WSJ - "Behind the U.S.'s Growth Lead Over Europe" - Could It Be Obama's Policies?

[TomCADem]

It is almost funny the degree to which the WSJ bends over backward to avoid giving credit to President Obama's economic policies or the stimulus as a reason why Europe appears to be getting worse with sovereign debt issues compared to the U.S.

http://online.wsj.com/article/SB10001424052748704269004575073320619483574.html?mod=googlenews_wsj

Amid the cacophonous economic debate echoing in Washington, what's most striking are two numbers: 5.7% and 0.4%.

Those are the economic-growth rates in the latest quarter for the U.S. and Europe, respectively. The difference is so strikingly in America's favor that it warrants a little more attention, both because of what it says about the current state of affairs and for the lessons it might offer policy makers.

The gap between American and European growth can be attributed partly to economic cycles and partly to some artificial expansion in that big U.S. growth figure for the last quarter of 2009. But the disparity also suggests that, amid all the scrambling and stumbling, at least a few things were done right in the American response to the economic crisis of the past two years, and a few things less right in Europe.

Such questions haven't been explored much in this weeks' economic debate in Washington, which has been a fairly sterile shouting match over whether the stimulus package signed into law by President Barack Obama precisely a year ago has accomplished much.

[tabatha]

1. yeah, read that MannyGoldstein.

[MannyGoldstein]

2. Did You Know That Germany Is The #1 Exporter In The World?

When we become the largest exporter in the world, get six weeks vacation, paid maternity and paternity leave, and a minimum wage of $40k a year, give me a call, OK?

US growth is based on cheapening labor, and only benefits Obama's beloved Privileged Class.

[quaker bill]

3. Hang on to this conclusion

for as long as you can. It is dated to expire in March or April. Only 1/3 of the stimulus is out the door, the rest is coming soon.

BTW, if you do not think these sorts of things are timed to show maximum effect during the run up to an election, I am a wetlands ecologist in Florida and can show you to some fine property.

[TomCADem]

4. Just a friendly reminder, Germany is not Europe...

Here is a map:

<>

:hi:

[MannyGoldstein]

5. Fine. Europe, In Aggreagate, Is The Largest Exporter In The World

And pretty much all countries have policies more like Germany's than like the US. That's how they can be an economic union, by having similar policies.

[TomCADem]

6. Here Is Paul Krugman On Europe's Problems, He Has A Different Take

I think Paul Krugman has the absolute opposite take, and he faults Europe's rush to adopt a single currency without any coordination on other policy issues.

http://www.nytimes.com/2010/02/15/opinion/15krugman.html?partner=rssnyt&emc=rss

Consider the case of Spain, which on the eve of the crisis appeared to be a model fiscal citizen. Its debts were low — 43 percent of G.D.P. in 2007, compared with 66 percent in Germany. It was running budget surpluses. And it had exemplary bank regulation.

* * *

The result was rapid growth combined with significant inflation: between 2000 and 2008, the prices of goods and services produced in Spain rose by 35 percent, compared with a rise of only 10 percent in Germany. Thanks to rising costs, Spanish exports became increasingly uncompetitive, but job growth stayed strong thanks to the housing boom.

Then the bubble burst. Spanish unemployment soared, and the budget went into deep deficit. But the flood of red ink — which was caused partly by the way the slump depressed revenues and partly by emergency spending to limit the slump’s human costs — was a result, not a cause, of Spain’s problems.

And there’s not much that Spain’s government can do to make things better. The nation’s core economic problem is that costs and prices have gotten out of line with those in the rest of Europe. If Spain still had its old currency, the peseta, it could remedy that problem quickly through devaluation — by, say, reducing the value of a peseta by 20 percent against other European currencies. But Spain no longer has its own money, which means that it can regain competitiveness only through a slow, grinding process of deflation.

[MannyGoldstein]

8. Apples And Oranges

What Krugman and I are stating are not, somehow, mutually exclusive. They are both happening.

[TomCADem]

10. Apples and Oranges...Says The Person Holding Up Germany ...

...as a representative sample of the entirety of Europe.

:hi:

[liberal_at_heart]

11. I agree

The gap between rich and poor grows bigger every day here in the US. My husband's vacation just got cut by a week not to mention our crappy insurance that just keeps getting crappier every single year. It's a new year. That means we are back to paying everything out of pocket until we reach our $2500 deductible for the year. Yippie. Go USA! If we lived in Europe we would have much more vacation and we would have national healthcare. I want to live in Europe or the UK someday so badly.

[RainDog]

7. no doubt Obama's policies helped the U.S. - tho so much more needs to be done

but the U.S. economy was and has been hit much harder than the European one since 2007.

three nations are creating problems - Greece, Portugal and Ireland - that the EU is addressing.

the U.S., on the other hand, has a state that is one of the largest economies in the WORLD, that has contributed to the handout southern states for decades, that is now ignored by that same nation that it helped to succeed.

the issues with the european economy at this time also have to do with fall out from Wall Street push pail ponzi schemes.

if the U.S. did its job and regulated the banking industry, the U.S. would not have had the current meltdown, so I don't see any big reason for thinking the U.S. has more sound economic policy, or legislative ideas.

like Dr. Dean said, no one goes bankrupt in Europe b/c of medical bills or health issues. No one goes without the basics of life in the Euro system - tho plenty do here. The drastic level of CEO pay in relation to employees is not in the same universe as the pornographic pay outs here in the U.S.

Unions are still strong enough there to keep a viable middle class, which is the strongest indicator of a healthy democracy in any nation.

If Obama wants to succeed, he'll stop the wholesale destruction of the middle class in the U.S. by corporate lobbyists for things like insurance and pharma cos, for instance.. oh, and speaking of HCR.

[Pirate Smile]

9. Obama tried to get Europe to do a (or many) Stimulus package(s) but they said no.

US did one. China did a lot. You can certainly tell the difference.