Why is the European press more pessimistic than the American press?

by on November 26, 2007 at 8:40 am in Economics | Permalink

Paul Krugman points this out, for instance read today’s FT article, titled in the print edition "Investors Fear New Turmoil: Credit markets Expect Recession in US."  InTrade gives about a fifty percent chance of recession in the U.S., so you could argue the case for optimism or pessimism either way.

Does the greater pessimism of Europeans produce more disciplined and respectful children?  Or just more pessimistic newspapers?  I believe the "America is due for a comeuppance" view remains very popular across the Atlantic.

Addendum: Here is one optimistic account, from Oklahoma.

1 odograph November 26, 2007 at 8:49 am

I think a lot of people want to give good news, to name the best outcome that still might be possible. I know I do. I think we are headed for a recession, but it’s hard to look at a co-worker with a difficult mortgage and tell him that.

So I say ‘things might be ok because …”

2 floyd November 26, 2007 at 9:17 am

Well, the Larry Summers piece, also in today’s FT, says the same thing. Is Mr. Summers American or European?

3 angus November 26, 2007 at 9:29 am

“It is an economy that produces almost nothing outside of the agricultural sector”

Congratulations sir, for writing the stupidest thing I’ve ever read. Wow. Well done indeed.

4 Great Zamfir November 26, 2007 at 9:43 am

I doubt the FT is a very typical European newspaper., Most newspapers publish little texts “Crisis in US might be worsening, experts say”, “Crisis in US might be almost over, experts say”.

5 Chuck Brown November 26, 2007 at 10:03 am

The book “Cowboy Capitalism: European Myths, American Reality” by Olaf Gersemann poses an interesting hypothesis about European media negativity about the US.

The main points are:

(1) Unlike in the US, where multitudes of companies run the media and many different voices are heard, in European nations quite frequently governments run the media and fewer voices are heard.

(2) European governments tend to be dominated by parties with leftist/socialist (by American standards) agendas.

(3) These political parties have a vested interest in playing up negatives of the US system (greater crime, higher infant mortality, greater economic inequality, the less job security) because if they played up the positives of the US system (American make more money than Europeans do, live in bigger houses, have lower unemployment, find jobs much more quickly after being fired, tend to be much more optimistic about their economic futures, etc.) more Europeans might demand political / economic conditions similar to those that exist in America.

6 Rich Berger November 26, 2007 at 10:43 am

I believe the “America is due for a comeuppance” view remains very popular on this side of the Atlantic, too.

7 8 November 26, 2007 at 10:56 am

I think the dollar and current credit crisis are overdone, but even if I accept that American problems are worse than European problems (and on three major ones, demographics, total debt to GDP and unfunded liabilities, the U.S. is in a far better position) does anyone doubt the U.S. won’t respond better? Outside of Sarkozy in France, is any European nation pushing for reform as much as this year’s political candidates in the U.S.? Where is Europe’s Ron Paul?

8 odograph November 26, 2007 at 11:11 am

OK, so I am an American pessimist (that’s actually true), but hasn’t the sub-prime story come out in drips and drabs? With each stage told as “this could be the end of it”?

This certainly could be the end of it, but it could also be a sliding position in a longer tale.

9 Patinator November 26, 2007 at 12:10 pm

Forget about the papers and just look at the divergence between the Fed Funds Rate and LIBOR. I would call it fear more than pessimism, but that is a real impact indicator of European fear of U.S. debt markets.

10 Finnsense November 26, 2007 at 1:12 pm

The FT is as economically right-wing as it gets so I don’t think the smug European explanation works. It might do if it was the Guardian. Nevertheless, it is undoubtedly true that Europeans are quite pleased by the idea of a US recession. 15 years is a long time to have your nose rubbed in the sand about your economic shortcomings.

You have to understand the European perpective on this. What they have wanted to guard is a way of life that they think has value. A way of life in which all people have access to a decent minimum standard of living and where work and economic growth are not valued above family and security. The stakes are high. If America has a bump here for five years and Europe does not, the 25% wealth gap between the countries will shrink to something that can be explained away and we in Europe can happily believe that a version of our system can compete with the US. If, however, the US pulls further away even after all this, simply put, we lose.

You better believe Europeans want the US to fall into recession, even if it is only a deeper one than we do.

11 Varangy November 26, 2007 at 2:23 pm


With all due respect (I am a big fan), but you obv do not understand the depth of and moreover, the importance of irrational ant-Americanism in European culture. As a European, let me make it clear, Europeans are steeped in and indoctrinated with anti-Americanism at a young age.

All you have to know about European anti-Americanism is three broad things (yes, these are generalizations):

1) Europeans tend to define themselves by what they are not. That is, Europeans are not Americans, therefore they are Europeans (sort of a tautology, I know). Europeans do not guzzle cola and hamburgers etc etc — while Americans tend to define themselves by what they are, they love apple pie, baseball, cowboys etc etc

I do not think that the European self-definition/psyche is a healthy one.

2) European anti-Americanism is the social glue what holds Europe/the EU together. What do, say, Hungary and Greece have in common? Really, not a whole helluva lot — but get a bunch of Europeans together, they can all agree that Americans are barbarians/douchbags etc etc

3) Love/hate relationship of Europe with America. They are drawn to America but at the same time repelled. This is hard to reconcile.

There are many more valid generalities that one make to explain the European psyche, which in turn, explains European newspapers attitudes’ on the American economy.

12 edh November 26, 2007 at 4:43 pm


Funny, you just described the Democrat Party in America, especially over the last five or six years.

13 Petrarca November 26, 2007 at 4:55 pm


I believe your socialist friends are right. Steel production will have vital impact on the outcome of the coming dreadnought race…

14 Varangy November 26, 2007 at 7:30 pm


I agree.

15 not_scottbot November 27, 2007 at 3:02 am

‘…more Europeans might demand political / economic conditions similar to those that exist in America.’

Obviously, your knowledge of what a typical German wants is as ignorant as what many American posters claim of Europeans in terms of the U.S. Of course, Germany remains not only the world’s largest exporter (you know, things like wind turbines, maglev trains, cruise ships), but also the country where Walmart had to close shop, because in the German retail sector, Walmart was a bloated, inefficient company compared to competitors like Aldi. While Germans are noted for the dour complaining, they have repeatedly expressed their lack of desire for American political/economic conditions by trying and finding executives guilty of self-dealing in company mergers (to which the banker Ackermann responded that American style mergers would be impossible in Germany, showing that he really missed the point of his trial), striking, protesting in the streets, and electing various parties which the voters feel represent their long term interests, such as the Greens.

Americans (and yes, I’m one, so please don’t try to tell me I know nothing about the U.S.) remain woefully ignorant about ‘anti-Americanism.’ It is not anti-American to be disgusted about America’s lack of interest in climate change (when not actively denying it, regardless of cause), it is instead self-interest on the part of anyone concerned about crop failures, and what crop failures tend to foretell in terms of conflict. At least attempting to prepare for the future, instead of denying anything is changing, seems like a reasonable investment in German terms.

Further, most of the Germans I know were very pro-American, but somewhere between 2002 and 2005 lost much of their respect for a country they looked up to. In part, because most Germans were convinced that after four years of Bush as president, real Americans would replace such an obvious failure. Which ironically shows just how pro-American most Germans were, as they believed that Americans would show that democracy actually works for the longer term good of citizens, even if occasionally it was less than optimal in its results.

The finger-printing of non-citizens at the border is the major reason a 55 year old IBM salesman decided not to buy his retirement home in Florida, for example, because he did not want to be treated as a criminal. In my eyes, this doesn’t make him anti-American, merely someone who has made a choice to avoid a country that doesn’t meet his standards of civilized behavior – torturing prisoners, not to mention kidnapping innocent people to be tortured (a German citizen, subsequently denied entry to the U.S. to plead his case in front of a court of law, by the way), was simply confirmation a year or two later that his decision was correct.

Of course there is critical and biased press here – Der Spiegel is a classic example. But generally, its anti-Catholic bias under its founder was much nastier than its anti-Americanism. Somehow, this never received any attention from Americans, in part because much of this bias fits in well with the anti-Catholic bias of many Americans.

And yet it is very rare that I see anti-American quotes pasted in such discussions from such papers as Bild (Germany’s largest, and arguably most influential paper) or the FAZ, the paper that generally represents Germany’s business/conservative elite. That is because they aren’t easy to find.

As a final comment – as a Dutch colleague remarked, most Americans think Europe is France, which is wrong. And to help those who want to believe every comment concerning Americans is anti-Americanism, I guess this makes him another bitter anti-American European, because he is insulted that his country is ignored. For the rest of us, he is just making a fairly commonplace observation.

16 Ryan November 27, 2007 at 3:39 am

There is likely going to be a recession in the United States (a bad one). There is no way Europe is going to escape it either, especially with the huge rise in the Euro. It’s going to affect most of the countries in the world.

17 not_scottbot November 28, 2007 at 4:11 am

Part of what Walmart bought when entering the German market was Wertkauf – a fairly successful business in this region. However, the high turnover rate of fairly clueless American executives (I know people who were family/friends of people who were part of Wertkauf’s management – I am merely repeating their opinion), the lack of understanding concerning German mores (such as forbidding Walmart employees from having romantic relationships), and a possible reason which as an American seems plausible to me – they expected to break the union representing former Wertkauf/Kolossa employees, thus reducing their ‘overhead’ immensely.

As for exporting – it is simply the contrast between an economy which continues to function in the face of fierce global competition, and one that feels it has the right to lecture the rest of the world about superior models, while needing to import roughly 5% of its GDP to keep itself functioning.

Maybe it is the region that I live in, around Karlsruhe, or maybe it is the industry I work in, software, but I have yet to see the anti-Americanism which is so highly visible to so many others, especially Americans. Certainly, there are parts of the media which are quite anti-American, but for every Spiegel there is Fokus – yet another media source I rarely see cited for anti-American quotes, even though its circulation is equal to Der Spiegel’s.

What I have certainly seen is an utter and total disgust with George Bush as president, but in comparison to Ireland, where I could find literally no one who had anything positive to same about him, at least some small percentage of Germans feel Bush is doing necessary things. (And yes, though many of those people are not exactly the sort you would want as supporters, some are at least reasonable in their opinion.)

Yes, the fingerprinting is coming – my children got their passports just ahead of the deadline. Not so surprisingly, the reason that such fingerprinting is now required for travel, is because the U.S. demands it.

18 翻译公司 February 25, 2008 at 8:04 am

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