Over the weekend, when discussing the latest casualty [10]of Bernanke's disastrous monetary policy, the US corporate pension plan, we touched on a topic that has been a recurring theme on these pages: "the start of the unwind of the welfare myth, if only in the private sector for now, made worse by Ben Bernanke's endless tinkering in what was formerly a free market, should be making the guardians of the status quo very, very nervous... and certainly has the disciples of the Bismarckian welfare state delusion on their toes, because they can see very well what is coming down the road." Moments ago none other than Germany's finance minister, Schrodinger Schaeuble [11], explained just why this observation is at the core of all modern problem, going so far as using the R-word in the context of Europe (first, and then everywhere else).
From Reuters [12]:
German Finance Minister Wolfgang Schaeuble warned on Tuesday that failure to win the battle against youth unemployment could tear Europe apart, while abandoning the continent's welfare model in favour of tougher U.S. standards would cause "revolution".
Germany, along with France and Italy, backed urgent action to rescue a generation of young Europeans who fear they will not find jobs, with youth unemployment in the EU standing at nearly one in four, more than twice the adult rate.
"We need to be more successful in our fight against youth unemployment, otherwise we will lose the battle for Europe's unity," Schaeuble said.
While Germany insists on the importance of budget consolidation, Schaeuble spoke of the need to preserve Europe's welfare model.
If U.S. welfare standards were introduced in Europe, "we would have revolution, not tomorrow, but on the very same day," Schaeuble told a conference in Paris.
"We have to rescue an entire generation of young people who are scared. We have the best-educated generation and we are putting them on hold. This is not acceptable," Italian Labour minister Enrico Giovannini said.
...
"Let's be honest, there is no quick fix, there is no grand plan," said Werner Hoyer, head the European Investment Bank.
This explains why our long-running series of charts of youth unemployment has been labeled "Europe's scariest chart [13]."
What is amusing, however, is that for Schauble it is not just abandoning the welfare state model that would promptly incite glimpses of the new coming of the French revolution: all that is needed is the adoption of "tougher US standards." Tougher?
Then perhaps a better question is how US society has been so remarkably reslient in the fact of a "recovery" that has led to job gains exclusively for the older set [14], those 55 and older, while the number of young workers (54 and under) employed is still down some 3 million since the arrival of Obama?
Jobs: young vs old:
[15]
And more granular, broken down by age group.
[16]
Oh well, just add more QE (because 4 years of the same one and only remaining flawed prescription to a gangrenous underlying problem are obviously not enough) and let it simmer. Eventually, it will be different.