5 Myths About Sick Old Europe

WaPo ^ | October 7, 2007 | Steven Hill

[srotaG adirolF]

In the global economy, today's winners can become tomorrow's losers in a twinkling, and vice versa. Not so long ago, American pundits and economic analysts were snidely touting U.S. economic superiority to the "sick old man" of Europe. What a difference a few months can make. Today, with the stock market jittery over Iraq, the mortgage crisis, huge budget and trade deficits, and declining growth in productivity, investors are wringing their hands about the U.S. economy. Meanwhile, analysts point to the roaring economies of China and India as the only bright spots on the global horizon. But what about Europe? You may be surprised to learn how our estranged transatlantic partner has been faring during these roller-coaster times -- and how successfully it has been knocking down the Europessimist myths about it.

[Darkwolf377]

Not so long ago, American pundits and economic analysts were snidely touting U.S. economic superiority to the "sick old man" of Europe. What a difference a few months can make. Today, with the stock market jittery over Iraq, the mortgage crisis, huge budget and trade deficits, and declining growth in productivity, investors are wringing their hands about the U.S. economy.

Yes, the good ol USA is on the trash heap, isn't it? (yawn)

[Navy Patriot]

America is finished and the Washington Post is elated.

[garyhope]

Yep, once again the WAPOO (oh, excuse me for adding the extra O) proves that Europe is better than America.

I wonder when they’re all moving to Fraannhce?

[americanophile]

Fine by me that Europe’s strong, the US does so much better with competition.

[DoughtyOne]

Today, with the stock market jittery over Iraq, the mortgage crisis, huge budget and trade deficits, and declining growth in productivity, investors are wringing their hands about the U.S. economy. Meanwhile, analysts point to the roaring economies of China and India as the only bright spots on the global horizon. But what about Europe?

The stock market is in 14,000 plus territory. LOL

I'm not convinved the mortgage crisis is all that bad. Just months ago we were being told by everyone who was someone, that we wouldn't survive until November. Guess what...

Wringing their hands... Investors have pushed the DOW up over 14,000. Look what's between their hands WP, it's greenbacks.

Yep, China is sure the place I'd put my investments. A few more lead paint, dog food and other scandles, and we'll see who's economy is rosey.

It's election time again. Hillary is here to rescue us and the WP has to make sure there's something for her to rescue us from. As if she'd have a clue if there were.

[Lancey Howard]

The author, Steven Hill, is a liberal Democrat.
You can check out some of his columns at the link below:

http://www.newamerica.net/people/steven_hill

[Darkwolf377]

Hillary is here to rescue us and the WP has to make sure there's something for her to rescue us from.

Yes, is there any doubt that the MSM is in "Talk Down the Economy" mode?

[Proud_USA_Republican]

“may be surprised to learn how our estranged transatlantic partner has been faring during these roller-coaster times “

I guess those collapses of german and british banks recently was just a mirage. A figment of my imagination.

[DoughtyOne]

Six Myths About the Big U.S. NEWS Media Players

1. They are interested in providing detailed unbiased reports with the goal of informing the knowledge of U.S. citizens

2. They have no political favorites honest

3. They never suppress information that could provide a more balanced view of their ideological opponents

4. They care about our troops, or specifically care if our troops die as a result of information they publish

5. They would rather see our nation's well being protected, than see a Republican president's policies proven wrong

6. They want the United States to continue to exist in it's present form / and would hate to see a Marxist collectivist system replace what we have

[DoughtyOne]

Not at our house. (:->)=

[CheyennePress]

The guy does make some very salient points.

First, Europe is an attractive investment for a number of reasons, the least of which isn’t the fact that their rates of corporate taxation are far less than what we have in the US, which are some of the most stifling in the world. (*ahem* Mitt Romney is the only one talking about it *cough*)

Second, their workforce is on the whole more educated and producing more professionals to drive their economies. We don’t produce enough engineers, for instance, to drive our economy, and we’re depending on bringing in foreign workers to drive the engine.

Part of the reason that the European economy has been able to keep abreast with the US’ is our trade deficit, which has sent the dollar downward. I guess that’s good for Boeing, but not a fabulous trend, frankly.

There is some absolute nonsense in it, though. Take this quotation:

>>> “Europe doesn’t so much have a welfare society as a comprehensive system of institutions geared toward keeping everyone healthy and working.” <<<

That statement is absolute trash. Europeans call in sick FAR more than Americans do. Scandinavians are the absolute worst. Freaking slugs at times. The average Swede takes 32 days of sick leave per year. The average Norwegian takes a comparable number of days.

Of course, part of this has to do with a higher percentage of smokers in Europe. But the numbers are pretty ridiculous:

>>>On an average day, about 25 percent of Norway’s workers are absent from work, either because they have called in sick, are undergoing rehabilitation or are on long-term disability. The rate is especially high among government employees, who account for half the work force.

The average amount of time people were absent from work in Norway in 2002, not including vacations, was 4.8 weeks. Sweden, its closest competitor, totaled 4.2 weeks, while Italy came in at 1.8 weeks and Portugal at 1.5 weeks, according to the Organization for Economic Cooperation and Development. <<<

http://query.nytimes.com/gst/fullpage.html?res=9B01E5DF143DF936A15754C0A9629C8B63&sec=&spon=&pagewanted=print

There’s a reason that output per capita in Europe is only about 68% of what it is in the US.

[Lancey Howard]

As a socialist (read the article, it’s clear), the author is naturally trying to spin the socialist welfare states of old Europe as thriving success stories rather than the depressed mediocrities that in reality they are.

And, of course, the United States is no good at all.

In one article (there’s a link in post #7 above; scroll down to a list of the author’s columns) Hill even laments the election of “conservative” Sarkozy in France.

[Darkwolf377]

(*ahem* Mitt Romney is the only one talking about it *cough*)

(cough) No he's not. (cough)

June 7, 2007

Mr. THOMPSON: We have, you know—if you include state taxes—the highest corporate tax rate in the world. That makes us less competitive. All those things have to be looked at. And all those—especially as far as the corporate tax rate is concerned, need to be clearly reduced, I think.

from an interview with Larry Kudlow

http://blog.nam.org/archives/2007/06/has_fred_thomps.php

Fred Thompson called for an extension of President Bush's tax cuts and a large reduction in the corporate tax rate at a speech today to a conservative group.

http://www.crosstabs.org/stories/elections/2008/fred_thompsons_speech_to_the_dad_summit_a_revisit

Thompson said he accepted Dell's invitation to talk about manufacturing "and what we might do in terms of policies in this country, tax policies and things like that, to make it easier for companies to keep their business here, to do their manufacturing here instead of taking it other places." Thompson was told by a Dell vice president that the U.S. has the second-highest corporate tax rate in the world, behind Japan, Dell spokeswoman Colleen Ryan said. He was also urged to consider how heavily the government taxes income earned in foreign countries, she said.

http://www.statesman.com/news/content/news/stories/local/09/20/0920thompson.html

Saturday, 10/06/07 Fred Thompson calls for corporate tax cuts

WASHINGTON — More tax cuts are needed to stimulate the U.S. economy, Republican presidential candidate Fred Thompson told a meeting of economic conservatives Friday. At a summit of the Americans for Prosperity Foundation, Thompson called for extension of the tax cuts championed by President Bush and said the country's corporate tax rate should be cut from its current 34 percent to at least 28 percent.

http://tennessean.com/apps/pbcs.dll/article?AID=/20071006/NEWS0206/710060390/1016/NEWS02

And if the Huffington Post doesn't like him, he can't be too bad on corporate taxes:

http://www.huffingtonpost.com/david-sirota/fred-thompson-k-street_b_51415.html

[CutePuppy]

with the stock market jittery over Iraq, the mortgage crisis, huge budget and trade deficits, and declining growth in productivity, investors are wringing their hands about the U.S. economy.

Stop reading right here and declare a huge bias in opinion piece, because this is not reporting.

Stock market, after months of declining because of expectations of war with Iraq, took off immediately after Operation Iraqi Freedom started and haven't yet looked back, though market at its record highs looks overextended. Obviously, whatever jitters there are in the market, they are absolutely not due to Iraq.

There is no mortgage crisis, anybody who wants to can get a loan, but many wait for a huge housing bubble (mostly in 5 states) to settle down and prices to come down before buying and that created a problem for few banks involved in poor lending practices, and some real estate companies, home builders and mortgage lending shops who now see a steep decline in business. This is cyclical and predictable, and though painful for these industries, is not a mortgage crisis.

Huge budget and trade deficits have been with us for a long time, and while need attending by limiting spending and bad legislations that make us less competitive with other countries (e.g. Sarbanes-Oxley, minimum wage raise, various states' global warming initiatives, higher taxes, corn ethanol initiatives, not passing oil and gas production in ANWR and coastal areas, etc.) those same countries have similar problems, some due to particularly relatively strong euro / currency.

We may have started to see declining growth in productivity recently after years of high growth of productivity, but it's still a growth, and some of it is due to the same bad legislations mentioned above, yet the productivity in Europe is nowhere near ours. There was an article recently in WSJ that Mexicans working in USA are 5 times more productive than same workers doing the same kind of work in Mexico.

And, finally, why would "investors" worry about state of economy, when they can invest in so many places around the globe, or even bet / "invest" against the economy or dollar through different instruments including various derivatives. Some of hedge funds went bust recently, while some others made money off of their loss. Investment opportunity is generally divorced from state or direction of the economy, and the economy (strangely) is still quite healthy so far, even with all the attempts by Democrats to kill it in time for 2008 election.

Author is either completely incompetent in financial and economic matters, or is completely biased and issues his opinions in place of reporting, or is both incompetent and biased. Case closed.

[jwh_Denver]

“I’m not convinved the mortgage crisis is all that bad. Just months ago we were being told by everyone who was someone, that we wouldn’t survive until November. Guess what...”

It ain’t November yet. But I’m not saying we won’t survive until then. But, could you name me just one person who is “someone” outside of the MSM that said that?

Of course you’re not convinced the mortgage crisis is all that bad. How much have you read about it outside of the MSM? The whole world got the hershey squirts from it a month or so back so how bad could it be? What does the world know that you don’t?

But I’m just a doom and gloomer so no need to even listen to me. Right? I think there is a 30 to 40% chance the DOW will hit 15,000. I know exactly why I think that it might.

[SaxxonWoods]

“There’s a reason that output per capita in Europe is only about 68% of what it is in the US.”

And let’s not forget the high unemployment rates compared to the USA.

---

“Second, their workforce is on the whole more educated and producing more professionals to drive their economies.”

My European friends tell me that unless one is born into the right family, those great Euro educations are wasted. That’s why many with an entrepreneurial bent move to the USA.

[DB]

Simply look at productivity per worker and the standard of living in each place.

Case closed.

[ketsu]

My European friends tell me that unless one is born into the right family, those great Euro educations are wasted. That’s why many with an entrepreneurial bent move to the USA.

I don't think that's true. I've worked with a few french and northern european engineers and they are doing quite well for themselves in their home countries. That's because they were *good at their jobs*. If you want to be incompetent and get a good job, the family connections are all important. But that's the same anywhere. I've seen countless examples of nepotism in the US and abroad.

[Atlantic Bridge]

Hehe! For someone from good ole Europe it is quite funny to watch the immediate and very emotional reaction on a -in my eyes- quite balanced article here.

The facts in the article are true. The European economy is doing fine in the moment although we still face some big problems of course. Nevertheless the propaganda bubble about the sure downfall of Europe is complete BS. Neither America nor Europe will vanish into thin air, but both are facing major changes.