted to finance retirement pensions, unemployment benefits, parental leaves, and even medical leaves.
Do you think that paying a corporation to invest in the stock market is more socialist than this?
A lot of European countries have a much more paternal approach. Citizens can't be trusted to make good decisions, so they only receive part of their salary, and the rest is being managed "for them" - and that's non-negotiable (but there are some exceptions). A lot more stable, but a lot less free because you have a guardian making those decisions for you.
This system has its problems, mostly demographics with fewer young people entering the workforce and an unwillingness to fill the gap with immigration, but it has nothing to do with not trusting people to make their own decisions. It’s simply a historically grown approach which actually has worked quite well (and better than in the US for a greater share of society) for over a century.
It is a big Ponzi scheme, and now that fewer people are joining the workforce, governments borrow money to pay pensions. And a duscretiinary power to decide how much a retired worker gets. Nothing scremas solidarity more than a bureaucrat deciding that from next month your grandma is only entitled to this much pension because there’s less money for it.
The American way is actually the mote fairer system. Could be even more fair if you did mot have to pay tax on your pension gains from stocks inventments and whatnot.
I want to add one more aspect to this.
If I gamble my pension away, I have detrimental effect on my neighbours and the rest of society. Sure I could work for a little longer, but not for too long.
One non-exhaustive example: If I don’t die right after my last contract ends, it means I’m consuming food and have some kind of shelter, which is payed by somebody.
At some point it’s going to be absolute carnage. Private investment companies have already seen the end game and from direct observation have been pushing the hype to drive volume so they can shift their holdings on to the bagholders.
Good luck. It’s not a stable market. It’s fucked.
I once asked what could be the alternative they literally couldn't answer me. Virtually every EU citizen with a bit of money has part of their savings invested in the same 5 US big tech companies. And I am sure it is the same in many parts of the world.
We are very very far from initial role of a bank and you might wonder why Europe has its own banking system in the end. It also explains why the price of those stocks are so high.
Consolidation of power means that’s just what happens when you chuck money into an index fund, even a global one.
I made more out of the tech market in the last 5 years than I would have in it by having sensible advice and a half decent financial model.
Gen X here btw. Some of my age-peers have low financial sense so that figures.
But when companies do this while their stock is overpriced, they’re wasting shareholder money on expensive shares. Executives pad their own pockets while shareholders get screwed.
I’d rather see companies pay better dividends or keep the cash. At least then shareholders actually benefit instead of just watching executives get richer.