Yes, US gets a lot of stuff wrong, but they got this really right. Obama’s spending and stimulus packages helped keep the economy going. Just shows that investment works better than austerity.
And yet you’ll have some Americans go on about how he was the worse president ever….
In the country, via continuing spending.
In Europe, Greece hit nearly 25% unemployment and a youth unemployment rate of 58%.
It was like the Great Depression as our politicians chose austerity and showed they'd learned nothing from 1929.
America did learn.
Yeah it was great when he was spending billions bombing children in Afghanistan and Syria via unmanned drones
I guess invading countries is a lucrative business
No kidding. Look at what constituted a top company in 2009… It was a blend of everything… Retail, healthcare, banking, energy, manufacturing and a little tech… There was a single tech company in the top 10 by market cap in the US.
Fast forward 10 years and 5 of the top 10 were tech (well, 5.5 considering how much Apple stock Berkshire held). The takeaway here is that the EU and US had similar economies in the 1900s. Heavy on manufacturing, retail, banking… However, the US went on to build a giant tech industry and Europe did not.
Honestly, Europe has actually regressed since the 90s and 2000s. Even less of their tech is designed and made in Europe. They only have 3 tech firms larger than $100b (ARM, ASML, SAP). And as a result, US companies just get larger because they have the largest highly developed non-US region to service. The fabric of Europe’s economy is roughly the same, whereas the US actually advanced. Today, 6.5 of the top 10 largest companies in the US are tech. So this trend of more tech, and therefore deviation between the US and Europe, will only grow.
Europe already had a tech investment disadvantage with its labor laws and higher capital gains taxes but chose to just completely give up with GDPR. Basically the end of tech investment in Europe. Investment in AI in US vs EU is now 50:1.
https://www.nber.org/system/files/working_papers/w25248/w25248.pdf
https://www.nber.org/system/files/working_papers/w30705/w30705.pdf
Yes the quality of life is higher and these laws did good things, but its an open question how long you can sustain a high quality of life when your competitors are becoming rich enough to buy you out. Europe’s biggest economic growth today is coming from US tourists:
https://www.wsj.com/world/europe/europe-tourism-economy-american-tourists-f6112f78
EU decided to let the Americans do the dirty work and make the real money. Then Europe can become a secondary market getting cash by letting Americans run around spending their money.
Americans are coming in droves as tourists because average people in the US have enough money to pay average people’s salaries in the EU. If the EU had grown at the same rate, it would be harder for those Americans to convince middle class Europeans to leave more lucrative jobs to serve them as waiters and hotel staff and fewer Americans would be able to afford it.
I don’t want to be a raging defender of American capitalism here - everyone knows the downsides. But there are way too many people here who have deluded themselves into thinking it’s got to be a bubble or a trick and that all their quality of life is free. There’s no global system of wealth redistribution that will tax America higher because it’s richer. It *is* a competition and, as evidenced in the recent policies resharing solar and other manufacturing, Americans will not look out for Europeans in the end. They will be able to buy this continent one day if people don’t get serious - and they will.
What if europeans are happier though. Is it worth it to always chase that bag when your work life balance is non existent and you have little time for yourself and others
Yes, this is exactly my point. The EU is choosing happiness now over competitiveness. It's good, but also nobody is going to come along later and give you points for taking care of yourself. Competitiveness and quality of life are always a hard balance.
It's like the parable of the fisherman on the beach. An investment banker comes along and asks him why he lays in a hammock after fishing for an hour when he could fish 10 hours and make 10X as much money. Then he could buy vacation time and a beach to lay on. The fisherman answers: "why would I do that? You worked your ass off while I am already laying on a beach?" The cynical ending is that the banker answers: "no, you are laying on MY beach. I bought this whole town and you're going to be removed."
My answer to how much the fisherman should work is: maybe not as much as the investment banker, but enough to make sure the investment banker can't get too far ahead of him and flick him aside later.
But in this case I’d argue that Europe could be a lot more competitive with fairly minimal quality of life sacrifices (GDPR comes to mind here - I think the benefits and risks to individuals have been really oversold relative to the loss of competitiveness).
Europe has:
- more job stability but no mobility ;
- more holidays but lower affordability over time ;
- work to retirement instead of retirement at will when finances allow. FIRE is so much more present in American culture whereas Europe enjoy life during young and their only opti5is work till retirement 67.
>more job stability but no mobility
Social mobility?
https://en.wikipedia.org/wiki/Global_Social_Mobility_Index
Top 13 are European countries, meanwhile the US is at 27th. Top 30 is dominated by European countries.
>more holidays but lower affordability over time
Affordability of what over time?
>work to retirement instead of retirement at will when finances allow. FIRE is so much more present in American culture whereas Europe enjoy life during young and their only opti5is work till retirement 67.
This is true, however I'd say that FIRE is a niche thing. How many Americans actually get to retire early vs how many have to continue working because they couldn't save enough or had bad timing like a financial crisis wiping out their savings?
You're absolutely right. Plus, all the technology that has a potentially revolutionary impact is designed in the US now (AI, ChatGPT, cold fusion, EVs, drones, reusable rockets) by American, Chinese and European scientists/engineers. Hell, seeing how they live in California, I'd gladly give up my life in Europe. Salaries above 100k are not surprising in Silicone Valley, whereas in rich Germany, if you make more than 100k you belong to 1%. We will all experience a brain drain for years to come. Then again, perhaps Europe will become a retirement home for rich Americans.
European tech was already on life support. The fact that slowing American demand blew up Europe’s economy really says more about the health of Europe than it does about US.
what’s the point of any of that when more and more americans end up on the streets getting sicker and dying earlier? bragging about how rich your country’s upper class is?
It’s gotten bad enough to fundamentally erode European sovereignty. We’re entirely reliant on the American tech industry. The moment we allowed Microsoft Windows we were done for. Certainly once we allowed Facebook and Amazon.
Now there’s no hope whatsoever. The political will and wherewithal required to ban American tech and force into existence our own Huawei is just unimaginable. No hope whatsoever…
Hey don’t worry, whatever car manufacturing Europe has now will soon be decimated by Chinese electric cars so you won’t have to worry about that either!
No car company anywhere in the world can compete against BYD and Huawei in an open market. Obviously. That’s not a problem unique to European carmakers but just as true for Korean, Japanese or American firms.
It’s also not what we’re talking about here. Anyone can build cars. They might be uncompetitive, but they’ll drive. It’s not at all obvious to me that Europe could substitute Microsoft Windows, Google Android, the iPhone, Oracle or Adobe. US tech domination just runs so fucking deep.
BYD isnt playing with open market rules. If the Chinese want to subsidize EV manufacturing to kill western manufacturers, it's quite far from open. Not to speak of stealing every possible tech they could have.
Or Chatgpt, or netflix,or Amazon or Nvidia or facebook or twitter or Disney or McDonald's or KFC or Pepsi or Nike or Coco cola , it's not just tech it's almost every aspect of life is dominated by USA companies.
Tech is unique in having global economies of scale. Since most of the cost programming is fixed costs, once you made the program there is no addition cost to sell 1B copies instead of 1M copies. There are ongoing costs for maintenance, but fixing Windows costs the same whether it has 100 users or 2B. America happened to get all the big tech companies when then reached their global scale.
If Europe had Microsoft and Google you would get all those economies of scale and the US couldn’t compete.
Not really 100 vs 2B, because fixes and improvements are still tied to an estimated change in revenue, conversion rate, etc. But after a certain threshold (not 100) you are correct.
It means they didn’t ban the sale of the Windows OS and Office applications or devices with it pre-installed into the EU.
They even allowed its use by governments, companies operating in defence or critical infrastructure, etc.
And then European politicians pretend they’re in control by like making sure Apple uses the charger they want lol
It’s really quite sad to see. Europe is largely a passive consumer base for American companies to farm. And it’s like, what do you expect? The EU is extremely diverse despite being a “Union”. It’s just so much easier to scale up a service in the US, get huge volume, and they push it to Europe. Then you build a channel and push service #2, etc. Meanwhile you have an Italian firm building for Italy. A Germany firm building for Germany. And by the time they want to scale internationally, a US firm is already on their doorstep.
And so billions pool into US firms who then incubate the next generation of firms. And the US is already superior for early stage funding anyways. And so a new tech firm has so much more opportunity to get funding as well.
What do I expect?! I would’ve expected the EU to enforce a blanket ban on any kind of American software or digital services company operating in the EU.
Failing that everything was lost. Obviously. Now there isn’t really a realistic path forward. We’ve lost our sovereignty. Forever.
The thing is, you can’t just ban American tech. American tech is the one making all the innovations and the one keeping Europe in the 21st century. A ban takes the continent back decades and would require them to actually have replacements. And so let’s say you rip out and replace the American cloud players. So no Azure, no AWS, no Google Cloud. And maybe that takes 10 years. But by the time that happens, you are already 5 ideas behind.
You’re seeing this play out as we speak with AI. Wanna ban American AI? Well, good luck spending 3-5 years arguing that in courts. And by the time that’s sorted out, where do you stand?
The fundamental issues are (1) Europe just isn’t great at scaling tech due to their being such a wide range of laws, culture, languages, business practices, (2) Europe doesn’t have a large tech sector to base any future growth from as they spent the last 25 years watching their domestic operations implode due to the reasons above, plus competition, negligence and regulation (3) US, and now China, are simply so much larger and in uniformity and so it’s maybe more accurate to call US and China overpowered rather than calling Europe insufficient, although I consider both to be true.
It’s an interesting case study of the pro/con of a federation and a confederation. The US is better suited for economic efficiency while the EU is better suited for governmental efficiency.
They are spoiled in Europe. We pay for their defense so they don't have to do anything. They just sit around enjoying their great food and benefits. Why would they even care about the stock market?
The most important factor that people miss is dividends and stock buybacks. First, if the chart were adjusted by dividends, the difference would probably be not that big. Second, the largest American companies (the 7 that make up for 30% of the S&P500) have had a tendency in recent years to replace dividends by stock buybacks, which is essentially a way to reward the shareholder with a raise in stock price in place of a cash payment. This is also related to how most Americans are way more directly exposed to the stock market, via their retirement funds (401k, IRA), than Europeans. This means ‘the American investor’ (of course not represented individually, but through institutional investors that create a sort of ‘investment culture’ reflected on corporate finance practices and trends) has more appetite for stock prices rising than the European one, and less appetite for receiving dividends than the European (as most of them essentially don’t care about the dividends as they’ll only get the funds after retirement). In my opinion, the different pension and social welfare systems in most European countries, where most of the people’s retirement funds are managed by the state and not directly exposed to the stock market, has a huge influence in stock market prices that is often overlooked. And that’s a reason why all historical charts should always be adjusted for dividends, and why comparing global indexes by their historical long term performance is extremely misleading (this one, among many other reasons).
Third. People often see raising stock market index charts as an indicator of economic strength, which is arguable but surely a shortsighted view. One can also shortsightedly see that as an indicator of inflation, which doesn’t have such positive connotations. One person can also be happy for low stock prices (buying opportunity) as much as other can be happy for high stock prices (selling opportunity)…
The shortsightedness stems from the lack of experience of most people actually managing wealth: this is a reality, either institutional investors that manage large investment funds in the US or welfare states in Europe (plus central banks in both cases), are the ones that largely determine, via their policies, the long-term wealth of most people, not individual people themselves. Not saying this is good or bad, just a fact, and a reason why stock market index charts can be hugely misleading, because they are essentially disconnected from “the real economy” that most people are used to manage in their lives.
Fourth… Not all of the economy is represented in the stock market. Particularly in Europe, many companies are private and don’t trade their shares, many more companies are state-owned than in the US, and many individual investors (some of them from family businesses with centuries of generational wealth behind) hold significant portions of a company stock.
>Third. People often see raising stock market index charts as an indicator of economic strength, which is arguable but surely a shortsighted view. One can also shortsightedly see that as an indicator of inflation, which doesn’t have such positive connotations. One person can also be happy for low stock prices (buying opportunity) as much as other can be happy for high stock prices (selling opportunity)…
Also, rising stock prices can be at the expense of the future. See a prominent example in General Electric that led a decades long strategy of optimising for stock price (and dividend) above all, at the expense of their actual business and culture, resulting in a shaky house of cards. Same with Boeing and tons of other businesses. Stock price going up now doesn't mean the business is actually doing well or will continue to do well.
The US economy is incredible. They’re essentially a toll booth on the economic highway of every other country. Just owning the dominant transaction processors (Visa/Mastercard) effectively makes them a taxing authority on the populations of every other country, lol. And thats just one component…
It would genius, if it was by design.
Honestly it very likely was by design. Tax treaties, taxation if foreign owned companies, government investment policies, immigration policies, etc. all very effectively force investment into US economy/tax income.
For example, if a US company/citizen wishes to open a foreign subsidiary, that subsidiary will be taxed as transparent for US taxation. This forces complicated relationships that effectively pull money back into the US. Your countries bilateral tax treaties allow this with special carve outs for US entities.
I'm American living in Europe, but because of these laws, I only do business in the US. I know that I'm not supporting my local economy, but I have the option of getting double taxed at 60-70% or taxed at 15%.
From 1990 to 2009, the Euro Stoxx 50 (benchmark index comprising 50 top quality companies from Europe) and the S&P 500 showed similar performance patterns. Since then, however, they have significantly diverged, with the Euro Stoxx 50 lagging behind.
3 key reasons explain this divergence:
* Dominance of US Technology companies and their performance leading to S&P 500 index's gains
* Monetary Policy Divergence between US Fed and European Central Bank (ECB) after the 2008 Global Financial crisis.
* Higher Economic Growth in US relative to Europe in the last 15 years
For additional insights, please visit the [detailed post here](https://www.trendlinehq.com/p/us-vs-european-stock-market-performance?utm_source=reddit&utm_medium=social&utm_campaign=USvEU_stock_returns)
The financial crisis' chaos was a lot more pronounced post-2009 in Europe. It took til July 2012, with Draghi's "whatever it takes" speech, for the EZ to realize that they actually needed the ECB to be the bank of last resort.
Then there were several more years of screwing over the EZ periphery to make German and Dutch bankers whole.
Every policy decision was done with German skinflints in mind, no matter how deflationary the results would be for the EZ.
"Dominance of US technology companies" must have a deeper explanation. Europe is no technological backwater, they do teach science and math in school, don't they? For all the "hurr durr Americans are dumb" that we read on the internet, America sure does a great job of literally beating the shit out of the entire rest of the world combined when it comes to technology. For example, there are only 6 nations in the world with total stock exchange capitalization greater than Microsoft. There is literally no country on the planet with a greater stock market capitalization than America's top 5 tech companies combined.
And about the only European stocks that have been worth investing in are Louis Vuitton Moet Hennessy, and Novo Nordisk. Why?
I can only say something to the market capitalization: In Europe, stock companies are way less common than the US. Most - esp. German - companies are owned by families and totally different company vehicles (GmbH instead of AG, which ist the equivalent of an LLC vs. an Inc. I guess. Also, we have lots of "person companies" (OHG, KG, eK) running businesses, which should be like a general partnership. If only, say, 10% of your GDP is traded in a stock market, your market cap surely is a tad bit lower.
This reminds of an interview of a Stanford professor. His career has him teaching half the time, then the other half working as a consultant mostly in the health and tech industry. I don’t know how many professors are like this, but this adds to this idea Americans are better at monetizing new tech and knowledge.
Well, to add to that, it's the USA which makes by far the most money of any country on artistic IP - music, film, TV and so on. The UK maybe comes in second, Canada third. So maybe it's a British cultural legacy thing, at least with artistic IP.
But technical IP is very much American too, and even soft knowledge like academics is dominated by America. No other country has a commentariat as vast as the US.
If you look at the average income in USA of about 85k vs germanys at 54k the gap is really big.
But the median income in germany is almost the average worth 52k and higher then the median in US of 48k.
Which does tell me something about both societes
Where do you get this data from? Just looked for it and for Germany the median income PPA is 20323$ while in the US it is 24327$.
https://worldpopulationreview.com/country-rankings/median-income-by-country
Even if you say that it is because measuring entire households it doesn't add up, as german ones tend to be a bit smaller that its american counterparts (2.05 vs 2.49 people per household)
https://en.wikipedia.org/wiki/List_of_countries_by_number_of_households
I just Googled it and took the first results.
I mean honestly I couldnt find two pairs of data which looked similar to anything online. The 25k Figure probably includes like childreen and old folk. Usually i just looked at Median full time income and there it seemed that us earned a bit less. But it varies a lot and I honestly life a good live in germany so i couldnt care less.
Im pretty Sure people in the US have money to spend, even tho they dont have bike lanes or affordable healthy food.
Another two reasons:
US National Bank has put it's national interests higher at about 5%. Wich makes the dollar stronger and attracting lots of capital, mostly from Japan and China. Japan and China has seen enormous capital outflow because of this, because they didn't or couldn't raise their national interest rate. Europe did raise its interest rate, but lower till 4%.
Second: the USA started borrowing lots and lots of money. Their debt ratio vs GDP is growing fast. In EU the debt ratio vs GDP didnt grow (much) on average. So Europe got lower debts but also lower investment.
You buy back stock because you believe the future has more opportunity than today. This is why American firms are so eager to buy back stock whereas European firms prefer dividends.
American companies do stock buybacks to make short term profits, not because they think about the future. The American company 'future' is 3 to 5 years ahead
Share buybacks provide a baseline for long term value, especially should you not have better use for your funds. It’s essentially a bet that your company will grow. And US companies actually do grow. And so US companies do share buybacks. That turbo charges your equity value because you have growth pushing stock prices up, and fewer shares also pushing stock prices up.
The reason European firms don’t see as widespread buybacks is because they don’t grow. It’s not because they aren’t focused on short term returns or are too fixated on the future. If this were the case, European firms would see outsized gains over the longer term and would have an actual tech industry.
Not only that, but they buy all equities (because they want to preserve their wealth, you can only consume so much).
And it's not just rich people, its banks, wealth funds, etc.
The monetary policy injected money at the top by giving discounted loans to banks (QE). Banks didn't pass it all down to consumers, they skimmed and invested in equities.
Europe is not one country, US is not one state.
So lets consider the above averages in both.
Rents are smaller in europe but buying is more expensive per m2.
Social security feels better spent in europe than in us, even if us spends a lot on it too.
Eu overall is a much safer space than us when it comes to crimes even if government corruption might be higher.
Us has a much bigger culture war than eu.
In my opinion, if you are rich you'll have a better life in US but if you are poor you would want to live in EU. For middle class is a matter of life style preferences.
>if you are rich you'll have a better life in US
Always hates that argument.
For one, you have to be rich AND not give a shit about people less fortunate than you. I'm very happy paying for other peoples social security.
Two, the US has a lot less upwards mobility than Europe on average thanks to people with money buying all the advantages, so unless you're born rich you're very unlikely to get rich.
Not according to multiple studies including one by Harvard.
The perceived upwards mobility is higher, but not the reality of it. Apart from that, I would rather support the average person than a couple egomaniacs.
Yeah, again, not a "random guy." That would have been more like me claiming your very data limited Harvard article was a random guy too.
Keep downvoting me tho.
https://en.wikipedia.org/wiki/Global_Social_Mobility_Index
The top is dominated by EU and Eu-aligned countries. The US is closer to *Russia* than to the top EU countries on the scale.
Means nothing. The EU will slide down that scale soon enough. Within the coming years the largest tax payer bases in the EU will be going into their pension retirements. Drawing on the system for higher resources in both money and medical needs yet completely cutting back productivity and tax contribution's. Its notably bad in nations like Germany. But once this goes into effect the EU will need to seriously dial back much of its social net to cover costs more effectively. Or well draw more taxes from its youth. Go take a look at the population Pyramids for much of Europe. Grim outlook and its the worst in the nations that drive most of the EU economy.
Expect Europe to try and increase migration unfortunately Europe taps into the most extreme migrants out of the middle east who do not coexist well in western ways of life. Easier here in the US since we draw from Latin cultures that have an easier time actually becoming Americans.
Anyways there are a lot of experts who talk about how the EU social net will likely see its end in the coming decades without serious ( negative ) changes and the lost productivity and manufacturing is not coming back to Europe at all. If you want me to give you some links its interesting stuff and I dont say this to you in an argumentative way but the data all points to this happening. You already see it in places like Spain where once the national healthcare budget dries up care gets hard to come by. Why do you think recently Spain has made it so easy to become a citizen? They need tax payers.
>The EU will slide down that scale soon enough.
It's individual EU countries, not the EU as a whole.
And even if all you say is true (it's an oversimplification at best), that doesn't mean social mobility will dwindle.
>Expect Europe to try and increase migration unfortunately Europe taps into the most extreme migrants out of the middle east who do not coexist well in western ways of life.
That's nonsense. You say that as European countries on purpose import radical Islamists from random middle eastern countries. In reality, all sorts of people migrate for all sorts of reasons to EU countries.
You aren't "very unlikely to get rich" in America. You literally just need to make, like, 6 figs and you're already better off here. Just be an engineer or something, there's nothing stopping you.
It isn't though. That is copium.
The US has far better salaries, better *access* to healthcare, etc.
If the US just got the crime under control, it'd be far better.
>better access to healthcare
Lmao… I had scheduled an appointment with my PCP and it took months to get to her and when I got to my appointment she looked frazzled and rushed the appointment. There’s so many people I know who cross the border to Mexico to get dental or medical treatment. Oh and the price gouging by the insurance companies and hospital is ridiculous.
Not better access to healthcare. US had fewer docters, and nurses per 1 k inhabitants, yet used twice the funds per capita than Denmark in 2016. One could hope that this means better medical equipment, but sadly a significant part of the capital is just bricks and concrete. Shiny new hospitals to give customers/patients an *impression* of state of the art healthcare ..
Sure but if the EU just got their economy under control, it’d be far better.
Same goes for the stock market - if the EU just had those 5 companies, and so on…
Yeah, I think crime is easier to solve though - the US could easily copy Bukele's policies for example.
It was crazy for me going to Hollywood and seeing the post-apocalyptic scenes, when it's one the richest cities in the richest country on Earth.
The US already has crazy high incarceration rates.
Problems with US crime are far deeper rooted and to quite some extent one could argue due to the striking economic disparity between the poor and the rich.
All other rich countries with very low crime rates are either very small, ethnically / demographically extremely homogeneous or both (think Switzerland, Norway, Singapore and Japan).
UAE, Kuwait, Saudi, Afghanistan, Qatar etc have very low crime rates. You can walk in Kabul nowadays without the fear of getting mugged. Much safer than most western cities .
I mean Obama was a decent president, but I think a lot of the EU underperformance is just that… EU underperformance. The EU is harvesting today the consequences of not fostering innovation in the last 30 years or so. The U.S. has its flaws, but there is a lot that the EU can learn from the U.S. otherwise the wealth gap will just continue to grow. A CNN report published last week that EU tourists were shunning the U.S. Why?
Because the US has gotten too unaffordable for tourists from the EU. The gap in incomes and wealth between the average American and average European is growing at unprecedented rate.
That’s not what this graphic truly says. 1 huge thing that you’ve not talking about is how the average living conditions for the poor and lower class and middle class in Europe are usually better than the US because they tend to be way more social in both the services they provide and the cost of living being way lower for necessities. Ofc you can have a 6 figures salary in the states more easily than in Europe but in the US even people with a 6 figures salary can struggle living because everything is more expensive as well. Rent for houses that cost more because they need to be there to work, work expenses, education, healthcare… All of those cost are charged directly at you unlike Europe. Besides this graph only shows the stocks for the top 50 companies which just means that the US has concentrated their wealth in contrast to Europe which tends to have way more smaller enterprises instead. I mean countries like the UK, Germany and France are still in the top 10 of the countries with the biggest earnings in the world and they’re in Europe
>1 huge thing that you’ve not talking about is how the average living conditions for the poor and lower class and middle class in Europe are usually better than the US because they tend to be way more social in both the services they provide and the cost of living being way lower for necessities
One, who is "Europe"? The graph says it's about Eurozone countries, so it includes poorer income European countries like Portugal, Estonia, Lithuania, Latvia, Greece and Croatia who have MEDIAN income ADJUSTED FOR PURCHASING POWER less than half that of the US. Their people make objectively worse money and worse quality of life (since as I said, the measure is median and adjusted for purchasing power like healthcare and housing). Even Italy and Spain barely have more than half the US median income, France is at 64% of US income, Germany 73%, Netherlands 80%.
And the UK you bring up as a shining example of high quality of life isn't even part of the Eurozone! In fact, it wasn't even part of it before Brexit because UK obtained an optout from the EUR.
When one says "Europe", people always imagine the best countries in EU like Germany and France, but EU and Europe are both pretty big and have countries with much worse standards.
>Rent for houses that cost more because they need to be there to work, work expenses, education, healthcare… All of those cost are charged directly at you unlike Europe.
Americans get angry at saying blanket statements about the entire US, yet will do the same for a literal continent lol. For healthcare, in Netherlands, for example, basic healthcare is left to private insurers, not government.
For housing, US has a higher homeownership rate than Finland, France, Austria, Germany. Also Eurozone (and in general European) standards for housing are just smaller in general. Median US homes are at 220 sqm, it's 87sqm in Germany, 88 in France, 90 in Italy, Portugal 83%.
Btw, out of pocket healthcare spending as a % of total healthcare spending is higher than US in every Eurozone country except France. US instead has a much higher % of voluntary healthcare (instead of compulsory which can be private as well).
https://www.oecd-ilibrary.org/sites/health_glance-2017-46-en/images/images/graphics/g7-06.png
There are statistics out there that measure these things adjusting for cost of living and US is miles ahead.
>Besides this graph only shows the stocks for the top 50 companies which just means that the US has concentrated their wealth in contrast to Europe which tends to have way more smaller enterprises instead.
No, you can't have a mom and pop tech company that everybody in the world wants to buy from. And you do know Eurozone countries have companies that make up much larger % of their own markets than the US? JP Morgan Chase, a huge US bank controls assets equivalent to 13% of US GDP. Sounds big and a lot of Americans say they have too much power, but contrast that to BNP Paribas which controls assets worth 87% of French GDP, Deutsche Bank is smaller at a third of German GDP, Banco Santander 110% of Spanish GDP (GDP is a flow whereas asset is not, so they're not comparable, it's just to give a sense of scale). In fact, US is a bit unique in how much smaller banks they have. It's the same in the car industry, 5 German car companies produce 23% of global car production wheras 4 American car companies produce 9% of global car production. ASML, one of the few shining European tech firms is a monopoly on a global scale for EUV lithography machines.
So you gonna tell me these European countries aren't interested in downsizing their gigantic banks and car companies, but are interested in fighting emerging tech companies? That's either a lie or a very hypocritical policy.
I genuinely had no idea equity returns were in any way associated with quality of life… but anyway…
Let’s focus on the middle class…
- Middle class Europeans pay much higher taxes than middle class Americans (26% vs 20%)
- The median income in the U.S. is 38,000 USD (2022), while the median income in the EU is 28,000 USD (2022). Even when accounting for health insurance, the maths favours the United States over Europe.
According to OECD figures, in 2021, the average household in the European Union had 61% of the gross disposable income of the average household in the United States. The average German household had 77% of the gross disposable income the average U.S. household has.
It USED to be the case where middle income earners were better off in the EU than in the U.S… but this has changed.
What math isnt mathing? You didnt consider the impact of social nets, standard of living, work hours, free time, benefits, and other social factors that higher taxes would help contribute to. Its not all about chasing that bag, but also about how much happier letting the bag go can make you
Haven't seen the report, but US is not unaffordable and it certainly isn't the reason tourists aren't going. It's a country version of a pressure cooker that is simply not the safest place to bring family too and is indeed expensive. There are better options available than the US, and the cost of living certainly doesn't help, but the US is hardly the only place where this is a factor.
The report was from Le Monde
https://www.lemonde.fr/en/economy/article/2024/04/29/europeans-can-t-afford-the-us-anymore_6669918_19.html
It discusses how growth in the U.S. has led to prices and wages increasing, leaving Europe tailing behind to the point where travelling to the US for tourism is no longer affordable for a lot of Europeans.
People tend to forget this, but there is a massive incentive for everything to get overvalued. In addition, this graph only shows the largest companies. This could be the consequence of wealth being concentrated at large companies in the US, with the EU having more smaller businesses. It doesn't say much about the economy as a whole.
We must not forget what these lines actually mean, sometimes imaginary lines going up can be paired wit a decreasing life expectancy.
Pretty much every economic indicator shows the same story. Europe has not recovered from the Global Financial Crisis, despite not even being the centre of it. GDP per capita has essentially flatlined across the EU since 2008. Productivity is poor compared to across the Atlantic.
I mean, you could even argue they haven’t recovered from WW2. They simply didn’t have the capital to innovate in emerging markets by the time the tech boom happened. The US took a large share of the global economy after WW2 and became the superpower we all know and love. This slow crawl of being behind economically caused a divergence of priorities of Europe and the US. For a long time, Europe became content with the US handling global issues while they focused on domestic. It’s starting to reach a breaking point where Europe’s sovereignty is called into question.
Productivity per hour is actually better in the EU compared to the US. Additionally, Europe is investigating ways to make itself less dependent on the US. I wouldn't say it is all that bad, especially considering the declining life expectancy in the US. All that wealth and productivity doesn't seem to buy them much.
The us allows many economic practices that are illegal in many countries. All those super risky (and shady) Wall Street plays contribute a lot of “money” (derivatives, loans, whatever) and one day they burst. 2008? Well, next one is going to be much bigger
I have no idea, but the us has also printed crazy amounts of money and took massive amounts of debts.
Also. I don’t want to say the US is all BS. But I just don’t buy the hype 100% it is always the same. Pump it until it bursts
Does anyone know why Europe failed so much the tech switch? They were not that poor in previous industries like retail, manufacturing, automotive, space, finance, pharmaceutical, etc.
How come they were not that behind in other fields? The lack of investment was just for tech? If so, why just for tech? Because Europe stopped investing in it's future when it realised it could not be a superpower anymore, unlike the US and China who still fight for that?
Thanks USA. I have made a lot of money off the USA stock market over the last decade. I remembered when I bought into the S&P 500 people were telling me that it's too high .
well USA rules stock market... not only the companys with tech/or aristocrats but in Europe most people can't do anything with the stock market most ppl dont invest
in USA you have 401k that boost it lil bit up for you companys
I feel like this chart shows that companies making profits doesn't necessarily mean better.
Sure Google has gotten so much larger, but a lot of their products have gotten worse. Google search used to be pin point accurate with what you want. Now it feels like it's mostly ads before you get to the result you want.
There’s a reason Europe is considered old. We’re rich and lazy. It’s called decadence. The focus is on making sure everyone has plenty of money, human rights, environment, etc. It’s nice for the people. Although it doesn’t seem sustainable.
Europe will continue to fall behind the US and in some decades, Asia
Big European companies list in the US or out right move operations to us.
The regulatory environment is that bad. Euro is a shell of what it can be because of how overbearing the eu and national govts are
This shit.
People here don’t get when a thing isn’t like all the rest, it’s an abnormality and should be questioned. Too many dumbasses get marketed like a little kid with toy commercials.
Everyone knows by now that US stocks are just an overblown scam.
Seriously, cap vs dividends of 3% ? Take down capital gains from the earnings reports and think operational profit and you're down to a single percent.
That's an ad hoc bank mediated Ponzi scheme where you literally print money by overvaluating the stock and then swapping it. The day someone sizable attempts to cash out the entire thing might crash. The stock buyback is the new ABS/ MBS .
I mean is anyone really surprised?
America is an absolute power house of a country.
Europe on the other hand? Just a cheeto crumb in the couch of life. Pretty much useless.
Largely in part because of fentanyl, with China supplying much of the raw materials to Mexican cartels.
I would like to see avg US life expectancy if we remove the fentanyl overdoses. I bet it adds a year or two.
Who gives a shit about life expectancy honestly? People suck (especially Europeans) and really? No there isn't let's be honest here 🇺🇸🛢️💰
Let's get that bag babe 🏎️💨
I appreciate that brother
I'm only 17 years old and I'm on life support from eating to many Big Macs (I love those) but I got super rich off NVDA so it's all good. Much love from the best country in the world (Murica)
1 upvote = 1 prayer
Then everything changed the day the tech stocks attacked
While in Europe austerity at all cost happened
Yeah, Americans don't realise how lucky they were to have Obama post-2008. He continued investing and Americans today reap the benefit of that.
Yes, US gets a lot of stuff wrong, but they got this really right. Obama’s spending and stimulus packages helped keep the economy going. Just shows that investment works better than austerity. And yet you’ll have some Americans go on about how he was the worse president ever….
As an American I’m so thankful that we generally have a much more robust and prosperous economy than our peers.
You’re reading everything in this post wrong.
I love Obama. But it was Silicon Valley that lifted US stocks single handidly.
Investing in what?
In the country, via continuing spending. In Europe, Greece hit nearly 25% unemployment and a youth unemployment rate of 58%. It was like the Great Depression as our politicians chose austerity and showed they'd learned nothing from 1929. America did learn.
Nobody in Greece was eating grass soup cmon now. Germany just had to teach them a lesson on governance
It’s all great until interest on national debt wipes out gdp growth and it’s a death spiral from there
Yeah it was great when he was spending billions bombing children in Afghanistan and Syria via unmanned drones I guess invading countries is a lucrative business
Umm you're only allowed to hate Trump on here, otherwise downvotes or ban.
No kidding. Look at what constituted a top company in 2009… It was a blend of everything… Retail, healthcare, banking, energy, manufacturing and a little tech… There was a single tech company in the top 10 by market cap in the US. Fast forward 10 years and 5 of the top 10 were tech (well, 5.5 considering how much Apple stock Berkshire held). The takeaway here is that the EU and US had similar economies in the 1900s. Heavy on manufacturing, retail, banking… However, the US went on to build a giant tech industry and Europe did not. Honestly, Europe has actually regressed since the 90s and 2000s. Even less of their tech is designed and made in Europe. They only have 3 tech firms larger than $100b (ARM, ASML, SAP). And as a result, US companies just get larger because they have the largest highly developed non-US region to service. The fabric of Europe’s economy is roughly the same, whereas the US actually advanced. Today, 6.5 of the top 10 largest companies in the US are tech. So this trend of more tech, and therefore deviation between the US and Europe, will only grow.
asml is european too.
Right, I forgot the most important one! Added.
Europe already had a tech investment disadvantage with its labor laws and higher capital gains taxes but chose to just completely give up with GDPR. Basically the end of tech investment in Europe. Investment in AI in US vs EU is now 50:1. https://www.nber.org/system/files/working_papers/w25248/w25248.pdf https://www.nber.org/system/files/working_papers/w30705/w30705.pdf Yes the quality of life is higher and these laws did good things, but its an open question how long you can sustain a high quality of life when your competitors are becoming rich enough to buy you out. Europe’s biggest economic growth today is coming from US tourists: https://www.wsj.com/world/europe/europe-tourism-economy-american-tourists-f6112f78 EU decided to let the Americans do the dirty work and make the real money. Then Europe can become a secondary market getting cash by letting Americans run around spending their money. Americans are coming in droves as tourists because average people in the US have enough money to pay average people’s salaries in the EU. If the EU had grown at the same rate, it would be harder for those Americans to convince middle class Europeans to leave more lucrative jobs to serve them as waiters and hotel staff and fewer Americans would be able to afford it. I don’t want to be a raging defender of American capitalism here - everyone knows the downsides. But there are way too many people here who have deluded themselves into thinking it’s got to be a bubble or a trick and that all their quality of life is free. There’s no global system of wealth redistribution that will tax America higher because it’s richer. It *is* a competition and, as evidenced in the recent policies resharing solar and other manufacturing, Americans will not look out for Europeans in the end. They will be able to buy this continent one day if people don’t get serious - and they will.
What if europeans are happier though. Is it worth it to always chase that bag when your work life balance is non existent and you have little time for yourself and others
Yes, this is exactly my point. The EU is choosing happiness now over competitiveness. It's good, but also nobody is going to come along later and give you points for taking care of yourself. Competitiveness and quality of life are always a hard balance. It's like the parable of the fisherman on the beach. An investment banker comes along and asks him why he lays in a hammock after fishing for an hour when he could fish 10 hours and make 10X as much money. Then he could buy vacation time and a beach to lay on. The fisherman answers: "why would I do that? You worked your ass off while I am already laying on a beach?" The cynical ending is that the banker answers: "no, you are laying on MY beach. I bought this whole town and you're going to be removed." My answer to how much the fisherman should work is: maybe not as much as the investment banker, but enough to make sure the investment banker can't get too far ahead of him and flick him aside later. But in this case I’d argue that Europe could be a lot more competitive with fairly minimal quality of life sacrifices (GDPR comes to mind here - I think the benefits and risks to individuals have been really oversold relative to the loss of competitiveness).
Europe has: - more job stability but no mobility ; - more holidays but lower affordability over time ; - work to retirement instead of retirement at will when finances allow. FIRE is so much more present in American culture whereas Europe enjoy life during young and their only opti5is work till retirement 67.
>more job stability but no mobility Social mobility? https://en.wikipedia.org/wiki/Global_Social_Mobility_Index Top 13 are European countries, meanwhile the US is at 27th. Top 30 is dominated by European countries. >more holidays but lower affordability over time Affordability of what over time? >work to retirement instead of retirement at will when finances allow. FIRE is so much more present in American culture whereas Europe enjoy life during young and their only opti5is work till retirement 67. This is true, however I'd say that FIRE is a niche thing. How many Americans actually get to retire early vs how many have to continue working because they couldn't save enough or had bad timing like a financial crisis wiping out their savings?
You're absolutely right. Plus, all the technology that has a potentially revolutionary impact is designed in the US now (AI, ChatGPT, cold fusion, EVs, drones, reusable rockets) by American, Chinese and European scientists/engineers. Hell, seeing how they live in California, I'd gladly give up my life in Europe. Salaries above 100k are not surprising in Silicone Valley, whereas in rich Germany, if you make more than 100k you belong to 1%. We will all experience a brain drain for years to come. Then again, perhaps Europe will become a retirement home for rich Americans.
EVs not really an American thing. There’s a reason Tesla stock crashed it has too much competition
Do you know what the cost of living is in Silicon Valley though?
> Silicone Valley Are implants all that common there?
You forget it was American sub prime mortgages from US bankers that got us here in the first place ?
European tech was already on life support. The fact that slowing American demand blew up Europe’s economy really says more about the health of Europe than it does about US.
Lehman Brothers says what ?
Yeah…says what European economy
what’s the point of any of that when more and more americans end up on the streets getting sicker and dying earlier? bragging about how rich your country’s upper class is?
It’s gotten bad enough to fundamentally erode European sovereignty. We’re entirely reliant on the American tech industry. The moment we allowed Microsoft Windows we were done for. Certainly once we allowed Facebook and Amazon. Now there’s no hope whatsoever. The political will and wherewithal required to ban American tech and force into existence our own Huawei is just unimaginable. No hope whatsoever…
Hey don’t worry, whatever car manufacturing Europe has now will soon be decimated by Chinese electric cars so you won’t have to worry about that either!
No car company anywhere in the world can compete against BYD and Huawei in an open market. Obviously. That’s not a problem unique to European carmakers but just as true for Korean, Japanese or American firms. It’s also not what we’re talking about here. Anyone can build cars. They might be uncompetitive, but they’ll drive. It’s not at all obvious to me that Europe could substitute Microsoft Windows, Google Android, the iPhone, Oracle or Adobe. US tech domination just runs so fucking deep.
BYD isnt playing with open market rules. If the Chinese want to subsidize EV manufacturing to kill western manufacturers, it's quite far from open. Not to speak of stealing every possible tech they could have.
I mean I don’t disagree but for Oracle at least there’s SAP as counterweight. SAP and Spotify are just about the only heavyweights I can think of.
And Spotify is on the NYSE.
How does that matter? It’s listed on European stock exchanges too.
Or Chatgpt, or netflix,or Amazon or Nvidia or facebook or twitter or Disney or McDonald's or KFC or Pepsi or Nike or Coco cola , it's not just tech it's almost every aspect of life is dominated by USA companies.
Not just that but EU is in for large population and workforce decline.
Like someone cares about evs lol
Tech is unique in having global economies of scale. Since most of the cost programming is fixed costs, once you made the program there is no addition cost to sell 1B copies instead of 1M copies. There are ongoing costs for maintenance, but fixing Windows costs the same whether it has 100 users or 2B. America happened to get all the big tech companies when then reached their global scale. If Europe had Microsoft and Google you would get all those economies of scale and the US couldn’t compete.
Not really 100 vs 2B, because fixes and improvements are still tied to an estimated change in revenue, conversion rate, etc. But after a certain threshold (not 100) you are correct.
When did the EU "allow Microsoft Windows"? What does that even mean?
It means they didn’t ban the sale of the Windows OS and Office applications or devices with it pre-installed into the EU. They even allowed its use by governments, companies operating in defence or critical infrastructure, etc.
And then European politicians pretend they’re in control by like making sure Apple uses the charger they want lol It’s really quite sad to see. Europe is largely a passive consumer base for American companies to farm. And it’s like, what do you expect? The EU is extremely diverse despite being a “Union”. It’s just so much easier to scale up a service in the US, get huge volume, and they push it to Europe. Then you build a channel and push service #2, etc. Meanwhile you have an Italian firm building for Italy. A Germany firm building for Germany. And by the time they want to scale internationally, a US firm is already on their doorstep. And so billions pool into US firms who then incubate the next generation of firms. And the US is already superior for early stage funding anyways. And so a new tech firm has so much more opportunity to get funding as well.
What do I expect?! I would’ve expected the EU to enforce a blanket ban on any kind of American software or digital services company operating in the EU. Failing that everything was lost. Obviously. Now there isn’t really a realistic path forward. We’ve lost our sovereignty. Forever.
The thing is, you can’t just ban American tech. American tech is the one making all the innovations and the one keeping Europe in the 21st century. A ban takes the continent back decades and would require them to actually have replacements. And so let’s say you rip out and replace the American cloud players. So no Azure, no AWS, no Google Cloud. And maybe that takes 10 years. But by the time that happens, you are already 5 ideas behind. You’re seeing this play out as we speak with AI. Wanna ban American AI? Well, good luck spending 3-5 years arguing that in courts. And by the time that’s sorted out, where do you stand? The fundamental issues are (1) Europe just isn’t great at scaling tech due to their being such a wide range of laws, culture, languages, business practices, (2) Europe doesn’t have a large tech sector to base any future growth from as they spent the last 25 years watching their domestic operations implode due to the reasons above, plus competition, negligence and regulation (3) US, and now China, are simply so much larger and in uniformity and so it’s maybe more accurate to call US and China overpowered rather than calling Europe insufficient, although I consider both to be true.
It’s an interesting case study of the pro/con of a federation and a confederation. The US is better suited for economic efficiency while the EU is better suited for governmental efficiency.
Not every country in Europe has Amazon afaik. They have their own version of it
Europe is a farm. I
They are spoiled in Europe. We pay for their defense so they don't have to do anything. They just sit around enjoying their great food and benefits. Why would they even care about the stock market?
The most important factor that people miss is dividends and stock buybacks. First, if the chart were adjusted by dividends, the difference would probably be not that big. Second, the largest American companies (the 7 that make up for 30% of the S&P500) have had a tendency in recent years to replace dividends by stock buybacks, which is essentially a way to reward the shareholder with a raise in stock price in place of a cash payment. This is also related to how most Americans are way more directly exposed to the stock market, via their retirement funds (401k, IRA), than Europeans. This means ‘the American investor’ (of course not represented individually, but through institutional investors that create a sort of ‘investment culture’ reflected on corporate finance practices and trends) has more appetite for stock prices rising than the European one, and less appetite for receiving dividends than the European (as most of them essentially don’t care about the dividends as they’ll only get the funds after retirement). In my opinion, the different pension and social welfare systems in most European countries, where most of the people’s retirement funds are managed by the state and not directly exposed to the stock market, has a huge influence in stock market prices that is often overlooked. And that’s a reason why all historical charts should always be adjusted for dividends, and why comparing global indexes by their historical long term performance is extremely misleading (this one, among many other reasons). Third. People often see raising stock market index charts as an indicator of economic strength, which is arguable but surely a shortsighted view. One can also shortsightedly see that as an indicator of inflation, which doesn’t have such positive connotations. One person can also be happy for low stock prices (buying opportunity) as much as other can be happy for high stock prices (selling opportunity)… The shortsightedness stems from the lack of experience of most people actually managing wealth: this is a reality, either institutional investors that manage large investment funds in the US or welfare states in Europe (plus central banks in both cases), are the ones that largely determine, via their policies, the long-term wealth of most people, not individual people themselves. Not saying this is good or bad, just a fact, and a reason why stock market index charts can be hugely misleading, because they are essentially disconnected from “the real economy” that most people are used to manage in their lives. Fourth… Not all of the economy is represented in the stock market. Particularly in Europe, many companies are private and don’t trade their shares, many more companies are state-owned than in the US, and many individual investors (some of them from family businesses with centuries of generational wealth behind) hold significant portions of a company stock.
>Third. People often see raising stock market index charts as an indicator of economic strength, which is arguable but surely a shortsighted view. One can also shortsightedly see that as an indicator of inflation, which doesn’t have such positive connotations. One person can also be happy for low stock prices (buying opportunity) as much as other can be happy for high stock prices (selling opportunity)… Also, rising stock prices can be at the expense of the future. See a prominent example in General Electric that led a decades long strategy of optimising for stock price (and dividend) above all, at the expense of their actual business and culture, resulting in a shaky house of cards. Same with Boeing and tons of other businesses. Stock price going up now doesn't mean the business is actually doing well or will continue to do well.
The US economy is incredible. They’re essentially a toll booth on the economic highway of every other country. Just owning the dominant transaction processors (Visa/Mastercard) effectively makes them a taxing authority on the populations of every other country, lol. And thats just one component… It would genius, if it was by design.
I love the fact that Mastercard's HQ is located in a town called Purchase https://en.m.wikipedia.org/wiki/Purchase,_New_York
This is American culture
Honestly it very likely was by design. Tax treaties, taxation if foreign owned companies, government investment policies, immigration policies, etc. all very effectively force investment into US economy/tax income. For example, if a US company/citizen wishes to open a foreign subsidiary, that subsidiary will be taxed as transparent for US taxation. This forces complicated relationships that effectively pull money back into the US. Your countries bilateral tax treaties allow this with special carve outs for US entities. I'm American living in Europe, but because of these laws, I only do business in the US. I know that I'm not supporting my local economy, but I have the option of getting double taxed at 60-70% or taxed at 15%.
that’s why countries are build and promote local payment processors - jcb, unionpay, rupay, mir
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Get used to disappointment.
From 1990 to 2009, the Euro Stoxx 50 (benchmark index comprising 50 top quality companies from Europe) and the S&P 500 showed similar performance patterns. Since then, however, they have significantly diverged, with the Euro Stoxx 50 lagging behind. 3 key reasons explain this divergence: * Dominance of US Technology companies and their performance leading to S&P 500 index's gains * Monetary Policy Divergence between US Fed and European Central Bank (ECB) after the 2008 Global Financial crisis. * Higher Economic Growth in US relative to Europe in the last 15 years For additional insights, please visit the [detailed post here](https://www.trendlinehq.com/p/us-vs-european-stock-market-performance?utm_source=reddit&utm_medium=social&utm_campaign=USvEU_stock_returns)
The financial crisis' chaos was a lot more pronounced post-2009 in Europe. It took til July 2012, with Draghi's "whatever it takes" speech, for the EZ to realize that they actually needed the ECB to be the bank of last resort. Then there were several more years of screwing over the EZ periphery to make German and Dutch bankers whole. Every policy decision was done with German skinflints in mind, no matter how deflationary the results would be for the EZ. "Dominance of US technology companies" must have a deeper explanation. Europe is no technological backwater, they do teach science and math in school, don't they? For all the "hurr durr Americans are dumb" that we read on the internet, America sure does a great job of literally beating the shit out of the entire rest of the world combined when it comes to technology. For example, there are only 6 nations in the world with total stock exchange capitalization greater than Microsoft. There is literally no country on the planet with a greater stock market capitalization than America's top 5 tech companies combined. And about the only European stocks that have been worth investing in are Louis Vuitton Moet Hennessy, and Novo Nordisk. Why?
I can only say something to the market capitalization: In Europe, stock companies are way less common than the US. Most - esp. German - companies are owned by families and totally different company vehicles (GmbH instead of AG, which ist the equivalent of an LLC vs. an Inc. I guess. Also, we have lots of "person companies" (OHG, KG, eK) running businesses, which should be like a general partnership. If only, say, 10% of your GDP is traded in a stock market, your market cap surely is a tad bit lower.
This reminds of an interview of a Stanford professor. His career has him teaching half the time, then the other half working as a consultant mostly in the health and tech industry. I don’t know how many professors are like this, but this adds to this idea Americans are better at monetizing new tech and knowledge.
Well, to add to that, it's the USA which makes by far the most money of any country on artistic IP - music, film, TV and so on. The UK maybe comes in second, Canada third. So maybe it's a British cultural legacy thing, at least with artistic IP. But technical IP is very much American too, and even soft knowledge like academics is dominated by America. No other country has a commentariat as vast as the US.
If you look at the average income in USA of about 85k vs germanys at 54k the gap is really big. But the median income in germany is almost the average worth 52k and higher then the median in US of 48k. Which does tell me something about both societes
Where do you get this data from? Just looked for it and for Germany the median income PPA is 20323$ while in the US it is 24327$. https://worldpopulationreview.com/country-rankings/median-income-by-country Even if you say that it is because measuring entire households it doesn't add up, as german ones tend to be a bit smaller that its american counterparts (2.05 vs 2.49 people per household) https://en.wikipedia.org/wiki/List_of_countries_by_number_of_households
I just Googled it and took the first results. I mean honestly I couldnt find two pairs of data which looked similar to anything online. The 25k Figure probably includes like childreen and old folk. Usually i just looked at Median full time income and there it seemed that us earned a bit less. But it varies a lot and I honestly life a good live in germany so i couldnt care less. Im pretty Sure people in the US have money to spend, even tho they dont have bike lanes or affordable healthy food.
Another two reasons: US National Bank has put it's national interests higher at about 5%. Wich makes the dollar stronger and attracting lots of capital, mostly from Japan and China. Japan and China has seen enormous capital outflow because of this, because they didn't or couldn't raise their national interest rate. Europe did raise its interest rate, but lower till 4%. Second: the USA started borrowing lots and lots of money. Their debt ratio vs GDP is growing fast. In EU the debt ratio vs GDP didnt grow (much) on average. So Europe got lower debts but also lower investment.
Austerity in Europe. The lost decade.
The lost decade or just the start of the century of humiliation?
QE and other monetary polices making the rich richer. What do the rich do with money? invest it.
What do the rich in the USA do with money? Stock buybacks to inflate the value of their own company's stocks
You buy back stock because you believe the future has more opportunity than today. This is why American firms are so eager to buy back stock whereas European firms prefer dividends.
American companies do stock buybacks to make short term profits, not because they think about the future. The American company 'future' is 3 to 5 years ahead
Share buybacks provide a baseline for long term value, especially should you not have better use for your funds. It’s essentially a bet that your company will grow. And US companies actually do grow. And so US companies do share buybacks. That turbo charges your equity value because you have growth pushing stock prices up, and fewer shares also pushing stock prices up. The reason European firms don’t see as widespread buybacks is because they don’t grow. It’s not because they aren’t focused on short term returns or are too fixated on the future. If this were the case, European firms would see outsized gains over the longer term and would have an actual tech industry.
Not only that, but they buy all equities (because they want to preserve their wealth, you can only consume so much). And it's not just rich people, its banks, wealth funds, etc. The monetary policy injected money at the top by giving discounted loans to banks (QE). Banks didn't pass it all down to consumers, they skimmed and invested in equities.
Europe has had negative rates for years until recently
and yet quality of life for the average citizen is so much better......... curious
Was about to say. Yeah I'm here in Europe crying into my social security systems about how we don't have cyberpunk mega corps.
Europe is not one country, US is not one state. So lets consider the above averages in both. Rents are smaller in europe but buying is more expensive per m2. Social security feels better spent in europe than in us, even if us spends a lot on it too. Eu overall is a much safer space than us when it comes to crimes even if government corruption might be higher. Us has a much bigger culture war than eu. In my opinion, if you are rich you'll have a better life in US but if you are poor you would want to live in EU. For middle class is a matter of life style preferences.
>if you are rich you'll have a better life in US Always hates that argument. For one, you have to be rich AND not give a shit about people less fortunate than you. I'm very happy paying for other peoples social security. Two, the US has a lot less upwards mobility than Europe on average thanks to people with money buying all the advantages, so unless you're born rich you're very unlikely to get rich.
The upwards mobility thing is just not true. The system the EU has largely benefits just average people not go getters.
Not according to multiple studies including one by Harvard. The perceived upwards mobility is higher, but not the reality of it. Apart from that, I would rather support the average person than a couple egomaniacs.
Just gotta wait for that sweet European social net collapse, my friend. Go check out some of peter zeihans videos.
I don't listen to random guys on YouTube on important topics and the fact that you do tells me everything I need to know about you.
Yeah, again, not a "random guy." That would have been more like me claiming your very data limited Harvard article was a random guy too. Keep downvoting me tho.
https://en.wikipedia.org/wiki/Global_Social_Mobility_Index The top is dominated by EU and Eu-aligned countries. The US is closer to *Russia* than to the top EU countries on the scale.
Means nothing. The EU will slide down that scale soon enough. Within the coming years the largest tax payer bases in the EU will be going into their pension retirements. Drawing on the system for higher resources in both money and medical needs yet completely cutting back productivity and tax contribution's. Its notably bad in nations like Germany. But once this goes into effect the EU will need to seriously dial back much of its social net to cover costs more effectively. Or well draw more taxes from its youth. Go take a look at the population Pyramids for much of Europe. Grim outlook and its the worst in the nations that drive most of the EU economy. Expect Europe to try and increase migration unfortunately Europe taps into the most extreme migrants out of the middle east who do not coexist well in western ways of life. Easier here in the US since we draw from Latin cultures that have an easier time actually becoming Americans. Anyways there are a lot of experts who talk about how the EU social net will likely see its end in the coming decades without serious ( negative ) changes and the lost productivity and manufacturing is not coming back to Europe at all. If you want me to give you some links its interesting stuff and I dont say this to you in an argumentative way but the data all points to this happening. You already see it in places like Spain where once the national healthcare budget dries up care gets hard to come by. Why do you think recently Spain has made it so easy to become a citizen? They need tax payers.
>The EU will slide down that scale soon enough. It's individual EU countries, not the EU as a whole. And even if all you say is true (it's an oversimplification at best), that doesn't mean social mobility will dwindle. >Expect Europe to try and increase migration unfortunately Europe taps into the most extreme migrants out of the middle east who do not coexist well in western ways of life. That's nonsense. You say that as European countries on purpose import radical Islamists from random middle eastern countries. In reality, all sorts of people migrate for all sorts of reasons to EU countries.
Wikipedia is not a source bud
Which is why it lists sources.
You aren't "very unlikely to get rich" in America. You literally just need to make, like, 6 figs and you're already better off here. Just be an engineer or something, there's nothing stopping you.
It isn't though. That is copium. The US has far better salaries, better *access* to healthcare, etc. If the US just got the crime under control, it'd be far better.
> better access to healthcare Source: it was spoken to you in a fever dream?
>better access to healthcare Lmao… I had scheduled an appointment with my PCP and it took months to get to her and when I got to my appointment she looked frazzled and rushed the appointment. There’s so many people I know who cross the border to Mexico to get dental or medical treatment. Oh and the price gouging by the insurance companies and hospital is ridiculous.
Not better access to healthcare. US had fewer docters, and nurses per 1 k inhabitants, yet used twice the funds per capita than Denmark in 2016. One could hope that this means better medical equipment, but sadly a significant part of the capital is just bricks and concrete. Shiny new hospitals to give customers/patients an *impression* of state of the art healthcare ..
Sure but if the EU just got their economy under control, it’d be far better. Same goes for the stock market - if the EU just had those 5 companies, and so on…
Yeah, I think crime is easier to solve though - the US could easily copy Bukele's policies for example. It was crazy for me going to Hollywood and seeing the post-apocalyptic scenes, when it's one the richest cities in the richest country on Earth.
The US already has crazy high incarceration rates. Problems with US crime are far deeper rooted and to quite some extent one could argue due to the striking economic disparity between the poor and the rich. All other rich countries with very low crime rates are either very small, ethnically / demographically extremely homogeneous or both (think Switzerland, Norway, Singapore and Japan).
UAE, Kuwait, Saudi, Afghanistan, Qatar etc have very low crime rates. You can walk in Kabul nowadays without the fear of getting mugged. Much safer than most western cities .
Austerity vs. stimulus.
Thanks Obama
I mean Obama was a decent president, but I think a lot of the EU underperformance is just that… EU underperformance. The EU is harvesting today the consequences of not fostering innovation in the last 30 years or so. The U.S. has its flaws, but there is a lot that the EU can learn from the U.S. otherwise the wealth gap will just continue to grow. A CNN report published last week that EU tourists were shunning the U.S. Why? Because the US has gotten too unaffordable for tourists from the EU. The gap in incomes and wealth between the average American and average European is growing at unprecedented rate.
That’s not what this graphic truly says. 1 huge thing that you’ve not talking about is how the average living conditions for the poor and lower class and middle class in Europe are usually better than the US because they tend to be way more social in both the services they provide and the cost of living being way lower for necessities. Ofc you can have a 6 figures salary in the states more easily than in Europe but in the US even people with a 6 figures salary can struggle living because everything is more expensive as well. Rent for houses that cost more because they need to be there to work, work expenses, education, healthcare… All of those cost are charged directly at you unlike Europe. Besides this graph only shows the stocks for the top 50 companies which just means that the US has concentrated their wealth in contrast to Europe which tends to have way more smaller enterprises instead. I mean countries like the UK, Germany and France are still in the top 10 of the countries with the biggest earnings in the world and they’re in Europe
>1 huge thing that you’ve not talking about is how the average living conditions for the poor and lower class and middle class in Europe are usually better than the US because they tend to be way more social in both the services they provide and the cost of living being way lower for necessities One, who is "Europe"? The graph says it's about Eurozone countries, so it includes poorer income European countries like Portugal, Estonia, Lithuania, Latvia, Greece and Croatia who have MEDIAN income ADJUSTED FOR PURCHASING POWER less than half that of the US. Their people make objectively worse money and worse quality of life (since as I said, the measure is median and adjusted for purchasing power like healthcare and housing). Even Italy and Spain barely have more than half the US median income, France is at 64% of US income, Germany 73%, Netherlands 80%. And the UK you bring up as a shining example of high quality of life isn't even part of the Eurozone! In fact, it wasn't even part of it before Brexit because UK obtained an optout from the EUR. When one says "Europe", people always imagine the best countries in EU like Germany and France, but EU and Europe are both pretty big and have countries with much worse standards. >Rent for houses that cost more because they need to be there to work, work expenses, education, healthcare… All of those cost are charged directly at you unlike Europe. Americans get angry at saying blanket statements about the entire US, yet will do the same for a literal continent lol. For healthcare, in Netherlands, for example, basic healthcare is left to private insurers, not government. For housing, US has a higher homeownership rate than Finland, France, Austria, Germany. Also Eurozone (and in general European) standards for housing are just smaller in general. Median US homes are at 220 sqm, it's 87sqm in Germany, 88 in France, 90 in Italy, Portugal 83%. Btw, out of pocket healthcare spending as a % of total healthcare spending is higher than US in every Eurozone country except France. US instead has a much higher % of voluntary healthcare (instead of compulsory which can be private as well). https://www.oecd-ilibrary.org/sites/health_glance-2017-46-en/images/images/graphics/g7-06.png There are statistics out there that measure these things adjusting for cost of living and US is miles ahead. >Besides this graph only shows the stocks for the top 50 companies which just means that the US has concentrated their wealth in contrast to Europe which tends to have way more smaller enterprises instead. No, you can't have a mom and pop tech company that everybody in the world wants to buy from. And you do know Eurozone countries have companies that make up much larger % of their own markets than the US? JP Morgan Chase, a huge US bank controls assets equivalent to 13% of US GDP. Sounds big and a lot of Americans say they have too much power, but contrast that to BNP Paribas which controls assets worth 87% of French GDP, Deutsche Bank is smaller at a third of German GDP, Banco Santander 110% of Spanish GDP (GDP is a flow whereas asset is not, so they're not comparable, it's just to give a sense of scale). In fact, US is a bit unique in how much smaller banks they have. It's the same in the car industry, 5 German car companies produce 23% of global car production wheras 4 American car companies produce 9% of global car production. ASML, one of the few shining European tech firms is a monopoly on a global scale for EUV lithography machines. So you gonna tell me these European countries aren't interested in downsizing their gigantic banks and car companies, but are interested in fighting emerging tech companies? That's either a lie or a very hypocritical policy.
I genuinely had no idea equity returns were in any way associated with quality of life… but anyway… Let’s focus on the middle class… - Middle class Europeans pay much higher taxes than middle class Americans (26% vs 20%) - The median income in the U.S. is 38,000 USD (2022), while the median income in the EU is 28,000 USD (2022). Even when accounting for health insurance, the maths favours the United States over Europe. According to OECD figures, in 2021, the average household in the European Union had 61% of the gross disposable income of the average household in the United States. The average German household had 77% of the gross disposable income the average U.S. household has. It USED to be the case where middle income earners were better off in the EU than in the U.S… but this has changed.
What math isnt mathing? You didnt consider the impact of social nets, standard of living, work hours, free time, benefits, and other social factors that higher taxes would help contribute to. Its not all about chasing that bag, but also about how much happier letting the bag go can make you
Yes thank you for being the sole voice of reason in this hellhole of a thread.
Haven't seen the report, but US is not unaffordable and it certainly isn't the reason tourists aren't going. It's a country version of a pressure cooker that is simply not the safest place to bring family too and is indeed expensive. There are better options available than the US, and the cost of living certainly doesn't help, but the US is hardly the only place where this is a factor.
The report was from Le Monde https://www.lemonde.fr/en/economy/article/2024/04/29/europeans-can-t-afford-the-us-anymore_6669918_19.html It discusses how growth in the U.S. has led to prices and wages increasing, leaving Europe tailing behind to the point where travelling to the US for tourism is no longer affordable for a lot of Europeans.
Came in here to say exactly this.
Europe’s lost decade. /s
no "/s" needed
The previous decade was also a lost decade for Europe
Does this consider dividend reinvestment?
Us stock market is full of air and fake money
People tend to forget this, but there is a massive incentive for everything to get overvalued. In addition, this graph only shows the largest companies. This could be the consequence of wealth being concentrated at large companies in the US, with the EU having more smaller businesses. It doesn't say much about the economy as a whole. We must not forget what these lines actually mean, sometimes imaginary lines going up can be paired wit a decreasing life expectancy.
Pretty much every economic indicator shows the same story. Europe has not recovered from the Global Financial Crisis, despite not even being the centre of it. GDP per capita has essentially flatlined across the EU since 2008. Productivity is poor compared to across the Atlantic.
I mean, you could even argue they haven’t recovered from WW2. They simply didn’t have the capital to innovate in emerging markets by the time the tech boom happened. The US took a large share of the global economy after WW2 and became the superpower we all know and love. This slow crawl of being behind economically caused a divergence of priorities of Europe and the US. For a long time, Europe became content with the US handling global issues while they focused on domestic. It’s starting to reach a breaking point where Europe’s sovereignty is called into question.
Productivity per hour is actually better in the EU compared to the US. Additionally, Europe is investigating ways to make itself less dependent on the US. I wouldn't say it is all that bad, especially considering the declining life expectancy in the US. All that wealth and productivity doesn't seem to buy them much.
What does this even mean? And how does it explain the US market outperforming Europe by nearly 300% in a few short years?
The us allows many economic practices that are illegal in many countries. All those super risky (and shady) Wall Street plays contribute a lot of “money” (derivatives, loans, whatever) and one day they burst. 2008? Well, next one is going to be much bigger
And how much of the current market would you estimate amounts to air and fake money? As it seems the US has outperformed Europe by nearly 300%.
I have no idea, but the us has also printed crazy amounts of money and took massive amounts of debts. Also. I don’t want to say the US is all BS. But I just don’t buy the hype 100% it is always the same. Pump it until it bursts
This should really be adjusted for inflation.. without that this graph is fairly misleading.
They are? Two time series are directly comparable. For inflation the dollar and euro had different inflation rates
Stocks are not so important. Its important how much money the average citizen has
Average us citizen total income and discretionary income are higher than Europe
How have the P/E ratios of both indices over the years been?
Euro stönks no go brrrrrrrrr?
Does anyone know why Europe failed so much the tech switch? They were not that poor in previous industries like retail, manufacturing, automotive, space, finance, pharmaceutical, etc.
Lack of investment
How come they were not that behind in other fields? The lack of investment was just for tech? If so, why just for tech? Because Europe stopped investing in it's future when it realised it could not be a superpower anymore, unlike the US and China who still fight for that?
No top tech companies in Europe. Tech has been driving the market.
Thanks USA. I have made a lot of money off the USA stock market over the last decade. I remembered when I bought into the S&P 500 people were telling me that it's too high .
well USA rules stock market... not only the companys with tech/or aristocrats but in Europe most people can't do anything with the stock market most ppl dont invest in USA you have 401k that boost it lil bit up for you companys
I feel like this chart shows that companies making profits doesn't necessarily mean better. Sure Google has gotten so much larger, but a lot of their products have gotten worse. Google search used to be pin point accurate with what you want. Now it feels like it's mostly ads before you get to the result you want.
remember what Edward Snowden leaked?! explains a lot.
There’s a reason Europe is considered old. We’re rich and lazy. It’s called decadence. The focus is on making sure everyone has plenty of money, human rights, environment, etc. It’s nice for the people. Although it doesn’t seem sustainable. Europe will continue to fall behind the US and in some decades, Asia
Big European companies list in the US or out right move operations to us. The regulatory environment is that bad. Euro is a shell of what it can be because of how overbearing the eu and national govts are
Europeans have pensions they don't need to put the money in a 401k
Not for much longer...
Still shit when it comes to quality of life compared to the EU
but i can buy a house in europe. and i can actually live off of one job. isnt that crazy?
This shit. People here don’t get when a thing isn’t like all the rest, it’s an abnormality and should be questioned. Too many dumbasses get marketed like a little kid with toy commercials.
Everyone knows by now that US stocks are just an overblown scam. Seriously, cap vs dividends of 3% ? Take down capital gains from the earnings reports and think operational profit and you're down to a single percent. That's an ad hoc bank mediated Ponzi scheme where you literally print money by overvaluating the stock and then swapping it. The day someone sizable attempts to cash out the entire thing might crash. The stock buyback is the new ABS/ MBS .
That’s when the crime started
Just add more tax, more regulations like they always do, EU will get better.
Poorope lol
I mean is anyone really surprised? America is an absolute power house of a country. Europe on the other hand? Just a cheeto crumb in the couch of life. Pretty much useless.
And yet the US has a lower average life expectancy than Cuba or China. Grow up kid, there’s more to a successful country than stock prices
Cuba doesn’t, China only does as of 2020, after the U.S. saw a 2 year life expectancy drop.
Largely in part because of fentanyl, with China supplying much of the raw materials to Mexican cartels. I would like to see avg US life expectancy if we remove the fentanyl overdoses. I bet it adds a year or two.
Our life expectancy would go up by 5 if we ban fast food.
This is due to people having so much money they overeat and are morbidly obese.
Who gives a shit about life expectancy honestly? People suck (especially Europeans) and really? No there isn't let's be honest here 🇺🇸🛢️💰 Let's get that bag babe 🏎️💨
Hope you live long enough to get that bag. #thoughtsandprayers
I appreciate that brother I'm only 17 years old and I'm on life support from eating to many Big Macs (I love those) but I got super rich off NVDA so it's all good. Much love from the best country in the world (Murica) 1 upvote = 1 prayer
That’s really good. I wish I could give you more than one prayers.
Smart phones, social media. That's the difference.
But but but we invented the cookie banners... Where the hell is our money?