Archive for the 'Europe' Category

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How The European Welfare State Affects Women

Newsweek writes:

Here’s a pop quiz on gender equality. In which part of the world are women most likely to reach the highest rungs of power? Choice A offers new moms 12 weeks of maternity leave, almost no subsidized child care, no paid paternity leave and has a notoriously hard-driving business culture. Choice B gives them five months to three years of paid time off from their jobs after having kids. Millions put their offspring into state-sponsored day-care centers for several hours a day. Government agencies, full of female directors and parliamentarians, protect workers at the expense of business and favor a kinder, gentler corporate culture. So which place is better for women who want to make it to the top? If you guessed A, the United States, you’d be right. If you chose B—Europe—think again.

It sounds impossible, but it’s true. For all the myths of equality that Europe tells itself, the Continent is by and large a woeful place for a woman who aspires to lead. According to a paper published by the International Labor Organization this past June, women account for 45 percent of high-level decision makers in America, including legislators, senior officials and managers across all types of businesses. In the U.K., women hold 33 percent of those jobs. In Sweden—supposedly the very model of global gender equality—they hold 29 percent.

Germany comes in at just under 27 percent, and Italian women hold a pathetic 18 percent of power jobs. These sad statistics say as much about Europe’s labor markets, lingering welfare-state policies and corporate leadership as they do about its attitudes toward women. It’s not that European women are stuck in the house. (After all, 57 percent of women in the EU 15 work, less than the U.S. rate of 65 percent, but not dramatically so.) The real problem is that Europe has been consistently unable to tap the highest potential of its female workers, who represent half of college graduates in most countries. Women, it seems, can have a job—but not a high-powered career.

The full article can be found here. Link via The Liberal Order.

The Difference Between ‘Old Europe’ And The United States

Historian Thomas C. Reeves, writing in the History News Network, details the differences between ‘Old Europe’ and the United States:

The United States has moved far ahead of every European country in every significant economic category. As Olaf Gersemann recently pointed out, “Adjusted for differences in price levels, per capita income in the United States now exceeds France by close to 40 percent. Germany and Italy lag even further behind.” If labor productivity continues on its recent path, Americans will double their per capita income by 2026, while Germans will increase theirs by only 44%.

Big government, high taxes (Germany’s government currently taxes away about 44% of the nation’s output), the welfare state, a zero sum mentality that often treats economic competition with disdain, low labor productivity, the failure to develop a dynamic service sector, and a falling birth rate have gravely weakened the future of the European nations. Public confidence has been badly shaken, resulting in what has been called a “crisis of the spirit” among Europeans.

In a Harris poll of 2002-2003, 57% of Americans said they were very satisfied with their life. In France the figure was 14%, in Germany, 17%, and in Italy 16%. When asked how they expected their personal situation to change in five years, 63% of Americans said it would improve. Only 20% of Germans shared that outlook, and only 42% of the French.

While the United States is experiencing jobless rates below 5%, Germany and France have double digit rates. A quarter of all workers under 25 in France, Germany, and Italy are unemployed. A poll conducted among 11,200 Europeans in 2005 showed that 81% of Germans, 58% of the French, and 38% of Italians cited unemployment as the most pressing problem facing their respective nations. When asked if “success is determined by forces outside our control,” only 32% of Americans agreed, while 68% of Germans, 66% of Italians, and 54% of the French took that position.

Ireland and Britain have chosen a different path, opting to be more like the Americans and promoting economic competition, low taxes, and minimal government intrusion. Both countries have prospered accordingly. Ireland today enjoys a per capita income about 20% higher than in Germany and France.

While America prospers and grows, Old Europe, as Donald Rumsfeld and others call it, is in an economic and demographic tailspin. It should surprise few that tensions exist between the Western powers. Many political and intellectual leaders in Europe continue to deride American style capitalism, calling it “right wing” and regressive. One wonders how deeply “Eurosclerosis” will become before voters clamor for serious reforms and abandon the politicos and ideological elitists who currently chain their prosperity and curtail their hope.

So the next time someone suggests higher taxes, more welfare, and more business regulations, tell them about what those have done to the European economy. The full article can be found here.

High Taxes In France

The Washington Post writes:

On average, at least one millionaire leaves France every day to take up residence in more wealth-friendly nations, according to a government study.

At a time when France is struggling to stay competitive in an increasingly integrated world, business leaders say the country can’t afford to make refugees of some of its most established business families. They include members of the Taittinger champagne empire, the Peugeot auto magnates and leading shareholders of dominant retailers Carrefour and Darty. Also going are members of a new generation of high-tech entrepreneurs.

Socialist leaders and some government officials argue that the rich are merely trying to shirk their social responsibilities by fleeing the country with their millions.

“France is penalizing success in a big way,” argued Payre, who is now 43 and has started a new company in Brussels that he said did nearly $32 million in business this year. “The loss in income for the government is the smallest part. The big issue is the loss of all that creative energy this country is dying for.”

The full article can be found here.

Quote Of The Day

“Sweden’s unemployment rate is 15 per cent, three times the figure being used by the government, according to new research from McKinsey Global Institute, the think tank”. –Financial Times

Update: Economist has more.

European Racism

The Los Angeles Times reports:

Although players of color have graced Europe’s top leagues since the 1970s, and there’s hardly a championship team anywhere without some Brazilian or African imports, an astonishing level of racism persists among some fans and even coaches.

Ukraine coach Oleg Blokhin, for example, recently complained that the influx of foreign players deprived his compatriots of role models: “Let them learn from [our players] and not some Zumba-Bumba whom they took off a tree, gave two bananas and now he plays in the Ukrainian league.”

Then there was Spain’s coach, Luis Aragones, caught on TV telling striker Jose Antonio Reyes that he was better than his French Arsenal teammate Thierry Henry. Except Aragones didn’t say Henry’s name; he used a vicious racial epithet.

In Spain, Italy and Eastern Europe, black players regularly suffer racial abuse in the form of ape noises and bananas thrown from the stands.

Although the penalties aren’t always as strong as they ought to be, FIFA, the sport’s governing body, has made combating racism a priority.

The full article can be found here.

Update: An ESPN special of the whole thing here.

Quote Of The Day

“On the face of it, America’s welfare system is harsher and less hospitable than Europe’s, something that many liberals lament. But in this respect, at least, that appearance is misleading. The unintended consequences of Europe’s milder regime are not just a looming fiscal collapse but also, in the meantime, intensifying and plainly self-destructive anti-immigration sentiment. America’s harsher insistence on work is not just economically advantageous (which is self-evident) but socially beneficial as well (which some may find surprising). Jobs alone are not enough to ensure successful assimilation of immigrants, but jobs are a necessary condition. By insisting that immigrants work, the host country attacks the incumbents’ intellectual and emotional resistance to immigration. The work requirement increases the dispersed economic benefits; it reduces or eliminates the net fiscal burdens; and it lowers cultural barriers. As a result, tempers cool. In these key respects, America’s more brutal model is kinder — in addition to bring more sustainable”. –Clive Crook, of Oxford and the London School of Economics, writing in The Atlantic

Quote Of The Day

“One of Mr. Paulson’s first briefings from the Treasury staff should be about what high taxes have done to the economies of Europe. According to research by Nobel laureate Edward Prescott and by economists Steven Davis and Magnus Henrekson, the high tax rates in Europe have reduced work effort and distorted the industrial mix. The Davis-Henrekson study reports that a tax increase of 12.8 percentage points (a change of one standard deviation) reduces work for an average adult by 122 hours per year. It also reduces the employment-population ratio by 4.9 percentage points and increases underground economy by 3.8% of GDP. As Mr. Paulson works to resolve the fiscal imbalance, he should keep the European experience firmly in mind”. –Gregory Mankiw, detailing the challenges facing Hank Paulson as Treasury secretary

Quote Of The Day

“I have a friend who is French who is a great Silicon Valley entrepreneur. He was born in France but his parents were from Tunisia (he’s Jewish). He was born in France so he has no accent. But he told me that he ultimately left France because everyone he met treated him as a Tunisian and not French. Even though he was born in France, the French still felt he was an immigrant. Now, he says i[n] his very strong French accent, people in Silicon Valley treat him as an American”. –Auren Hoffman, a Silicon Valley entrepreneur

Quote Of The Day

“I already wrote in my Spanish blog about an article published in Spanish leading newspaper El País about Condolezza Rice. This article argued that since Condolezza Rice was black it was to be expected that her intentions would be dark, lacking in transparency. It literally said that “it is obvious that Condolezza Rice´s hands are dark, the left one as well as the right one” and went on to criticize her. Interestingly when I wrote about how racist that comment seemed to me most Spaniards disagreed and felt it was fair to use a person’s skin color to criticize their behaviour. I strongly believe that racial relations will not improve in Europe until native Europeans don’t realize how racist “acceptable” comments over here can be”. –Martin Varsavsky, a Spaniard writing on Immigration in Europe

Quote Of The Day

“Having lived through the experience of being an immigrant both in the United States and in Europe I would like to make some comments on what are the key issues that Europe needs to address for a better assimilation of immigrants…I am a Spaniard. I have the same rights as all the Spaniards. Still Spanish newspapers keep referring to me as the Argentine entrepreneur Martin Varsavsky. Indeed in some cases I have been even called the Jewish entrepreneur Martin Varsavsky. I still have to find one article that refers to me as a Spaniard or even as a Spaniard of Argentine origin. Now don’t get me wrong, I am proud of being Argentine and proud of being Jewish, but now I am a Spanish citizen building businesses in Spain and elsewhere. Why does the American press write about me as a Spanish entrepreneur and the Spanish press as an Argentine entrepreneur? ” –Martin Varsavsky, a Spaniard writing on Immigration in Europe

Quote Of The Day

“Many economists have recognized for more than a decade that the generous minimum wages and other rigidities of the French labor market caused unemployment rates that have remained stubbornly high since the early 1990′s. Immigrants, youths, and other new entrants into the labor market have been hurt the most since they have had the greatest difficulty finding jobs. The overall French unemployment rate is now almost 9 per cent- compared to about 5 per cent in the US- with a rate over 20 per cent for young persons. About 40 per cent of the unemployed have been without a regular job for over a year, a rate that is far higher than the American long-term unemployment rate. The French have intentionally avoided collecting separate economic data on Muslims, but the Muslim unemployment rate is estimated by labor economists in France at more than 20 per cent, with the unemployment rate for young Muslims probably exceeding 30 per cent”. –Gary Becker, Nobel Prize winning economist discussing the French Riots

Quote Of The Day

“Advocates of the European model point to the pockets of poverty in the United States, but may not realize that poverty cannot be abolished without recourse to measures that produce the social pathologies that we observe in Europe. Social mobility implies the opportunity to fail. If society protects jobs, the employment opportunities of ambitious newcomers are reduced and they may end up at the embittered margin of society. Thus, it is not poverty that breeds extremism; it is social policies intended in part to eradicate poverty that do so, by obstructing exit from minority subcultures. If Muslims in European societies do not feel a part of those societies because public policy does not enable them to compete for the jobs held by non-Muslims–if instead, excluded from identifying with the culture of the nation in which they reside they perforce identify with the worldwide Muslim culture–some of them are bound to adopt the extremist views that are common in that culture. The resulting danger to Europe and to the world is not offset by long vacations”. –Richard Posner, discussing the differences between the U.S. Economic model and the European economic model with regard to immigrants, specifically Muslim immigrants, over at the Becker-Posner blog

Quote Of The Day

“Krugman’s failure to relate the European model to Europe’s Muslim problem is telling. To point to the upside of Europe’s social model without mentioning the most serious downside is to provide bad advice to our own policymakers. The assimilation of immigrants by the United States, compared to the inability of the European nations to assimilate them–with potentially catastrophic results for those nations–is not unrelated to the differences between economic regulation in the United States and Europe. Because the U.S. does not have a generous safety net–because it is still a nation in which the risk of economic failure is significant–it tends to attract immigrants who have values conducive to upward economic mobility, including a willingness to conform to the customs and attitudes of their new country. And because the U.S. does not have employment laws that discourage new hiring or restrict labor mobility (geographical or occupational), immigrants can compete for jobs on terms of substantial equality with the existing population. Given the highly competitive character of the U.S. economy, in contrast to the economies of Europe, employers cannot afford to discriminate against able workers merely because they are foreign and perhaps do not yet have a good command of English. By the second generation, most immigrant families are fully assimilated, whatever their religious beliefs or ethnic origins”. –Richard Posner, discussing the differences between the U.S. Economic model and the European economic model with regard to immigrants, specifically Muslim immigrants, over at the Becker-Posner blog

Quote Of The Day

“There is an ongoing debate among economists over whether social mobility is greater in the United States or Europe. The general evidence on this does not offer a definitive answer, but there is little doubt that most immigrants believe opportunities for themselves and their children are greater in the United States. This is why America is the first choice of most immigrants whenever they can choose where to go, and it also explains the different attitudes of immigrants in Europe and America. As Posner emphasizes, most immigrants, non-Muslim as well as Muslim, feel far more accepted in the United States than in Europe, are less segregated here in both their living arrangements and employment, and appear to advance more easily toward higher level jobs”. Gary Becker, Nobel Prize winning economist, discussing the difference between the US economic model and the European economic model over at the Becker-Posner blog

Quote Of The Day

“Clearly, the European system of employment helps the “insiders” with good jobs, and works against “immigrants” and other newcomers ,or “outsiders” in labor markets. …The labor market restrictions, however, make it hard for immigrants to obtain jobs in the legal economy, so either they are unemployed, or they work in the flourishing underground economies of Europe, where they avoid paying taxes. Apparently, the French intentionally do not collect data on unemployment rates of their Muslim population, but economists there tell me they believe it is more than double the official overall French rate of over 10 per cent unemployed”.Gary Becker, Nobel Prize winning economist, discussing the difference between the US economic model and the European economic model over at the Becker-Posner blog

Quote Of The Day

“The root of Old Europe’s problems is that it is in denial regarding the nature of the society it has constructed. In the first instance, European nations are capitalist, not socialist. It takes capitalism to have socialism, in the sense that without capitalism you get Cuba and North Korea and Albania when you try to redistribute. How many politicians in Old Europe are ready to defend capitalism against the utopian left? Not one prominent man or woman. Old Europe thinks that it has reached a sort of end-of-history—people dream of moving beyond capitalism to a more “humane” world. Witness the 35 hour week. The 35 hour week will go down in history as the point at which France raised its hands, capitulated, and sank into a slumber. Let’s hope that the rest of Europe wakes up before the continent’s relative decline leads to protectionism and drags the rest of us down”. –Timothy B. Smith, associate professor of history and chair of undergraduate studies at Queen’s University, Ontario, discussing the fate of Europe in the libertarian blog Cato Unbound