Here is what this chart shows. Compared across more than 100 factors measured by the World Economic Forum Global Competitiveness Report, from corruption to deficits, JP Morgan analyst Michael Cembalest calculates that the major countries on the euro are more different from each other than basically every random grab bag of nations there is, including: the make-believe reconstituted Ottoman Empire; all the English speaking Eastern and Southern African countries; and all countries on Earth at the 5th parallel north. And here is your tweetable fact: A monetary union might make more sense for every nation starting with the letter "M" than it does for the eurozone.Thompson has now come up with another of Michael Cembalest’s charts. This one illustrates nicely the eurozone’s weakness of lacking any mechanism for fiscal transfers (ie money raised by the government) to the poorer from the richer areas. In the UK these take place from London and the South East to practically everywhere else; the South West, in particular Cornwall, and the North East being significant beneficiaries. Cembalest’s chart explains how in the US this happens between the rich California-Connecticut-Illinois-New Jersey-New York quintuple and poorer states like Tennessee:
Thompson goes on to explain that:
If similar, seamless transfers existed in the EU, the rich north would have to send to Portugal and Greece at least an additional 30 cents for every dollar they paid in taxes, year after year after year. When you hear commentators say, "the eurozone must begin to transition toward a fiscal union," what they are saying, in human-speak, is that the Europe needs to be more like the United States, with balanced budget laws for its individual members and seamless fiscal transfers from the rich countries to the poor, to protect the indigent, old, and sick, no matter where they reside. The Germans call this sort of thing "a permanent bailout." We just call it "Missouri."