Why Europe is falling way behind America’s powerhouse economy
An American in Europe these days might find themself in a strange situation — or at least that was my experience, having recently spent a week there, traveling from Germany to Norway to Spain. In the United States, we talk about our economic problems. In Europe, the talk is all about how Europe has been unable to keep up with the U.S. powerhouse. Sign up for Democracy, Refreshed, a newsletter series on how to renovate the republic. The facts are stark. In 2008, the United States and the euro-zone economies were roughly the same size. Today, the American economy is nearly twice the size of the euro zone. And it’s not just one measure. Average European income is now 27 percent lower than in the United States, and average wages are 37 percent lower. When the British left the European Union, they fantasized about forging a close relationship with the United States, almost becoming the 51st state. Were that to happen, it is surely sobering to Britons to realize that they would find themselves in the 51st poorest state in the union, with a per capita gross domestic product below that of Mississippi. The U.S. economy towers above Europe’s these days. The United States’ technology companies dominate the continent. U.S. banks are far more profitable than European ones. U.S. energy production has created a boom in manufacturing which is luring many European companies to the United States. As one German CEO said to me. “America is an easier place to do business, has fewer regulations, and now has much lower energy costs. How do I rationally invest in Europe?” Two of Europe’s largest oil companies, Shell and TotalEnergies, have mused about fleeing Europe and floating their shares on the New York Stock Exchange.
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