It's America - Not Europe

[stevemon]

So Wrong, So Often, For So Long, Yet It's Europe We Want To Copy

By THOMAS SOWELL | Posted Tuesday, June 24, 2008 4:30 PM PT
IBDeditorials.com: Editorials, Political Cartoons, and Polls from Investor's Business Daily -- So Wrong, So Often, For So Long, Yet It's Europe We Want To Copy


If anyone suggested that Tiger Woods should try to be more like other golfers, people would question the sanity of whoever made that suggestion.

Why should Tiger Woods try to be more like Phil Mickelson? If Tiger turned around and tried to golf left-handed, like Mickelson, he probably wouldn't be as good as Mickelson, much less as good as he is golfing the way he does right-handed.

Yet there are those who think that the United States should follow policies more like those in Europe, often with no stronger reason than the fact that Europeans follow such policies. For some Americans, it is considered chic to be like Europeans.

If Europeans have higher minimum wage laws and more welfare state benefits, then we should have higher minimum wage laws and more welfare state benefits, according to such people. If Europeans restrict pharmaceutical companies' patents and profits, then we should do the same.

Some justices of the U.S. Supreme Court even seem to think that they should incorporate ideas from European laws in interpreting American laws.

Before we start imitating someone, we should first find out whether the results that they get are better than the results that we get. Across a very wide spectrum, the U.S. has been doing better than Europe for a very long time.

By comparison with most of the rest of the world, Europe is doing fine. But it is like Phil Mickelson, not Tiger Woods.

Minimum wage laws have the same effects in Europe as they have had in other places around the world. They price many low-skilled and inexperienced workers out of a job.

Because minimum wage laws are more generous in Europe than in the U.S., they lead to chronically higher rates of unemployment in general and longer periods of unemployment than in the U.S. — but especially among younger, less experienced and less skilled workers.

Unemployment rates of 20% or more for young workers are common in a number of European countries.

Among workers who are both younger and minority workers, such as young Muslims in France, unemployment rates are estimated at about 40%.

The American minimum wage laws do enough damage without our imitating European minimum wage laws. The last year in which the black unemployment rate was lower than the white unemployment rate in the U.S. was 1930. The next year, the first federal minimum wage law, the Davis-Bacon Act, was passed. One of its sponsors explicitly stated that the purpose was to keep blacks from taking jobs from whites.

No one says things like that any more — which is a shame, because the effect of a minimum wage law does not depend on what anybody says. Blacks in general, and younger blacks in particular, are the biggest losers from such laws, just as younger and minority workers are in Europe.

Those Americans who are pushing us toward the kinds of policies that Europeans impose on pharmaceutical companies show not the slightest interest in what the consequences of such laws have been.

One consequence is that even European pharmaceutical companies do much of their research and development of new medications in the U.S., in order to take advantage of American patent protections and freedom from price controls.

These are the very policies that the European imitators want us to change.

It is not a coincidence that such a high proportion of the major pharmaceutical drugs are developed in the U.S. If we kill the goose that lays the golden egg, as the Europeans have done, both we and the Europeans — as well as the rest of the world — will be worse off, because there are few other places for such medications to be developed.

There are a lot of diseases still waiting for a cure, or even for relief for those suffering from those diseases. People stricken with these diseases will pay the price for blind imitation of Europe.

Underestimating The U.S.

It must be a bitter disappointment to those in the media and in politics who have been dying to use the word "recession" that, for the second quarter in a row, there has been no downturn in the economy, though growth has been slow.

Alarmists have been reduced to quoting other alarmists on the supposedly impending recession, but that is still not the real thing.

The definition of a "recession" is very clear and straightforward: Two consecutive quarters of negative growth. We have not yet had one consecutive quarter of negative growth.

The fault-finding brigades of critics of the American economy and society are among the reasons why there is so much talk about how we ought to do things that are being done in Europe.

We need to understand America first, before we start imitating Europe. The American economy produces the largest output in the world — more than Japan, Germany and Great Britain combined. Measured by purchasing power, output per capita in the U.S. is the highest of any large nation.

There are some very small places such as Luxembourg or the Cayman Islands with higher purchasing power per capita. But as professor Benjamin M. Friedman of Harvard put it, places like Luxembourg are "technically countries but are more like large suburbs." Luxembourg's total population is about the same as that of Long Beach, Calif. Wal-Mart has more employees than the total population of Luxembourg.

Some other small places, like the Cayman Islands, are tax havens that attract the wealth of people who are not really Cayman Islanders.

Among countries at all comparable to the U.S. in size or population, none has achieved as high an output per capita. New Jersey produces more than Egypt. California produces more than Canada or Mexico.

Desperate efforts to depict all the prosperity and progress in the U.S. as being monopolized by "the rich" have led to all kinds of statistical mumbo jumbo, such as comparing the changing ratios between statistical categories over time and ignoring the fact that most of the people in those categories move from one category to another over the years.

Studies that follow given individuals over time show the exact opposite of what is being said in the mainstream media and in politics. That is, most of the working people in the bottom fifth of the income distribution rise into the top half, and the rate of increase of their incomes is greater than that of most of the people initially in the top fifth.

Those individuals in the top 1%, as of a given time, actually have an absolute decline in income over time. As they drop out of the top 1%, they are replaced by others, so that the statistical category can be doing great while the flesh-and-blood people who pass in and out of that category are by no means gaining on those further down the income distribution.

None of this is rocket science. But most people in politics, the media and academia insist on using statistics based on the fate of abstract categories over time — households, families, income brackets — even when other statistics, based on following specific individuals over time, are available.

Households and families vary in size from group to group and are generally declining in size over time, but an individual always means one person. Income per household or family can be stagnant, or even declining, while income per person is rising. That has in fact been a general pattern in recent decades, which may be why the nay-sayers are forever citing household and family income statistics, while ignoring statistics on income per person.

Amid a general undermining of American economic performance, it is hardly surprising that so many people think we should imitate what the Europeans are doing — whether in the economy, in foreign policy or in other areas.

We can always learn particular things from other countries, whether in Europe, in Asia, or elsewhere. But imitating Europeans when they are not doing as well as Americans makes no sense.

A Not-So-Sophisticated Record

Some of the people who are most adamant against outsourcing economic activity from the U.S. to other countries often seem to think we should outsource our foreign policy to "world opinion" or act only in conjunction "with our NATO allies."

Like so many things that are said when it comes to public policy, there is very little attention paid to the actual track record of "world opinion" or of "our NATO allies."

Often there is a blanket assumption that European countries are just so much more sophisticated than American "cowboys." But there is incredibly little interest in the track record of those European sophisticates whom we are supposed to consult about our own national interests — including, in an age when terrorists may acquire nuclear weapons, our national survival.

In the course of the 20th century, supposedly sophisticated Europeans managed to create some of the most monstrous forms of government on earth — communism, fascism, Nazism — in peacetime, and to start the two World Wars, the bloodiest in all human history. In each of these wars, both the winners and the losers ended up far worse off than they were before these wars were started.

After both World Wars, the U.S. had to step in to save millions of people in Europe from starving amid the wreckage and rubble that their wars had created. These do not seem like people whose sophistication we should defer to.

Between the two World Wars, European intellectuals — more so than ordinary people — completely misread the threat from Nazi Germany, and were urging disarmament in France and England, while Hitler was rapidly building up the most powerful military force on the continent, obviously aimed at neighboring countries.

During the Cold War, many European intellectuals once again misread the threat of a totalitarian dictatorship — in this case, the Soviet Union. When they finally recognized the threat, many saw the question as whether it was "better to be red than dead."

They were no more prepared to stand up to the Soviet Union than they had been ready to stand up to Nazi Germany in the 1930s. Worse yet, much of the European intelligentsia objected to America's standing up to the Soviet Union.

Many of them were appalled when Ronald Reagan met the threat of new Soviet missiles aimed at Western Europe by putting more American missiles in Western Europe, aimed at the Soviet Union.

Reagan, in effect, called the Soviet Union and raised them, while many of the European sophisticates — as well as much of the American intelligentsia — said that his policies would lead to war. Instead, it led to the end of the Cold War.

Are we now to blindly imitate those who have been so wrong, so often, over the past hundred years?

[Steve Wood]

Anyone that has seen the hairy armpits and hairy legs on European women should know better than to imitate them.

Question, is...we have bailed Europe out twice in the past 100 years...who is going to save us once we are like them.

We would probably get more respect if we had sent them a bill for services rendered.

[gbsean]

who wants to be like Europe??? that why people keep coming to America....I have no desire to go back....Nice place to visit,,,,but I would never have the lifestyle I have here..i still talk to relatives and freinds in England...Holland and Germany...and they come to visit and see my house and all the stuff we have....could never happen unless you had mucho $$$$

[salvageV6]

Europeans have had some great ideas over the years.

Religious persecution was one good one.