The economic image of the United States as a high-rolling tycoon at a Vegas casino, willing to gamble and reap rewards, has always stood in stark contrast to that of the European bean counter.
Now here in Europe, long a bastion of distrust toward unfettered capitalism, there's a question running underneath the financial crisis: Is the era of "anything goes" free markets over?
French President Nicolas Sarkozy is refuting the infallibility of free markets. Italian Finance Minister Giulio Tremonti is touting his best-selling book, a treatise against globalization. His German counterpart, Peer Steinbrück, points a sharp finger of blame at the United States, telling parliament recently that it is "the source" and "the focus" of the crisis.
"Some in Europe see the financial crisis as a win on points for the Continental financial system against the Anglo-American one," conservative commentator Friedhelm Hengsbach recently wrote in the Süddeutsche Zeitung, a German daily.
These instances of schadenfreude and we-told-you-so have tapered off lately as Europe, seeing many of its own financial institutions fail in the past week, has been unable to hold up its financial systems as better prepared to mitigate an economic meltdown. Iceland, for instance, is at risk of "national bankruptcy," according to Prime Minister Geir H. Haarde.
But they underscore the fundamentally different philosophies of the US and EU toward market economics, and suggest that a deep-rooted disdain for US financial policy is peaking here. They also go some way to explaining how both sides of the Atlantic are responding to the crisis and which direction capitalism might take when financial systems finally recover and rebuild.
The US – and to an extent, Britain – have traditionally favored a hands-off approach to economic policy punctuated by risk-taking, a basic trust in financial institutions, and a preference to react to markets rather than influence them. Continental Europe is more cautious, favoring national regulation and oversight and choosing, philosophically, to side with social welfare and job security over corporate culture.
The difference can be seen in how each is responding to the financial crisis. The US passed a $700 billion bailout fund. European countries have acted to save their own banks, but on an EU level there is little agreement on a similar fund, and debate has centered on the extent to which the bloc should guarantee private bank deposits – with several countries deciding to back them 100 percent.
"The EU approach mostly has been directed at rescuing the small saver first and worrying about the big financial institutions later," says Peter Ireland, an economics professor at Boston College. "There's a sense that the United States did it the opposite way, where, from the beginning, it was all about the institutions and only after did they think about small savers."
There are drawbacks to Europe's economic model, says Stefan Bielmeier, an analyst at Deutsche Bank. He says a penchant for regulation has kept Europe's economy less nimble and less able to recover than America's.
Olaf Gersemann, author of "Cowboy Capitalism: European Myths, American Reality," agrees.
"In the old industrial age, discipline worked better," Mr. Gersemann says. "In an age that supports flexibility over discipline and professionalism, the American way might be a better way to do business."
So, when European leaders rail against American capitalism, is it merely populism? No, analysts say: The financial crisis has exposed the need for greater government regulation of financial systems, a position Europe has a track record of supporting, says Gerhard Illing, research director at the Institute for Economic Studies in Munich.
At the Group of Eight meeting in Germany last year, for example, Chancellor Angela Merkel pushed for greater regulations for hedge and private equity funds. The US and Britain resisted. "The mood has changed now," says Mr. Illing. "I think we will go more in the direction Europe is seeking."
That includes greater oversight of international banks with locations in more than one European country, which Brussels has already proposed. Also in the offing: an overhaul of European accounting rules and potential limits on bank lending practices.
Public opinion in Europe is supporting more financial overhaul, and the crisis is serving to fuel Europeans' latent distrust of corporations.
Nowhere is that truer than in Germany, which has long clung to what it calls a social market economy – combining some traits of capitalism with strong commitments to labor protection and social welfare values.
Germany is now the primary voice against a Europe-wide bailout fund. Its government, which already had to deal with a massive corporate tax scandal this year, faces pressure at home for not regulating corporations enough.
"There is now a huge corporate distrust in a society that is always swinging between, on the one hand, saying yes to a kind of capitalism and on the other a kind of modern socialism," says Otto Fricke, a member of the Liberal Party in the German parliament.
A financial crisis, Mr. Fricke says, "always gets people swinging to the socialist side."