Comments for How Socialist Europe Is Crushing the United States

How Socialist Europe Is Crushing the United States

2009-05-20T12:29:25Z

It was no doubt painful for the Economist when it half-conceded, a couple of issues ago, that maybe the French economy is doing something right. The French! Somewhere between the socialized medicine and the runaway state planning, they managed to create a series of automatic stabilizers that kept unemployment from shooting through the roof and demand from the falling through the floor. This led to a hearty round of round of soul-searching about various European models waxing as the Anglo-Saxon model wanes.

Somewhat along those lines, I see via the Center for Economic and Policy Research that new comparative unemployment data is available, and America now has higher unemployment than the EU-15. Fancy graph:
]]> My first thought after looking at this graph was that it couldn't be population adjusted. (The average unemployment rate among 15 European countries would look very different from the unemployment rate in Europe.) But it is.

My second thought was that this would look different if you took all 27 EU countries into consideration, and not just the 15. But I went back to the source data and found that I was pretty much wrong about that too. The unemployment rate across the EU is 8.3%.

Comment from jamie_t on 2009-05-20

2009-05-20T14:01:19Z

am i the only one who notices how innane it is to use the above graph as a demonstration of european supriority? so EU-15 unemployment rate is significantly higher than US unemployment for two decades, but now that they're approximately equal the EU is "crushing" the US?

Incidentally, the wonderful automatic stabilizers are simply postponing the rise in unemployment, which is expected to catch up in the next few months.

how much you wanna bet that US unemployment is lower than that of the EU-15 for the period 2010-2020? I'll bet you a bazillion dollars.

Comment from jamie_t on 2009-05-20

2009-05-20T14:01:46Z

inane

Comment from Diversity on 2009-05-20

2009-05-20T15:23:55Z

Our European recession is lagging the US one. (Thank heaven they are not precisely in step.) And unemployment is still a lagging indicator everywhere. We won't be able to see who comes off less badly in the recession for another year or more; let alone who has less difficulty in climbing out of the recession.

The point which sticks right now is that the financial crisis was born and raised in the USA; even though it was lead into a good deal of additional debauchery in Europe as it was growing up.

Comment from Steve Koch on 2009-05-20

2009-05-20T15:45:06Z

Jamie does make a great point. I looked at the graph and laughed out loud.

Unemployment benefits are a great way to sustain consumer demand. The problem is that the better the unemployment benefits are, the less motivation there is to go back to work (that free time is pretty sweet).

Comment from Bill Mint on 2009-05-20

2009-05-20T16:00:01Z

Assuming 12 data points a year, the current score would be 196-1 against Socialist Europe. Who's crushing who again? I also want to get in on this bet.

Currently on the front page of this website is an article on the financial centers of the world, and how the centers of the maligned Anglo-Saxon world were in fact, weathering the current economic climate better than most. Forgive me if I don't declare the capitalist west "defeated" after one data point.

Also, go ask the French or Germans if they would be opposed to locking in their unemployment at 8.5%. They'd take it in a heartbeat. German unemployment is at its lowest rate in 15.5 years at 7.8%.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTJmPij.mUyI&refer=home

As alluded here by other commenters and quoted in the above article, everyone expects European unemployment numbers to go up again once the manufacturing slowdown that has affected the US trickles across the pond.

Cherry picking data and then using unnecessary rhetoric doesn't prove anything and shows intellectual laziness.