With Chancellor Merkel in Washington this week, the New York Times was out with an editorial touting Germany and its export prowess as “a model” for “how to stay competitive” as “a smart industrialized country.” It sent us scrambling to the Web site of Germany’s federal statistical office, which told us for the most recent month on record, March, the unemployment rate in Germany was 9.8% — more than double the American rate of 4.4% for than month. While Ms. Merkel is more conservative than her predecessor, Chancellor Schroeder, what passes for conservative, at least on economics, in Europe is a far cry from what Americans understand as a free market approach. On January 1 of this year, Ms. Merkel increased the value-added tax in Germany to 19% from 16%, an increase of more than 18%. Bloomberg News summed up the results in an article that began, “Retail sales in Germany, Europe’s largest economy, unexpectedly fell in March after a tax increase in January,” an account we’d agree with excepting the word “unexpectedly.” Some “model.”

Meanwhile, the Daily Telegraph reports that in neighboring France, “If there is one thing that unites both candidates in France’s presidential run-off this Sunday, it is a shared belief that Anglo Saxon hedge funds are the great villains of modern civilization.” The newspaper reports from Paris that “Nicolas Sarkozy, the neo-Gaullist favourite, has vowed to ‘hit predators’ with a tax on speculative investments — apparently a version of the Tobin tax, a staple of pop-Europe for years.”

The Telegraph quotes Mr. Sarkozy as saying, “We can’t tolerate hedge funds buying a company with debt, firing a quarter of the staff and then enriching themselves by selling it in pieces. We didn’t create the euro to have capitalism without ethics or morals.” The report than notes drily, “Mr. Sarkozy is supposed to be the ‘free market’ candidate.” It’s no wonder that when Europeans manage to make a small fortune, the first thing they do with it is try to invest it in America, where, for all the complaining, much of it justified, about Sarbanes-Oxley and excessive litigation and regulation, the climate for entrepreneurship and capitalism is far more advanced than it is on the continent.