I'm European. I think Europe’s main problem is that its leaders and citizens are more concerned with how to distribute wealth than with creating it. In many countries, much more importance is placed on pensions than on the education of the younger generations.
Krugman’s analysis may well be accurate, but the problem is that China is now beginning to assert itself in sectors where Europe used to be strong (manufacturing, automotive, etc.). If our software is American and our hardware is Chinese, who will pay for the pensions?
Yes, but this only works as long as the economy remains competitive. Europe is rapidly squandering the human and economic capital it has accumulated over centuries, while the US and Asia continue to grow. Welfare exists as long as someone pays for it.
The best cars were built between 2000 and 2010. Pretty much the pinnacle of the internal combustion engine without all the millions of lines of buggy code that apparently no longer allow you to open your car freely.
Krugman’s analysis may well be accurate, but the problem is that China is now beginning to assert itself in sectors where Europe used to be strong (manufacturing, automotive, etc.). If our software is American and our hardware is Chinese, who will pay for the pensions?