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Is Atlas Shrugging?
Posted by: McQ on Monday, June 11, 2007

Probably not, but it is instructive to note that the so-called 'equity society' of European welfare states that so many here hope to emulate is having a pretty rough time and, it appears, those paying the freight are getting a bit tired of it:
The great unsung success story of the EU over the decades has been its social democratic exercise in redistributing wealth between and within countries, narrowing the wealth gap and hugely benefiting states such as Greece, Portugal, and Ireland. In essence this meant that big, wealthy Germany kept the chequebook open.

But those days are over. United Germany is a relatively poorer Germany. Having poured hundreds of billions of euros into ex-communist eastern Germany to fund unification over the past 15 years, the burghers of Munich, Cologne, or Hamburg are less keen to stump up for Bulgarians or Poles.

The result is that in an EU of 500 million people, the wealth gap is greater than ever. The richest corner, inner London, generates more than three times the wealth of the EU average, while north-eastern Romania manages barely a quarter. The rich regions are clamouring for a new dispensation, arguing that they only want a square deal.

"It's all very well to support solidarity and national cohesion, it's quite another to damage yourself or endanger your own growth," says Mr Guardans of Catalonia. "We only want to receive back what we pay in."
The "great unsung success" has been "redistribution"? Well obviously that is a very debatable subject isn't it, especially with fairly static economies and chronic double digit unemployment plaguing the EU?

Despite its efforts at redistribution - it's supposed "great unsung success" - the "wealth gap" is "greater than ever". For those of you who worry about such things as a wealth gap, claim it must be addressed in the US and who think that on the whole Europe has the right model for an 'equitable society', how do you explain all of this?
 
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Probably with fingers in their ears, and shouting "la la la la" over and over again...
 
Written By: Scott Jacobs
URL: http://
Uh, while I agree that there are problems in Europe’s political economy, I think you’re missing the point. The poorest (Romania) only joined the EU on January 1, 2007. The poor East European states joined on January 1, 2004. What caused the gap to be large is admitting new states into their club.

Also note that they’re not talking so much about individuals, but states — the EU has helped Ireland, Greece and other states develop a much better economy. The reason is not income redistribution but policies designed to help markets function in those states, plus the opening up of easier trade and cross border investment. I suspect that will work with Eastern Europe too — though, clearly, it’ll take time.
 
Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm

Erb states : "What caused the gap to be large is admitting new states into their club."

Funny , that is similar to the argument I make about America’s ’rich-poor’ problem. Without 12 million working at levels the American’s won’t , the income gap wouldn’t be so high would it? Doesn’t stop leftists from moaning about ’evil’ America though.
 
Written By: doubled
URL: http://
All right: who took Scott Erb out and replaced him with the "Scott Erb" commenting today? I’ve read three of his comments today and largely or totally agreed with all three. That is, so far as I can recall, unprecedented.
 
Written By: Jeff Medcalf
URL: http://www.caerdroia.org/blog
That is, so far as I can recall, unprecedented.
It should also be slightly disturbing...
 
Written By: Scott Jacobs
URL: http://
the EU has helped Ireland, Greece and other states develop a much better economy. The reason is not income redistribution but policies designed to help markets function in those states, plus the opening up of easier trade and cross border investment.
I’m not sure that is 100% accurate Scott. While in Ireland this year, I saw where the Irish spent a lot of EU money on things like roadside sculptures (is that really a good expense?). I also spoke with dairy farmers who produced milk so well that the EU put limits on milk production. Those pesky Irish though turned that excess milk into chocolate and faced subsequent limits on chocolate production. They have largely succeeded though, but are now faced with a massive influx of eastern Europeans looking for work, and willing to work cheap (sound familiar?). And as they are all members of the EU, they get to migrate freely. Many issues to be dealt with there for sure.

The other thing about Europe and the EU I found interesting, is England, Scotland, Wales and No Ireland are still using the Pound. What’s up with that?
 
Written By: meagain
URL: http://
You’re right about the milk. The albatross around the EU’s neck is the CAP (Common Agriculture Policy) which in its heyday accounted for 70% of the EU’s budget (now it’s just above 40%). It originally was a deal to get France to join since the French were convinced that free trade would help the defeated but still industry-oriented Germany more than itself. France had a strength in farming and got a sweet deal for the CAP. The French remain most adamant about tryin got maintain it, though agriculture lobbies across Europe are strong (as they are in the US). At one point people talked of butter mountains and wine lakes as the original CAP did nothing to limit production and promised a "fair price" to farmers no matter what they produced. That meant buying up massive amounts of excess production. But Ireland’s recovery I think was driven more by internal reforms than EU support — the EU didn’t give enough to create the massive turnaround in Ireland.

The Euro isn’t used by Great Britain, Denmark and Sweden, all of whom opted out (officially only Denmark got the right to opt out, but no one has tried to force the issue). All the new East European states are outside the Eurozone as well.

BTW, Germany did spend about a trillion to rebuild the horrible East German economy (population: 16 million). That caused high taxes in Germany and massively slowed down the economy. A lot of West Germans were grumbling in the 90s that they wished East Germany had never joined.
 
Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
McQ:
For those of you who worry about such things as a wealth gap, claim it must be addressed in the US and who think that on the whole Europe has the right model for an ’equitable society’, how do you explain all of this?
doubled:
Without 12 million working at levels the American’s won’t , the income gap wouldn’t be so high would it?

The EU takes in several million low paid Eastern Europeans and integrates them as citizens of the EU. These people able to advance themselves by competing in a free job market. At the same time the EU maintains border controls and arranges for the return of illegal non-EU immigrants as a matter of priority.

The US takes in several million low paid non-registered illegals and denies them citizenship. These are second class residents who try to compete in an un-free job market and who must accept lower wages.

Is this Atlas shrugging?
 
Written By: unaha-closp
URL: http://warisforwinning.blogspot.com/
Is this Atlas shrugging?
Angus, do you know what "Atlas shrugging" means?
"It’s all very well to support solidarity and national cohesion, it’s quite another to damage yourself or endanger your own growth," says Mr Guardans of Catalonia. "We only want to receive back what we pay in."
 
Written By: McQ
URL: http://www.qando.net/blog
Improper punctuation.

Is this "Atlas" shrugging?

Are the illegals who are allowed longterm residency in the USA the "Atlas"? They get taxed at the same rate for less benefit, than citizens. Can for instance the high crime stats of illegals be attributed to them shrugging against the system that "mooches" off any of their legal endeavours?
 
Written By: unaha-closp
URL: http://warisforwinning.blogspot.com/
Are the illegals who are allowed longterm residency in the USA the "Atlas"?
No. Again, I ask if you know what is meant by the term "Atlas shrugging"?
 
Written By: McQ
URL: http://www.qando.net/blog
I think he knows what the term means, but is twisting it to make a point. You’re evading his point.

Cohesion funds (formerly regional development funds) have not been the key to economic success in places like Greece and Ireland. These funds have always been too meager, and states have routinely looked out for their national interest. In fact, regional development funds have gone to the "core" wealthy states quite often too. Germany, contrary to what the article insinuated, was not paying large amounts into the EU in order to "do good," but because they saw it in their interest to assure continuation of the project. Most German contributions went to the CAP, the British rebate, and other expenses than to regional development funds. So I think the article is off base — the EU has worked because it has broken down trade barriers and made investment and movement labor within the Union much easier, thereby giving states a chance to reform and connect with a larger market.

So the idea that Germany or other EU states has been paying out in order to bring other states up to their standards is simply not true.
 
Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
The EU takes in several million low paid Eastern Europeans and integrates them as citizens of the EU
For your analogy to work, we would have to take on Mexico as part of the the US. The EU now encapsulates those former eastern European states. Hence the incredible amount of Poles I met in Ireland.

We already do a better job of assimilating legal migration of labor in the US. When people are having a tough time finding work in Boston, we freely move to other areas of the country and find jobs. Moving from Boston to Atlanta is now the equivalent of moving from Poland to France. Migrating from Mexico to the US illegally is nowhere near the same.
 
Written By: meagain
URL: http://
the EU has worked because it has broken down trade barriers and made investment and movement labor within the Union much easier, thereby giving states a chance to reform and connect with a larger market.
yep - just like we have here in the good ole US of A. movement of labor and capital within the union. Does Mexico want to become the 51st state?
 
Written By: meagain
URL: http://
I ask if you know what is meant by the term "Atlas shrugging"?
Refusing to pay for goods you do not use, by withdrawing labour from the service of those who force you to pay for such things. I see analogy in working under the table or in an illegal enterprise rather than paying for medical care of those who would tax without offering the service. Or is it something else?

Do not have any solution, just figuring out a problem into terms that I can follow.
 
Written By: unaha-closp
URL: http://warisforwinning.blogspot.com/
Refusing to pay for goods you do not use, by withdrawing labour from the service of those who force you to pay for such things.
Did you read the book?
 
Written By: meagain
URL: http://
Refusing to pay for goods you do not use, by withdrawing labour from the service of those who force you to pay for such things. I see analogy in working under the table or in an illegal enterprise rather than paying for medical care of those who would tax without offering the service. Or is it something else?
It is when the producers quit producing and refuse to do what is necessary to support the system which is engaged in exploiting their productivity in order to redistribute their wealth to non-producers.

That’s why I highlighted this comment in the story:
"It’s all very well to support solidarity and national cohesion, it’s quite another to damage yourself or endanger your own growth," says Mr Guardans of Catalonia. "We only want to receive back what we pay in."
And of course, what he wants, he’ll never get and it seems he’s coming to that realization as are many others among the producers in Europe (if this story is to be believed).
 
Written By: McQ
URL: http://www.qando.net/blog
Interesting comparison to Mexico becoming the 51st state. I found it rather remarkable that the EU decided to expand. It was a business-driven decision (the EU’s growth has been very much driven by the business sector in Europe, for obvious reasons) done to expand the labor market and create conditions for an East European boom that would feedback to West Europe (much like US Marshall plan aid helped lead to an American boom when Europe grew). The politics were a bit like the immigration debate here — fear of all those Poles moving to Ireland and the like. Ultimately I think they feared instability in Europe and did this to assure democratization. It worked — Slovakia, Bulgaria and Romania were going towards the dark side, but the risk of missing out on EU membership pulled them back and now they are starting to perform remarkably well. If that continues, then over time the flood of workers westward will stop as opportunities grow in the East.

The EU has been an amazing success; a continent goes from internal wars to economic linkages and interdependence in decades. Countries that once were enemies now don’t even have border checks and use the same currency. And, while Americans often accuse the EU of being too "socialist," it’s actually a shining example of the power of markets and freedom to overcome nationalism and conflict.
 
Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
Did you read the book?
No. Read a few summaries.
It is when the producers quit producing and refuse to do what is necessary to support the system which is engaged in exploiting their productivity in order to redistribute their wealth to non-producers.
Yeah. Who is a non-producer here, a Mexican illegal working in paid employment or a retired civil servant who is getting subsidised heart pills?

What I am trying to figure out is if an "Atlas Shrugging" effect can explain an issue. America appears to operate a do not ask, do not tell approach to immigration - as long as the immigrants do not break the law and keep their head down very little is done about them. And the illegals have sacrificed a lot to cross the border so that they and theirs can have a better future. Why then do so many work in illegal enterprise and elevate their risk of being returned?

Partly it must be due to the higher returns criminal enterprise can provide, but perhaps the "Atlas Shrugging" effect also forms a moral driver in deciding to not contribute to a system that redistributes your taxes to people of a class you can never legally enter.

Illegals appear to have a stronger case for resentment than Mr Guardans. If Mr Guardans sees that there is benefit being granted to Bulgaria, Estonia, etc. from his production then it is possible for him to move there and benefit. Or if he is opposed on principle he can move to a state like the Czech Republic where the ratio of taxation to benefit is closer to balance. In doing so this "producer" can derive the most favourable conditions for himself. However Mr Guardans resides in Spain which for 25 years from the death of Franco was a net beneficiary of EU CAP & regional development funds - making Spain appear to be a nation of long term moochers - how much this gripe is a genuine philosophical disquiet on a "producer’s" part and how much is the whine of a Spainard losing his EU perks is hard to say.
 
Written By: unaha-closp
URL: http://warisforwinning.blogspot.com/
Yeah. Who is a non-producer here, a Mexican illegal working in paid employment or a retired civil servant who is getting subsidised heart pills?
Who’s supporting the system Angus? A recent study says low-skilled workers are a net drain by about $30K a year in government benefits received v taxes paid.
 
Written By: McQ
URL: http://www.qando.net/blog
They won’t be staying low skilled forever, generally they are young people crossing the border who will learn skills on the job. Is the moral choice for them to commit to support a system that taxes them and explicitly offers greater benefit to others, or to avoid the system.
 
Written By: unaha-closp
URL: http://warisforwinning.blogspot.com/
"We only want to receive back what we pay in."

We hear that complaint here, from time to time, from states like New York, I think.
*************************

"... it’s actually a shining example of the power of markets and freedom to overcome nationalism and conflict."

And perhaps the power of a few hundred thousand American troops.

**************************

"They won’t be staying low skilled forever, generally they are young people crossing the border who will learn skills on the job."

It is certainly possible for them, theoretically, to raise their income to a bracket where they are net payers into the system instead of a drain, but in actuality, it ain’t gonna happen to enough of them to change the equation. Just the cost of cleaning up the mess they are leaving when they cross the border is more than the local governments can afford. Perhaps those nice folks who put water barrels out in strategic locations can also put out some dumpsters for the illegals to put their trash in. And some porta-potties.


 
Written By: timactual
URL: http://
They won’t be staying low skilled forever, generally they are young people crossing the border who will learn skills on the job.
A) that’s not necessarily true.

B) isn’t it the right of the country, and espeically if it is a welfare state, to decide who it lets in and why? One obvious reason to turn some away is to prevent them from coming in and being a net drain on the system.
 
Written By: McQ
URL: http://www.qando.net/blog

 
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