My, but 2007 seems like a long time ago.
In 2007, Jay-Z made a video for “American Gangster” in which he prominently displayed a very large stack of banknotes—not the Benjamins that it used to be all about, but euros. And why not? The euro was, back then, at an all-time high against the U.S. dollar. Things went well for the eurozone for a while: In 2008, the European Union’s economy was larger than that of the United States. But growth changes everything, and the European Union has paid a high price for eurosclerosis: By 2022, the U.S. economy was 25 percent larger than the combined economies of the European Union and the United Kingdom, formerly the EU’s second-largest national economy. The U.S. economy is about 50 percent larger than the economy of the post-Brexit European Union. In 2008, a U.S. dollar would get you only 0.63 euros; in September 2022, the dollar bought you 1.03 euros, though as of Friday the greenback was only at 0.92 euros—not a record high, but almost half-again as much as it traded at in 2008. The United States is today much wealthier than the European Union on a per capita basis, with a gross domestic product per capita nearly 50 percent higher (on purchasing-power parity basis) than in the European Union. The only EU countries with higher per-capita GDPs than the United States are Ireland and Luxembourg, relatively small countries where the data are distorted by corporate profit-shifting. (Two European countries that are not EU members also have higher per-capita GDPs: Norway and Switzerland.) So, sing another chorus of “All About the Benjamins.”
But is that actually good for the United States?
Not at all, says the European Council on Foreign Relations, a think tank that provides invaluable resources for non-specialists looking to keep up with European affairs. Just a few days before President Emmanuel Macron of France warned about Europe becoming a “vassal” of the United States, the ECFR issued a report with a cheeky title—“The Art of Vassalisation”—and a sobering subtitle: “How Russia’s war on Ukraine has transformed transatlantic relations.” All that growth has been good for the United States, as has the continued development of U.S. military capabilities, even if many analysts argue that the United States has fallen grievously behind in its defense investments. (Fred Kagan is one of these; listen to his conversation with The Dispatch’s Jonah Goldberg here.) The Europeans have spent years talking about “strategic autonomy”—meaning the development of EU capabilities in such a way as to give the European Union the ability to see to its interests without U.S. support and, if necessary, in the face of U.S. opposition—but the European Union has grown less powerful relative to the United States during all those years of “strategic autonomy” talk rather than growing into more of an equal.