11 ms·

The puzzle of Europe

60 points by barry-cotter 6y ago

matthewmacleod 6y ago
Likely lots of reasons, but you're not going to find any answers here. Sentences like: The grand failure of the world's biggest free trade zone really is a striking fact to gnaw on. do not suggest that the author will have any particular interest in facts that don't align with their existing ideas. In reality causes are likely a mixture of: - Tighter regulatory environment - More barriers in the overall market - Lower income inequality - Fewer hours worked And this says very little about the benefits or costs of the decisions that might lead to these outcomes, or why they indicate "falling further behind".
arcturus17 6y ago
Internet companies are in great part responsible for the phenomenal growth that the US or China are seeing, and I think it is hard to deny that the EU has completely fallen off the bandwagon in this regard - or didn't even hop on it in the first place. I remember seeing in one of Mary Meeker's recent reports that there was only one European company in the top-30 of global internet companies: Spotify, at number 30. The situation is dire, and I'm not sure there is much to be done. There has been talk of the EU funding AI and cloud-computing superefforts, but I'm skeptical that this will produce results. I also agree with the author's sentiment that perhaps all the technological regulation in the EU may have stifled competition dramatically (Ben Thompson and others have been positing that GDPR for example may have been a boon for incumbents and a disaster for newcomers, as the former can afford to jump through all the hoops while the latter have a much harder time doing so) There may be a good argument in the sentiment that many are repeating in the thread: growth for the sake of growth is not necessarily good, and wealth distribution is also important. But the EU cannot afford to completely neglect growth and its compounding nature over time, or it risks becoming completely sandwiched by the US and China. Maybe the ECSC was born primarily to foster trade between its members and not so much to worry about forming a "bloc" that could stand up to other superpowers, but I think it's hard to deny that this is a legitimate expectation of many EU citizens nowadays. Perhaps the EU should think outside of the box and look for other avenues of growth, and also review existing regulation. I'm cynical on both fronts nonetheless: despite having been staunchly pro-EU all my life, I get the feeling that the weight of its bureaucracy makes innovation and changing laws very difficult. I find it much more akin to a continent drifting millimeters each year, rather than a massive fleet of ships, which would be complex to commandeer, but would still retain its fundamental capabilities for changing course and reorganizing itself.
leto_ii 6y ago
Since many people in the thread have already raised really good objections about the myopic nature of focusing on GDP growth to measure social progress, I'd like to add a comment on the final paragraph of the post: > These are huge numbers. The worst estimates of climate change are 7% of GDP in 2100. And those are surely overstated (see the excellent new paper by José Luis Cruz and Estban Rossi-Hansberg) You may admire the NHS for saving money, but even if the 20% of GDP we spend on health care is totally wasted, we're still ahead. Lots of people admire the European model. Just how far Europe is behind the US is remarkable -- and getting worse. It really bothers me that the guy casually waves away the problem of climate change, reducing it to at most a cost of 7% of GDP by 2100 - this is a major error that many economists make. If the worst of climate change happens, there won't be much of a GDP left to count - you just can't capture catastrophic changes with macro-economic time series forecasting. It's also astonishingly simplistic to do back of the envelope extrapolations of GDP growth and healthcare costs and conclude that the US will 'come up ahead'. What people admire about the NHS is not that it saves money, it's that it delivers good healthcare to everybody (also more cheaply than the private US system).
Pandabob 6y ago
As a Finn this keeps me up at night. According to the World Bank data our GDP per capita was roughly equal to that of the US in 2008 (even slightly higher for a while) [0]. Since then the recession hit us a lot harder than the US and our economy still hasn't recovered. I don't have a good explanation on what happened and why we haven't been able to recover. The conventional answer is some mix of failed austerity based politics in the early 2010s, a bloated public sector, stiff labour markets and structural problems relating to an aging and shrinking population. On top of the facts mentioned above (or maybe because of them) there's a weird sense of fatalism in our society that I find deeply unnerving. We did a decent job of handling the pandemic, but apparently completely suppressing the pandemic was determined to be "impractical" for what ever reason I still can't fathom. Now we're postponing our state/municipality elections because of not being able to keep the virus in check. I'm feeling angry about my own country in a way I haven't before. We're still doing ok, but I'm frustrated that no one is really demanding that we do better. [0]: https://datacommons.org/tools/timeline#place=country%2FFIN%2Ccountry%2FUSA&statsVar=Amount_EconomicActivity_GrossDomesticProduction_Nominal_PerCapita https://datacommons.org/tools/timeline#place=country%2FFIN%2...
- oblio 6y ago
  Nokia & associated businesses, don't forget that, too. Nokia itself was a decent chunk of the Finnish economy plus it enabled all sorts of associated businesses.
rbrbr 6y ago
I am missing Germany in this diagram, Europe’s strongest economy.
nly 6y ago
What about inequality and various quality-of-life factors? GDP-per-capita is a mean, it doesn't tell you anything about distribution. Qatar has a higher GDP-per-capita than the United States, but most of that wealth is highly concentrated. The Republic of Ireland also beats the US. Explain that. Without doing so it's fairly meaningless.
- disgruntledphd2 6y ago
  > The Republic of Ireland also beats the US. Explain that. This is driven by multinational profit shifting, and is in no way reflective of the actual Irish economy.
yetihehe 6y ago
Why? Because GDP is not everything. Some countries maximize GDP, some countries optimize everything.
nickpp 6y ago
Socialism. Now coming to a country near you!
- piva00 6y ago
  Where in Europe does socialism exist?
- turbinerneiter 6y ago
  Which EU country is socialist?
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  - yqzo 6y ago
    ,
murbard2 6y ago
There are certainly a lot of factor at play, and business friendliness is probably near the top. Nonetheless, an interesting potential factor is that one of the main US export has been dollars. Global demand for dollars shores up the US living standard by soaking up the supply and dampening the inflationary pressure of monetary expansion.
kolinko 6y ago
GDP is not the only metric that matters when estimating country’s wealth. For example, good public healthcare and transport can lower the country’s GDP and improve it’s citizens wellbeing at the same time. I’m not saying that France/Italy have it better for their citizens, but treating GDP as a main metric is terribly flawed.
- deepstack 6y ago
  right on the money. One index that is far from perfect that give an alternative view is https://happyplanetindex.org https://happyplanetindex.org I'm not saying it is more accurate than the GDP measure, it just offer a different view.
  - nly 6y ago
    Norway seems to fair well on both metrics.
    - ath92 6y ago
      It's the combination of being a Nordic social democratic + having large oil reserves.
      - kwhitefoot 6y ago
        Sweden is doing pretty well too. No oil there.
        jacquesm 6y ago
        Sweden is a pretty impressive industrial exporter.
      - jacquesm 6y ago
        And more importantly: not spending the money from that oil wealth in a stupid way but setting it up to generate future revenue streams that benefit everybody. As opposed to other countries which squandered their riches on short term stuff.
deepstack 6y ago
US is very much pumped up by their FAANG stocks. It is not very representative of wealth of the country in general. If one were to take other things in into account quality of life, time spent with family/friends, is US really better off?
- Cilvic 6y ago
  I'd also like to understand how much of GDP would be accounted for by FAANG
  - jiofih 6y ago
    Their value is higher than the combined GDP of Germany and Italy. FAANG market cap: US$7T USA GDP: US$20T
    - oblio 6y ago
      Well, market cap isn't GDP. Market cap is what people think a company is worth. You want to look at revenues/sales, since GDP is formed out of consumption. So that would make things a bit more comparable. Getting back to FAANG: Amazon: $386bn Apple: $274bn Google: $182bn Netflix: $25bn Facebook: $85bn So that would bring the numbers up to $925bn. Now, a lot of this revenue is global, so the US stuff is probably 50% or less. However, a big chunk of this global revenue is the thing that allows US salaries to be so high. Also, if we were in normal times, these companies would repatriate their profits and be taxed in the US, plus these profits would be reinvested in the company or invested in the US. So I'd count the US "contribution" not as strictly half ($462bn) but more likely closer to $600bn. Also, FAANG is a catchy name but it's not a good economic representation. Netflix is big-ish, it's a household name, but it's much smaller than the others. There are also some big companies missing from it: Microsft: $143bn Oracle: $39bn Adobe: $11bn Salesforce: $17bn IBM: $73bn Dell: $92bn Intel: $71bn HP: $58bn Cisco: $51bn So that's another $546, using the same "formula" from above, probably another $350bn "contribution" for the US. And that's just the absolute A tier plus the B+ tier. If we start including B (Uber, big but debt ridden; ServiceNow, etc.) and C tiers (ever heard of Axway?), I imagine we get to $1500-2000bn easily, especially since I forgot to add numbers for some big B+ tier companies up there (Broadcomm, Qualcomm, etc.).
radicalbyte 6y ago
I've always assumed it is because all of the big tech companies are from the UK and tech companies are the driver of growth long-term. Additionally, the EU is lightyears ahead of the US wrt decarbonization; if we suddenly priced carbon properly then the US would be a lot less wealth in comparision.
- jacquesm 6y ago
  > I've always assumed it is because all of the big tech companies are from the UK Except of course that that isn't true at all.
mcv 6y ago
Could it be that European countries care less about raising GDP at any cost, and more about making sure that wealth benefits everybody to some degree? The US has far more inequality than Europe. I think you'd get very different graphs if you compared the incomes of the lower half of the population. Or even the lower 80%. So to what extent is that high GDP actually benefitting the US as a whole? It's not a game where GDP is your high score.
- deepstack 6y ago
  One thing that an older retired executed who has worked all around the world said to me is "in US people live to work", and in Europe, "people work to live" Really rings true to me.
- rapsey 6y ago
  > Could it be that European countries care less about raising GDP at any cost, and more about making sure that wealth benefits everybody to some degree No european politican in power is that altruistic. Ours are in no way less crazy or corrupt than the US ones. Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo. Europe has old corporations and the system is built to benefit them. We also have very little VC money going around. The EU is technically a single market but in reality there are big barriers. Not anywhere close to what US or China has as a domestic market. Companies have a pretty damn tough time getting out of their country. Mostly because there is so little VC money to help them get out. The reason for limited VC money is because there are few exit strategies. Going public in the US means getting way more money. The stock market in an EU country is not anywhere near what the US stock market is. The reason the stock market is not as developed is simple, US dollar is the worlds reserve currency not the Euro.
  - mcv 6y ago
    > No european politican in power is that altruistic. It's not about personal altruism, it's about creating the right institutions that encourages politicians to do the right thing, and to hold them accountable when they don't. In the US, these systems don't work very well. I remember when Congress had an approval rating in the single digits, yet 90% of all incumbents got re-elected. That's a pretty clear sign that the very basis of your democracy doesn't work right. > Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo And yet political systems change. Absolute rulers decide to share their power, write liberal constitutions and hold fair elections, politicians in district systems decide to change to proportional representation, men vote to allow women to vote. Of course these changes often require protests by the people who used to be excluded, but those protests happened, and the people in power listened and changed the rules. It's mostly the US where a large number of people insist that the rules of two and a half century ago are sacred and should never be changed. Few other countries hold to that sort of idiocy. (Though the UK might be as bad or worse than the US in that regard.) > We also have very little VC money going around. That is absolutely true. The US is great for money. It's great for rich people and for investors. And many European startups end up moving to the US. But that doesn't change the fact that regular people aren't benefitting all that much from it. Warehouse workers for Amazon often work in atrocious circumstances that would not be allowed in the EU. How does their country's high GDP or Amazon's high market value benefit them if their job is destroying them?
Adisuki 6y ago
I feel like this post is one-sided. It doesn't take into account any other factor except GDP, focuses only on some countries, and makes the EU the bad guy.
- blunte 6y ago
  Keep in mind that TFA didn't choose that title. TFA is a reasonable look at just GDP, without consideration or judgement. It asks some questions, but they are not outside the scope of GDP. The problem is that the person who submitted the article chose an inflammatory title, just like he has done on many of his past submissions. There's an agenda at play here that goes unnoticed, and it has a lot of people in this comment section worked up.
dan1234 6y ago
Is there a list anywhere which shows the median disposable income, and savings rate for citizens of a country? In my mind, these are the metrics that make people feel ‘better off’.
- throwawayzRUU6f 6y ago
  The figure you're looking for is called 'Adjusted Household Disposable Income per capita PPP' - probably the best indicator of material standards of living there is. The word adjusted refers to the fact that in-kind transfers, like healthcare, social benefits or universal education are paid by the taxpayer. PPP, Purchasing Power Parity, evens out the impact of price differences. Several things stand out: - Citizens in larger countries have it better than one would expect. This reflects the economies of scale, and matches well with the informal anecdotes of people who have lived there - that despite GDP and productivity figures, somehow life's better there - Tax havens don't really benefit the citizens of their countries, outside of a narrow sliver of population. Material standard of living in Ireland is below that of Italy Here's a report from Eurostat: https://ec.europa.eu/eurostat/databrowser/view/sdg_10_20/default/table?lang=en https://ec.europa.eu/eurostat/databrowser/view/sdg_10_20/def... Here's a more comprehensive set of data - builds up a very interesting argument, based on AHDI figures: https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ https://randomcriticalanalysis.com/2018/11/19/why-everything...
rob74 6y ago
Interesting that he's talking about "Europe", but only actually includes stats for three European countries. Maybe including others (e.g. Germany) wouldn't have served the point he's trying to make?
- curo 6y ago
  GDP per capita in Germany is $48k and in the US $63k. Growth is 1.2% and 2.29% respectively: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=DE-US https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
  - hocuspocus 6y ago
    And how much public and private debt creation was needed behind these growth numbers?
    - curo 6y ago
      Good question. Private-debt-to-GDP ratio: - Germany (154) - Scandinavia (269-280) - Western Europe (224-266) - US (220) https://tradingeconomics.com/country-list/private-debt-to-gdp https://tradingeconomics.com/country-list/private-debt-to-gd... Gov-debt-to-GDP ratio: - Germany (58) - Scandinavia (~40) - Western Europe (~100) - US (108) https://tradingeconomics.com/country-list/government-debt-to-gdp https://tradingeconomics.com/country-list/government-debt-to...
      - ThePhysicist 6y ago
        Germany is above 80 percent now due to Covid-19. Still better than other countries though, but not great.
        pas 6y ago
        Why is it not great?
fermienrico 6y ago
EU has anemic salaries for my profession (software engineer). What’s the reason for this deficit? Why aren’t there any Silicon Valleys in the EU? Salary difference is so large, I would never move. Land is dirt cheap, housing is affordable and private healthcare is fine in the US. Before we get in a war on HN - I would move instantly if the salary is matched or even better than US since everything else is scarce in EU (housing, land). Yep, here comes the downvotes.
- arghwhat 6y ago
  I think it's just more well-balanced over here to be honest. For Denmark: 1. We have a much more chill working situation. You work a regular work day, you're not the property of the company you work at, you do not have non-compete clauses (the company would have to pay your salary in full as long as it was valid), a lot of things that in the US come from post-tax salary is handled by the tax (education for you and your kids, healthcare, etc.) 2. Trying your luck as entrepreneur is easier and much lower risk than in the US. It's also quite easy to get "free" entrepreneurial government grants of small to medium sizes. As a result, there tends to be more, smaller startups, and bootstrapping is popular. When VCs aren't involved, salaries tend to be less astronomical. 3. Software engineer salaries in the US are blown completely out of proportions, and too market-distorting to be goal to have. Just moving to where the salary is highest with no other consideration for anything else sounds... Short-sighted, narrow-minded and greedy (but not in a smart way).
- coldtea 6y ago
  >Salary difference is so large, I would never move. It's not like the EU wants you to move here, in the first place...
  - fermienrico 6y ago
    Not with that attitude!
- eek04_ 6y ago
  There is a certain total of income for salary available in a country; e.g, the US is spending about 44% of GDP on salaries/compensation[1]. The difference in income for software engineers is partially (and possible mainly) because the US is very income-inequal - ie, because there are more poor people to prop you up. If you look at income inequality before taxes and transfers[2], the US is the most income-inequal of any of the OECD countries. If you look at it after taxes and transfers[3], Chile, Turkey and Mexico manage to do worse. [1] https://fred.stlouisfed.org/graph/?g=2Xa https://fred.stlouisfed.org/graph/?g=2Xa [2] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient,_before_taxes_and_transfers https://en.wikipedia.org/wiki/List_of_countries_by_income_eq... [3] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient,_after_taxes_and_transfers https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
mkl95 6y ago
I can only talk about tech. Unless you work for a FAANG, there's a perpetual feeling that you are a second division player in the software industry. Some big factors are lack of investment and competitiveness. Even if you are a senior developer, if you are not too happy about your current job finding a better position can take you months. There's no such thing as "fuck you experience" here allowing you to switch jobs overnight.
raverbashing 6y ago
Pointing out the growth of some countries while excluding others (Germany? Ireland? Finland? Sweden?) is debatable, because intra-EU GDP "exchange" might be a thing > What the heck happened? It could happen here too. Maybe it already has, just not as bad. Yes, it is possible. Add Japan to the graph, see what happens. I think the bigger part of the answer is China. Some of it is PPP. Some of it is that Italy has internal problems to solve. Some of it is what I'd call "paper GDP"
BasDirks 6y ago
> The average European is about a third or more worse off than the average American, and it's getting worse. No. GDP does not equal well-being. I mean, the numbers presented in the article _are_ interesting, but their interpretation seems simplistic.
jacquesm 6y ago
That's a pretty badly supported article.
mqp 6y ago
It would be helpful if the title was more specific as the blog post discusses GDP specifically. More to the point, GDP isn't everything. There are many factors at play. It is possible to cherry pick a multitude of attributes to compare Europe with the US and have either appear to be failing in a graph. Think about how the graph would look if the following were considered: education levels, clean air/water, broadband connectivity, health care, inner city and suburban public transport. Also when comparing Europe it would be fair to include Europe in the data rather than a select few countries, otherwise the title (and the argument) becomes more misleading.
jobigoud 6y ago
Because we use a different metric to define what progress is. And we are wondering why is the USA falling behind?
i_have_an_idea 6y ago
As a European, my personal opinion is that it is because of an overfocus on regulation and underfocus on innovation. Everybody that I know that has an idea or a business that might be worth something, is moving or trying to move to the US. The mix of too much regulation, high taxes and difficult access to capital is just too much for most new businesses to handle. So, they are moving somewhere else. I think, despite the talk about higher quality of life, etc., that is going to make us losers in the long run and actually erode our quality of live. Because we need a productive and innovative economy to keep our living standards.
- throwawayzRUU6f 6y ago
  I'd argue it's working as intended and it's the US who's the outlier. Regulations usually pop up because systems, left on their own, tend to evolve towards a spiral of undesirable social dumping and other negative outcomes. We tend to focus on a minority of arduous regulations, ignoring the majority of them that make our lives better. High taxes, when distributed fairly, are a good thing - talent and hard work gets you to upper-middle class, but really high incomes are mostly down to luck. Now, the move from taxing incomes to taxing wealth is long overdue, but that's a different discussion. Difficult access to capital - can it be that Europeans are simply less exuberant, less gullible, and assess startups more realistically? Getting seed funding worth of lifetime income of a median person, for a dubious idea without any reasonable business model - that's the anomaly, not the other way around.
- c06n 6y ago
  As a fellow European working in research, I agree with every point. I am not having a good feeling about the future here.
JW_00000 6y ago
It'd be interesting to see more countries added, and not just UK, France, Italy, and Greece. The UK is different in that it is no longer in the EU and never was in the Eurozone. Italy and Greece suffered badly from the Eurocrisis. What about Germany, Poland, the Nordic countries? Or just an EU average? Also, are these figures adjusted for PPP? (And can you therefore make a blanket statement such as "The average European is about a third or more worse off than the average American"?) I'm going to guess not: [1] and [2] compare the GDP per capita without and with adjustment for PPP between the US and France. The first (no PPP adjustment) shows how France plateaued after 2008, while the US kept increasing. The second shows that both kept increasing at the same rate (albeit with France's figures consistently 20% lower than the US). By the way as a European I don't disagree that the EU's (average) economy has fared worse in the last 10 years than the American economy. But these numbers are too simplistic to find out what the underlying causes are. [1] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=FR-US https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [2] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=FR-US https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat... [3] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=US-UK-FR-IT-GR-DE-EU https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [4] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=US-UK-FR-IT-GR-DE-EU https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat... [3] and [4] are those same graphs for the countries in the article + Germany + EU average.
alyizzet 6y ago
One outlier mentioned here is Italy which has a high rate of youth unemployment/underemployment and huge brain drain flows to Northern EU so it makes sense that they are in a freefall but for others mentioned in the article like the UK I don't think it is a fair comparison as USA has a significant demographic advantage and a huge integrated market making it easy to scale for companies which in the EU only Germany has a comparable status not the UK or France.
mytailorisrich 6y ago
> This should be profoundly unsettling for economists. Everyone thinks free trade is a good thing. The European union, one big integrated market, was supposed to ignite growth. It did not. The grand failure of the world's biggest free trade zone really is a striking fact to gnaw on. Why try to see the single market as a failure out of the blue just by comparing GDP growth? The single market has been a great success and has undoubtedly boosted growth. The issue is that it is not everything. For example, the business environments in France and Italy are far from being friendly and efficient. The UK's is much friendlier but IMHO the UK has chosen a path of making London an island of prosperity based on services (with a strong emphasis on finance) while letting the rest of the country fend for itself (the UK has both the richest and poorest areas in Northern Europe)...
orian 6y ago
Can it also be that the time of Europe exploiting the rest of the world is over, the last 50 years is US exploiting the world (like forcing it to obey they rules, FAANG de facto monopolies), and the next 50 years will be the china doing exactly the same as old powers but in a Chinese way? :) Historically, the empires exploited other countries, it used to be very brutal, now it's just who works for whom, who is the product, who control the money and information flow.
simonh 6y ago
How on earth can an article about GDP in the Euro area not include a line for Germany?
tormeh 6y ago
Europeans are old. This is often forgotten. Old people are slow to adapt. So Europe is old and old-fashioned. This is not great for prosperity. Same with Japan.
- oblio 6y ago
  Americans are also getting older :-)
mellosouls 6y ago
Actual title: The puzzle of Europe
teekert 6y ago
Anecdotal: London's GDP was considered super high and growing. Why did citizens not experience any increases in happiness and well being? Because policy focussed on attracting super rich people, and a couple of them raised the GDP significantly. GDP is not a good measure of estimating the pleasure/happiness derived from of living in a country.
- alexgmcm 6y ago
  GDP is also just a bad measure. I mean as Bobby Kennedy said "...it measures everything in short, except that which makes life worthwhile." The size of an economy doesn't indicate whether or not it is actually improving people's lives. Again, to quote RFK: "It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities."
- austhrow743 6y ago
  Hold up, why on earth would you think gdp has anything to do with happiness? Do you think humans for the vast majority of our history and also in the vast majority of places today were/are utterly miserable?
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blunte 6y ago
The title is (intentionally?) imprecise. There are so many variables of value other than GDP. The US is #40 on the list of countries by citizen lifespan. It's #15 on quality of life index (assuming you believe in the methodology of defining that index). It's #45 when freedom of press is measured. I would not be surprised if, after taking all the different indices into account, the US is not in the top 5 overall. GDP matters little if you don't have freedom, healthy long life, maternity leave (and other expensive but necessary quality of life benefits). Also, reconsider GDP per capita relative to hours worked. The US is not the leader here. It's no surprise that if you work a lot more hours, you should have higher overall output (diminishing returns, but still obviously higher).
tifadg1 6y ago
It's easy to refute articles which treat EU as a single entity, instead of what it is - 27 countries with different law bases, languages and income levels. Median p.a income in US is 43k USD. Median p.a. income in Germany is 33k USD. Median p.a income in Bulgaria is 4k USD. With such big outliers all the equations regarding EU as 1 entity will be off by such a wide margin that it'll be useful only to get the conclusions you (the presenter) want. Here's more subtle factors though: * how much does healthcare cost? * how much does bringing a child up cost? * how much does education cost? * how much does real-estate cost? With all that, I think that unless you're the top earner and can take advantage of favorable taxation schemes, favorable healthcare schemes, favorable living location, you're better of being median in western europe.
Traster 6y ago
So this guy just straight up missed the euro crisis or something? You cannot talk about growth in Europe without talking about the effect the Euro has on exports. Germany can export it's super high quality products across the world with an artificially deflated currency because the currency is tied to weak countries like Italy (and by the way, then invest that surplus in really crappy ways). Meanwhile Italy can't compete in the global market for exports because their currency is held artificially high because it is tied to Germany.
bwb 6y ago
I find it slightly hilarious that Germany, Austria, and others are not on this list. It just feels pretty cherry picked and I'd like to see more data for the EU average and all the countries (esp eastern block). GDP is also interesting as a metric, because you can inflate it by having a terrible and inefficient health care system. If health care takes an extra 8% of your entire GDP, what value is that bringing if the results are so much lower than a country that has a system that saves that 8% points? Italy is a giant dysfunctional mess, no question there. France, I have a lot of questions about the work they have done to try to insulate their workforce from globalization. Some of that is showing cracks, some isn't. If the USA had done more to insulate the poor and middle class from the impact of globalization would our GDP be lower or higher? Something I've been thinking about. Especially as we finally consider measures to help people weather the storm as the economic system raises everyone up globally...
johbjo 6y ago
Possibly biggest difference: government deficit spending and negative trade balance. Should contribute to GDP through spending that would otherwise not happen. This is not afforded to anyone without reserve currency status. EU governments are prevented from running deficits due to some treaty in order to keep the euro stable, and historically the currencies would depreciate quickly.
areoform 6y ago
One of the oddest things about such comparisons, is that no one is talking about asset price inflation in the US led by capital injection by the Fed. Here's one perspective, almost a 23.6% of all dollars ever created were created in 2020, https://www.thestreet.com/mishtalk/economics/23-6-of-all-us-dollars-were-created-in-the-last-year https://www.thestreet.com/mishtalk/economics/23-6-of-all-us-... As a friend (thanks Tom!) laid it out, 1980 $1.6T in circulation, $2.9T GDP 1990 $3.2T in circulation, $6T GDP 2000 $4.7T in circulation, $10.2T GDP 2010 $8.5T in circulation, $15T GDP 2020 $19T in circulation, $21.4T GDP All of these dollars had to go somewhere, they went to inflating asset prices, which then lead to more "wealth", which in turn allowed people to charge more for the same goods and services, which in turn leads to what we're seeing today. In many ways, this post is an argument around Baumol's cost disease (i.e. a bag of saline that used to cost $1 to $10, inflation adjusted, with most of the price being the packaging, now costs $700+ for no discernible reason) than other types of macroeconomic policy. It is surprising that, as a rule, such analyses don't consider the difference in American and European monetary policy. Essentially, even though they are broadly similar, their capital injection system does seem to produce somewhat different effects that are showing up in this data. More generally, most economic policy discussions have become murkier and stranger because of the difficulty of establishing ground truth through economic data. After all, how do you use something as a reference for measure, when the references rapidly changes in a short period of time? It seems apparent to me that alternative measures need to be used instead, and that their use should be taken more favorably, and when we view the state of these countries through alternative indices. For example, average lifespans have declined in the US, for several years in a row - a first for the developed world, https://www.advisory.com/daily-briefing/2019/12/02/middle-age-death https://www.advisory.com/daily-briefing/2019/12/02/middle-ag... The US has the highest infant and maternal mortality rate of these countries, and the rate is increasing https://hbr.org/2019/06/the-rising-u-s-maternal-mortality-rate-demands-action-from-employers https://hbr.org/2019/06/the-rising-u-s-maternal-mortality-ra... Other measures are trending in the wrong direction as well, from economic mobility, https://www.pnas.org/content/117/1/251 https://www.pnas.org/content/117/1/251 , to a reduction in access to safe drinking water - https://www.sciencemag.org/news/2018/02/millions-americans-drink-potentially-unsafe-tap-water-how-does-your-county-stack https://www.sciencemag.org/news/2018/02/millions-americans-d... , and the return of diseases of poverty such as hookworm. https://www.npr.org/sections/goatsandsoda/2017/12/12/570217635/the-u-n-looks-at-extreme-poverty-in-the-u-s-from-alabama-to-california https://www.npr.org/sections/goatsandsoda/2017/12/12/5702176... The flywheel of prosperity has been broken for some time now, and the drift in the US between the "other America" and paper wealth is rapidly increasing. The EU, on the other hand, has had some of the same problems, but to a much smaller degree, and the group of nations has increased in net prosperity when measured through these indices. The question we should ask is why. Why did this divergence happen in America and not Europe? On a personal note, the metrics I'm most interested in are indirect measures of "effective" research and research into basic science. My experience on both sides of the pond tells me that in some ways, the EU is catching up to the US in that regard - at least in my experience. However, I'd like to find a reliable dataset (or datasets) before making this claim.
ThePhysicist 6y ago
GDP / working hour is a better metric IMHO. French people work a lot less than Americans on average. My former colleagues from Academia there enjoyed 8-10 weeks of vacation per year, plus a sizeable number of public holidays. On paper they also worked fewer hours than most people in the US, I think their contracts were for 30-32 hours per week on average. Most of them worked way more though since they really enjoyed their research. Their contracts allowed them to add all that overtime to a "time account" that they could eventually cash in to e.g. take a year-long sabbatical (fully paid of course) a couple of times during their careers. Also, there's free and full health coverage included, a state pension, family money and time off for raising children etc. etc.. And don't forget that life in France is also (mostly) amazing: Beautiful nature, amazing food, great culture. I'm German btw and I swear I don't get money from the French government for praising them, I just really liked living there for a while. So I guess you have to decide if having 20 % more GDP per capita is worth throwing away all those luxuries. Having spent time both in the US and in various European countries I'd say no, for most people it's not a good deal. People working in tech are an anomaly BTW, so I'd exclude them from this discussion as they're making up less than 1 % of the working population, hence they are a pretty exclusive and not very representative group of people. All the positive things aside it seems young people there also struggle way more than the older generations, as housing prices etc. have gone up immensely (in the Paris region e.g. you can pretty much forget to buy a house as a young middle class family).
- Seb-C 6y ago
  > free and full health coverage included I don't know about other European countries, but I often heard this argument in France, and it is bullshit. It's free but overall about 60~70% of your work value/cost for employer is taxed. It's free, but when you need to see an ophthalmologist (for example), you are either lucky to get an appointment next year, or have to pay 150 Euros for a non-affiliated doctor. Its free, but so completely broken that we have to pay by ourselves what is called a "mutuelle", which is basically an insurance that covers partially what is not paid by the national health system. And this thing became mandatory a few years ago. It's free but so inefficient and corrupted that when you subscribe you have to wait 6 months and re-do the procedure 3 times because they lost your files somewhere in the bureaucratic black-hole. If this is the definition of "free" in Europe, I'd rather get both my money and the real freedom to decide how to use it.
Grustaf 6y ago
I wonder how many Europeans that would rather live in the US. And out of that 1% or so, how many would still want to once they've visited? Quality of life in Europe is infinitely higher for all but the wealthiest.
- TMWNN 6y ago
  Why don't you ask those who actually vote with their feet? A random German is four times more likely to move to the US, than an American is to move to Germany. A German is 16 to 48 times more likely to obtain US citizenship than an American obtaining German citizenship. See discussion at https://news.ycombinator.com/item?id=25367731 https://news.ycombinator.com/item?id=25367731
  - Grustaf 6y ago
    Americans are obviously very unlikely to move anywhere, and not least because they don't know very much about the outside world, let alone speak a foreign language. The per capita discussion in that post is of course a bit misleading, the US is larger so it's also more likely to attract immigrant. But my point still stands, unless you are already well off, or an academic, you are very unlikely to have better quality of life in the US than here. You need a pretty high salary in SF for example if you want to enjoy the lifestyle of a nurse or street sweeper in Copenhagen.
    - TMWNN 6y ago
      >The per capita discussion in that post is of course a bit misleading, the US is larger so it's also more likely to attract immigrant. A migrant doesn't care if the country he is moving to has a million, 10 million, or 100 million people. He cares that it offers the job opportunities/welfare programs he wants. If Mexico was the same population of about 100 million and the US had 33 million instead of 330 million people but was just as wealthy, would a single Mexican illegal alien be dissuaded from attempting to sneak across the border? Of course not. >Americans are obviously very unlikely to move anywhere, and not least because they don't know very much about the outside world, let alone speak a foreign language. No. The same disparities exist with Canadians, Britons, and Australians vis-a-vis Americans. The dataset I link to in the discussion shows that, on a per capita basis, [a Canadian is 27 times more likely to move to the US than an American is to move to Canada](https://np.reddit.com/r/MapPorn/comments/6lin9k/reupload_population_of_americans_in_canada_any/dju6fus/?context=3 https://np.reddit.com/r/MapPorn/comments/6lin9k/reupload_pop...). The per capita population flows between, say, Canada and Australia are much more normalized (that is, close to 1:1) >You need a pretty high salary in SF for example if you want to enjoy the lifestyle of a nurse or street sweeper in Copenhagen. Ah yes, as we can see from the massive flow of Americans moving from San Francisco to Copenhagen to work as nurses and street sweepers. >But my point still stands, unless you are already well off, or an academic, you are very unlikely to have better quality of life in the US than here. I repeat: Why don't you ask those who actually vote with their feet? Their answers are quite clear, to anyone who looks at the data.
blunte 6y ago
It's important to remember that HN is not immune to information warfare (whether driven by corporate or political goals). TFA is just discussing one topic, GDP, without making broad statements. However, the submitter has chosen an intentionally misleading title. Looking at the submissions of this submitter, this is an intentional pattern. (edit - typos!)
mschuster91 6y ago
> GDP per capita is income per capita. The average European is about a third or more worse off than the average American, and it's getting worse. European costs of living are way lower in Europe. Not just rent (fwiw, even as someone living in Munich, US rents sound utterly ridiculous) but also everything else (with the notable exception of gas/diesel). Not to mention medical insurance/debt: with a ~3500€ gross job, an employee pays ~275€ a month for full medical coverage - including, if married and the s/o not working, the whole family! > What the heck happened? It could happen here too. What happened is mostly that the US exploded their financial industry over the last decades. In Europe, pension funds are (mostly) on a "rolling" basis - meaning that the contributions of the current working generation plus tax-funded prop-ups are used to pay for the current pensioner generation. Also, there are decent public social security networks (unemployment insurance, health insurance, assistance for the poor), and universities are government-funded which means that (UK excepted) tuitions are either not existing or extremely low if you are a citizen of an EU country. In the US in contrast, people are supposed to save on the capital markets for their retirement via 401k and the likes, for their kids' education (529 plans) and for their medical needs (MSA). That money is parked for extremely long time and available to prop up the economy - and in times of extremely low interest rates, that money is available to fund even the most dumbass ideas (remember Yo?), stuff that eventually destroys societal foundations (not just "social" networks, but also Walmart/Amazon who kill off retail and other "gig economy" companies) or for predatory lending (the money backing student loans, paycheck loans and five-digit credit card limits has to come from somewhere!). The downside of this: the US economy is massively dependent on "the stonks go up and up", which means that times of crisis hit the US population extremely hard as both 2008ff and corona showed, with dozens of millions losing their jobs and homes or depending on food banks over the course of maybe a month; Europe meanwhile weathered the crisis way better on these metrics. > the world's biggest free trade zone became the world's biggest regulatory-stagnation, high-tax, welfare-state disincentive zone LOL What? At least our people don't suffer for over half a decade from lead in water pipes (Flint), week-long power cuts due to natural disasters or shoddy maintenance (California fires, Texas snow desaster), our consumers aren't ripped off for internet and cable TV, full-time employees generally aren't depending on food banks/food stamps to survive while their employer's owners rake in billions... regulation is a good thing because usually the only ones profiting off of de-regulation are the 0.01% elites while everyone else and nature pays the price.
reacharavindh 6y ago
GDP is not the only or the best metric to look at a country’s or society’s well being, life quality or even the economy. I live in DK now, having moved from the US. I get paid less than before, but I don’t need to save for health insurance and the off chance that I might get some expensive disease that the insurance company wouldn’t cover! Neither do I need to save for paying super expensive day care, or child education, or college costs of my son. So, money exchange is different when you don’t pay for a lot of services like in the US. The experience we felt when our little boy was born was unforgettable. We drive to the hospital, get treated very well, get a room to stay close to the hospital with service from resident nurses in case we needed help or education about taking care of the baby, and all through this without ever thinking about money or bills....! Let that sink in. Everyone who lives here gets that treatment and gets to enjoy the baby being born instead of the financial burden. I will happily pay my 37% income tax and high VAT if it brings happiness and fairness to all. It’s not perfect, but it’s the closest there is.
Shadonototro 6y ago
because: - the US prints infinite dollar - the US impose trade restrictions that kill businesses - the US send the lawyers when you try to compete with them
Glavnokoman 6y ago
"GDP per capita is income per capita" Stopped reading after this.

60 points by barry-cotter 6y ago

Likely lots of reasons, but you're not going to find any answers here. Sentences like: The grand failure of the world's biggest free trade zone really is a striking fact to gnaw on. do not suggest that the author will have any particular interest in facts that don't align with their existing ideas. In reality causes are likely a mixture of: - Tighter regulatory environment - More barriers in the overall market - Lower income inequality - Fewer hours worked And this says very little about the benefits or costs of the decisions that might lead to these outcomes, or why they indicate "falling further behind".

arcturus17 6y ago

Internet companies are in great part responsible for the phenomenal growth that the US or China are seeing, and I think it is hard to deny that the EU has completely fallen off the bandwagon in this regard - or didn't even hop on it in the first place. I remember seeing in one of Mary Meeker's recent reports that there was only one European company in the top-30 of global internet companies: Spotify, at number 30. The situation is dire, and I'm not sure there is much to be done. There has been talk of the EU funding AI and cloud-computing superefforts, but I'm skeptical that this will produce results. I also agree with the author's sentiment that perhaps all the technological regulation in the EU may have stifled competition dramatically (Ben Thompson and others have been positing that GDPR for example may have been a boon for incumbents and a disaster for newcomers, as the former can afford to jump through all the hoops while the latter have a much harder time doing so) There may be a good argument in the sentiment that many are repeating in the thread: growth for the sake of growth is not necessarily good, and wealth distribution is also important. But the EU cannot afford to completely neglect growth and its compounding nature over time, or it risks becoming completely sandwiched by the US and China. Maybe the ECSC was born primarily to foster trade between its members and not so much to worry about forming a "bloc" that could stand up to other superpowers, but I think it's hard to deny that this is a legitimate expectation of many EU citizens nowadays. Perhaps the EU should think outside of the box and look for other avenues of growth, and also review existing regulation. I'm cynical on both fronts nonetheless: despite having been staunchly pro-EU all my life, I get the feeling that the weight of its bureaucracy makes innovation and changing laws very difficult. I find it much more akin to a continent drifting millimeters each year, rather than a massive fleet of ships, which would be complex to commandeer, but would still retain its fundamental capabilities for changing course and reorganizing itself.

leto_ii 6y ago

Since many people in the thread have already raised really good objections about the myopic nature of focusing on GDP growth to measure social progress, I'd like to add a comment on the final paragraph of the post: > These are huge numbers. The worst estimates of climate change are 7% of GDP in 2100. And those are surely overstated (see the excellent new paper by José Luis Cruz and Estban Rossi-Hansberg) You may admire the NHS for saving money, but even if the 20% of GDP we spend on health care is totally wasted, we're still ahead. Lots of people admire the European model. Just how far Europe is behind the US is remarkable -- and getting worse. It really bothers me that the guy casually waves away the problem of climate change, reducing it to at most a cost of 7% of GDP by 2100 - this is a major error that many economists make. If the worst of climate change happens, there won't be much of a GDP left to count - you just can't capture catastrophic changes with macro-economic time series forecasting. It's also astonishingly simplistic to do back of the envelope extrapolations of GDP growth and healthcare costs and conclude that the US will 'come up ahead'. What people admire about the NHS is not that it saves money, it's that it delivers good healthcare to everybody (also more cheaply than the private US system).

Pandabob 6y ago

As a Finn this keeps me up at night. According to the World Bank data our GDP per capita was roughly equal to that of the US in 2008 (even slightly higher for a while) [0]. Since then the recession hit us a lot harder than the US and our economy still hasn't recovered. I don't have a good explanation on what happened and why we haven't been able to recover. The conventional answer is some mix of failed austerity based politics in the early 2010s, a bloated public sector, stiff labour markets and structural problems relating to an aging and shrinking population. On top of the facts mentioned above (or maybe because of them) there's a weird sense of fatalism in our society that I find deeply unnerving. We did a decent job of handling the pandemic, but apparently completely suppressing the pandemic was determined to be "impractical" for what ever reason I still can't fathom. Now we're postponing our state/municipality elections because of not being able to keep the virus in check. I'm feeling angry about my own country in a way I haven't before. We're still doing ok, but I'm frustrated that no one is really demanding that we do better. [0]: https://datacommons.org/tools/timeline#place=country%2FFIN%2Ccountry%2FUSA&statsVar=Amount_EconomicActivity_GrossDomesticProduction_Nominal_PerCapita https://datacommons.org/tools/timeline#place=country%2FFIN%2...

oblio 6y ago
Nokia & associated businesses, don't forget that, too. Nokia itself was a decent chunk of the Finnish economy plus it enabled all sorts of associated businesses.

rbrbr 6y ago

I am missing Germany in this diagram, Europe’s strongest economy.

nly 6y ago

What about inequality and various quality-of-life factors? GDP-per-capita is a mean, it doesn't tell you anything about distribution. Qatar has a higher GDP-per-capita than the United States, but most of that wealth is highly concentrated. The Republic of Ireland also beats the US. Explain that. Without doing so it's fairly meaningless.

disgruntledphd2 6y ago
> The Republic of Ireland also beats the US. Explain that. This is driven by multinational profit shifting, and is in no way reflective of the actual Irish economy.

yetihehe 6y ago

Why? Because GDP is not everything. Some countries maximize GDP, some countries optimize everything.

nickpp 6y ago

Socialism. Now coming to a country near you!

piva00 6y ago
Where in Europe does socialism exist?
turbinerneiter 6y ago
Which EU country is socialist?
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- yqzo 6y ago
  ,

murbard2 6y ago

There are certainly a lot of factor at play, and business friendliness is probably near the top. Nonetheless, an interesting potential factor is that one of the main US export has been dollars. Global demand for dollars shores up the US living standard by soaking up the supply and dampening the inflationary pressure of monetary expansion.

kolinko 6y ago

GDP is not the only metric that matters when estimating country’s wealth. For example, good public healthcare and transport can lower the country’s GDP and improve it’s citizens wellbeing at the same time. I’m not saying that France/Italy have it better for their citizens, but treating GDP as a main metric is terribly flawed.

deepstack 6y ago
right on the money. One index that is far from perfect that give an alternative view is https://happyplanetindex.org https://happyplanetindex.org I'm not saying it is more accurate than the GDP measure, it just offer a different view.
- nly 6y ago
  Norway seems to fair well on both metrics.
  - ath92 6y ago
    It's the combination of being a Nordic social democratic + having large oil reserves.
    - kwhitefoot 6y ago
      Sweden is doing pretty well too. No oil there.
      - jacquesm 6y ago
        Sweden is a pretty impressive industrial exporter.
    - jacquesm 6y ago
      And more importantly: not spending the money from that oil wealth in a stupid way but setting it up to generate future revenue streams that benefit everybody. As opposed to other countries which squandered their riches on short term stuff.

deepstack 6y ago

US is very much pumped up by their FAANG stocks. It is not very representative of wealth of the country in general. If one were to take other things in into account quality of life, time spent with family/friends, is US really better off?

Cilvic 6y ago
I'd also like to understand how much of GDP would be accounted for by FAANG
- jiofih 6y ago
  Their value is higher than the combined GDP of Germany and Italy. FAANG market cap: US$7T USA GDP: US$20T
  - oblio 6y ago
    Well, market cap isn't GDP. Market cap is what people think a company is worth. You want to look at revenues/sales, since GDP is formed out of consumption. So that would make things a bit more comparable. Getting back to FAANG: Amazon: $386bn Apple: $274bn Google: $182bn Netflix: $25bn Facebook: $85bn So that would bring the numbers up to $925bn. Now, a lot of this revenue is global, so the US stuff is probably 50% or less. However, a big chunk of this global revenue is the thing that allows US salaries to be so high. Also, if we were in normal times, these companies would repatriate their profits and be taxed in the US, plus these profits would be reinvested in the company or invested in the US. So I'd count the US "contribution" not as strictly half ($462bn) but more likely closer to $600bn. Also, FAANG is a catchy name but it's not a good economic representation. Netflix is big-ish, it's a household name, but it's much smaller than the others. There are also some big companies missing from it: Microsft: $143bn Oracle: $39bn Adobe: $11bn Salesforce: $17bn IBM: $73bn Dell: $92bn Intel: $71bn HP: $58bn Cisco: $51bn So that's another $546, using the same "formula" from above, probably another $350bn "contribution" for the US. And that's just the absolute A tier plus the B+ tier. If we start including B (Uber, big but debt ridden; ServiceNow, etc.) and C tiers (ever heard of Axway?), I imagine we get to $1500-2000bn easily, especially since I forgot to add numbers for some big B+ tier companies up there (Broadcomm, Qualcomm, etc.).

radicalbyte 6y ago

I've always assumed it is because all of the big tech companies are from the UK and tech companies are the driver of growth long-term. Additionally, the EU is lightyears ahead of the US wrt decarbonization; if we suddenly priced carbon properly then the US would be a lot less wealth in comparision.

jacquesm 6y ago
> I've always assumed it is because all of the big tech companies are from the UK Except of course that that isn't true at all.

mcv 6y ago

Could it be that European countries care less about raising GDP at any cost, and more about making sure that wealth benefits everybody to some degree? The US has far more inequality than Europe. I think you'd get very different graphs if you compared the incomes of the lower half of the population. Or even the lower 80%. So to what extent is that high GDP actually benefitting the US as a whole? It's not a game where GDP is your high score.

deepstack 6y ago
One thing that an older retired executed who has worked all around the world said to me is "in US people live to work", and in Europe, "people work to live" Really rings true to me.
rapsey 6y ago
> Could it be that European countries care less about raising GDP at any cost, and more about making sure that wealth benefits everybody to some degree No european politican in power is that altruistic. Ours are in no way less crazy or corrupt than the US ones. Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo. Europe has old corporations and the system is built to benefit them. We also have very little VC money going around. The EU is technically a single market but in reality there are big barriers. Not anywhere close to what US or China has as a domestic market. Companies have a pretty damn tough time getting out of their country. Mostly because there is so little VC money to help them get out. The reason for limited VC money is because there are few exit strategies. Going public in the US means getting way more money. The stock market in an EU country is not anywhere near what the US stock market is. The reason the stock market is not as developed is simple, US dollar is the worlds reserve currency not the Euro.
- mcv 6y ago
  > No european politican in power is that altruistic. It's not about personal altruism, it's about creating the right institutions that encourages politicians to do the right thing, and to hold them accountable when they don't. In the US, these systems don't work very well. I remember when Congress had an approval rating in the single digits, yet 90% of all incumbents got re-elected. That's a pretty clear sign that the very basis of your democracy doesn't work right. > Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo And yet political systems change. Absolute rulers decide to share their power, write liberal constitutions and hold fair elections, politicians in district systems decide to change to proportional representation, men vote to allow women to vote. Of course these changes often require protests by the people who used to be excluded, but those protests happened, and the people in power listened and changed the rules. It's mostly the US where a large number of people insist that the rules of two and a half century ago are sacred and should never be changed. Few other countries hold to that sort of idiocy. (Though the UK might be as bad or worse than the US in that regard.) > We also have very little VC money going around. That is absolutely true. The US is great for money. It's great for rich people and for investors. And many European startups end up moving to the US. But that doesn't change the fact that regular people aren't benefitting all that much from it. Warehouse workers for Amazon often work in atrocious circumstances that would not be allowed in the EU. How does their country's high GDP or Amazon's high market value benefit them if their job is destroying them?

Adisuki 6y ago

I feel like this post is one-sided. It doesn't take into account any other factor except GDP, focuses only on some countries, and makes the EU the bad guy.

blunte 6y ago
Keep in mind that TFA didn't choose that title. TFA is a reasonable look at just GDP, without consideration or judgement. It asks some questions, but they are not outside the scope of GDP. The problem is that the person who submitted the article chose an inflammatory title, just like he has done on many of his past submissions. There's an agenda at play here that goes unnoticed, and it has a lot of people in this comment section worked up.

dan1234 6y ago

Is there a list anywhere which shows the median disposable income, and savings rate for citizens of a country? In my mind, these are the metrics that make people feel ‘better off’.

throwawayzRUU6f 6y ago
The figure you're looking for is called 'Adjusted Household Disposable Income per capita PPP' - probably the best indicator of material standards of living there is. The word adjusted refers to the fact that in-kind transfers, like healthcare, social benefits or universal education are paid by the taxpayer. PPP, Purchasing Power Parity, evens out the impact of price differences. Several things stand out: - Citizens in larger countries have it better than one would expect. This reflects the economies of scale, and matches well with the informal anecdotes of people who have lived there - that despite GDP and productivity figures, somehow life's better there - Tax havens don't really benefit the citizens of their countries, outside of a narrow sliver of population. Material standard of living in Ireland is below that of Italy Here's a report from Eurostat: https://ec.europa.eu/eurostat/databrowser/view/sdg_10_20/default/table?lang=en https://ec.europa.eu/eurostat/databrowser/view/sdg_10_20/def... Here's a more comprehensive set of data - builds up a very interesting argument, based on AHDI figures: https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/ https://randomcriticalanalysis.com/2018/11/19/why-everything...

rob74 6y ago

Interesting that he's talking about "Europe", but only actually includes stats for three European countries. Maybe including others (e.g. Germany) wouldn't have served the point he's trying to make?

curo 6y ago
GDP per capita in Germany is $48k and in the US $63k. Growth is 1.2% and 2.29% respectively: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=DE-US https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
- hocuspocus 6y ago
  And how much public and private debt creation was needed behind these growth numbers?
  - curo 6y ago
    Good question. Private-debt-to-GDP ratio: - Germany (154) - Scandinavia (269-280) - Western Europe (224-266) - US (220) https://tradingeconomics.com/country-list/private-debt-to-gdp https://tradingeconomics.com/country-list/private-debt-to-gd... Gov-debt-to-GDP ratio: - Germany (58) - Scandinavia (~40) - Western Europe (~100) - US (108) https://tradingeconomics.com/country-list/government-debt-to-gdp https://tradingeconomics.com/country-list/government-debt-to...
    - ThePhysicist 6y ago
      Germany is above 80 percent now due to Covid-19. Still better than other countries though, but not great.
      - pas 6y ago
        Why is it not great?

fermienrico 6y ago

EU has anemic salaries for my profession (software engineer). What’s the reason for this deficit? Why aren’t there any Silicon Valleys in the EU? Salary difference is so large, I would never move. Land is dirt cheap, housing is affordable and private healthcare is fine in the US. Before we get in a war on HN - I would move instantly if the salary is matched or even better than US since everything else is scarce in EU (housing, land). Yep, here comes the downvotes.

arghwhat 6y ago
I think it's just more well-balanced over here to be honest. For Denmark: 1. We have a much more chill working situation. You work a regular work day, you're not the property of the company you work at, you do not have non-compete clauses (the company would have to pay your salary in full as long as it was valid), a lot of things that in the US come from post-tax salary is handled by the tax (education for you and your kids, healthcare, etc.) 2. Trying your luck as entrepreneur is easier and much lower risk than in the US. It's also quite easy to get "free" entrepreneurial government grants of small to medium sizes. As a result, there tends to be more, smaller startups, and bootstrapping is popular. When VCs aren't involved, salaries tend to be less astronomical. 3. Software engineer salaries in the US are blown completely out of proportions, and too market-distorting to be goal to have. Just moving to where the salary is highest with no other consideration for anything else sounds... Short-sighted, narrow-minded and greedy (but not in a smart way).
coldtea 6y ago
>Salary difference is so large, I would never move. It's not like the EU wants you to move here, in the first place...
- fermienrico 6y ago
  Not with that attitude!
eek04_ 6y ago
There is a certain total of income for salary available in a country; e.g, the US is spending about 44% of GDP on salaries/compensation[1]. The difference in income for software engineers is partially (and possible mainly) because the US is very income-inequal - ie, because there are more poor people to prop you up. If you look at income inequality before taxes and transfers[2], the US is the most income-inequal of any of the OECD countries. If you look at it after taxes and transfers[3], Chile, Turkey and Mexico manage to do worse. [1] https://fred.stlouisfed.org/graph/?g=2Xa https://fred.stlouisfed.org/graph/?g=2Xa [2] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient,_before_taxes_and_transfers https://en.wikipedia.org/wiki/List_of_countries_by_income_eq... [3] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient,_after_taxes_and_transfers https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...

mkl95 6y ago

I can only talk about tech. Unless you work for a FAANG, there's a perpetual feeling that you are a second division player in the software industry. Some big factors are lack of investment and competitiveness. Even if you are a senior developer, if you are not too happy about your current job finding a better position can take you months. There's no such thing as "fuck you experience" here allowing you to switch jobs overnight.

raverbashing 6y ago

Pointing out the growth of some countries while excluding others (Germany? Ireland? Finland? Sweden?) is debatable, because intra-EU GDP "exchange" might be a thing > What the heck happened? It could happen here too. Maybe it already has, just not as bad. Yes, it is possible. Add Japan to the graph, see what happens. I think the bigger part of the answer is China. Some of it is PPP. Some of it is that Italy has internal problems to solve. Some of it is what I'd call "paper GDP"

BasDirks 6y ago

> The average European is about a third or more worse off than the average American, and it's getting worse. No. GDP does not equal well-being. I mean, the numbers presented in the article _are_ interesting, but their interpretation seems simplistic.

jacquesm 6y ago

That's a pretty badly supported article.

mqp 6y ago

It would be helpful if the title was more specific as the blog post discusses GDP specifically. More to the point, GDP isn't everything. There are many factors at play. It is possible to cherry pick a multitude of attributes to compare Europe with the US and have either appear to be failing in a graph. Think about how the graph would look if the following were considered: education levels, clean air/water, broadband connectivity, health care, inner city and suburban public transport. Also when comparing Europe it would be fair to include Europe in the data rather than a select few countries, otherwise the title (and the argument) becomes more misleading.

jobigoud 6y ago

Because we use a different metric to define what progress is. And we are wondering why is the USA falling behind?

i_have_an_idea 6y ago

As a European, my personal opinion is that it is because of an overfocus on regulation and underfocus on innovation. Everybody that I know that has an idea or a business that might be worth something, is moving or trying to move to the US. The mix of too much regulation, high taxes and difficult access to capital is just too much for most new businesses to handle. So, they are moving somewhere else. I think, despite the talk about higher quality of life, etc., that is going to make us losers in the long run and actually erode our quality of live. Because we need a productive and innovative economy to keep our living standards.

throwawayzRUU6f 6y ago
I'd argue it's working as intended and it's the US who's the outlier. Regulations usually pop up because systems, left on their own, tend to evolve towards a spiral of undesirable social dumping and other negative outcomes. We tend to focus on a minority of arduous regulations, ignoring the majority of them that make our lives better. High taxes, when distributed fairly, are a good thing - talent and hard work gets you to upper-middle class, but really high incomes are mostly down to luck. Now, the move from taxing incomes to taxing wealth is long overdue, but that's a different discussion. Difficult access to capital - can it be that Europeans are simply less exuberant, less gullible, and assess startups more realistically? Getting seed funding worth of lifetime income of a median person, for a dubious idea without any reasonable business model - that's the anomaly, not the other way around.
c06n 6y ago
As a fellow European working in research, I agree with every point. I am not having a good feeling about the future here.

JW_00000 6y ago

It'd be interesting to see more countries added, and not just UK, France, Italy, and Greece. The UK is different in that it is no longer in the EU and never was in the Eurozone. Italy and Greece suffered badly from the Eurocrisis. What about Germany, Poland, the Nordic countries? Or just an EU average? Also, are these figures adjusted for PPP? (And can you therefore make a blanket statement such as "The average European is about a third or more worse off than the average American"?) I'm going to guess not: [1] and [2] compare the GDP per capita without and with adjustment for PPP between the US and France. The first (no PPP adjustment) shows how France plateaued after 2008, while the US kept increasing. The second shows that both kept increasing at the same rate (albeit with France's figures consistently 20% lower than the US). By the way as a European I don't disagree that the EU's (average) economy has fared worse in the last 10 years than the American economy. But these numbers are too simplistic to find out what the underlying causes are. [1] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=FR-US https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [2] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=FR-US https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat... [3] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=US-UK-FR-IT-GR-DE-EU https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location... [4] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=US-UK-FR-IT-GR-DE-EU https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat... [3] and [4] are those same graphs for the countries in the article + Germany + EU average.

alyizzet 6y ago

One outlier mentioned here is Italy which has a high rate of youth unemployment/underemployment and huge brain drain flows to Northern EU so it makes sense that they are in a freefall but for others mentioned in the article like the UK I don't think it is a fair comparison as USA has a significant demographic advantage and a huge integrated market making it easy to scale for companies which in the EU only Germany has a comparable status not the UK or France.

mytailorisrich 6y ago

> This should be profoundly unsettling for economists. Everyone thinks free trade is a good thing. The European union, one big integrated market, was supposed to ignite growth. It did not. The grand failure of the world's biggest free trade zone really is a striking fact to gnaw on. Why try to see the single market as a failure out of the blue just by comparing GDP growth? The single market has been a great success and has undoubtedly boosted growth. The issue is that it is not everything. For example, the business environments in France and Italy are far from being friendly and efficient. The UK's is much friendlier but IMHO the UK has chosen a path of making London an island of prosperity based on services (with a strong emphasis on finance) while letting the rest of the country fend for itself (the UK has both the richest and poorest areas in Northern Europe)...

orian 6y ago

Can it also be that the time of Europe exploiting the rest of the world is over, the last 50 years is US exploiting the world (like forcing it to obey they rules, FAANG de facto monopolies), and the next 50 years will be the china doing exactly the same as old powers but in a Chinese way? :) Historically, the empires exploited other countries, it used to be very brutal, now it's just who works for whom, who is the product, who control the money and information flow.

simonh 6y ago

How on earth can an article about GDP in the Euro area not include a line for Germany?

tormeh 6y ago

Europeans are old. This is often forgotten. Old people are slow to adapt. So Europe is old and old-fashioned. This is not great for prosperity. Same with Japan.

oblio 6y ago
Americans are also getting older :-)

mellosouls 6y ago

Actual title: The puzzle of Europe

teekert 6y ago

Anecdotal: London's GDP was considered super high and growing. Why did citizens not experience any increases in happiness and well being? Because policy focussed on attracting super rich people, and a couple of them raised the GDP significantly. GDP is not a good measure of estimating the pleasure/happiness derived from of living in a country.

alexgmcm 6y ago
GDP is also just a bad measure. I mean as Bobby Kennedy said "...it measures everything in short, except that which makes life worthwhile." The size of an economy doesn't indicate whether or not it is actually improving people's lives. Again, to quote RFK: "It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities."
austhrow743 6y ago
Hold up, why on earth would you think gdp has anything to do with happiness? Do you think humans for the vast majority of our history and also in the vast majority of places today were/are utterly miserable?

deleted 6y ago

[deleted]

blunte 6y ago

The title is (intentionally?) imprecise. There are so many variables of value other than GDP. The US is #40 on the list of countries by citizen lifespan. It's #15 on quality of life index (assuming you believe in the methodology of defining that index). It's #45 when freedom of press is measured. I would not be surprised if, after taking all the different indices into account, the US is not in the top 5 overall. GDP matters little if you don't have freedom, healthy long life, maternity leave (and other expensive but necessary quality of life benefits). Also, reconsider GDP per capita relative to hours worked. The US is not the leader here. It's no surprise that if you work a lot more hours, you should have higher overall output (diminishing returns, but still obviously higher).

tifadg1 6y ago

It's easy to refute articles which treat EU as a single entity, instead of what it is - 27 countries with different law bases, languages and income levels. Median p.a income in US is 43k USD. Median p.a. income in Germany is 33k USD. Median p.a income in Bulgaria is 4k USD. With such big outliers all the equations regarding EU as 1 entity will be off by such a wide margin that it'll be useful only to get the conclusions you (the presenter) want. Here's more subtle factors though: * how much does healthcare cost? * how much does bringing a child up cost? * how much does education cost? * how much does real-estate cost? With all that, I think that unless you're the top earner and can take advantage of favorable taxation schemes, favorable healthcare schemes, favorable living location, you're better of being median in western europe.

Traster 6y ago

So this guy just straight up missed the euro crisis or something? You cannot talk about growth in Europe without talking about the effect the Euro has on exports. Germany can export it's super high quality products across the world with an artificially deflated currency because the currency is tied to weak countries like Italy (and by the way, then invest that surplus in really crappy ways). Meanwhile Italy can't compete in the global market for exports because their currency is held artificially high because it is tied to Germany.

bwb 6y ago

I find it slightly hilarious that Germany, Austria, and others are not on this list. It just feels pretty cherry picked and I'd like to see more data for the EU average and all the countries (esp eastern block). GDP is also interesting as a metric, because you can inflate it by having a terrible and inefficient health care system. If health care takes an extra 8% of your entire GDP, what value is that bringing if the results are so much lower than a country that has a system that saves that 8% points? Italy is a giant dysfunctional mess, no question there. France, I have a lot of questions about the work they have done to try to insulate their workforce from globalization. Some of that is showing cracks, some isn't. If the USA had done more to insulate the poor and middle class from the impact of globalization would our GDP be lower or higher? Something I've been thinking about. Especially as we finally consider measures to help people weather the storm as the economic system raises everyone up globally...

johbjo 6y ago

Possibly biggest difference: government deficit spending and negative trade balance. Should contribute to GDP through spending that would otherwise not happen. This is not afforded to anyone without reserve currency status. EU governments are prevented from running deficits due to some treaty in order to keep the euro stable, and historically the currencies would depreciate quickly.

areoform 6y ago

One of the oddest things about such comparisons, is that no one is talking about asset price inflation in the US led by capital injection by the Fed. Here's one perspective, almost a 23.6% of all dollars ever created were created in 2020, https://www.thestreet.com/mishtalk/economics/23-6-of-all-us-dollars-were-created-in-the-last-year https://www.thestreet.com/mishtalk/economics/23-6-of-all-us-... As a friend (thanks Tom!) laid it out, 1980 $1.6T in circulation, $2.9T GDP 1990 $3.2T in circulation, $6T GDP 2000 $4.7T in circulation, $10.2T GDP 2010 $8.5T in circulation, $15T GDP 2020 $19T in circulation, $21.4T GDP All of these dollars had to go somewhere, they went to inflating asset prices, which then lead to more "wealth", which in turn allowed people to charge more for the same goods and services, which in turn leads to what we're seeing today. In many ways, this post is an argument around Baumol's cost disease (i.e. a bag of saline that used to cost $1 to $10, inflation adjusted, with most of the price being the packaging, now costs $700+ for no discernible reason) than other types of macroeconomic policy. It is surprising that, as a rule, such analyses don't consider the difference in American and European monetary policy. Essentially, even though they are broadly similar, their capital injection system does seem to produce somewhat different effects that are showing up in this data. More generally, most economic policy discussions have become murkier and stranger because of the difficulty of establishing ground truth through economic data. After all, how do you use something as a reference for measure, when the references rapidly changes in a short period of time? It seems apparent to me that alternative measures need to be used instead, and that their use should be taken more favorably, and when we view the state of these countries through alternative indices. For example, average lifespans have declined in the US, for several years in a row - a first for the developed world, https://www.advisory.com/daily-briefing/2019/12/02/middle-age-death https://www.advisory.com/daily-briefing/2019/12/02/middle-ag... The US has the highest infant and maternal mortality rate of these countries, and the rate is increasing https://hbr.org/2019/06/the-rising-u-s-maternal-mortality-rate-demands-action-from-employers https://hbr.org/2019/06/the-rising-u-s-maternal-mortality-ra... Other measures are trending in the wrong direction as well, from economic mobility, https://www.pnas.org/content/117/1/251 https://www.pnas.org/content/117/1/251 , to a reduction in access to safe drinking water - https://www.sciencemag.org/news/2018/02/millions-americans-drink-potentially-unsafe-tap-water-how-does-your-county-stack https://www.sciencemag.org/news/2018/02/millions-americans-d... , and the return of diseases of poverty such as hookworm. https://www.npr.org/sections/goatsandsoda/2017/12/12/570217635/the-u-n-looks-at-extreme-poverty-in-the-u-s-from-alabama-to-california https://www.npr.org/sections/goatsandsoda/2017/12/12/5702176... The flywheel of prosperity has been broken for some time now, and the drift in the US between the "other America" and paper wealth is rapidly increasing. The EU, on the other hand, has had some of the same problems, but to a much smaller degree, and the group of nations has increased in net prosperity when measured through these indices. The question we should ask is why. Why did this divergence happen in America and not Europe? On a personal note, the metrics I'm most interested in are indirect measures of "effective" research and research into basic science. My experience on both sides of the pond tells me that in some ways, the EU is catching up to the US in that regard - at least in my experience. However, I'd like to find a reliable dataset (or datasets) before making this claim.

ThePhysicist 6y ago

GDP / working hour is a better metric IMHO. French people work a lot less than Americans on average. My former colleagues from Academia there enjoyed 8-10 weeks of vacation per year, plus a sizeable number of public holidays. On paper they also worked fewer hours than most people in the US, I think their contracts were for 30-32 hours per week on average. Most of them worked way more though since they really enjoyed their research. Their contracts allowed them to add all that overtime to a "time account" that they could eventually cash in to e.g. take a year-long sabbatical (fully paid of course) a couple of times during their careers. Also, there's free and full health coverage included, a state pension, family money and time off for raising children etc. etc.. And don't forget that life in France is also (mostly) amazing: Beautiful nature, amazing food, great culture. I'm German btw and I swear I don't get money from the French government for praising them, I just really liked living there for a while. So I guess you have to decide if having 20 % more GDP per capita is worth throwing away all those luxuries. Having spent time both in the US and in various European countries I'd say no, for most people it's not a good deal. People working in tech are an anomaly BTW, so I'd exclude them from this discussion as they're making up less than 1 % of the working population, hence they are a pretty exclusive and not very representative group of people. All the positive things aside it seems young people there also struggle way more than the older generations, as housing prices etc. have gone up immensely (in the Paris region e.g. you can pretty much forget to buy a house as a young middle class family).

Seb-C 6y ago
> free and full health coverage included I don't know about other European countries, but I often heard this argument in France, and it is bullshit. It's free but overall about 60~70% of your work value/cost for employer is taxed. It's free, but when you need to see an ophthalmologist (for example), you are either lucky to get an appointment next year, or have to pay 150 Euros for a non-affiliated doctor. Its free, but so completely broken that we have to pay by ourselves what is called a "mutuelle", which is basically an insurance that covers partially what is not paid by the national health system. And this thing became mandatory a few years ago. It's free but so inefficient and corrupted that when you subscribe you have to wait 6 months and re-do the procedure 3 times because they lost your files somewhere in the bureaucratic black-hole. If this is the definition of "free" in Europe, I'd rather get both my money and the real freedom to decide how to use it.

Grustaf 6y ago

I wonder how many Europeans that would rather live in the US. And out of that 1% or so, how many would still want to once they've visited? Quality of life in Europe is infinitely higher for all but the wealthiest.

TMWNN 6y ago
Why don't you ask those who actually vote with their feet? A random German is four times more likely to move to the US, than an American is to move to Germany. A German is 16 to 48 times more likely to obtain US citizenship than an American obtaining German citizenship. See discussion at https://news.ycombinator.com/item?id=25367731 https://news.ycombinator.com/item?id=25367731
- Grustaf 6y ago
  Americans are obviously very unlikely to move anywhere, and not least because they don't know very much about the outside world, let alone speak a foreign language. The per capita discussion in that post is of course a bit misleading, the US is larger so it's also more likely to attract immigrant. But my point still stands, unless you are already well off, or an academic, you are very unlikely to have better quality of life in the US than here. You need a pretty high salary in SF for example if you want to enjoy the lifestyle of a nurse or street sweeper in Copenhagen.
  - TMWNN 6y ago
    >The per capita discussion in that post is of course a bit misleading, the US is larger so it's also more likely to attract immigrant. A migrant doesn't care if the country he is moving to has a million, 10 million, or 100 million people. He cares that it offers the job opportunities/welfare programs he wants. If Mexico was the same population of about 100 million and the US had 33 million instead of 330 million people but was just as wealthy, would a single Mexican illegal alien be dissuaded from attempting to sneak across the border? Of course not. >Americans are obviously very unlikely to move anywhere, and not least because they don't know very much about the outside world, let alone speak a foreign language. No. The same disparities exist with Canadians, Britons, and Australians vis-a-vis Americans. The dataset I link to in the discussion shows that, on a per capita basis, [a Canadian is 27 times more likely to move to the US than an American is to move to Canada](https://np.reddit.com/r/MapPorn/comments/6lin9k/reupload_population_of_americans_in_canada_any/dju6fus/?context=3 https://np.reddit.com/r/MapPorn/comments/6lin9k/reupload_pop...). The per capita population flows between, say, Canada and Australia are much more normalized (that is, close to 1:1) >You need a pretty high salary in SF for example if you want to enjoy the lifestyle of a nurse or street sweeper in Copenhagen. Ah yes, as we can see from the massive flow of Americans moving from San Francisco to Copenhagen to work as nurses and street sweepers. >But my point still stands, unless you are already well off, or an academic, you are very unlikely to have better quality of life in the US than here. I repeat: Why don't you ask those who actually vote with their feet? Their answers are quite clear, to anyone who looks at the data.

blunte 6y ago

It's important to remember that HN is not immune to information warfare (whether driven by corporate or political goals). TFA is just discussing one topic, GDP, without making broad statements. However, the submitter has chosen an intentionally misleading title. Looking at the submissions of this submitter, this is an intentional pattern. (edit - typos!)

mschuster91 6y ago

> GDP per capita is income per capita. The average European is about a third or more worse off than the average American, and it's getting worse. European costs of living are way lower in Europe. Not just rent (fwiw, even as someone living in Munich, US rents sound utterly ridiculous) but also everything else (with the notable exception of gas/diesel). Not to mention medical insurance/debt: with a ~3500€ gross job, an employee pays ~275€ a month for full medical coverage - including, if married and the s/o not working, the whole family! > What the heck happened? It could happen here too. What happened is mostly that the US exploded their financial industry over the last decades. In Europe, pension funds are (mostly) on a "rolling" basis - meaning that the contributions of the current working generation plus tax-funded prop-ups are used to pay for the current pensioner generation. Also, there are decent public social security networks (unemployment insurance, health insurance, assistance for the poor), and universities are government-funded which means that (UK excepted) tuitions are either not existing or extremely low if you are a citizen of an EU country. In the US in contrast, people are supposed to save on the capital markets for their retirement via 401k and the likes, for their kids' education (529 plans) and for their medical needs (MSA). That money is parked for extremely long time and available to prop up the economy - and in times of extremely low interest rates, that money is available to fund even the most dumbass ideas (remember Yo?), stuff that eventually destroys societal foundations (not just "social" networks, but also Walmart/Amazon who kill off retail and other "gig economy" companies) or for predatory lending (the money backing student loans, paycheck loans and five-digit credit card limits has to come from somewhere!). The downside of this: the US economy is massively dependent on "the stonks go up and up", which means that times of crisis hit the US population extremely hard as both 2008ff and corona showed, with dozens of millions losing their jobs and homes or depending on food banks over the course of maybe a month; Europe meanwhile weathered the crisis way better on these metrics. > the world's biggest free trade zone became the world's biggest regulatory-stagnation, high-tax, welfare-state disincentive zone LOL What? At least our people don't suffer for over half a decade from lead in water pipes (Flint), week-long power cuts due to natural disasters or shoddy maintenance (California fires, Texas snow desaster), our consumers aren't ripped off for internet and cable TV, full-time employees generally aren't depending on food banks/food stamps to survive while their employer's owners rake in billions... regulation is a good thing because usually the only ones profiting off of de-regulation are the 0.01% elites while everyone else and nature pays the price.

reacharavindh 6y ago

GDP is not the only or the best metric to look at a country’s or society’s well being, life quality or even the economy. I live in DK now, having moved from the US. I get paid less than before, but I don’t need to save for health insurance and the off chance that I might get some expensive disease that the insurance company wouldn’t cover! Neither do I need to save for paying super expensive day care, or child education, or college costs of my son. So, money exchange is different when you don’t pay for a lot of services like in the US. The experience we felt when our little boy was born was unforgettable. We drive to the hospital, get treated very well, get a room to stay close to the hospital with service from resident nurses in case we needed help or education about taking care of the baby, and all through this without ever thinking about money or bills....! Let that sink in. Everyone who lives here gets that treatment and gets to enjoy the baby being born instead of the financial burden. I will happily pay my 37% income tax and high VAT if it brings happiness and fairness to all. It’s not perfect, but it’s the closest there is.

Shadonototro 6y ago

because: - the US prints infinite dollar - the US impose trade restrictions that kill businesses - the US send the lawyers when you try to compete with them

Glavnokoman 6y ago

"GDP per capita is income per capita" Stopped reading after this.