It seems that the United States economy is improving since it's recession, but the Eurozone is still behind. Why is that? Do you think the problem could be because of government policy, structural, or cultural problems?

Another question, do you recommend getting a CFA or CPA license for job security and higher salary?


Dear Cristina--

Thank you for your questions and thank you for using Since your two questions are not related to one another, I will deal with them separately.

#1 - Eurozone Economic Growth
First, I am not an expert on the Eurozone. However, I certainly follow events there closely. The Eurozone has serious, serious problems. There are valid questions about whether it will survive in its current form and with its current membership. Even though voters in Scotland recently decided not to separate themselves from the United Kingdom, that kind of 'let's-go-it-alone' attitude hasn't gone away, either in Scotland or elsewhere. In Spain, for instance, an area called Catalonia is agitating for its independence.

The problem for both the Scots and the Catalons begins with the currency issue. Spain is on the Euro, so Catalonia would (a) either have to ask for, and receive, acceptance into the EU, or (b) start a new currency. Both of those are problematic. The anti-U.K. movement in Scotland said that it would remain on the U.K.'s pound sterling. Lloyd's of London responded to that idea by saying it would close all of its offices in Scotland. The Bank of England, which overseas the pound sterling the way the Federal Reserve in this country oversees the U.S. dollar, was non-committal about whether a new stand-alone Scotland would be allowed to use the pound sterling. Many experts believe that that was a major reason that the move to separate from the U.K. failed by a pretty wide margin--55% to 45%.

You can imagine what it would be like here in our own country if one state decided it no longer wanted to be part of the United States. You will recall, of course, that we fought a four-year war (1861-65) over that very 'secession' issue.

In the Eurozone generally, government consumes a far greater slice of a country's GDP than is the case here in the U.S. Or, I should say, than WAS the case before Mr. Obama took office in 2009. Our national debt, which was already a problem before he took office, has become a far larger problem now. No family and no country can borrow money indefinitely and carry a larger and larger debt load. At some point--and no one knows what that point is--lenders will refuse to lend without demanding, in return for additional loans, severe restrictions on spending. By the end of Mr. Obama's term in office, the United States will have borrowed an additional $10 TRILLION. You may recall that he castigated George W. Bush's deficit spending (which was 'ONLY' $5 trillion in new debt) as "immoral" and as "irresponsible." Yet he makes Bush look like a rank amateur when it comes to spending. The elections in November will tell us a great deal about whether the current, unsustainable rate of federal spending in our country is likely to change anytime soon. It needs to. Whether it will or not is an open question.

The one advantage that the U.S. has in this situation is that the U.S. dollar is the world's 'reserve currency'. That is, international trade is pegged to the dollar. If the dollar got so weak--compared to other currencies--then there would be a movement to change the reserve currency from the dollar to some other currency. . .perhaps the Chinese yuan. That would set off a recession here in the U.S. that would make the one in 2008-09 look like child's play. The only other possible choice is the Euro, which brings us back to your question.

Countries in Europe spend close to 50% of GDP. The historical average here in the U.S. has been in the 30-35% range. The more of an economy that is consumed by government, the less that is left for private investment. If investment is low, growth will be slow. That is the overall reason that the recovery in the Eurozone has been even more anemic than it has here in the U.S., where it's been really anemic. Within the Eurozone, however, some countries' economies are stronger than others. For instance, the economy in Germany and in the U.K. has been generally stronger than those of other EU members. Five countries--Portugal, Italy, Ireland, Greece, and Spain (the 'PIIGS')--have struggled big-time; France is also on the ropes.

The principal problem is that politicians buy votes by 'giving' people money and/or goods and services. The economic ignorance of those receiving the goodies prevents them from realizing that, at some point, all the free stuff has to be paid for. . .and the monies borrowed to give it to them in the first place have to be paid back. There is always a day of reckoning. The only question is when.

In the EU, the problem is exacerbated by the fact that northern members of the EU are, generally speaking, much more disciplined in their spending and pay much more attention to their budget deficits than do the countries in the south of the EU. Note that four countries in PIIGS--Portugal, Italy, Greece, and Spain--are from the the south.

The spending problem is exacerbated by fear. Here I'm talking about the fact that 24 of the 28 member countries of NATO do NOT spend the NATO-mandated 2% of GDP on defense. (The four that do are the U.S., the U.K., Estonia, and, if you can believe it, Greece.) With the mess in the Middle East and with Mr. Putin trying to rebuild the old Soviet Union, Europe fears war in its neighborhood. And fearful people don't spend money. That lack of spending makes weak economies even weaker.

So, in a nutshell, Cristina, there you have it. These are tough, tough problems with no easy answers or quick fixes. It's much easier to spend other people's money than it is spend our own. And that produces deficits which, at some point, must be repaid.

#2 - CFA vs. CPA
As for your question about CFA vs. CPA, there is no simple answer, and I would be irresponsible to offer one to you here. If you want to pursue this separately, you can send me an e-mail off-line to: When you do, please include (a) your resume, and (b) copies of your university transcript(s). Be forewarned, however: Because of the time required to help an individual, I do not give that advice for free. I'd much rather that you research this matter on your own because I can't give you good advice without investing a substantial amount of my time in learning about you, your background, your interests, your grades, your career, your aptitudes, and your aspirations. I have to charge for that time, or my family gets penalized. That's no fair to them or to me, as I'm sure you can understand.


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Warren D. Miller, CFA, CPA, ASA


My expertise in economics is limited to three sub-disciplines: Austrian economics, industrial organization, and evolutionary economics. Questions dealing with macroeconomics and other sub-disciplines of the subject should be submitted to those who have the appropriate expertise. N.B.: I DO NOT ANSWER QUESTIONS MARKED 'PRIVATE' because I believe that knowledge should not be hoarded. I also believe that such questions are likely to come those trying to cheat. Also, as one who was a full-time academic for half a decade, I can recognize test/homework questions several time zones away. Do not demean yourself by submitting such questions to me. Those who do so are cheating; I WILL call you out publicly. I have a zero-tolerance policy for cheating and dishonesty. In addition, please don't emulate the businessman who posted a request for help in August 2008. He expressly denied that he was seeking "investment advice" and said that his query was for, and I quote, "educational and informational purposes." Later, he allowed as how his questions related to the possible purchase of a $500K piece of equipment. I said I thought he had misrepresented himself. Bottom line: high-end business consulting is how I make my living. I am the sole support for my family. Please respect that fact and don't try to get for free what our clients pay for. If your company is big enough to have a sophisticated problem, it can afford to pay for the expert advice we and others provide. Beckmill Research, LLC, is a 95-octane firm. We're small, but we've been at this for nearly 20 years. We know what we're doing. Segue: Early on, some asked me for career advice; I gave it. I now get many such requests. The demand for a valuable good that is free is unlimited, so I now charge for that advice. Email me: Finally, PLEASE DO NOT ASK FOR INVESTMENT ADVICE. I am not licensed to provide such advice. If you want such counsel, talk to your financial planner or other financial adviser.


I work with Austrian economics (which differs in major respects from the traditional economics), industrial organization (which is about industry structure, conduct, and performance), and evolutionary economics (almost, but not quite, the economic analog of its biological counterpart) every day in my work. I appraise closely-held businesses, provide exit-planning services, and offer high-level strategic analysis, advice, and solutions to CEOs and owners of mid-sized businesses. Understanding, applying, and writing about these disciplines is an essential part of how I have made my living since 1993.

CFA Institute, Strategic Management Society, American Society of Appraisers, Academy of Management, Culver Legion, National Association of Scholars.

CFA Magazine, Strategic Finance, Valuation Strategies, Journal of Advanced Property Economics, Harvard Business Review, American Fly Fisher, CFA Digest, CPA Expert, Business Valuation Review, among others

Chartered Financial Analyst designation (2006); Accredited Senior Appraiser in Business Valuation (2006); Certified Public Accountant (1992); MBA - Oklahoma State University (1991); Completed all of my Ph.D. coursework in strategic management - Oklahoma State University (1983-87); BBA in finance and accounting - U. of Oklahoma (1975)

Awards and Honors
Business Valuation Volunteer of the Year (2001) - American Institute of CPAs; Winner - Oklahoma Humorous-Speaking Contest - Toastmasters International (1971)

Past/Present Clients
Names are confidential. However, the "sweet spot" of our target market is companies that are too big to be small and too small to be big. Usually, those are companies with employees in the 15-to-100 range. At the low end of that range is where companies can first take advantage of the specialization of labor. However, having everyone do everything is a tough habit for many--most, I would argue--small enterprises. That is why they not only remain small, but also fail to survive beyond a second generation. Only 5% (one in twenty) companies make it to the third generation of ownership.

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