Europe's problems are of Europe's making

I really enjoy Walter Russell Mead as one of the more sensible and erudite thinkers about international affairs and yet even he comes up with some doozies. In this instance, I think he is directionally right but the situation is much worse than he protrys. The headline is right: From Europe’s Challenge Is Decline, Not Trump by Walter Russell Mead.

The American intellectual class once rang with inspired and sometimes envious praise of a rising Europe. In 2002 an influential Atlantic essay argued that the “rising challenger” to American primacy was “not China or the Islamic world but the European Union, an emerging polity that is in the process of marshaling the impressive resources and historical ambitions of Europe’s separate nation-states.” It warned Americans to prepare for the emergence of a new superpower on the world stage.

This is not what Europe’s friends see today. Philanthropist George Soros—one of Europe’s keenest observers and strongest defenders—predicted last week that unless things change, “the European Union will go the way of the Soviet Union in 1991.” He is far from alone among the EU’s supporters in bewailing the bloc’s inability to master its growing difficulties.

Decline, not the Donald, is the specter haunting Europe today. The numbers make this clear. Some readers objected to World Bank data in last week’s column showing that, in dollar terms, the eurozone economy had not recovered from the 2008-09 financial crisis. In euro terms, they point out, eurozone gross domestic product has been growing. But even using the euro-denominated figures issued by the European Central Bank, the growth rate from 2009 to 2017 was only 0.6% per year. That’s anything but robust.

Mr. Trump’s tweets aren’t the reason populists are governing Italy and the gilets jaunes revolt has shaken Emmanuel Macron’s reform efforts in France. Since the financial crisis, the Italian economy—measured in euros—has been shrinking at an average rate of 0.5% a year, while the French economy has been growing at an average of only 0.8%. Only the gush of cheap energy made possible by American fracking keeps these fragile economies afloat; at an oil price of $125 a barrel, the eurozone—and its banking system—might well face another economic crisis.

The idea of a European Union was an appealing concept but it has proven both dysfunctional and unreformable for a long time. Back in the 1980s or 1990s the European Mandarin Class began to recognize that their labor markets were sclerotic, undermining the competitiveness of their national economies. They set out to reform those markets and then discovered that those reforms conflicted with so many other unicorn policies that they had to abandon them.

I share Mead's hope that the Europeans can reform themselves but the omens do not augur well.

However, it is even worse than Mead describes and he leaves out some of the most obvious culprits. Massive state planning. Massive EU planning and regulations. Hidden national debts. High effective tax rates. Low consumer choice. Eroding cultural trust. Stark rejection by citizens of their Mandarin Classes. Virtually non-existent national militaries. Rising cultural cringe. And most catastrophically, demographic collapse.

All of those have been trends long preceding Trump. All of those are trends the Mandarin Class still want to ignore. All of those trends are a road towards irrelevance at best and perdition at worst. I do hope Europe reawakens and decides to retake their position in global affairs.

I think Mead and I share similar hopes but I do not understand his apparent respect for and hopes of the existing Mandarin Class who have created the mess they are in.

As an aside, I have heard various people on various occasions refer to Trump as the Great Clarifier or the Great Revealer and I suspect that there is much to that claim. He is not necessarily doing it deliberately but the Mandarin Class's reaction him is bringing much clarity to a discussion which was obfuscated and confused.

This is an example. Europe's problems are or Europe's making and they have little to do with the US and nothing to do with Trump. That's pretty clear. The Great Clarifier indeed.