Both sides get *Europe* completely wrong in the US presidential campaign debates. Thread (1/7)
The left sees Europe as an El Dorado of free healthcare, free education and workers’ rights.
The right sees it as a socialistic nightmare with no growth and no innovation.
The left sees Europe as an El Dorado of free healthcare, free education and workers’ rights.
The right sees it as a socialistic nightmare with no growth and no innovation.
(2/7) Both are wrong. Sometimes the mistakes are obvious. @SteveRattner write in the NYT that "Germany has had a significantly slower growth rate than ours for many years"... Here is the data:
So that's just a bit embarrassing...
So that's just a bit embarrassing...
(3/7) .. but the bigger mistake is not to understand what Europe has done over the past 20 years. It has moved towards free markets. In that sense it has become *more* American (at least as America used to be). This graph shows the number of days required to start a business.
(4/7) For reasons I explain in my book, Europe managed to take some of the good ideas that prevailed in the US 20 or 30 years ago. This is why the lower and middle classes in the EU have been doing better than the lower and middle classes in the US. They enjoy lower prices.
(5/7) At the same time, the EU has retained a broader welfare state. But this is about social transfers, not direct interventions in the economy. In fact the states intervene less in the economy today than 20 years ago. And that is mostly a good thing.
(6/7) A perfect example is the mortgage market. We do not have the equivalent of Fannie Mae and Freddie Mac. We have private markets... In healthcare, we have a mix of public spending and private markets. The exact mix varies from country to country, but that's the big picture.
(7/7) If the US wants inspiration from the EU, it should take the *best* ideas from Europe, just like the EU did from the US 20 years ago. Not the other way around.
