1.7. Consider the following two claim . The first would be a typical statement at the magazine The Nation, while the second would be a typical statement at the magazine ational Review:

Europeans have strong labor unions, so their workers get a bigger share of the pie than American workers.

Since European businesses are highly regulated, they have little incentive to make big profits. Therefore, they get a much smaller share of national product than American workers.

It is true that Europeans have stronger labor unions than Americans, and it is true that European businesses face higher regulatory burdens than American businesses. But with that in mind, what is wrong with these two statements? What fact are they ignoring?

And what does that fact tell us about what strong unions and high levels of government regulation can't do?