Princeton University professor and columnist Paul Krugman deservedly won Forbes.com's "Dunce of the Week" award for his New York Times column "French Family Values" (July 29, 2005). Krugman asks, "But are European economies really doing that badly? The answer is no," adding that "Americans are doing a lot of strutting these days, but a head-to-head comparison between the economies of the United States and Europe -- France, in particular -- shows that the big difference is in priorities, not performance. We're talking about two highly productive societies that have made a different tradeoff between work and family time."
Krugman's assertion is basically this: The income gap, about 40 percent, is not the result of lower efficiency in Europe. It is the result of Europeans working less than Americans. Not because they can't find work, but because they work fewer hours, preferring to spend more time with their families and on leisure activities.
Contrast Krugman's nonsensical argument with New America Foundation senior fellow Joel Kotkin's findings in "America Still Beckons," published by The American Enterprise magazine (October-December 2005). Kotkin says that Europe has weakened considerably. "Since the 1970s, America has created some 57 million new jobs, compared to just 4 million in Europe (with most of those in government). For the last quarter century, the United States has enjoyed consistently higher rates of economic growth and productivity than European countries, and the gap has been widening. The United States is now at the forefront in many critical global industries, particularly finance, technology, and entertainment." Europe's "portion of world GDP dropped from 34 percent to 20 percent between 1913 and 1998, while the United States held its own at about 22 percent of global GDP."
In the same edition of The American Enterprise, Karl Zinsmeister's article, "Europe Learns the Wrong Lessons," says, "In France, Italy, Germany, and Belgium, approximately a quarter of all workers under 25 are currently unemployed." High minimum wages and employment protection regulations make it nearly impossible to fire people, thereby making it costly to hire them. Europe's stagnation and decline might explain why its best brains are leaving in droves.