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EU Savors, US Wavers

November 13, 1997



Germany's powerless but influential president, Roman Herzog, recently called on Europe to be more entrepreneurial and less cautious - more like America.

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He did so, ironically, just as America seemed to be wavering about continuing on its immensely successful entrepreneurial, job-creating course.

Speaking at a dinner of the European Forum in Berlin, Herzog chided his fellow continentals for being better at "worrying about our stability, our possessions, than at unleashing economic dynamism."

He made it clear he was talking about creating faster growth and more jobs. How? By creating incentives for: (1) more enterprising education, leading to (2) more innovative research, creating (3) new knowledge-based industries, funded by (4) more risk-taking investment markets.

The implication from President Herzog and his fellow speakers was that in order to grow such an innovative economy and much-needed new jobs, Germany and its neighbors would have to curb their governments' appetites for big shares of national revenues.

It's perplexing, as already noted, that Mr. Herzog should be thus egging on the growth of risk-taking entrepreneurship and reform of Europe's welfare state proclivity just as the US appears to be flinching from that course.

We're confident that such flinching is only momentary. But congressional Democrats' veto of President Clinton's drive to further expand global trade (see above) is disturbing. That's because it seems to spring from doubts about the ability of America's hugely successful, job-creating entrepreneurial economy to compete.

Perhaps the grass is always greener on the other side of the ocean. Mr. Herzog and like-minded leaders are saying Europe can't grow its way out of dispiriting 11 percent unemployment by working shorter hours and expecting government programs to be the chief job-creating machinery.

America's much smaller slice of labor that is union-led is pleading the opposite course: give us more government job protection. And House minority leader Dick Gephardt is defying his president on every trade issue because of that fear-driven outlook.

That's despite the fact that the nation has not for decades enjoyed such full employment, low inflation, rising productivity, and consumer prosperity - all directly linked to trade.

Mr. Herzog has the right idea. America has tested that idea for many years now. Of course, it needs further refining. But, basically, it works.