Friday, January 15, 2010

Krugmanism of the Day

UPDATE: 2008 per capita GDP (at PPP) data from the World Bank via Carpe Diem; Europe still well poorer than U.S. average.

In the January 10th New York Times, Paul Krugman extols Europe's economic success:
Even calmer conservatives have been issuing dire warnings that Obamacare will turn America into a European-style social democracy. And everyone knows that Europe has lost all its economic dynamism.

Strange to say, however, what everyone knows isn’t true. . .

The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works.

Actually, Europe’s economic success should be obvious even without statistics. . . In any case, the statistics confirm what the eyes see.
I've addressed this misconception before, but surf to Political Calculation's nifty interactive chart from a year ago, and sort by per capita GDP (last column) [added 1/19: Political Calculation's interactive chart of 2008 per capita GDP comparisons]. Professor Mark Perry summarizes:
If France became a U.S. state it would rank #48 out of 51 by per capita GDP, just barely ahead of America's two poorest states -- West Virginia and Mississippi. Belgium, Finland, U.K. Germany and Spain would rank in the bottom 20% of U.S. states by per capita GDP, just barely ahead of Arkansas but below Kentucky. Although Netherlands, Sweden and Denmark are among Europe's wealthiest countries, as U.S. states they would be between 14.5% and 18% below the U.S. average.
(via Greg Mankiw)


Gringo said...

We should all follow the advice of Nobel Prize winners. After all, Dr. Krugman was so good at predicting what Canadians thought about their health care system.

OBloodyHell said...

Coyoteblog also covers this topic

Carl said...

From the Coyote Blog post OBH linked:

"This is EXACTLY why states build pretty high-speed trains and grand municipal buildings and huge triumphal arches -- as a way to distract both their own citizens (and outsiders) from their own well-being relative to others. Its the magician waving something shiny around in his left hand to take your eyes off the right. And it is pathetic that not only does a former Nobel Laureate fall for it, but he doubles down by telling everyone else to fall for it."

OBloodyHell said...

BTW -- Carl, the quote you pick out is an echo of a longer piece from several days before, in case you did not spot it:

The Timeless Appeal of Triumphalism

Which goes into more detail on the whole high-speed-rail schtick.

OBloodyHell said...

Gringo, a good test of someone's critical thinking abilities is answered by the simple question: "What is your opinion of Paul Krugman?"

If the person isn't trying not to spit (and/or not vomit) then they are an idiot.

bobn said...

Although Netherlands, Sweden and Denmark are among Europe's wealthiest countries, as U.S. states they would be between 14.5% and 18% below the U.S. average.

OMG! They're below average! Do you know that almost half of everything is below average! This is an abomination and must be stopped!

Once again Mark Perry shows his "cleverness".

He may be ahaead of Krugman, but that's a very low bar to set.

Carl said...

bobn: Way below average: only Luxembourg breaks into the top 23 U.S. states. Advantage, Perry (over bobn and Krugman). See also this and this.