In an email response to my piece on declinism and triumphalism, Steven Den Beste writes

It is true that if you do your analysis with a narrow shutter, you can get that kind of changed impression on a regular basis. It’s also the case that many of those who have trumpeted the decline of American, when short-term opportunity arose, have an agenda and criticize us for other reasons when our economy is good.

But it’s possible to look at underlying problems and see trends which are more critical, and not illusionary. The demographic inversion that Europe faces is not transitory.

I also don’t think that the decline of Europe is inevitable; I think it may well be possible for them to turn things around. Part of why I’ve been writing what I have is a forlorn hope that my small voice may contribute to a process of waking up the people of Europe to make the changes which are necessary to save themselves, before it’s too late.

One thing we do now know: For all its ideological appeal, socialism doesn’t actually work, and the more closely any nation embraces the socialist redistributionist ideal, the less will overall its economy will function.

In this case, it is extremely disturbing that Germany essentially sat out the last economic boom cycle. It’s not merely that it didn’t perform as well during that interval as we did, it’s that their economy was in what amounted to recession the entire interval. (It’s just that it wasn’t quite as bad a recession as what’s happening there now.)

I guess what I’m trying to say is that just because other people have made these kinds of arguments wrongly before doesn’t mean that I and the rest who are making them about Europe now must also be wrong. A stopped clock and all that..

There are a lot of points here, but I just want to observe that the tendency to focus on Germany as the archetypal EU nation while understandable (it’s the biggest) can be quite misleading. The most important reason is the fact that this is the first economic cycle since reunification. Reunification was a big economic shock in itself, made more so by the decision (politically justifiable but economically unfortunate) to merge the two currencies at parity. Not only were there real economic shocks, but all the economic statistics were distorted by this. For example, Zinsmeister quotes high German unemployment rates, but ignores the fact that the rate for the former West Germany is not that much different from the US (8 per cent as opposed to 6) and that even this rate is boosted somewhat by Easterners seeking work in the West. Taking all this into account, it’s not that surprising that the Germans have missed an expansion cycle.

The move to the euro raises somewhat similar issues. In a globalising world, the removal of the barrier to mobility created by exchange rates will have long-run benefits, but a single currency complicates short-term macroeconomic management, and Germany has suffered from this. Somewhat paradoxically, the Germans who lobbied hard to ensure that they would not be subject to the inflationary bias of the Italians and others, are now suffering from the deflationary effects of a tight monetary policy.