Surprising? Not really. In 1990, the EU accounted for more than 27% of global GDP, more than the United States at the time; today, its share is just over 17%. And as Europe's economic power has weakened, so has its ability to exert regulatory influence on the world stage, a fact most evident in the failure of the EU's 14 rounds of sanctions to thwart Russian President Putin's military might.
So centrists seeking to strengthen Europe's international role and tame populists would be wise to put the economy at the center of their policy agenda — and to learn a lesson or two from the United States, rather than ridicule its brutality and political dysfunction.
Many of the grievances exploited by populists stem from a lack of economic vitality and sluggish productivity growth, from concerns about the cost of living and rising fuel and energy prices to pressures from immigration on housing and public services.
And despite these problems, the U.S. economy remains significantly richer and more dynamic than its European counterparts. For example, a comparison of real incomes using 2021 data shows that “France's GDP per capita is lower than that of the 48th-poorest U.S. state, Arkansas, while Germany's GDP per capita is now as rich as that of Oklahoma, the 38th (poorest) U.S. state.” Moreover, real wages, expressed in purchasing power parity, have grown faster in the U.S. than in any other G7 country and remain more than 30% higher than in Germany.
President Joe Biden signed bills including semiconductors and infrastructure that were passed with more bipartisan support than any president in decades. | Brendan Smiarowski/AFP via Getty Images
Of course, the gridlock and excessive rhetoric coming out of Washington is hardly a model for the world, but the combination of federalism and a large domestic market continues to serve as a reliable engine of American prosperity.
At the same time, America’s political quirks should not distract outside observers from the fact that President Joe Biden has signed more bills passed with bipartisan support, including on semiconductors and infrastructure, than any president in decades. In early August, the White House announced new measures to streamline existing regulatory requirements for the construction of new housing and transportation projects. And while, as in other developed democracies, bureaucracy and “not in my backyard” policies are major impediments to economic growth, behind the facade of climate activism, the U.S. government has also overseen a dramatic supply increase in oil production on federal lands.
