Under President Obama, the old normal unemployment rate in the former Western Europe — around 8 percent — seems to have become the new normal in the United States. I guess there’s at least poetic justice in this, since leading Democrats like Obama and John Kerry tend to see Western Europe as a model for the U.S.
Unfortunately, though, the new normal unemployment rate in Europe is much higher than 8 percent. As John Steele Gordon informs us, the current rate for the 17 countries that use the euro stands at 12 percent.
Not all Eurozone nations are hurting. The unemployment rates in Austria and Gemany are 5.8 percent and 5.4 percent, respectively. That’s the old normal in the U.S.
But France’s unemployment rate is 10.8 and Spain’s is 26.3 percent, about equal to the American unemployment rate at the very bottom of the Great Depression. France and Spain are, of course, more free-spending than Germany.
Things are likely to get worse in Europe. Gordon notes that the Eurozone economy is still contracting and the euro itself is in crisis.
This is bad news for the U.S. After all, Europe is our largest trading partner. As Gordon concludes, quoting Bette Davis’ line from “All About Eve”: “Fasten your seatbelts; it’s going to be a bumpy night.”