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Home Publications Blogs Beat the Press Can the European Welfare State Survive? Can National Public Radio Survive?

Can the European Welfare State Survive? Can National Public Radio Survive?

Wednesday, 14 July 2010 04:29

NPR wants to convince listeners that the European welfare state is on its last legs. While it tells listeners this, nothing in the piece actually supports this case.

For example, it implies that growth is grinding to a halt in Europe because of its generous welfare state, noting that Europe is expected to grow just 1.0 percent this year, while the U.S. is projected to grow by 3.0 percent. Actually, GDP growth in the U.S. is projected as being close to 2.1 percent this year by the Congressional Budget Office and most other forecasters, but this is really beside the point. More importantly, no one would draw any conclusions about growth based on a single year, especially one in the middle of a downturn.

Any economist could have explained to NPR that growth in the European Union (EU) is being constrained right now by lack of demand, not lack of supply. This means that the cause of weak growth in the EU right now cannot be welfare state restrictions on supply but rather bad policies from the European Central Bank and the Bank of England (they claim to fear inflation, which in the real world ranks slightly below an invasion from Mars on the list of risks right now). If the central banks pursued more expansionary monetary policy, there is little doubt that economies across Europe would be growing more quickly. It is almost inconceivable that NPR could do a piece referring to Europe's weak growth and not note this fact.

It is also important to note that Europe has much slower population growth than the United States. Economists usually focus on per capita income as a primary measure of economic well-being, not total GDP. (Indonesia has a much higher GDP than Denmark, but because it has 40 times the population, no one would claim that Indonesia is richer.) The difference in population growth is approximately 0.9 percentage points, which means that per capita growth in the EU and the U.S. are projected to be very comparable this year.

The piece also briefly commented on the universal health care provided in Europe and implied that this may no longer be affordable. It would have been worth noting that European countries pay on average less than half as much per person as the United States for health care. In fact, the government spends more money per person on our private health care system than governments do in Europe on their more publicly controlled systems. It is absurd to imply that a switch to a U.S.-type system would somehow save money.


Comments (10)Add Comment
written by izzatzo, July 14, 2010 6:27
Once there was a symptom
For which there was no cause
Which had to have a reason
In austerity faith religion

It had to be supply
The source of all sin
We have met the enemy
It's us deep within

Give up the vices
Slothful welfare states
Cast off socialism
Insufferable ingrates

Demand will not return
Until you see the light
The symptom is not the cause
It's predatory parasites

No not us, the rentier class
We mean you, the vampire mass
Bloodsucking life from supply side shoots
You killed demand with vampire welfare boots
written by Richard, July 14, 2010 7:30
So...if we read between the lines, Europe is doing quite well! Thank you very much! That's what we want, slow growth, or no growth! Growth can't continue forever! Time for a new paradigm, and we will have to learn to pull ourselves out of recession without rampant growth.
written by skeptonomist, July 14, 2010 8:58
In a "free-market", "democratic" system, money flows where the profit is. The theory of pure free markets, which is used to justify some of the more nonsensical assertions which are common in public economic discourse, assumes that the only competition is in price and product quality. Actually, those who run larger enterprises seem to find that their profit is better maximized by spending money on product advertising and to buy influence in the media and the political system. One thing that big-money interests have spent a lot of money and effort on has been imposing restraints on and buying influence in "public" radio and TV, to make sure that their views get maximum exposure and independent views are minimized. They will continue to do this, and also to try to bring the internet under the control of big business.
written by catclub, July 14, 2010 11:53
"It is almost inconceivable that NPR could do a piece referring to Europe's weak growth and not note this fact."

I don't think that word means what you think it means.
Does NPR Intentionally Deceive on the Economy?
written by Hugh Sansom, July 14, 2010 1:11
NPR's reporting on economic issues is so consistently bad and so consistently skewed conservative that we should be asking whether the slant is intentional. For years, its management has grown steadily more conservative. Despite popular representations, its lead reporters have never been especially liberal (or obviously conservative, with exceptions like Juan Williams).

On balance I'd say that the obvious conclusion is that NPR treats economic reporting much as the Wall Street Journal treats its editorials -- as a forum for advocacy rather than journalism.
written by Queen of Sheba, July 14, 2010 4:12
I wonder how long it will take for this country to realize what a huge mistake it was to "reform" our health care system by leaving it to the tender mercies of private for-profit insurance companies and how much money could be saved by following Europe's lead and instituting a publically controlled system. I would guess at least a couple generations - plenty of time for corporations to even more completely take over the reins of our government.
Thank you Dean
written by William Hurley, July 14, 2010 11:58
I had to turn my radio off and leave the house as the NPR segment you shred here ended. Let's just say that the unchecked and blatant misinformation being broadcast really got my Boston Irish up!

The quality of NPR's economics/business reporting has gone from vapidly inoffensive to aggressively hostile to reason, fact and history. The local affiliate here in Portland, OR is even worse.
written by Union Member, July 15, 2010 10:28

... and very, very dangerous junk.
NPR Growth Forecasts Are Correct
written by Robert Shelburne, July 20, 2010 8:16
I believe, as of July 2010, most forecasters expect US growth to be about 3 per cent not the two per cent you (Dean) give from CBO. This is true of the IMF and UN, and private forecasters like the Economist Intelligence Unit and Consensus Economics. Also the lack of demand in Europe is the result of limited fiscal stimulus due to debt concerns related to the welfare state. So I think this criticism of NPR is unjustified.
Our New Prosperity
written by DHFabian, July 21, 2010 10:34
Well, we got rid of our welfare state in 1996, and look how well the nation has prospered ever since!

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.