by Gary Alexander
May 12, 2026
As we passed the 81st anniversary of Victory in Europe (V-E Day, May 8, 1945) last week, it brought to mind how well that continent recovered from major wars and conflicts over the last century, but it also brought to mind the sad fact Europe is once again facing serious challenges to its growth and security.
After massive bombing raids, Germany was almost totally destroyed, but this primary adversary in that global conflict recovered more rapidly than anyone then thought possible, due in large part to Marshall Plan aid and finance minister Ludwig Erhard’s Economic Miracle (“Wirtschaftswunder”). Soon, quality German cars, cameras, machinery and other sectors rose the ashes faster than anyone expected, as we learned the painful lesson from World War I not to cripple our former adversary but help them recover.
After the Berlin Wall fell in 1989, Europe grew in parallel with the U.S. as an economic power. After the 2008 crisis, however, Europe was slow to recover. Since 2010, the U.S. economy significantly outperformed the European Union (EU), with America’s nominal GDP more than doubling, from $14.8-trillion in 2008 to $31.3-trillion now, compared with the EU’s tepid total of just 13% growth ($16.4-trillion to $18.6-trillion) since 2008, with virtually no growth in the recession-ridden years 2023 to 2026. (The United Kingdom didn’t do much better, growing by a total of only 15% in the 17 years since 2008).
In The Wall Street Journal last May Day (Friday, May 1), economist Joseph C. Sternberg penned an op-ed titled, “What Happens When Europeans Find Out How Poor They Are?” He cited some of the numbers I’ll quote here, plus this: “Politically, bliss is ignorance. European welfare states, by creating relatively comfortable lives for voters, conceal the full extent of Europe’s prosperity gap.” Yes, it’s nice to live a “comfortable” life, but only after you struggle and fight to create progress, reaping “comfort” later on.
Sternberg closed with this warning: “The bliss will run out when the funding for welfare does. Voters will then have to confront their failure to generate enough growth to pay for social benefits….”
According to World Bank data, shown in the chart below, the EU’s total output in 2007 exceeded that of the U.S., but then Europe quickly sank behind the U.S. and continues to lag farther behind in the 2020s.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
As it turns out, the U.S. suffered no recession between 2009 and the COVID attack in 2020, while Europe suffered an immediate second deep recession in 2010-12, tied to the sovereign debt crisis emerging in the EU’s Mediterranean region – the so called “PIGS” – an acronym for Portugal, Italy, Greece and Spain.
In 2008, EU and U.S. GDPs were roughly equal, but now U.S. GDP is roughly 50% above the EU’s GDP.
Accounting for population, per capita income comparisons are even more dismal. According to the IMF, per capita GDP is currently $94,400 in the U.S. compared with $65,300 in Germany, $61,000 in the UK and $52,000 in France – the three biggest economies in Europe. Overall, EU per capita GDP has fallen from 76% of U.S. levels in 2008 to barely half that today, due to weak members hobbling their growth.
In 2024, according to Greg Ip, writing (“U.S. Economy Reigns…” in the Wall Street Journal, 2024), the U.S. accounted for “26.3% of the global gross domestic product, the highest in almost two decades.” As this two-year-old chart shows, the EU/UK out-produced the U.S. until their lines crossed in 2014:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
China has ascended, until recently, but China has started to sag due to its new demographic realities.
U.S. dominance is even more pronounced in terms of stock market profits. Since 2010, U.S. market capitalization (as a percent of the world), has grown from barely 40% to over 60%, according to MSCI.
Limiting the data to the U.S vs. Europe, these two major market blocs rose or fell in tandem for two decades after the fall of the Berlin Wall, 1989 to 2009, but then the U.S. market lead took over, big time:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Some Reasons Why the U.S. Will Likely Remain No. 1
One major reason the U.S. is running laps around Europe is that we encourage technological advances, and we welcome immigrants more so than any other nation or region. Those two forces combine when we see about half the founders of our Magnificent 7 companies are immigrants – like South Africa-born Elon Musk; Nelsen Huang, a Taiwan native; Sergey Brin, Russian-born co-founder of the major search engine, plus Polish American Steve Wozniak and Syrian American Steve Jobs forming Apple 50-years ago. We have two current CEOs of Mag-7 companies who were born in India – Sundar Pichai and Satya Nadella.
I’ll bet most of my readers here cannot name any major technology innovator domiciled in Europe (without tapping into AI or a search engine), or any European technology giant founded or led by immigrants there.
Sure, other nations can copy or steal our technology, but do these other nations innovate or create big new ideas? Not very often, due to strong central controls over private productivity and output there, robbing their creative geniuses of the fruits of their creativity – so their most creative citizens migrate to the U.S.
The U.S. assimilates immigrants better than most other countries, especially those among our major competitors in Europe and Asia. This is fairly evident when you walk the streets of Tokyo or Beijing.
Why do we assimilate others so well? As he often did, Ronald Reagan put it best, here in a 1988 speech:
“America represents something universal in the human spirit. I received a letter not long ago from a man who said, ‘You can go to Japan to live, but you cannot become Japanese. You can go to France to live and not become a Frenchman. You can go to live in Germany or Turkey, and you won’t become a German or a Turk.’ But then he added, ‘Anybody from any corner of the world can come to America to live and become an American.’ A person becomes an American by adopting America’s principles, especially those … in the Declaration of Independence.”
That’s something to bear in mind as we approach the Declaration’s 250th birthday this July 4th.
Also, American states had their Civil War but now live in peace, creating a fertile laboratory of growth, with 50-states competing to attract businesses and population (i.e., taxpayers) luring better ideas to their state by offering more freedom, while those states intent on punishing businesses and people (with high taxes and regulations) generally lose population. By contrast, Europe remains fractured, not united.
The world keeps saying America is a “young” nation – not as mature as Europe – but we have the world’s oldest and longest lasting Constitutional republic, while the fractured EU is barely 30-years old, a newbie.
To the world, we say, “Come to America, or copy us, your choice,” but don’t let old ideas cripple you.
Navellier & Associates; own Apple Inc. (AAPL) in managed accounts. Gary Alexander does not personally own Apple Inc. (AAPL).
All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Job Growth Exceeds Analyst Expectations
Income Mail by Bryan Perry
The Bullish Outlook for U.S. Energy Infrastructure Strengthens
Growth Mail by Gary Alexander
America is Running Economic Laps Around Europe
Global Mail by Ivan Martchev
Political Considerations Before the Trump-Xi Summit
Sector Spotlight by Jason Bodner
When the Tide Turns This Fast, Pay Attention
View Full Archive
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About The Author
Gary Alexander
SENIOR EDITOR
Gary Alexander has been Senior Writer at Navellier since 2009. He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks. For the previous 20-years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.
Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s. He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division. Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander
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