Life Is Good in America, Even by European Standards

2022 may be remembered as the year when living standards in the US truly pulled away from those in Western Europe. One concrete piece of evidence is the collapse of the euro to parity with the dollar, or lower yet, but there is also a more general sense that the gap is widening.

The old narrative was simple: Per capita incomes in the US might range 30% higher or more, but Western European lifestyles are less stressful and more relaxing. European health care systems, and their near-universal coverage, are also superior.

That narrative now lies in tatters.

The major disruptor has been energy markets. The US really does seem to have energy independence. Americans complain about high gasoline prices, but the American way of life has barely been affected. This summer Americans took to the road in record numbers. Energy supplies to homes and businesses have continued, though rising prices have created some pressure.

But the situation in Europe is far worse. Much of Western Europe, dependent on gas supplies from the East, faces serious questions about how it will get through the winter. In Germany, Google searches for “firewood” have risen sharply. Even the French, with their heavy reliance on nuclear power, now face very high prices and serious shortages; they did not invest enough in the maintenance of their nuclear power system.