European Stocks crumble

What impact did the German regional election have on German stocks? The Conservative government has done a fairly good job running things. Their unemployment rate was exactly the same as ours in January 2009, but while ours is now at 9.1 percent and theirs is 7 percent. The US and Germany have both incurred a lot of debt since then, though theirs has gone up because they are trying to bail out the other spendthrift countries in Europe. My own guess is that it is the fear that the German Social Democrats will regain control that is causing stocks in Germany to fall.

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Blogger Paul Jackson said...

I like your column and read it regularly, however I take issue today with your graphs -- not with the data itself, but how you represent it (or how the creator did, if not you). The Germany graph is at .2 scale while the US graph is at .5 scale -- this creates a false impression of the degree of difference and change. The numbers don't need that and apples-to-oranges comparisons are intellectually dishonest.

9/05/2011 12:24 PM  
Blogger John Lott said...

Dear Paul:

Thanks, Paul. The point wasn't the scale, the point was that Germany's unemployment rate now is lower than in January 2009, while ours is much higher. I am not susceptible to the scale issues, and I generally put these post up so that I can remember what I think are important facts or examples.

9/05/2011 6:16 PM  

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