The View From 1776

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On May 13, 2005, Wall Street Journal columnist David Wessel, from one side of his mouth, informed us:

“As Rich-Poor Gap Widens in the U.S., Class Mobility Stalls: Those in Bottom Rung Enjoy Better Odds in Europe”

“....The promise that a child born in poverty isn’t trapped there remains a staple of America’s self-portrait..... Although Americans still think of their land as a place of exceptional opportunity—in contrast to class-bound Europe—the evidence suggests otherwise.”

But, on July 7, 2005, in “Familiar Litany of Woes Across the Pond,” he tells us from the other side of his mouth:

“A few hundred business and bureaucratic believers in what they like to call Project Europe gathered at the French seaside resort of La Baule last week. Many were glum, disheartened by the French and Dutch rejection of the European constitution (though each offered a different explanation of what it really meant) and dismayed by Western Europe’s disappointing economy....It isn’t only that the European economy isn’t growing very fast or that the latest apples-to-apples comparisons put unemployment in the 12 countries that share the euro at 8.9% versus 5.2% in the U.S. It isn’t only that the European Central Bank, unlike the U.S. Federal Reserve, won’t help ignite growth. It’s all those clouds on the economic horizon.”

Perhaps part of the problem is that liberal-socialists either don’t want to see the facts, or deliberately lie about them, because, without spiritual content, their atheistic, materialistic lives have no meaning unless the collectivized state can be worshipped as all powerful and totally effective.

One such example, either of ignorance or mendacity, is a letter to the editors appearing in the July 7, 2005, edition of the New York Times:

Ireland’s Success Story
To the Editor:
Thomas L. Friedman ("Follow the Leapin’ Leprechaun,” column, July 1) argues that Germany and France must either follow Ireland and adopt the Anglo-Saxon social model or become “museums.”

He is right that low labor costs have been a key to Ireland’s success. But making it easier to fire workers was not what made the difference; the Irish “social model” has changed little since the early 1990’s, when unemployment was 15 percent.

Far more important was government-led coordination of collective bargaining and tax policy.

The Anglo-Saxon free-market model is not the only viable alternative. Germany and France will be more successful if they look to models closer to home, like the Netherlands, Norway and Austria, three strong welfare states with labor regulations similar to those of Germany and France, but with unemployment rates lower than the United States and with employment rates much more impressive than Ireland’s.
And they’ve done it without Ireland’s Anglo-Saxon levels of inequality and poverty!

David R. Howell
New York, July 1, 2005
The writer is a professor of economics at the Milano Graduate School of New School University.

A couple of comments regarding Professor Howell’s letter: First, the original name for New York City’s New School University was The New School for Social Research.  That institution was founded in 1919 by Charles Beard, Thorstein Veblen, and John Dewey, three of the leading American advocates of socialism in the early 20th century.  Ideas emerging from it must be filtered with the foreknowledge that they may be lethally tainted with the corruption of socialism.

Second, to nit-pick one data bit advanced by Professor Howell, the economy in the Netherlands is anything but strong, and the true unemployment rate is multiples of the unemployment rate in the United States.

The July 6, 2005 edition of The Wall Street Journal reported, in"The Disabled Dutch:"

“If there were a poster child for the need for economic reform in Europe, the Netherlands’ disability benefit system would surely be a finalist for the job. Some one million people—out of a work force of 7.6 million—collect disability benefits in Holland.

This is not because the Dutch are injury-prone or because the Netherlands is a dangerous place to live and work. It is an open secret in Holland that the standards for disability are loose and often abused. Employers have been known to “retire” people to the disability system to get them off their payrolls. The extensive use of the disability system has also helped keep unemployment statistics relatively low by European standards, although the official figure has topped 7% during the current protracted recession.”

Mr. Wessel tells us that the unemployment rate in the United States is 5.2%.  In the Netherlands it’s officially 7%.  But one million out of 7.6 million on permanent disability leave, a large portion of them simply because it’s easier to draw full pay without working, is more than 13% of the labor force.  That means that the true unemployment level in the Netherlands is somewhere between 7% and 20%.

Only to a blind worshipper of socialism can that be viewed as a “strong economy” and held up as a model for economic policy.

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