The U.S. vs. Europe: A Study of Contrasts

Frank Viviano


From New America Media:

To anyone who grew up in the Cold War, the rhetoric of the Republican Party’s 2012 presidential candidates is strangely familiar. The United States, they warn, is threatened by an alien ideology. What’s startling is that the bogeyman this time around is not resurgent and increasingly hostile Russia, but Western Europe – Washington’s closest and most steadfast ally since the end of World War II.


According to Mitt Romney, currently the leading G.O.P. contender, “Barack Obama wants us to turn into a European-style welfare state,” a development that would “poison the very spirit of America.”


Newt Gingrich charges that Romney himself is guilty of “looking into European socialist ideas.” Not to be outdone, Rick Santorum fulminates that Western Europe is “being overrun from overseas... and they have no response. They have nothing to fight for. They have nothing to live for."


There’s no question that the European Union is struggling today, beset by many of the same economic problems as the United States (thanks in no small part to the shenanigans of U.S. financial firms). The EU faces a major debt crisis in its laggard Mediterranean states, and has yet to arrive at a workable solution.


Nonetheless, as a resident of Western Europe for more than two decades, I recognize almost nothing in the portrait painted by the men who hope to unseat Obama.


But let’s take their rhetoric seriously and compare the economic performance of the United States to that of a trio of emblematic European nations: Germany, the Netherlands and Sweden. With a half-century record of extensive investments in social services and national infrastructure, they are among the principal architects of a system that supposedly leaves Western Europeans with nothing to live or fight for.


The Real Champs of the Capitalist League

In the economic realm, three measures dominate conventional assessments of success and failure: unemployment, foreign trade and sovereign debt, the ratio of government debt to Gross Domestic Product (GDP).


On every count, the achievements of Western Europe leave the United States in the dust.

With some justification, President Obama has expressed pride at the gradual decline of American joblessness from more than 10 percent shortly after he took office to the most recent level of 8.5 percent. But this success pales considerably by comparison with the Netherlands’ 5.8 percent, Germany’s 6.3 percent and Sweden’s 6.7 percent.


Foreign trade is the bellwether of business acumen everywhere on our globalized planet, notably including China, where the vast majority of exports are produced by manufacturers as fervently dedicated to capitalism as New Gingrich and his ultra-free-marketer rival Ron Paul. But the world’s champion exporters over the last ten years are not the Chinese. They’re the Germans, who enjoy an annual trade surplus of nearly $200 billion.


In per capita terms, Germans sold $2,300 more of their products overseas than they bought for every one of the nation’s 82 million citizens. The per capita surplus figures for Sweden ($2,400) and the Netherlands ($2,800) are even higher.


The United States, by depressing contrast, has an annual trade deficit now approaching $600 billion, by far the most dismal on Earth, amounting to a $2,000 loss registered on the bottom line of every American. That number has risen every year since the Republican-governed 1980s, recovering somewhat under Democrat Bill Clinton and then skyrocketing at an unprecedented pace under George W. Bush.


As damning as these figures may be, it is in sovereign debt that the willful ignorance – or outright deceit – of the G.O.P. candidates is most glaring. As a result of endless tax cuts for the wealthy by their party’s predecessors in the White House, tied to endlessly rising expenditures on unfunded Republican-declared foreign wars, the United States has a sovereign debt ratio of 102, not far behind the 118 of universally derided Italy.


In Sweden, allegedly the most dissolute spendthrift in the Republicans’ European socialist welfare nightmare, sovereign debt stands at a paltry 39.7, which translates into the unavoidable conclusion that Swedish Social Democrats are more cautious spenders than all of America’s Republican administrations dating back to Richard M. Nixon. The Dutch come in at a very respectable 62.9, and the Germans at 83, astonishing for a nation that has been rebuilding its entire eastern infrastructure since the Berlin Wall collapsed.


Life is More Than a Cash Register

In the United States, $7,538 was spent per person on health care in 2008, the latest year for which accurate figures are available. The Dutch spent $4,063 that year, the Germans $3,737 and the Swedes $3,470 – an average of less than half the American level of spending, which has continued rising.


This gap cannot be explained away by differences in national wealth. The annual per capita GDP of Germany is $45,000, just a shade behind the United States at $48,000, which is in turn just shy of the Netherlands’ $51,000. Sweden is the leader by a country mile, at a staggering $62,000.


Results? At a fraction of the U.S. cost, adult life expectancy in all three of the European bogeyman nations is higher than in America. At the far end of the demographic curve, the differences are downright appalling. Infant mortality in the United States from 2005 to 2010 was a ghastly 6.81 deaths per 100,000 live births. In Sweden, the corresponding mortality rate is just 2.56, in Germany 3.71 and in Holland 4.42.


Health care standards in Europe are no theoretical matter for me. A doctor in Paris saved my life when I contracted cerebral malaria while on assignment in the southern Balkans. Another doctor in Milan saw me through a terrifying cancer scare a few years ago. Neither of them asked me to empty my wallet. It is taken for granted in Western Europe that high-quality medical attention should be available to everyone, and no politician – including those on the political far right – questions the premise. My Milanese physician co-authored the standard text on gastroenterology now in use in a dozen countries, and did double residencies in surgery and internal medicine at the University of Paris and at Stanford.


My friends in America worry constantly about the costs and limits of their health care. No one in Europe worries about these things.


There is something else worth mentioning on the subject of anxiety. Even after more than a decade of improvement, the homicide rate in the United States is at just under five murders yearly per 100,000 people. That’s almost six times the figure for both Holland (0.87) and Germany (0.84).


Where the American Dream Went

Egalitarianism, the idea that a level playing field of means and opportunities is a fundamental strength of democracy, has a long and honored legacy in the United States. By any objective standard, that legacy began to ebb in the Reagan years and has yet to recover.


The most authoritative measure of concentrated wealth – and poverty – is a complex formula known as the Gini coefficient, named for Corrado Gini, the Italian statistician who devised it. Put simply, the lower the Gini number, the more equitable a nation’s distribution of income.


As computed by none other than the Central Intelligence Agency, the Gini coefficients of Germany, the Netherlands and Sweden are all at 30 or under, among the world’s lowest. The United States, the CIA says, rates 45 on the Gini scale. That puts it roughly into the same league as Bulgaria, Cambodia, El Salvador, Iran, Madagascar and Rwanda.


The top 10 percent of Swedish incomes are 6.2 times greater than the lowest 20 percent. The top 10 percent of U.S. incomes are 15.9 times those of the lowest 20 percent. In short, the gap between rich and poor, between a level playing field and an unscalable mountain, is more than twice as large in the United States as it is in Sweden – whose privately-held industries manage to generate a significantly larger per capita GDP than their American counterparts. For the record, the gap is also twice as large in America between the top 20 percent and the lower 20 percent.


What this means for the American Dream, with its fantasies of poor boys who become millionaires through diligence and hard work, is documentable. A 2006 report commissioned by the Bonn-based Institute for the Study of Labor found that 42 percent of men raised by households in the lower fifth of U.S. incomes remain there as adults – almost double the number in Europe’s Nordic countries.


“Mobility in Europe,” the chance of climbing out of poverty and up to middle-income levels, “is actually greater than it is in America,” a U.S. presidential candidate lamented four months ago.


The speaker was not Barack Obama, the presumed agent of a foreign ideology. It was Rick Santorum, who later declared that Europeans have nothing to live for.

New America Media

Photo of Eiffel Tower: Fotopedia

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