Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Challenging the Narrative of European Decline

paulkrugman.substack.com

Post reply on HN
Print view View original

81–90 of 115 posts

Re: Challenging the Narrative of European Decline

#81

Post by ZeroGravitas »

comrade1234 wrote: post #8

"When we compare the European, or at least northern European, economy with that of the United States some points should be indisputable." So is he comparing Europe to the USA or just Northern Europe? And is he including Switzerland, Norway, Iceland, etc or just the EU? It's rather confusing and I wouldn't even know where to begin in trying to do these comparisons. I live in Switzerland and have worked on projects all…

Europe has either been expanding to include, if you look at EU, or it has always included, if you take the geographical boundary, a lot of very poor southern and eastern European countries.

I think EU expansion is a good thing but it makes even well intentioned comparisons difficult if e.g. Germany re-absorbs East Germany, or other nations join the EU

Poland was about 20% of the USA by PPP in the 90s, 40% when it joined the EU and 60% now.

Is that a success or a failure? It can definitely make some stats look worse.

Re: Challenging the Narrative of European Decline

#82

Post by ragebol »

rob74 wrote: post #21
ragebol wrote: post #16

> 10% of the US economy is IT The US is the IT-supplier of the world. I don't know how large a % of that comes for outside the US. But with all the 'shenanigans' of the Trump regime and the trust the US has lost due to that, that should lead to losing IT business from the rest of the world. In other words, If Europe would disavow using US IT, as would be the wise choice I think, then Europe might close the gap. I jus…

More pertinently, at the moment 100% of US economic growth is IT (or more precisely, AI). Let's see for how long...

It will be a spectacular crash if/when it crashes. But there is this old adage of 'the market can remain irrational much longer than you can stay solvent'.

I'm not holding my breath for this bubble.

Re: Challenging the Narrative of European Decline

#83

Post by ismailmaj »

DrBazza wrote: post #54
lp4v4n wrote: post #22

As someone who lives in Europe, my impression is that the continent's first priority is how to keep paying the fat pensions it pays to its retired class, the second priority is how to keep paying the pensions followed by a distant third about how to keep paying the pensions. For me it's remarkable how the continent lives looking at the past and not at the future. The older people I talk to show no concern about Europ…

I'm not sure what this obsession is at the moment with 'fat pensions'. Pensions are far from 'fat', and (european) governments have been very dishonest about what will happen state pensions for decades. Governments simply don't have the nerve or honesty to tell the population what's going to happen and get the message across to everyone. And at the same time, youth unemployment is really high. So what do you want, ol…

I can talk about France specifically, the working age population feels squeezed currently because a big portion of their wages goes to pay pensions, let's be specific:

for a 100k paid by your employer, 46k goes to you after all taxes, 45k goes to social contribution, of those 20k specifically to paying current pensioners[1].

It doesn't look so bad, unless you take into account the inversion of the demographic pyramid, the workers will get progressively more squeezed as older folks enter retirement, and are unlikely to get themselves good retirement given that there isn't enough kids to support them when they will be old.

And so, the rational move is to save more to fund your retirement while already getting pressured by relatively low wages and low saving potential due to the taxes, and France doesn't really have a growth lever to pull to get us out of this situation as we're already at a very high debt-to-GDP ratio.

So that's why some workers are unhappy with what they call "fat pensions", what also doesn't help in France is that the country is very centralized around Paris and rent is now another channel where money flows from workers to (often) pensioners.

As 2027 elections approaches, it seems we have the options of being even more fiscally irresponsible (the extremes), and the center seems to lean for austerity measures (Edouard Philippe) and none of these are making me optimistic about the future.

[1]: https://code.travail.gouv.fr/outils/simulateur-embauche

Re: Challenging the Narrative of European Decline

#84

Post by diego_moita »

deltarholamda wrote: post #71
diego_moita wrote: post #19

So, what he says is that productivity gains in the U.S. are: 1. Only apparent when measured at 2017 prices but not when measured at PPP (purchase power). 2. In the US most of productivity gains are concentrated at the tech industry and California. The rest of the economy (and most of non-California states) are less productive than Europe. Personally, I am not entirely convinced but these are interesting arguments. It…

US healthcare is extremely productive. It is also quite expensive.

Care to explain? If it is expensive how can it be productive?

Also, if it is productive why do the US has a smaller lifespan that so many OECD countries?

Re: Challenging the Narrative of European Decline

#85

Post by surgical_fire »

lp4v4n wrote: post #22

As someone who lives in Europe, my impression is that the continent's first priority is how to keep paying the fat pensions it pays to its retired class, the second priority is how to keep paying the pensions followed by a distant third about how to keep paying the pensions. For me it's remarkable how the continent lives looking at the past and not at the future. The older people I talk to show no concern about Europ…

Which country exactly has "fat" retirement payments in Europe?

I do have a private pension, and the country where I live a retirement payment can barely pay for a room in a shared apartment in the capital city. Not exactly what I call fat.

Re: Challenging the Narrative of European Decline

#86

Post by weatherlite »

ZeroGravitas wrote: post #81
comrade1234 wrote: post #8

"When we compare the European, or at least northern European, economy with that of the United States some points should be indisputable." So is he comparing Europe to the USA or just Northern Europe? And is he including Switzerland, Norway, Iceland, etc or just the EU? It's rather confusing and I wouldn't even know where to begin in trying to do these comparisons. I live in Switzerland and have worked on projects all…

Europe has either been expanding to include, if you look at EU, or it has always included, if you take the geographical boundary, a lot of very poor southern and eastern European countries. I think EU expansion is a good thing but it makes even well intentioned comparisons difficult if e.g. Germany re-absorbs East Germany, or other nations join the EU Poland was about 20% of the USA by PPP in the 90s, 40% when it joi…

Well Italy for example is a founding member and joined in 1958. So not including it makes as much sense as not including Germany.

Re: Challenging the Narrative of European Decline

#87

Post by bschmidt400 »

Gud wrote: post #78

I work in the energy sector for a manufacturer you’ve definitely heard of. The USA is ahead in certain industries, mostly information technology, but decades behind in others. Literally, you have technology most of Europe moved away from in the 80s(air insulated HV switchgear), where most of Europe now mostly builds gas insulated switchgear. Europa has a GDP on par with the USA. Honestly what do people think the prod…

[dead]

Re: Challenging the Narrative of European Decline

#88

Post by bildung »

DrBazza wrote: post #54
lp4v4n wrote: post #22

As someone who lives in Europe, my impression is that the continent's first priority is how to keep paying the fat pensions it pays to its retired class, the second priority is how to keep paying the pensions followed by a distant third about how to keep paying the pensions. For me it's remarkable how the continent lives looking at the past and not at the future. The older people I talk to show no concern about Europ…

I'm not sure what this obsession is at the moment with 'fat pensions'. Pensions are far from 'fat', and (european) governments have been very dishonest about what will happen state pensions for decades. Governments simply don't have the nerve or honesty to tell the population what's going to happen and get the message across to everyone. And at the same time, youth unemployment is really high. So what do you want, ol…

> I'm not sure what this obsession is at the moment with 'fat pensions'.

Pretty sure it's a concerted effort to force the EU countries to adopt private/financialized pension schemes and abandon the still dominant socialized model. The huge new inflow into the financial markets would make some people very very rich, and conveniently would also transform low pensions from a societal problem into a problem of bad personal foresight instead.

(Not accusing GP in particular, they probably just picked it up in the media)

Re: Challenging the Narrative of European Decline

#89

Post by bildung »

comrade1234 wrote: post #8

"When we compare the European, or at least northern European, economy with that of the United States some points should be indisputable." So is he comparing Europe to the USA or just Northern Europe? And is he including Switzerland, Norway, Iceland, etc or just the EU? It's rather confusing and I wouldn't even know where to begin in trying to do these comparisons. I live in Switzerland and have worked on projects all…

"(actually the euro area)", it says so multiple times in the article.

Re: Challenging the Narrative of European Decline

#90

Post by diego_moita »

tschellenbach wrote: post #67

Dutch living in Colorado. You can spin stats any way you like. But if you look at the last few waves of companies. Machines for making chips, manufacturing chips, designing chips, search, social, mobile, AI. If this was a soccer match the score would be 10-1 (yee ASML). Not only that the winners in these industries tend to compound and grow. There are many great things about the EU, that are outside of this competiti…

> Machines for making chips, manufacturing chips, designing chips, search, social, mobile, AI.

Read the article before trying to refute it. What it says is precisely that the US advantages are restricted to the IT sector that you mention. It is in the remainder of the economy that the EU pulls ahead.

Post reply on HN