I’m not a big fan of Obamanomics.
I don’t like the President’s class-warfare mentality on taxes. I don’t like his support for Keynesian spending policy. And I don’t like his costly expansions of government such as Obamacare.
Indeed, I even like mocking his reflexive statism.
That being said, I fully agree (albeit with some important caveats) with his observation that the United States generally is doing better than other nations.
Here are some blurbs from a Bloomberg report about the President’s remarks on that issue.
A month before congressional elections, President Barack Obama is making an appeal to American pride in promoting his economic policies, arguing that the U.S. is outpacing the recovery in other nations. …“The United States has put more people back to work than Europe, Japan, and every other advanced economy combined.” Obama said. …economies in Europe and Japan are sluggish. The recovery for the euro area — including France and Italy — stalled, with gross domestic product unchanged, from the first quarter to the second, according to Eurostat, the European Union’s statistics office in Luxembourg. Japan contracted by the most in more than five years, with GDP shrinking an annualized 7.1 percent, data from the government Cabinet Office in Tokyo show. …Jason Furman, the chairman of the White House Council of Economic Advisers…called Obama’s emphasis on the relative strength of the U.S. economy “useful context to compare to other countries that are facing similar challenges.”
I don’t know if the White House is correct on every specific claim, but it’s definitely true that the United States is out-pacing Europe.
Here are a couple of charts I found with a quick search. We’ll start with one comparing GDP performance. It’s not as up-to-date as the one I shared back in June, but it does a good job of showing how our cousins across the ocean are falling behind.
And here’s another chart I found showing how Europe also is lagging on employment.
And I can also say from personal experience, based on my trips to various conferences, that Europeans look at the American economy with envy. Heck, they even think 1 percent growth is a reason for celebration!
Which should give you an idea of how bad the outlook is in Europe.
After all, the United States is experiencing the weakest economic expansion since the Great Depression. Yet compared to European nations like France and Italy, we’re a powerhouse.
And this isn’t even a new development. After World War II, the European economies were converging with the United States. In other words, they were growing faster, which is what conventional economic theory predicts should happen over time.
But then, thanks the Europe’s shift to more statism in the 1960s and America’s shift to more freedom in the 1980s, the convergence stopped and America began to enjoy better performance. The data from recent years is just the latest bit of evidence.
Let’s now return to the central thesis of today’s post. As I said above, Obama is right that America is doing much better than most other nations.
But here’s the catch….and it’s a big one.
The President wants America to copy the policies that have caused economic stagnation in Europe!
Does he want higher tax rates? Yup.
Does he want more spending? You bet.
Does he want additional regulation? Yes.
Does he want increased intervention? Of course.
Does he want expanded welfare programs? Naturally.
In other words, when I read the article in Bloomberg, it was a very surreal experience. Is the President clueless? Or does he think we’re clueless? How could he brag about America out-performing Europe without realizing that he was attacking Obamanomics?
It was like getting a lecture on the merits of exercise from a guy who wants you to buy a big-screen TV and a lifetime supply of fast food. Or, better yet, check out these cartoons from Michael Ramirez, Glenn Foden, Eric Allie and Chip Bok.
By the way, I feel guilty about saying so many bad things about Europe, so let’s close with some reasonably clever anti-American humor from our European friends.
Here’s an image regarding culture.
And here’s one regarding…um…style.
P.S. Okay, maybe the Europeans have more culture and style, but Americans are more genuinely compassionate.
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The president’s policies are a comprehensive and unfolding attempt to make America like Europe. It is a proven package of easier hope with proven appeal in most electoral environments all over the world. It is a policy of redistribution, statism and low growth. A policy that promises, and often indeed achieves, very short term benefits to the masses, in exchange for longer term sub-par growth – and thus decline.
But to a majority of people, “a redistribution dollar today is worth five perpetually compounding dollars of growth in the future”. But try to entice the average voter into a much greater but delayed and perpetually compounding gratification. The way most people handle their finances should be good indication of your chances of success. Hence most electoral bodies choose France over Switzerland. And once they start declining it becomes impossible to let go.
Once past the point of no return, there will no longer be a choice. Once everyone depends on everyone, nobody will let go first. The critical mass for change — a return to steeper effort-reward curves and higher personal motivation — will never be achieved until things bottom out and people become completely demoralized and beaten down – soviet style bottom out. Look at Greece, Spain, Italy France and the rest of Europe in general, with their severely sub-par growth trendlines. They have not bottomed out yet. They are still a long way from it. Their decline will continue for a while in the foreseeable future. There is virtually zero chance that the voter-lemmings of these countries will ever be able to reverse statism in any meaningful way – until they completely bottom out. In those countries, everyone is using their two hands to hold on to someone else’s cojones,… and squeezes. Those who try to let go lose their only leverage on the system while still others continue to squeeze their cojones. The few who temporarily let go, quickly learn their lesson and immediately reengage in squeezing. The system is deadlocked in pain and misery… Eventually, an even bigger and oppressive calamity, Genghis Khan (again I do not mean the Chinese – I’m using the old Mongol’s name as a proxy for an authoritarian powerful juggernaut) slains them all.
That is the warning for America. But I’m afraid the tipping point has passed folks. The fact that American voters elected Mr. Obama to correct an accumulation of past statist problems, to achieve prosperity by flattening the effort-reward curve to European levels, is indication that America has entered the irreversible decline cycle. The fact that Americans today, after so many years of below world average growth (i.e. decline) still talk HopNChange, is an indication of the irreversible vortex of coercive collectivism gaining strength. American voters, like their European brethren are destined to enter a sequence of flip-flopping between the coercively collectivist hope of the left (redistribution, regulation, central planning and public spending) and the coercively collectivist hopes of right (militarism, central planning and public spending). Leftist tendencies and fascist tendencies are cousins. But they both claim the entire person. They claim most of a person’s vitality for public service. That is why the two cousins are in mortal combat. There is no room for both in the same person. But they are different incarnations of the same demon: Coercive collectivism. They both embody the futile hope: “that, some day, someone smarter, someone more competent, or someone simply harder working, under the coercion of either the people themselves or an enlightened elected elite, will leave their families every morning to produce mostly for the betterment of the whole. AND do so with enough residual enthusiasm to outcompete the remaining billions of this world. So that I the developed world voter-lemming can continue to be in the world’s top ten percent. Good luck with that hope. Problem is: In coercive collectivism you have no choice. You must do what the majority demands of you.
The entire western world, is on a sub-par growth trendline compared to the world average. Hence, the entire western world is in decline at various rates, perhaps the US one of the least bad, since it has not yet completely copied the welfare statism of Europe. But it is still past the electoral-political point of no return in escaping that fate.
Hope for the best but keep your options open outside America’s borders. The inflection point may be a lot closer than it seems. Now that voter-lemmings will erroneously interpret a couple of quarters of stronger growth as a return to a higher growth trendline – now is the time for wiser individuals to procure their Noah’s arc.
P.S. on the jokes: As someone who has grown up in European culture, I fail to see why all this past culture is better than present vibrancy. I live in the present, not the past — and look to the future. I’ll take a big truck with a V8 on my one acre American lot over an 18th century gargoyle on the balcony of my 1200sqf European apartment with the opera house and the Wagner plays on the next block. I live in the present, not the past. Differences aside, in a free world you can actually chose either. Both environments spontaneously form demand. Unfortunately, those choosing the European options want to force all into their choices. It’s inevitable they cry swinging the various flags of their newest incarnations of the same old demon: Coercive collectivism.