Roasted foreign chestnuts
By Walter Williams
Wednesday, November 23, 2005
Princeton University professor and columnist Paul Krugman deservedly won Forbes.com's "Dunce of the Week" award for a New York Times column last summer.
In his July 29 column, "French family values," Krugman asks, "But are European economies really doing that badly? The answer is no," adding that "Americans are doing a lot of strutting these days, but a head-to-head comparison between the economies of the United States and Europe -- France, in particular -- shows that the big difference is in priorities, not performance. We're talking about two highly productive societies that have made a different trade-off between work and family time."
Krugman's assertion basically is this: The income gap, about 40 percent, is not the result of lower efficiency in Europe. It is the result of Europeans working less than Americans. Not because they can't find work but because they work fewer hours, preferring to spend more time with their families and on leisure activities.
Contrast Krugman's nonsensical argument with New America Foundation senior fellow Joel Kotkin's findings in "America Still Beckons," published by The American Enterprise magazine (October-December 2005).
Kotkin says that Europe has weakened considerably. "Since the 1970s, America has created some 57 million new jobs, compared to just 4 million in Europe (with most of those in government). For the last quarter century, the United States has enjoyed consistently higher rates of economic growth and productivity than European countries, and the gap has been widening. The United States is now at the forefront in many critical global industries, particularly finance, technology, and entertainment."
Europe's "portion of world GDP dropped from 34 percent to 20 percent between 1913 and 1998, while the United States held its own at about 22 percent of global GDP."
In the same edition of The American Enterprise, Karl Zinsmeister's article, "Europe Learns the Wrong Lessons," says, "In France, Italy, Germany and Belgium, approximately a quarter of all workers under 25 are currently unemployed." High minimum wages and employment protection regulations make it nearly impossible to fire people, thereby making it costly to hire them. Europe's stagnation and decline might explain why its best brains are leaving in droves.
Kotkin reports: "Some 400,000 E.U. science and technology graduates currently reside in the United States, and barely one in seven, according to a recent European Commission poll, intend to return."
And there's one important difference between the world's poor who come to America and those who go to Europe. The poor tend to prosper much more here than they do in Europe.
Olaf Gersemann's article in The American Enterprise, "Europe's Not Working," says, "Nearly every top politician in Germany is on record giving a grave, smug warning about the danger of letting 'American conditions' seep into the German economy. In Germany's economic debate, 'American conditions' is code for stiff economic competition, low taxes, minimal state intrusion, and limited duration welfare payments."
Many American elites share Europeans' anti-Americanism. They're also against "American conditions" and want us to have Europe's high taxes, highly regulated economy and socialized medicine.
They want us to share the European lack of will to protect themselves.
In the past, Europeans were unwilling or unable to protect themselves against Nazism and communism. Now they demonstrate an unwillingness to protect themselves against Islam, hell-bent on conquering the West.
We just might have to pull Europe's chestnuts out of the fire. Again.
Walter Williams is a professor of economics at George Mason University.
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