Friday, June 29, 2012

Redistributing Wealth in the Eurozone

I find the dynamics of the expectation of countries having to bail out other countries in the Eurozone quite interesting.

Normally, inside a nation, say France, you have wealth distribution since politicians and the public can, through taxes, take money from the rich in order to help the poor. This works where the notion exist that it's fair to take money from the rich, because the rich are rich because of luck or power, or whatever and the poor are those who are less fortunate.

Now it gets interesting where you get the same dynamic in the Eurozone, where the countries that can't manage their economy well because of their bad policies, corruption, incompetence, etc. want to get financial assistance.  They want countries that have managed their economy well to bail them out.

It gets extra interesting, since Germany is a country where wealth is not something that was created because of imperial conquest or the likes, or because of abundant natural resources. They lost a war, and half of the country was even under communist rule until two decades ago. They achieved their wealth, and Merkel in particular don't see having to pay some kind of achievement guilt tax as being fair.

The real irony here is that the countries that are in financial trouble, are mostly so because of taxing success and cushioning failure.

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