The ‘superior’ European economy strawman

Oh good grief.  Reading the comment sections of some MSM articles and blog posts is a mixed blessing.  Twas reading some comments about Obamanomics at Q&A blog…. and some liberal starts spouting the success of the social democracies of Western Europe.   The willful ignorance, it must hurt.

So, the other side of the blessing is I get to add to the liberal straw man file.   Tino Sanandaji, PhD, over at Super Economy has done a knock-out job of slaying this liberal zombie-like straw  man.   I mean, seriously, they keep resurrecting this straw man even as socialists abandon their social democracies like rats on a burning ship.

Some juicy parts from Super Economy:

From a policy perspective, if America follows Paul Krugman and Barack Obama in “Europeanizing” the American economy, what is most likely to happen is that levels of income will drop to Europeans ones (or lower, taking into account demographic differences). Once this happens, it is hardly a consolation that America will grow at the same pace as Europe.

During the current recession, the US GDP fell by a 3.3%. Theoretically if the US adopts European policies and immediately decreases to the levels of EU15, its per capita GDP would fall by 26.5%, 8 times worse than The Great Recession! (in practice the convergence would probably happen through years of reduced growth).

*snip*

If France were to became an American state, it would be the 50th poorest, below Arkansas.

The EU.15 as a whole, which Krugman presents to his readers an economy as dynamic as the US, would be the 49th poorest state, below Alabama, a State that Paul Krugman ridiculed in 2005. Few Americans consider Alabama a dynamic state, because of the low average income (even though, hardly surprisingly, the poorer southern states have much faster per capita growth rates than the rich states such as New York). Why than should we consider Europe a dynamic region?

Even the richer European countries do not fare well against American states (the exceptions being oil rich Norway, financial city state of Luxembourg, free market Ireland and capitalist utopia Switzerland). Denmark and Sweden barely inch ahead of Kentucky, below Louisiana, New Mexico and Missouri. Minnesota is 34.4% richer than Sweden.

Go over there to see the charts and methodology.  There are lies, damn lies and liberal economics.

2 Responses to “The ‘superior’ European economy strawman”

  1. Visiting these “socialist paradises” is most enlightening. Compared to most American cities, Stockholm has a shopworn, run-down feeling to it. Businesses there don’t have a lot of vibrancy; they’re rather convervative about adopting new IT technology, for example.

    Those per-capita numbers are actually worse than they look when cost of living in Stockholm is taken into account. I’d estimate that I pay 30-50% more than I would in New York or Chicago for most things in restaurants and shops. (Not as bad as Oslo, where it’s closer to double.) If I recall correctly, about 20% of Swede live in the Stockholm area.

  2. Billy,

    Yes, you’re observation is correct as the prices reflect what was shown in the analysis at the link:

    *******

    Being the habitual cheater he is, Krugman asks his readers to compare America to Paris, London and Frankfurt.

    “For those Americans who have visited Paris: did it look poor and backward? What about Frankfurt or London? You should always bear in mind that when the question is which to believe — official economic statistics or your own lying eyes — the eyes have it.”

    If you stop and think about this for a second the problem becomes apparent. These are not representative cities, they are three of the absolutely richest areas of Europe!

    According to Eurostat, which contains GDP per capita figures for European regions, each inhabitant of London produces 65.3% more than the UK average. The figure for inner city London, the area most American visiting would see, is an 279%. That is not a typo. Inner city London is the richest region in Europe. Paris has a per capita income 272% higher than the French average. Lastly Frankfurt, the financial hearth of continental Europe, has a per capita GDP 278% higher than Germany as a whole. (Stockholm earns 37% above the Swedish average, for those curious).

    These figures overestimate the wealth disparity somewhat, since cities contain more jobs than people, especially important for financial centers (one reason why Luxembourg is so rich). But statistics are not fooling us, central Paris is rich, which our eyes would confirm. The suburbs and most of the rest of France is not. The correct comparison for Frankfurt would be Manhattan, not the US average.

    *****

    Liberal economics has the same model modifiers as their global warming analyses.

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