Krugman comes out cheerleading for Europe in a column recyled from two years ago. His point, then and now - when Evil Republicans say that Democratic policies will make the US look just like Europe, energized Dems should proudly say "And loving it" rather than cower with "Sorry about that, Chief".
Krugman continues to ignore some major counterarguments, such as the Europe's looming demographic disaster, their chronic free-riding on the US for defense and health care innovation, and their utter inability to create jobs that would absorb immigrants. However, anyone interested in learning how to upgrade their disingenuity or present awkward statistics in a positive light will benefit from Krugman's latest. Some snippets:
The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works.
Actually, Europe’s economic success should be obvious even without statistics. 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.
Is that how Nobel Laureates in economics are evaluating international economies these days? Paris is prosperous so its all good in Europe? Geez, the next time Krugman drives though his hometown of Princeton with his eyes open maybe he will come away convinced that it is all good in the US, too. OK, we all know he will come away envious of the huge homes being put up by the hedge fund heroes that are paid even more than Princeton profs with lucrative book deals, but still - his new position that anecdotes are evidence if they support your side seems like a new path for the once self-described reality-based community.
It’s true that the U.S. economy has grown faster than that of Europe for the past generation. Since 1980 — when our politics took a sharp turn to the right, while Europe’s didn’t — America’s real G.D.P. has grown, on average, 3 percent per year. Meanwhile, the E.U. 15 — the bloc of 15 countries that were members of the European Union before it was enlarged to include a number of former Communist nations — has grown only 2.2 percent a year. America rules!
Or maybe not. All this really says is that we’ve had faster population growth. Since 1980, per capita real G.D.P. — which is what matters for living standards — has risen at about the same rate in America and in the E.U. 15: 1.95 percent a year here; 1.83 percent there.
Per capita GDP matters for living standards but size matters when it comes to political power - as Jim Manzi notes, China is ruling Hong Kong, not vice versa.
Krugman also seems to accept (or wants to pretend) that low population growth just happened to Europe. However, small families may have been a logical consequence of a social policy oriented towards small cars, small homes, small job prospects, and huge taxes. I know I have an old post on this which I can't find which linked to European economists studying that very point, but The Economist noted European free-riding in this area as well:
An expensive welfare state also tends to reduce the size of the workforce. In arguing for a "libertarian approach" to fertility, Mr Quiggin seems to be implicitly assuming that Europe's birthrate is an exogenous variable, unaffected by the policies in question. However, there is substantial evidence that in modelling the welfare state, fertility is an endogenous variable: the more secure the safety net, the less likely people are to have children.
Governments have largely nationalised the traditional functions of the family, but in doing so they have not eliminated the need for future generations to care for the current ones in their dotage. Unfortunately, the assumption of family duties by the state allows people to free ride on the fertility of others—which they seem to be trying to do in massive numbers. As we've mentioned before, a society where everyone tries to free ride on everyone else is headed for disaster. Europe's safety nets, or at least the pension systems, may contain the seeds of their own destruction.
Back to Krugmania:
And what about jobs? Here America arguably does better: European unemployment rates are usually substantially higher than the rate here, and the employed fraction of the population lower. But if your vision is of millions of prime-working-age adults sitting idle, living on the dole, think again. In 2008, 80 percent of adults aged 25 to 54 in the E.U. 15 were employed (and 83 percent in France). That’s about the same as in the United States. Europeans are less likely than we are to work when young or old, but is that entirely a bad thing?
"Is that entirely a bad thing"? Really? Does the notion that unless something is all bad it is good actually win arguments on the left these days? Gosh, I want to play too - global warming will expand crop output in some regions and extend the summertime recreation season in New York and New England, so warming is not an entirely bad thing. Case closed. That was easy.
Well, maybe Krugman has created the Dem message for the 2010 election - Obama, Pelosi and Reid have not delivered more unemployment, they have delivered more quality family time! So who is the party of family values now, hmmm?
And now for some big-time Nobel Laureate quality work:
And Europeans are quite productive, too: they work fewer hours, but output per hour in France and Germany is close to U.S. levels.
They don't work as long, but they produce less per hour! I'm sold. Put another way, despite our deplorable public schools and willingness to accept unskilled workers (legally and illegally) from anywhere, the US still manages to produce more per worker than Europe. And this is meant to persuade people that Europe is on the right path?
The point isn’t that Europe is utopia. Like the United States, it’s having trouble grappling with the current financial crisis. Like the United States, Europe’s big nations face serious long-run fiscal issue...
Let's see - Europe has lower population growth, an older population, higher unemployment, less productive workers, and more generous pension and health care programs, so they lag us in every relevant variable. If the US has a looming Social Security and Medicare problem, what do they have? Well, like the US they have a problem!
Tyler Cowen is typically cogent in response to Krugman; among his many excellent points is this:
8. Countries have to start from where they're at. If you're constructing policy advice, you can either build on what a country is really good at or you can try to revise the internal culture of the country. If you're going to do the latter, come out and say so. Most of my policy recommendations are based on the former approach, namely strengthening what (the better-functioning) countries already are good at. I'm not suggesting that countries never change, but getting such changes right by deliberate policy interventions is very hard to do. I wish to stress this point applies to the pro-U.S. as much as the pro-Europe side.
I'd like everyone to have a sign, which they would hold up when appropriate: "My policies seek to revise the internal culture of my country." That's OK, but you're raising the bar for your own ideas and don't fool yourself into thinking otherwise.
America has been built on immigration and needs a growing job market that can absorb immigrants in a way that is very different from Europe. "German" is an ethnic identity' "French" is an ethnic identity; "American" is a state of mind. Third generation guest workers living in Germany are still Turkish; a person from anywhere can be as American as they want to be overnight.