It was early this summer, before Americans started crossing the Atlantic to savor the sweetness of European life. Prices are very much affordable for them there, and the Wall Street Journal gave the reason as being Europe’s inexorable impoverishment: “Europeans are facing a new economic reality, one they haven’t experienced in decades. They are becoming poorer,” wrote the business daily. In 2008, the eurozone and the US had equivalent gross domestic products (GDP) at current prices of $14.2 trillion and $14.8 trillion respectively (€13.1 trillion and €13.6 trillion). Fifteen years on, the eurozone’s GDP is just over $15 trillion, while US GDP has soared to $26.9 trillion.
As a result, the GDP gap is now 80%! The European Centre for International Political Economy, a Brussels-based think-tank, published a ranking of GDP per capita of American states and European countries: Italy is just ahead of Mississippi, the poorest of the 50 states, while France is between Idaho and Arkansas, respectively 48th and 49th. Germany doesn’t save face: It lies between Oklahoma and Maine (38th and 39th). This topic is muted in France – immediately met with counter-arguments about life expectancy, junk food, inequality, etc. It even irks the British, who are just as badly off, as evidenced in August by a Financial Times column wondering, “Is Britain really as poor as Mississippi?”
Europe has been (once again) stalling since Covid-19, as it does after every crisis. The Old Continent had been respected as long as Germany held out. But Germany is now a shadow of its former self, hit by Russian gas cuts and China’s tougher stance on its automotive and machine tool exports. The Americans don’t care about these issues. They have inexhaustible energy resources, as the producers of 20% of the world’s crude oil, compared with 12% for Saudi Arabia and 11% for Russia. China, to them, is a subcontracting zone, not an outlet for high-value-added products. The triumph of Tesla is making Mercedes and BMW look outdated.
This is yet another proof that economics as a study really has no connection to real world.
It really depends on the type and field of economics you’re looking at. Macro and micro are very very different fields. There are also a lot of different ways to present these facts. In general gdp means very little for normal people, and something like the Gini coefficient at least gets a little closer to a metric that actually represents the economic health of a country.
Is the massive growth making people happier, healthier?
Im sure it’s making the very few people who actually receive that wealth happier.
The common man ain’t seeing a dime of it though, so the rest of us ain’t
I live in Oklahoma, apparently better than Germany. Out-of-state corporations buy off our politicians. This means they get insane tax cuts among other sketchier tax schemes. Having low pay employees is one of our main draws for new businesses. Unemployment here is very low, but there isn’t much of a reason to stay in state when you are looking for a job. Our education system is getting worse and worse, good teachers leave the state every year and the leaders are doing jack shit to retain them.
This article, while interesting, seems a bit sensational.
Bottom line for me as an American: Is it a good time to vacay in the Eurozone?
It really is. I did a small one this summer and the US dollar went far. Third time in Germany and had a blast. Beer is everywhere there! Imagine walking into a restaurant and getting a craft beer quality drink served to you for $1.50. I can’t get an IPA for that price even at my local liquor store.
Belgium is next on the list. I keep running into people from there telling me how underrated it is.
That is a SUPERDOUBT. I seriously doubt the price was that even for a shitty Heineken/becks/dreher beer. We had inflation growing almost everywhere (except Switzerland but they simply keep repeating it to themselves, hotel prices are at least 15-25% more expensive than pre-covid) Also, euro/dollar exchange rate is now the same as it was pre-covid
I’m not saying you cant find good deals but that beer price in a restaurant is unrealistic.
Don’t know what to say. This is what I paid for house beer at 2 different places in Stuttgart. I guess I got really lucky?
Generally, yeah. I would avoid the summer, though. Europe is not equipped for high temperatures.
Time to get a US remote contracting role then I guess
Oh, you’re mistaking GDP for money going to workers here. Our (federal) minimum wage is still just $7.25/hr (€6.75/hr) and more than 1/3 of the states honor that. I think that’s even lower than Portugal. And there’s no healthcare with that (or any) wage/contract job.
Oh, sure, you can make money here, but it almost certainly won’t be as an average employee.
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It’s because americans are good at capitalism. Americans are so much more willing to put up capital to invest in a start up. In Europe investors are so much more risk averse, that they never hit any big wins. It also makes companies list on the american exchanges over european equivelant ones.
