Europe vs. USA – Again

For those of you that don’t know, there is a long-standing disagreement amongst economists of various leanings on what economic model is better for a country. On the one hand, you get ‘liberal’ leaning economists who prefer regulations, government services, and an overall welfare state system, than on the other hand, you get the more ‘conservative’ leaning economists who prefer anti-regulation, laissez-faire, low taxes and an overall anti-welfare state. In short, the liberal leaning economists tend to focus on income inequality while the conservative leaning economists tend to focus on economic growth. The debates are often fierce and can sometimes get personal. For non-economists like myself, it is hard to see who really has the upper hand (although my biases clearly lie on the conservative side) since it is hard to compare apples to apples, every economic situation has its own nuances and slight differences that complicate the comparisons (although, with the current progress towards the unification of Europe’s economy, me thinks that within a generation or two, we will be a lot closer at more definitively settling this debate).

Since the United States is widely viewed as following the more conservative economic model and since Europe is widely viewed as following the more liberal economic model, the debates often come down to USA economy vs. Europe economy, and which one is ‘better’. The liberal economist, for example, will point to the stock market burst and the (probable) current housing bubbles as evidence that our economy is too unstable, that these rapid ups and downs hurt the poor. The conservative economist will point to Europe’s very low economic growth (less than 1%, while the USA’s is more than 3%), and overall lower standard of living for the poor. Back and forth the debates go, than in comes talks about economic mobility, long-term welfare problems, and education and on and on with each trying to show why one economic philosophy is better than the other. Occasionally, you’ll get other stuff thrown in as well. The liberal leaning economists will talk about the United States religiousness, and the conservative leaning economists will talk about Europe’s secularism, or family values vs. materialism, etc…. and so continues the discussions.

So it’s expected that a disaster like Katrina, and our lousy handling of the situation, would flare up these discussions again. To give my readers a taste of how these debates play out, I thought I’d link to them, and allow my readers to make up their own minds. So if you have some free time, perhaps during lunch or something, take a look at this liberal leaning economic critique of the US and its economy, and than it’s conservative response here and here (yeah, the conservative pro-USA response gets two, call me bias, so what!!).

Enjoy.