Free Markets, Free People

social democracy

Let’s make the US like Germany … er, Mississippi?

The “social democracy” or “democratic socialism” model that many of the left want so badly is showing it isn’t all it’s cracked up to be.  For instance:

Since Sweden is held up as a sort of promised land by American socialists, let’s compare it first. We find that, if it were to join the US as a state, Sweden would be poorer than all but 12 states, with a median income of $27,167.
Median residents in states like Colorado ($35,830), Massachusetts ($37,626), Virginia ($39,291), Washington ($36,343), and Utah ($36,036) have considerably higher incomes than Sweden.
With the exception of Luxembourg ($38,502), Norway ($35,528), and Switzerland ($35,083), all countries shown would fail to rank as high-income states were they to become part of the United States. In fact, most would fare worse than Mississippi, the poorest state.
Oh, my!  Say it ain’t so, Bernie!
Germany, Europe’s economic powerhouse, has a median income ($25,528) level below all but 9 US states. Finland ranks with Germany in this regard ($25,730), and France’s median income ($24,233) is lower than both Germany and Finland. Denmark fares better and has a median income ($27,304) below all but  13 US states.
And Mississippi? Well, when adjusted for purchasing power, we find a funny thing (heh … I couldn’t help myself):
Now that we’ve accounted for the low cost of living in Mississippi, we find that Mississippi ($26,517) is no longer the state with the lowest median income in real terms. New York ($26,152) is now the state with the lowest median income due to its very high cost of living.
More importantly, when the European countries are adjusted for purchasing power, they fare even worse:
Once purchasing power among the US states is taken into account, we find that Sweden’s median income ($27,167) is higher than only six states: Arkansas ($26,804), Louisiana ($25,643), Mississippi ($26,517), New Mexico ($26,762), New York ($26,152) and North Carolina ($26,819).
We find something similar when we look at Germany, but in Germany’s case, every single US state shows a higher median income than Germany. Germany’s median income is $25,528. Things look even worse for the United Kingdom which has a median income of $21,033, compared to $26,517 in Mississippi.
So? So, myth busted.  If you want everyone to be the equal of  … well, now, New York … just listen to the siren song of social democracy. High taxes, marginal benefits and low purchasing power.  When you can’t even point to them being better than Mississippi in terms of median income, maybe it would be better not to hold up European social democracies as something to “strive” to be like.

It has come to this–China mocks West’s political system and economics

And, at the moment, rightfully so.  That’s not to say theirs is a superior system by any stretch.  Theirs just happens to be thriving at this moment in history.  But that doesn’t change the correctness of the basic kernel of their assessment:

In extensive talks with a series of Chinese leaders, an oft-cited point of criticism is the gridlock and “dysfunction” they see in Washington. They say fawning by U.S. political leaders seeking re-election has created an “entitlement culture” where the public has grown dependent on government largesse. Now, with the United States facing monumental economic and debt problems, the political system has been unable to curb generous entitlement programs or counter the economic downturn.

I really hate to say “I told you so”, because a) as Megan McArdle said yesterday it is “so … bleeding … obvious” and b) it really doesn’t take a rocket scientist to figure this was going to happen.  No, not China mocking us – they have their own economic problems ahead of them so I’m not particularly impressed with their mocking attitude.  The idea that running huge deficits, encouraging an entitlement culture, redistributing wealth and running up unpaid future welfare obligations was sustainable.

Heck, people like me and other authors on this blog have been saying that for years – decades even – that it was just a matter of time before it all collapsed like a wet paper box.  And we always get the hand wave from the so-called enlightened that we just don’t know what we’re talking about.

To them I say, “welcome to reality”.   Like gravity, the laws of economics will finally assert themselves.

And they have.

However, the performance of the Chinese economy in the global recession has had a beneficial effect for them among other nations.

China is now at a pinnacle of global leadership and influence as a result of its emergence as an economic superpower, even as the U.S. and other major industrial powers fell into disrepair as a result of the 2008 financial crisis, said Guo Zhenyuan, an analyst at the institute.

China gained the admiration of developing nations around the world with its ability to weather the crisis emanating from the U.S., even emerging from the downturn as the world’s main engine of growth, while its superior economic performance provoked jealousy in the U.S. and other developed nations, he said.

With that said, here’s what they’re now selling:

Mr. Chan said U.S. political leaders are so focused on short-term gains that they fail to make the painful long-term choices and changes in social programs needed to ensure the solvency of the government and vitality of the economy.

Chinese leaders, by contrast, lay out plans for the long term and systematically achieve them, producing unprecedented gains in living standards and a remarkable two decades of uninterrupted growth at nearly double-digit annual rates.

This proves that the Chinese system is better than the democratic system that the U.S. promotes around the world, Mr. Chan said.

And the dictators and totalitarians around the world take heart.  

Only because Western leaders, decades ago, perverted the true meaning of Western democracy and did exactly what the critique above says – began trading goodies for votes and created the social welfare state which was destined for failure.

Whether or not you agree that democracy is the problem is a rather moot point.  That’s what China is pitching and apparently there are eager listeners.  And we all know there are those out there who think they too can implement the Chinese model.    As Dr. Kissinger said they call it, “Socialism with Chinese characteristics”.   The rest of us call it totalitarianism, but like I said, in the face of the epic failure of Western Social Democracy and the rise of China, it’s a tough argument to fight at the moment.


Twitter: @McQandO