Unemployment Skyrockets: “U.S. now beating European unemployment rates”

by Hans Bader on November 10, 2009 · 15 comments

in Deregulate to Stimulate, Economy, Employment, Energy, Environment, Global Warming, Healthcare, Insurance, International, Legal, Personal Liberty, Politics as Usual, Regulation, Stimulus to Nowhere

Unemployment is now higher in the U.S. than in Europe,  reports the Washington Post.  “The official U.S. unemployment rate, reported last Friday, now stands at 10.2 percent,” compared to “9.7 percent” in Europe.   This is the highest rate in more than 26 years, and marks a huge change from the recent past, in which unemployment was double the American rate in much of Europe, such as in France.

Unemployment is at 10 percent in France, which refused to adopt a U.S.-style stimulus package, and only 7.6 percent in Germany, which adopted a stimulus package that was smaller relative to its economy than ours was.  (Countries that refused to adopt big stimulus packages have fared better than those that imitated President Obama. And the biggest-spending countries have suffered worst in the recession.)

A “broader measure of U.S. unemployment,” including discouraged workers, puts U.S. unemployment at 17.5 percent, reports the New York Times.

As the Post notes, “For many on the left, the lament for years has been: Why can’t America be more like Europe? Why can’t rustic Americans be more like sophisticated Europeans? The sentiment has resurfaced in recent months as the health-care debate has raged on — why can’t the American health-care system be more like Europe’s?”

Well, America is now more like Europe when it comes to unemployment.  But not when it comes to social benefits and protections.  The American Left knows how to import Europe’s failures, but not its successes.

The massive health-care bill passed by the House on Saturday is a classic example.  It would expand health care coverage somewhat, but not to European levels, and it would vastly increase the costs of our health care system, rather than reducing it to European levels.   It would also increase taxes to “European levels of taxation.”  The health care bill contains politically-correct provisions that Europeans would never put up with, like pork for trial lawyers and racial preferences.  And restrictions on national competition in health insurance, which do not exist in Europe.

In France, doctors don’t need to be paid as much, because competing professions, like lawyers, are paid less.  French law is much more conservative than American law when it comes to lawsuits, including lawsuits against doctors.  There are NO punitive damages, and France discourages lawsuits by making unsuccessful plaintiffs pay the other side’s legal bills.  (Other European countries have specialized health courts, rather than American-style jury trials, to cut lawyers’ bills, speedily compensate the injured, and prevent American-style baseless lawsuits against doctors.)  There are no racial preferences — even my Marxist father-in-law, a French trade unionist who likes Michael Moore’s book Stupid White Men, thinks that racial preferences are evil.  French people do not let political correctness shackle their minds the way American leftists do.

Europe is not as far to the left of America as people think, and America’s business climate is already not much more favorable than Europe’s.  For every three ways in which Europe is more socialistic than America, there are two ways in which it is less socialistic than America.  The Obama administration is getting rid of our advantages, but not our disadvantages.

American tort law and family law are much more burdensome, anti-business, and bent on redistribution of wealth, than Europe’s.

Confronted with the specter of new burdens under the health-care bills and global-warming bills backed by the Obama administration, many businesses with the money to do so are afraid to hire people and create jobs lest they be stuck with a large tab for things like health care benefits for newly-hired, less-skilled employees.

The Congressional Budget Office has repeatedly admitted that Obama’s stimulus package will shrink the economy “in the long run.”  It contained welfare and repealed welfare reform.  Unemployment is higher now than if Congress had voted it down.

Arty November 11, 2009 at 4:21 am

Every democracy is just one election away from social and economic catastrophe. The only hope is the the senate and congress has the collective wisdom to resist the destructive meddling of Democrat President Barrack Obama.

Sean Brunnock November 11, 2009 at 5:14 am

Incredibly shortsighted.

We just came out of a credit bubble on top of a stock market bubble. Our economy has practically collapsed. And you want to complain about health care? Come on! Do you really think that killing the health care bill is going to make up for the loss of the auto industry?

Hans November 11, 2009 at 5:35 am

Until recently, France's unemployment rate was double America's. See "What Causes Unemployment?," by Thomas Sowell (November 14, 2005).

Now, it is basically the same as America's.

Hans November 11, 2009 at 5:46 am

Sean errs in arguing that America's high unemployment rate relative to Europe is explained by banking and stock market bubbles.

Europe had banks that were even more leveraged than ours (and some European countries like the UK and Ireland had big housing bubbles, too; housing prices are much higher relative to incomes there).

And European stock markets rose even more precipitously relative to historical P/E ratios. My European mutual fund crashed far more than my American mutual funds.

Until recently, France’s unemployment rate was double America’s. See “What Causes Unemployment?,” by Thomas Sowell (November 14, 2005). Now it's the same. The disparity disappeared after early 2007. (What happened in 2007? Pelosi and Reid took over as Congressional leaders).

Sean Brunnock November 11, 2009 at 8:56 am

Hans, what on earth are talking about? America's unemployment rate is high because we lost jobs. For example, GM used to be America's biggest employer. Now they are bankrupt. Not only did GM lay off thousands of workers, but ancillary companies also laid off thousands. It is going to be difficult to recover from that.

I don't think you can tie the collapse of the American automobile industry to Obama or Pelosi.

Marty November 11, 2009 at 9:31 am

Arty, Thats why we don't live in a democracy, we live in a republic. A democracy is run by majority rules. A republic is run by laws. For example….30 wolves and 1 sheep discussing what to have for lunch would be a democracy. A lynch mob is a democracy. There are laws in a republic that prevent lynch mobs.

Badger November 11, 2009 at 11:28 am

Europe's successes?

Like Germany, where one third of the annual budget are used solely for social "spending"? There's a district in Berlin, Neu-Kölln it is called, where the local government has to use two thirds of the budget only because there are so many people who refuse to work.

One of my cousins works 40 hours a week and is paid ~700 Euros after tax. If you don't work you get 1,000 Euros easily in Austria, without the nasty finance minister grabbing your money. It's worse than that in Germany. However, the Austrian left wing has come up with the idea of 1,000 Euros "Mindestsicherung" for everyone. That's right, if you're out of the job or anything else along that line, the government wants to pay you 1,000 Euros every month simply for not doing anything.

They also punish success here. If you work hard, and end up successful, then you can be happy about paying up to 50% taxes on your salary. Once I worked 6 months per year only for the finance minister in my country because I had to pay 50% taxes on my salary. My father, a normal police officer, paid 43.7% taxes every month before he retired.

As for the health-care system. Please. It's definitely not better in Europe. Do you really want waiting times on everything?

My mother had a surgery last year, she had varices removed from her left leg. Public hospitals told her flatly: waiting time for this kind of surgery one year. But luckily she has private insurance and went to a private hospital there they said only one thing: when do you want to come?

And it goes on like that all across Europe.

Europe is not sophisiticated. Europe is rightfully called EUSSR these days. We're on the track to that.

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