Krugman Komedy: Europe as 'the Comeback Continent'

Paul Krugman clearly isn't lacking in chutzpah.

His January 11, 2008 New York Times column ("The Comeback Continent"; HT Tom Maguire via Instapundit) is yet another in a seemingly endless series of attempts by economic statists to convince people in the US that we need to be more like Europe -- specifically Western Europe -- and less like the growth-driven, market-based capitalists that we still largely are.

Here is part of what Krugman wrote in a remarkably fact-free column:

.... tales of a moribund Europe are greatly exaggerated.

..... I don’t want to exaggerate the good news. Europe continues to have many economic problems. But who doesn’t? The fact is that Europe’s economy looks a lot better now — both in absolute terms and compared with our economy — than it did a decade ago.

..... What European countries definitely haven’t done is dismantle their strong social safety nets. Universal health care is a given. So are a variety of programs that support families in trouble, helping protect Europeans from the extreme poverty all too common in this country. All of this costs money — even though European countries spend far less on health care than we do — and European taxes are very high by U.S. standards.

Well, Krugman is partially right. Parts of Europe are doing better. The only trouble is that the parts doing better are the ones not embracing the high-tax, high-spending model Krugman so adores.

Here, from this Wikipedia entry, are the real growth rates in Gross Domestic Product in 2006 for the US and various EU countries:

Latvia - 11.9%
Estonia - 11.4%
Slovakia - 8.3%
Lithuania - 7.2%
Czech Republic - 6.2%
Poland - 6.1%
Luxembourg - 5.7%
Bulgaria - 5.5%
Ireland - 5.2%
Finland - 4.9%
Hungary - 3.8%
Greece - 3.6%
Spain - 3.6%
USA - 3.3%
Austria - 3.2%
Norway - 3.0%
Denmark - 3.0%
Netherlands - 2.9%
Switzerland - 2.9%
EU as a whole - 2.9%
UK - 2.7%
Belgium - 2.5%
France - 2.3%
Germany - 2.2%
Italy - 1.6%
Portugal - 1.2%

It doesn't take a lot of examination to note that:

  • Overall EU growth still trails the US, and most likely will do so again this year. The first three quarters of US annualized GDP growth came in at 0.6%, 3.8%, and 4.9%.
  • The countries Krugman would prefer that we imitate -- France, Germany, the UK, and Italy -- still trailed the US in GDP growth in 2006. Germany's performance, while still mediocre, has improved since a less-leftist government headed by Angela Merkel took power in November 2005. One would hope that the center-right government of Nicholas Sarkozy in France that won election in May 2006 can improve that country's situation.
  • Newer EU members countries, including many that are adhering more closely to a low tax, flat tax, and/or less regulatory model are the ones bringing up the EU's overall GDP growth to near 3%. These would include countries that Krugman would prefer to ignore, particulary Ireland and the Baltic states, which have used frequent supply-side tax cuts to boost their economies.

So let's see -- The US is still outperforming the EU; the two big underperformers of Western Europe are moving, if in halting steps, away from the cradle-to-grave nanny state of their predecessors; and the EU's growth stars are for the most part the countries that have embraced free-market economics.

Other than that, Krugman has a point. (/sarcasm)

Cross-posted at BizzyBlog.com.

Tom Blumer
Tom Blumer
Tom Blumer is a contributing editor for NewsBusters.