I encourage you to read Yascha Mounk’s post at The Dispatch. Here’s the opening passage:
Largely unnoticed by the general public on both sides of the Atlantic Ocean is a particular way America has pulled away from Europe: The average American is now vastly more affluent than the average European. The difference is not only reflected in the overall sizes of their respective economies but by the much more practical metrics of disposable income, living space, and accessibility to basic services.
Despite the overwhelming evidence, though, the idea that Americans are better off than their European counterparts is an unpopular sentiment. I casually mentioned on a recent episode of Paul Krugman’s interview show that, whereas both continents were similarly affluent a few decades ago, America is now nearly twice as rich as Europe. Cue a flood of outraged emails.
The strength of this reaction may have had something to do with Krugman’s audience, which skews progressive and American. But I’ve had similar reactions from very different audiences in the past. When I cited the same stat to a center-right member of the European Parliament a few months ago, he insisted that such stats just weren’t meaningful; in all of the metrics of life quality that truly mattered, such as disposable income and access to good housing, Europeans were surely doing at least as well as Americans. But they are not.
The discrepancy cannot be explained away by claiming that American prosperity is a statistical fiction produced by some people being extremely wealthy:
America is indeed somewhat more unequal than Europe. But the difference is not nearly as stark as some people on both sides of the continent seem to assume. Indeed, the GINI coefficient (a standard metric economists use to measure inequality) for the United States, at 0.39, is only modestly higher than that of Britain, at 0.36, and only moderately higher than that of Germany, at 0.29. As a result, metrics that aren’t skewed by outsized wealth at the top, like household income at the median, still show a vast divergence between the two continents.
or by appealing to quality of life issues:
Since home prices are very expensive in the United States, many Americans might imagine that Europeans can afford to live in nicer apartments despite their nominally lower incomes. But the figures paint a different picture. The average home size in the United States is about 2,200 square feet. In Germany, it is 1,200 square feet. In the United Kingdom, it is 800 square feet. This extra space translates into all kinds of everyday amenities: Americans, for example, have about double the number of bathrooms per resident, enjoy much bigger refrigerators, and are much more likely than Europeans to have a dryer or a dishwasher in their home.
Dining out tells a similar story. The numbers are a little less exact, but estimates suggest that Americans eat out at a restaurant, have food delivered to their home, or order takeout about twice a week on average. According to a 2022 Gallup poll focusing exclusively on takeout food, for example, about 3 in 5 Americans say that they order food for pickup at least several times a month. Eating out is far less common in Europe, where there is a smaller number of restaurants per capita, and the percentage of income people are able to devote to eating out is significantly lower.
I suspect that throws a certain amount of sand at the claim that our European allies will soon be carrying the weight of their own defense. Even if they’re able to afford it that probably won’t be politically possible.
Although I acknowledge this:
But even on the American right, many have now become convinced that the global system built by America has turned to its disadvantage. They see the country, as President Donald Trump did in his first inaugural address, as the land of American carnage, with “mothers and children trapped in poverty in our inner cities [and] rusted-out factories scattered like tombstones across the landscape of our nation.”
I think I see that a bit differently than President Trump does. I think our prosperity means that we can afford to be taken advantage of a little by our European allies. All the more reason for us to maintain that prosperity which I believe means that we need to produce more of what we consume.
This is news? The Euros chose a more collectivist/it takes a village approach long ago. The results should not be surprising. But its a choice.
Americans are not Europeans. Although we are headed down a Steve path. Look at the proposed budget.
Further, as you point out, they have been parasites on US defense. It comes with their economic policy choices. But now we are broke. You can flex the twig only so many times, but it will break. We need them to pay up, and suffer the political fallout of their free beer policies. If we continue as is, we will go broke sooner. We have our own problems.
I don’t know if Trump can pull off his vision, but his vision is correct. Following our current path will result in debauchment of the currency. Its the only out. That will be very, very ugly.
Look at Europe’s history. It’s full of war. Look at the results of WW2. They have formed an alliance which has worked in terms of keeping them from going to war again. They had to deal with the fallout from WW2 much more than we did and they have had to rebuild the countries like Poland and East Germany after the Russian Empire split up.
That aside, the cultures are different. We value growth and affluence more than they do. Being American I agree with that and our growth has been better. We have tempered that by deciding we weren’t going to just let poor people die and we decided to try (and partially succeed) at treating minorities better. How European of us. Anyway, I am not moved by this manufactured crisis*. One of the reasons we are wealthier is our trade and Trump seems intent upon harming our trade relationships. He has created so much uncertainty, who knows what the tariffs or trade policy will be tomorrow?
Maybe even worse, POTUS has decided that he now runs, directly, everything about the country. A school or law firm offends him? Sic the DOJ on them. A corporation doesnt do what he intended. Call them and make threats. Congress is supine and SCOTUS almost as bad. What stops this from becoming our norm from now on? Argue tariffs and econ principles all you want but prior to Trump it would have been agreed upon that a centrally planned economy run by one person is a bad idea. Now the Drews of the world, the smartest guys in the room, are all in on the idea that this one guy is so special he should run everything.
*What we should be working on is addressing our debt. Almost any plan to bring back some more manufacturing if you want is going to lead to more govt spending.
Steve
As I’ve said before I’m skeptical that Mr. Trump actually has something as organized as a “vision”, or, at best, his vision is an emergent phenomenon. I suspect he’s much more transactional than having a vision would imply.
That’s not to say that some of the things that he proposes aren’t correct. Even a stopped clock, etc. I think the biggest impediments to his “pulling off his vision” are ignorance or indifference to the law, the do-nothing Congress, and single-step opposition to whatever he does because he does it by the Democratic leadership and major media outlets (NYT, WaPo, ABC, NBC, CBS).
I would agree that some of the things he is doing are good, or could be good. However, even then the way he does those things is often, IMHO, not good for the country. If he is going to be a dictator then his successor likely does the same and then it will be easy to undo anything he does.
Also, since I forgot above I would note that when allegations were made about the Clintons or Biden engaging in questionable activities I strongly supported investigating them. Note that the Trump supporters have gone silent over the obvious grifting and bribery with Trump?Melania coins, the plane, the LIV tour on Trump courses, the millions foreign countries are spending to rent space in Trump facilities, and the billions given by the Saudis to Jared.
Steve
Agreed. I don’t know whether that’s a consequence of ignorance, impatience, or indifference.