Sunday, April 11, 2010

An honest respones to eco-left

On Mr. Quigley has written an article “Nine Myth about Socialism in the US”, where he says that the US is not (yet?!) as socialist as the far right millionaires (Glenn Beck was his example) claim. Now, there are also far-left millionaires (Warren Buffet, Bill Gates, to name two), so I consider this only as an insult and a way to lash out, which is rather common to the right and the left when debating each other.

Now, the US is really not as generous as many European countries like Sweden, Germany, France or Greece, though the latter already suffers from it, but it has come closer to Europe than ever before and in some cases (California) it already overtook Europe.

But let’s tackle the myths one after the other. We will start with…

Myth  1: The US government is involved in class warfare attacking the rich to lift up the poor

Yes, it is and it has been long before even Medicaid and Medicare were thought up. It is a slow and painful way in the US, because there are still people here and there (especially in the Mid-West) don’t buy into this kind of paternalism. Class warfare (perceived or actual) is always used to sponsor some kind of socialist or egalitarian policy, but is not exclusively used by the Left, but also by the Right, when it comes to their pet-issues.

Now, the author doesn’t go into this issue but rather concentrates on the wealth gap, which I find dishonest, because in Europe the gap is also widening and still despite this widening, the poor in Europe and the US are better off than the people in more egalitarian societies like Kongo, where everyone is poor and the rich are more like the poor in the EU.

So, I’d rather compare poverty levels in the US to poverty levels in so-called egalitarian societies like CUBA or North Korea. Or Western Germany against the DDR for even a better comparison.

As a last note, I’d say that the gap is unimportant and to close it by means of distributing wealth from the rich to the poor, might even hurt more. Right now, the Rich in the EU and the US pay for roughly 50 % of the states income. If the Rich where to disappear, the rest would have to share that burden, which would be even harsher or outright unsupportable. It would also change the political landscape, because now the “givers” are no longer the trampled minority but rather 60% of the population, which could well put the Progressive Spender out of business.

Myth #2: The US already has the greatest health-care system in the world.

This one certainly is a myth, but for different reasons than the author of this piece might think. Now, to only cite “infant mortality” is not very bright, because infant mortality has not much to do with health care. If infant mortality would be a health care issue, then we would see similar results with care for the elderly. IF you look at the statistics, you will see that Germany and France (both with high levels of health-care and insurance coverage) are behind Andorra. So there are probably other factors involved.

However, we can find different faults in the US system. First, is protectionism, because health-care insurance companies cannot insure beyond state-boundaries. This is harsh, because it limits the insurer-pool and thus is bad for the “hard to insure”. Also, the supremacy of health-care insurance companies means that we don’t know the prices of the medical services we use, which is bad when it comes to distribute necessary services amongst a pool of consumers, who all want it but only some need it. I mean, heck, if it is for free, why not take it?

Right now, the US is the world leader in technology in the medical sector, the world 5 biggest enterprises develop and market their products (various scanners, stents etc.) in the US, because it is one of the few markets where you can still turn a profit. The EU mostly takes the free rider windfall benefits from this. If the US would join Europe, someone would have to take the US place, which would probably be China or India, unlike the US those countries do not care if the products are properly tested or not…

Myth #3: There is less poverty in the US than elsewhere.

I don’t understand what this has to do with socialism, but meh. Again I only need to reiterate my comment to Myth #1. Poverty != poverty, it is always a relative definition. There is even a culture of Freebies, where people only live of free food/products that are the result of modern consumerist society. In what other country in the world do the poor even live better with the scraps or can voluntarily choose this kind of culture, without starving to death?

Myth #4: The US is generous in its treatment of families with children

Well, this is a difficult issue, because in this wealth plays a role. Most of this has gone down the drain not because of the "evil” Republicans, but because of the negative connotation of marriage. Also, I’d not say that financial benefits to a family really do make families better of. In some European countries these financial benefits are distributed, because the governments want to raise baby rates. It is a means against the Methuselah problem of demographics that plagues some European countries.

It also tends to derail families, because it benefits poor families more. This leads to a second problem that displays itself in the distribution of birth rates. Rich families with a background in academics or related qualifications tend to have 1-2 children, while poorer families tend to have more children. This of course hurts not only the children, but also the families and raises class “warfare”.

I prefer generous treatments of families by given tax breaks to families, because that way it doesn’t feel like you are paid for having children. Though in the end, none of the two are really “generous treatment of families”. They are both attempts at social engineering, because the “old way” doesn’t work anymore.

Myth #5: The US is very supportive of its Workers

Well, but on the other side, the US has a very open (or at least had a very open) labor market. European labor markets are that restricted that European countries seldom have unemployment rates below 8%. On the other hand, the US is big on public unions for teachers and such. Most public employees gain more than their private counterparts in wages, which should be an indication that the government really spends a lot on workers.

Myth #8: Redistribution of income from rich to poor.

Well, I could start with a reference to my rebuttal of the first myth. Actually, the US redistributes more from rich to poor, but in a more inefficient way than other countries. Also, the US takes more money to spent on military, which is a big project to give employment to poor people, albeit a very cynical and vile way to do it.

It also depends on what you call rich and poor. Certainly people with more than 250.000 $ per year are spending their money on projects for the poor (the newest: foreclosure subsidies).

Myth #9. The US generously gives foreign aid to countries across the world.

Bad comparison, because private aid in the US trumps all other countries. Also, the US is so enlightened to see that foreign aid doesn’t help that much to elevate people out of poverty. The developed world spent billions on the poor in Africa, South America and Asia. However, the countries that emerged as winners were not the countries that benefited most from aid. Neither China nor India were the big receivers, but both became economic power houses and are now considered to be 2nd world, instead of 3rd world.

If we look to Africa, it is pretty bleak. Money doesn’t seem to solve the problem. Property rights and a rigid rule of law, however, help countries towards wealth creation, entrepreneurship and out of dependency on foreign charity. People only advance, when they themselves learn to solve problems and to seize opportunities. Of course, this is not achieved by throwing money at them and their corrupt governments. Money sprees are working, when it comes to immediate disaster relief, meaning catastrophes like the Tsunami in Thailand or the earthquake disaster in Haiti.

However, neither Thailand nor Haiti will be advancing into the ring of developed nations, if they just receive more foreign aid without getting a stable political scene and a tight rights and law management.

It is easy to go for the “bleeding hearts” solution of socialism, but time and time again have shown that this leads down a nasty path that only entrenches problems and doesn’t solve them. And yes, relatively the US has become more socialized since a decade ago. So, the Right is right to fear it, but they are not the solution to the problem.

Instead the author wants the US to follow the path of Europe, whose first democratic nation is, at this moment, on the brink of bankruptcy because they followed these ideas. The rest of the EU club is not far behind, not even the powerful nation of Germany.

No comments: