Europe slides into the poor house

The cause is ex­ces­sive gov­ern­ment spend­ing, in­clud­ing many failed ‘green’ projects

The Washington Times Weekly - - Commentary -

max­i­miz­ing rates that have only un­der­mined the de­sire to work, save or in­vest; and reg­u­la­tions that make no eco­nomic sense and are so nu­mer­ous and com­plex they only serve to un­der­mine the rule of law.

Europe, as well as other parts of the world, is lit­er­ally killing it­self by not hav­ing ba­bies. Most Euro­pean coun­tries now have fer­til­ity rates well be­low that needed to keep the pop­u­la­tion stable — for­get about grow­ing. A shrink­ing pop­u­la­tion adds to the rel­a­tive bur­den of tak­ing plants. At the same time, the United States em­braced frack­ing, al­low­ing it to move to cleaner en­ergy (nat­u­ral gas) and re­duce both CO2 emis­sions and elec­tric­ity costs.

Mod­ern Europe is the re­sult of the de­nial of physics, bi­ol­ogy and mi­cro-economics by too many politi­cians and two gen­er­a­tions of ig­no­rant vot­ers.

The United States is now grow­ing at more than twice the rate of Europe and is en­joy­ing full em­ploy­ment. In fact, there is no big de­vel­oped coun­try that is even close to the United States in terms of eco­nomic per­for­mance. China con­tin­ues to do well, but de­spite very rapid eco­nomic growth, its per capita in­come is still less than a fourth of the United States. China has a long way to go — par­tic­u­larly in the mod­ern­iza­tion of its fi­nan­cial sys­tem — which is still largely state-owned.

The main rea­son the United States looks so good is that Europe looks so bad. De­spite its re­cent success, the United States still could do bet­ter. As an Amer­i­can, it is dis­ap­point­ing to see how many U.S. politi­cians (mainly Democrats) have stud­ied the causes of Euro­pean stag­na­tion, but are ad­vo­cat­ing many of the same poli­cies that are de­stroy­ing Europe. On av­er­age, liv­ing stan­dards are about one-quar­ter lower in the EU than in Amer­ica and un­em­ploy­ment rates are twice as high.

There is noth­ing in­her­ent in the ge­og­ra­phy, cli­mate, nat­u­ral re­sources or peo­ples of Europe that keeps them poorer. It is merely a func­tion of bad poli­cies and poor lead­er­ship. What Europe, and the U.K. in par­tic­u­lar, needs is a new Mar­garet Thatcher. A per­son clear-eyed enough to see what needs to be done, and then the tough­ness and strate­gic sense to de­liver.

There are is­lands of success within Europe which can serve as good ex­am­ples. Lit­tle, land-locked, re­source-poor Switzer­land has man­aged to build a strong econ­omy and a very civil so­ci­ety with the rule of law. The Swiss have even man­aged to earn a higher per capita in­come than the United States. If Switzer­land can suc­ceed, as it has, then there is no rea­son the other na­tions of Europe can­not do equally well. Un­em­ploy­ment rate, % 3.6 3.9

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