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« NOT a Repugnant Conclusion: Michael Thomas PhD | Main | In Search Of Austrian Economists »


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Not only has Europe been plagued with economic problems for decades, it's not clear what more regulation has bought them in terms of stability in the current downturn. Here are stock market returns since the Dow peaked (10/11/07):

UK (FTSE 100) -39.1%
Germany (DAX 30) -41.4%
US (DJIA 30) -41.9%
Sweden (OMX 30) -42.1%
France (CAC 30) -47.2%

On this measure, it's fairly clear that Europe has not been insulated from the current downturn. In fact the favored examples of European-style capitalism, France and Sweden, have fared the worst.

Of course the stock market is just one measure, and these indices are certainly imperfect measures of the market. But it's not clear that France and Sweden are doing better in relative terms by any measure (e.g., GDP or Unemployment).

Well, it is like this. Economic downturns are actually not much felt in Europe, because of the safety nets. It's more like business as usual given that politicians are not really affected.

Since all blames goes to bankers and the government (for not regulating enough), there won't be any changes to the system, but only minor expansions in regulation (yes, this is till possible). Also, they ignore the fact that while the US is bottoming out, they are still plunging deeper into recession.

But all in all, Europeans think that they still have it better than the US, at least, in Europe noone is left to die because he is ill or lost his job. In Europe the government is caring unlike in the States (of cousre, this only shows ignorance compared to the expansion of social services in the US). So, while Europe plunges, it has no real cultural incentive to CHANGE anything. Instead the cries for more state-socialism rise (and often they cite as example that the capitalism of Ireland and Iceland has failed, though it was more likely that the borrowing of Ireland and Iceland failed).

I think Max is right. However things aren't as safe for collectivists as he describes.

I live in Ireland. It is very unlikely that welfare safety nets will shield people from the pain. Some have already been cut, I expect more will have to be cut before things level out again. Taxes are rising because the government cannot run large deficits without getting its credit downgraded.

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