LONG BEACH— Found this article today and thought it was interesting.
Obama’s False Choice
A “chaotic and unforgiving capitalism” is exactly what we need right now.
By Mark SteynWriting in the Chicago Tribune last week, President Obama fell back on one of his favorite rhetorical tics: “But I also know,” he wrote, “that we need not choose between a chaotic and unforgiving capitalism and an oppressive government-run economy. That is a false choice that will not serve our people or any people.”
Really? For the moment, it’s a “false choice” mainly in the sense that he’s not offering it: “a chaotic and unforgiving capitalism” is not on the menu, which leaves “an oppressive government-run economy” as pretty much the only game in town. How oppressive is yet to be determined: To be sure, the official position remains that only “the richest five percent” will have taxes increased. But you’ll be surprised at the percentage of Americans who wind up in the richest five percent. This year federal government spending will rise to 28.5 per cent of GDP, the highest level ever, with the exception of the peak of the Second World War. The 44th president is proposing to add more to the national debt than the first 43 presidents combined, doubling it in the next six years, and tripling it within the decade. But to talk about it in percentages of this and trillions of that misses the point. It’s not about bookkeeping, it’s about government annexation of the economy, and thus of life: government supervision, government regulation, government control. No matter how small your small business is — plumbing, hairdressing, maple sugaring — the state will be burdening you with more permits, more paperwork, more bureaucracy.
And don’t plan on moving. Ahead of this week’s G20 summit in London, Timothy Geithner, America’s beloved Toxic Asset, called for “global regulation.” “Our hope,” said Toxic Tim, “is that we can work with Europe on a global framework, a global infrastructure which has appropriate global oversight . . . ”
“Global oversight:” Hmm. There’s a phrase to savor.
“We can’t,” he continued, “allow institutions to cherry pick among competing regulators and ship risk to where it faces the lowest standards and weakest constraints . . . ”
Just as a matter of interest, why not? If you don’t want to be subject to the punitive “oversight” of economically illiterate, demagogic legislators-for-life like Barney Frank, why shouldn’t you be “allowed” to move your business to some jurisdiction with a lighter regulatory touch?
Borders give you choices. Your town has a crummy grade school? Move ten miles north and there’s a better one. Sick of Massachusetts taxes? Move to New Hampshire, as thousands do. To modify the abortionists’ bumper sticker: “I’m Pro-Choice And I Vote With My Feet.” That’s part of the self-correcting dynamism of capitalism: For example, Bono, the global do-gooder who was last in Washington to play at the Obama inauguration, recently moved much of his business from Ireland to the Netherlands, in order to pay less tax. And good for him. To be sure, he’s always calling on governments to give more money to Africa and whatnot, but it’s heartening to know that, when it comes to his wallet as opposed to yours, Bono — like Secretary Geithner — has no desire to toss any more of his money into the great sucking maw of the government treasury than the absolute minimum he can get away with. I’m with Bono and Tim: They can spend their money more effectively than hack bureaucrats can. We should do as they do, not as they say.
If you listen to the principal spokesmen for U.S. economic policy — Obama and Geithner — they grow daily ever more explicitly hostile to the private sector and ever more comfortable with the language of micro-managed government-approved capitalism — which, of course, isn’t capitalism at all. They’ll have an easier time getting away with it in a world of “global oversight” where there’s nowhere to move to. Unfortunately, even then it won’t work. Think about it: It takes extraordinary skill to create and manage a billion-dollar company; there are very few human beings on the planet who can do it. Now look at Obama and Geithner, the two men currently “managing” more money than any individuals in human history: not billions, but trillions.
Notwithstanding the Treasury secretary’s protestations that the Yes/No prompt buttons of Turbo Tax were too complex for a simple soul such as himself, it’s no reflection on the hapless Geithner that he’s unable to fix the planet. When the Bolsheviks chose to introduce Russians to the blessings of a “command economy” 90 years ago, they were dealing with a relatively simple agricultural society largely contained within national borders. Obama and Geithner are trying to do it with a sophisticated global economy in which North American consumers, European bankers, Asian suppliers, Saudi investors, and Chinese debt-holders are more tangled than an octopuses’ orgy. Even with “global oversight” — with the Toxic Tims of Germany, Argentina, and India all agreeing on how to fix the game — it can’t be done.
Barack Obama, even when he’s not yukking it up on 60 Minutes, barely disguises his indifference to economic matters. He is not an economist, a political philosopher, a geopolitical strategist. He is the president as social engineer, the Community-Organizer-in-Chief. His plan to reduce tax deductions for charitable giving, for example, is not intended primarily to raise revenue, but to advance government as the distributor of largesse and diminish alternative sources of societal organization, such as civic groups. Likewise, his big plans for socialized health care, a green economy, universal college education: They’re about extending the reach of the state.
Unfortunately, all of it costs money he doesn’t have. So he has to borrow it, in your name. Where does the world’s hyperpower go to borrow more dough than anyone’s ever borrowed in human history? More to the point, given that, partly at the behest of Obama and Geithner, almost every other western government is ramping up national debt to cover massive bank bailouts and other phony-baloney “stimuli,” is there enough money out there to buy up the debt that’s already been run up? Last week, at the official British Treasury auction, investors failed to buy the full complement of so-called “gilt-edged” 40-year bonds. Two such auctions have already failed in Germany. The U.S. Treasury, facing similar investor reluctance to snap up $34 billion of five-year notes, was forced to increase the interest it will pay on them. The Chinese and the Saudis have long taken the view that it’s to their advantage to own as much of the western world as they can snaffle up, but it’s unclear whether even they have pockets deep enough for what America and the many Bailoutistans of Europe are proposing to spend.
In their first two months, Obama and Geithner have done nothing but vaporize your wealth, and your children’s future. What began as an economic crisis is now principally a political usurpation. And, to return to the president’s “false choice,” that “chaotic and unforgiving capitalism” is exactly what we need right now. It’s the quickest, cheapest, fairest, most-efficient route to economic stabilization and renewal. A regimented and eternally forgiving global command economy with no moral hazard will destroy us all.
TennesseePaul
Stephen VanNuys
Brooklyn Daniel
The Freedom Thinker
Obama is absolutely right. There is something between American-style capitalism and the stereotype of SOCIALISM (horrors!) that most Americans believe in. It’s called European style social democracy and it works. For example, Denmark, one of the most socialist EU countries, was found, despite its tax levels that are 3 times those of the US, to have the best climate for business in the world by both Forbes and the Economist. I have documented a good number of other ways in which Denmark outperforms the US in my blog.
djcnor- I’d be curious to see references for your points on Denmark. I could understand them having a good climate, in terms of a stable country, with good laws, adn with an educated workforce. But what are their employment levels? And more generally, what is their population? I grow weary at times when people compare the US to countries with vastly smaller populations.
I think it is more relevant to compare us to the European continent as a whole. And the continent has historically had 8 – 10 percent unemployment (from the early 1990′s on). In that stretch, we’ve been between 4-6%, until recently. Seems there are some differences here? Curious your thoughts.
The references are on my blog on these pages:
http://djcnor.wordpress.com/2009/02/12/more-on-denmark/
http://djcnor.wordpress.com/2009/02/08/denmark-learn-from-it/
I refer you to the blog pages rather than directly to the references because there most be about 20 references in those two blog entries. Also among the references is a reference to the discussion that led me to bring them all together for easy access. That discussion features the arguments, and any references arrayed against mine so as to provide a complete story.
Denmark’s employment levels are very high no matter how you measure it. If you take the population of working age and see how many of those are employed, it’s actually a higher percentage than for the US. And the unemployment percentages are very small indeed (all this among the references above).
Their population is around 5 million, a large percentage of that in Copenhagen. I don’t see any problem comparing countries with less population.
Yes, there are differences throughout Europe, with some variation in unemployment, especially if you include the new EU members from Eastern Europe which are not yet really first world nations. But what the first world nations of Europe have in common is good safety nets. There was a recent article in the NY Times examining how a really good safety net provides for automatic stimulus in bad economic times as well as preventing extremes in deprivation.
I also did a blog entry on that.
http://www.nytimes.com/2009/03/27/world/europe/27germany.html?_r=1&emc=eta1
http://djcnor.wordpress.com/2009/03/27/printing-money-vs-a-good-safety-net/
They are not as concerned about unemployment as the US, because unemployment under their system doesn’t have the same effect. The unemployed still have healthcare, homes, food, and their kids have access to higher education of all sorts. Also retraining and re-education are very low cost and encouraged among the unemployed, so people stay unemployed while increasing their job skills, which these countries consider a good thing. They also have a more encouraging attitude toward mothers, and even fathers, staying home with their children in their early years.
Yes, and Hong Kong (communist China) is the most economically free state in the world. However, it doesn’t make stealing right. Just because there is a starving kid down the street doesn’t give me a right to come and steal from you to give to somebody else it’s still robbery.
If one can be morally justified in saying the ends justify the means it opens the door for much more trouble down the road.
We’ll see how Europe reacts to the coming inflation and dramtic devaluation of currencies globably from all our debt and spending.
[...] Freedom Tags: economics, Europe, Freedom, Obama I recently read a post regarding the choice between evil capitalism and evil socialism. It points out the Obama attempt at striking a balance between the two much like the European [...]
Freedom Press,did you somehow miss my first post? What kind of government do you think nations like Britain, Germany, and Japan have? They are social democracies, a system in between the US’s capitalism and China. And Denmark is only slightly to the left of Britain, Germany, and Japan. Many people in Europe would have no problem at all calling themselves socialist, and that does not mean they wish Communism had lasted in Eastern Europe. Remember who said Denmark had the best climate for business in the world, Forbes, yes American Forbes. I know it’s hard to accept though for some folks.
I understand what your saying. They are social democracies and they work.
However, what I was saying was just that because something works doesn’t mean it is right. I don’t think the ends justify the means.
And I will agree they “have worked” for a few years but I think one can debate that they “will work”. Europe (Denmark included) are having serious financial issues, Britian is literally broke, entitlement programs throughout mainland Europe are running out of control, they are culturally bankrupt, and more.
To Denmark specifically their economy only grows at .3% a year (and this is consider a best climate for business), which is no wonder as they actually have some of the highest taxes in the world with their VAT and income taxes, their national debt is almost as much a burden as it is in the US, and over 60% of their work force depends on stealing from the private sector for entitlements or government do nothing jobs.
Perhaps to you the ends justify the means to me they don’t. And I don’t think the ends in Europe or Denmark are far off.
FreedomThinker (sorry about the typo),
I’m glad you understand what I was saying. I’m not sure what you mean by “just because it works doesn’t mean it’s right” though. Could you give me an example of the type of things you mean?
Also, your statement that Europe is culturally bankrupt makes no sense to me either. Cultural activities are booming all over Europe. Do you have access to Euro-News at all? They have great coverage of cultural events and news.
Britain is no more broke than the US. The relative “brokeness” of Europe versus the US can be measured by what has happened to the US/Euro exchange rate. Note, please, that it the Euro that has become and remains stronger, so strong that there is even some talk in Britain that maybe they should join the Euro, and so strong that joining the Euro was Iceland’s choice of ways out of its problems.
Yes, Denmark’s economy grows slowly compared to the US. They are very dedicated to sustainability, a policy that will pay off big time in the long run.
That business about stealing from the private economy is faulty as well. A number of very large industries that employ large numbers of people are private in the US but government in Denmark. Healthcare is the most obvious ones. Workers in such industries are not parasites on the private sector any more than they are in the US.
Again you recruit the Communist aphorism “the ends justify the means”. Well, in this case, the means aren’t so ugly and the ends are a great quality of life. Why is that a bad thing?
GREAT RESPONSE!!! By just because it works doesn’t mean it is right I really mean anything. Something “working” doesn’t justify it morally. Their are two issues at stake philosophy/politics and ethics/morality. What is philosophically or politically expediant doesn’t necessarily make it morally or ethically right.
No, I don’t have much access to European news. Just for the record I think the U.S. is nearly culturally bankrupt as well. I struggle to find valuable cultural artifacts in modern life generally. Which is why I often find myself reading Dostoyevski or Tolstoy or Shakespeare. Or in movies watching older movies such as Kurowsowa’s Samurai classics. Or reading more historical fiction for great political leaders like Adams or Jefferson and not the Biographies of Carter or Clinton. The US still has a great business powerhouses like Microsoft or leaders like Covey or Welch. But then I’ve never read a spactacular business book out of Europe. While Michael Porter, Peter Drucker and others spring to mind here in the US.
As for stealing from somebody to give to others, those public industries (health care) in Denmark that you refer to are funded by somebody for somebody it isn’t the government that earns the money it is somebody elses money they had to take. So I don’t see how this is faulty thinking.
As to why it is a bad thing, I’d say simply once you head down the road of a little rough (or ugly) means for a “good” or perceived “good” end it becomes harder to reverse the trend. History is littered with examples of governments doing a little thing to justify a good result. The result has never been good in any historical example I’ve seen.
As for the quality of life I wonder how the average quality of life compares with Denmark and the US in car ownership, education, upward mobility, home size, vacation travel, and those factors?
As for Britian being no more broke then the U.S. I could argue the point but it isn’t needed because the U.S. is broke too and comparing two similar thing is comparing degrees. We have virtually no savings, are governmentally, businesswise, and personally choking on our own debt. The U.S. will not be paying back the debt we have with dollars nearly of value as they are now. We are debasing our currency as we speak.
Thank you. Until you can point to something that works, yet isn’t morally right, I must disagree. Perhaps I can give you an example myself, and we’ll see if you think it fits. I think that one of the best characteristics of the way Denmark solves problems is that they concern themselves most with practicality, does it work and is it cost effective. The example I present is how they went about bringing the attention of young men to the dangers of speeding. They studied what kind of thing got the attention of those causing the most accidents and….
http://news.bbc.co.uk/1/hi/world/europe/6181788.stm
I have no trouble finding valuable cultural artifacts. I think of this issue in terms of history beyond a few hundred years. For example, all that we know of ancient civilizations is via the great works of their people involved in one or the other of the arts. Unfortunately, modern civilizations seem to have forgotten this and leaving little behind that will last that long. I think “Blowing in the Wind” and “Imagine” qualify musically and will become folk songs when their authors have been forgotten. Art Nouveau will definitely leave some very valuable artifacts. The glass beads being made now are the best ever, a real golden age of that kind of artistry. Modern 7-pueblo pottery and jewelry also qualifies. I have my opinions of literature, adding Potter to the classics of children’s literature for example and Sendak (sp?) as well, for example. Once I get started, I could go on and on, so I’ll stop.
When government spends money in ways that benefit businesses and individuals at a cost less than they could provide such things for themselves individually, that is by taking advantage of the greatest “group buy” available, I don’t think that’s any problem at all, and Denmark does a lot of that. Healthcare is one such example, but it’s a long argument. I’ve written several posts on the subject on my blog if you want to look.
In talking about quality of life, you’re using a very American and very un-Danish value system. Danes have excellent public transportation and extensive bikeways, that often have the right of way over cars, and a huge selection of bike accesories that make it possible for families to do just fine without cars. They value their much longer vacations. In education, they have a lot of apprenticeship higher ed as well as university ed, and their higher education system is integrated with their industries. For example, you can study for a Ph.D. at NovoNordisk, a pharmaceutical company. They also see it as a whole-life thing. Further education is essentially free for the unemployed. Even their values concerning homes are different. For example, Copenhagen blocks are built so that the buildings line the block with an enclosed shared green area, part playground, part sports area, part laundry hanging space, and so on, all shared by all the people of the block. They also have a concept of what they aim for inside their home that is called, if I remember correctly, “hugli”, which is very roughly “cosy and hospitable”. It is common to have a large eating table in front of the counch and have a common open living room/dining room/kitchen space. Functionality is much more a value than size. As for travel, at any time, about 1/4 of the citizens are out of the country, and it was very common to see whole elementary classes at the railstations off for back-packing travels. I think I can find a reference for class mobility. Yes, Denmark does much better than the US in that.
http://www.conferenceboard.ca/HCP/Details/Society/class-mobility.aspx
These refs might help regarding the Danish lifestyle:
http://www.nationmaster.com/country/da-denmark/lif-lifestyle
http://www.limbistraine.com/ro/cercetare/Gabriela-Sauciuc/2.Denmark-Country-mentality-lifestyle-values.html
http://www.virtualtourist.com/travel/Europe/Denmark/Koebenhavns_Kommune/Copenhagen-162183/Local_Customs-Copenhagen-Lifestyle_Habits-BR-1.html
I hope our host doesn’t mind our discussion being so long. Maybe I’ll have to write another post on my own blog about Denmark. Mind you, I found it almost too civilized for American taste.
djcnor: Thanks for posting. Sorry for the delay in some of your posts going through. The system “spams” posts with too many URL’s in them as these are typically spams for viagra and so forth. To prevent this spam blocking aspect in the future it might work to put the links in several comments. Not sure. At any rate thank you for commenting and reading our blog. We appreciate it. I hope this issue doesn’t dampen the experience… I’ll try to stay more on top of it to keep your posts from getting flagged.
Yes, I can point to something that “works and isn’t morally right” from your own post.
“When government spends money in ways that benefit businesses and individuals at a cost less than they could provide such things for themselves individually, that is by taking advantage of the greatest ‘group buy’ available.”
The government isn’t spending their money. The government has taken that money from somebody else to redistribute it from one person to another for the greatest good (or “best buy”). People can form groups and collaboratives to do this thing on their own. The government is doing it for the greatest good. Of course those it take from don’t really need the cost benefit the cost benefit (best buy) is for another group. My question is as follows:
Now what if I come to you and say give me 53% of your income this year because I have more kids to feed then you and just lost my job, which was really the case (I lost my job 6 months ago I’ve got a wife and 4 kids. Luckily I just found a new job!) If you don’t give me the money I’ll shoot you and take it or put you in a cell in the bottom of my house until you agree to pay. If I did this then I’d be a criminal, wouldn’t you agree? Why is it ok that the governments of Denmark and the U.S. and other do this? Where do they get the get moral authority to do this?
Great cultural references. Blowing in the wind and imagine are wonderful. I must admit you are on to something there. Although I’m not sure how European these are (granted the Beatles are UK but it’s hard to think of them as distinctly European). They are also not all that modern. I’m not familiar with Art Nouveau or Pueblo art. Although I admit it sounds European. I am familiar with Harry Potter but to me it doesn’t stand up to something like Tolkien or even War and Peace. What great truths is it exposing (the value of friendship perhaps and magic is cool). I don’t know about Art Nouveau or Pueblo art and what cultural signifigance they hold. Like Brittany Spears the music can have a good beat and pretty vocals but the substance is lacking it doesn’t mean she isn’t an attractive dancer. If you value art solely for it’s visual appeal this is missing the larger picture to me. After all a stripper can be beautiful “art”. But that type of cultural significance is to me corruption. Again that is a personal view and culture “overall” may disagree.
Class mobility is influenced by class equality. In the US we have great class inequality, the skies the limit. I work for a mansion and extravgant vacations and a sports car not a home with a shared yard (now granted I may never achieve this but personally I think my chances are better in America). This equality in Denmark comes at the cost of a “sustainable” GDP and to me limited dreams. Which brings in another point the US subsidizes Denmark and most of Europes welfare programs. This is why Europe doesn’t want the US to follow in their footsteps. What does most of Europe spend on the military industrial complex? The US subsidizes alot of Europes welfare programs by sustaing a strong military to counter Russian empire ways, and even Germany’s historical empiring ways, etc. Who will be the stabilizing force if we fall as a world power will the world look to China? Russia? Iran? Denmark?
From one of your links I read:
“The Danish way of thinking: it is more sensible to have a secure life than to take big risks” [7]
This may be the case for Danes but it is very counter to the American revolutionary mentality (although I’m afraid we may be changing) but at the heart of the American experience is a revolutionary counter culture that takes risks and breaks the rules. A mentality especially when we feel we have right on our side (the Pilgrims, the Founding Fathers, the Civil War, the expansion west, etc.) is to shoot for the stars and risk it all.
As for American Missive I know they love this kind of debate. What is your blog address I’d be interested in checking it out.
As for a hint towards my personal views I don’t think America should be following any other countries. It is time for America to rewrite the rules based on what is right. Not what is easy – bailouts, taxes on the rich, making health care a right, etc.. It is time for another American revolution who will win I don’t know but it is here.
Tennessee Paul,
No problem. You’re doing fine. I’ll try to be as sucinct as I can manage in my discussion with FreedomThinker.
FreedomThinker,
I absolutely think you are wrong in your objections to the government organizing the biggest buying group in the country, all the citizens, for some essentials. Could you please explain what moral precept you think that violates?
I am sure that you don’t believe that in every case. Do you think the road system should consist entirely of toll roads managed by private enterprises? I’m sure you answer no. If you ask yourself why not, I think that you will find those same reasons apply to a number of other essentials used by all.
Just as a person who is entirely shut in still benefits by the existence of that road system, you benefit, for example, by good healthcare and education for all your fellow citizens. If the fellow who washes dishes in the restaurant you eat in does not have good heathcare, you stand to suffer for that too. That poor kid whose family doesn’t pay enough taxes to fund his schooling may be the doctor who saves your child’s life, or the fireman, or the accountant, or the teacher…. etc. It is much more efficient for the government to organize these things, rather than a multiplicity of private companies, in which case much of the money involved goes to paperwork handling.
I used more US-localized examples of cultural treasures in hopes that you would be more familiar with them, though, for example, I could have spoken of Gaudi’s work in talking about Art Nouveau. For an example of the pueblo pottery of the 7 famous families, google Joself Longwolf in images. He’s my favorite. They call his work “potter jewels” because they are often the size of ping pong balls and exquisitely carved. I disagree with your disdain for purely visual art appreciation. For example, I much prefer Gaudi’s Park Guell to Sacreda Familia.
No, class mobility is not dependent on class equality. It is by definition the chance of being able to move from one class to another within a certain amount of time, and as shown in the reference, you have a much better chance of that elsewhere. In the US, the sky may be the limit, but the chance of you reaching it is almost non-existant. That is the definition of low class mobility. Meanwhile in Denmark, the sky may not be quite as high, but your chance of getting there is within the realm of reasonable possibility. That is the definition of high class mobility.
As for your comment on the yard, think about it. Every person on that Danish block has the kind of yard that Americans dream of and almost never have. What’s so bad about having to share it? And even the poorest Danish elementary kid has that vacation.
This American idea that they subsidze European safety is wrong as well. Europeans have finally learned that in the end, what your safety really depends on is the good will of your neighbors, and they have acted to foster that.
You comment on comparative risks in Denmark and the US is also wrong, in my opinion. For example, many Americans would love to open their own business, but they don’t do it. They don’t dare because it means putting the family’s home and the savings for the kids higher education and often a member of the family’s health (for example if they have a diabetic in the family that will be very costly to insure privately) at risk. Danes, knowing that whatever happens, they will not go without shelter and food and healthcare and their kids will still have full access to higher education, dare to change careers, to open businesses. There are risks and risks, and there are many risks that are feasable and do not jeopardize resposibilities in Denmark that are not in the US.
My blog address is http://www.djcnor.wordpress.com.
I think it’s time for America to rewrite the rules based on what is right as well, but we have very different ideas of what is right. Mine has a lot more to do with the Golden Rule and the Beatitudes, with maximization of fulfillment of the talents of all people a major value along with care for the planet and a lack of exploitation of other people.
djcnor: Interesting discussion on class mobility. For clarification, how are you defining class?
Whoops. Make that Joseph Lonewolf.
Generally, in measureing class mobility, the concept of quartiles is used. The botton quartile is the 25% of the population with the lowest income. The top quartile is the 25% of the population with the highest income. It can also be done in terms of 10%’s, 20%’s, or even 5%’s.
I’m trying to find some good references for you. NPR had a program.
http://www.npr.org/templates/story/story.php?storyId=4662456
Only 7% of the US bottom quartile grow up to be in the top quartile.
Wiki has a good discussion of economic mobility in various countries.
http://en.wikipedia.org/wiki/Economic_mobility
I ask because income is distributed lognormally, not Gaussian. So there is a heavy portion always on the low end with the high end being exponentially further and populated by fewer people. This quintile attempt must be adjusted for the natural distribution factors of income otherwise it inappropriately assignes population sizes. Secondly if one defines the lower, middle and upper classes as income levels based on the Gaussian Distribution (of which no income distribution in the world matches, but it is still used for whatever reason), it would make income mobility impossible. This defines income level as relative. For instance, if everyone’s income increase it results in an equal number of the population always being in the same place relative to the other portion of the population. Even while comparing across generations. One could point to a family that was in the low class last generation and see that they are still in the low class in the current generation but not notice that other factors of life have changed. What income distributions do not show is an increase in the standard of living. The relative inexpense of goods and services. While “wages” appear stagnant, more people are able to purchase TVs, Computers, Cars, Washing machines, Dishwashers and so forth… items which were previously only the wealthiest of the population could obtain.
You stated earilier:
This is a natural trade off seen in most systems. The light that burns twice as bright burns half as long. As Wikipedia has it stated concerning acheiving the American Dream: “being able to advance your economic standing through hard work and effort” Moving up in the American economy is very possible. It just isn’t as easy. The trade off in America compared to Denmark (using the examples given and the premise set forth) means that you can reach higher goals through harder work (America), or easily obtain low goals with minimal work (Denmark).
Personally, I like the challenge.
Also, as you defined the difference between the two countries in the quote above, it seems this system of measurement is tilted in favor of one economic ideal over the other. Measurement of mobility is high in a region that, as you described, has low ceilings. Similarly, a particle confined in an infinite potential well moves with higher frequency between the borders of the well than a particle not confined.
Amen!
“You comment on comparative risks in Denmark and the US is also wrong, in my opinion. For example, many Americans would love to open their own business, but they don’t do it. They don’t dare because it means putting the family’s home and the savings for the kids higher education and often a member of the family’s health (for example if they have a diabetic in the family that will be very costly to insure privately) at risk. Danes, knowing that whatever happens, they will not go without shelter and food and healthcare and their kids will still have full access to higher education, dare to change careers, to open businesses. There are risks and risks, and there are many risks that are feasable and do not jeopardize resposibilities in Denmark that are not in the US.”
djcnor – What a refreshing breath of fresh air you are!!!
The lack of Universal Health Care in the US is a prison sentence for millions of brilliant and talented people and a way for the moneyed elite to limit their competition!
Asking the rich to pay taxes at the same rate of the rest of us is only fair. That they don’t is the very definition of the redistribution of wealth from the middle class, working class and working poor to the moneyed elite!
djcnor- thanks for the responses to my earlier inquiry. Only now having a chance to come back to this discussion. That was the most well articulated argument for democratic socialism I’ve heard in a long time. Certainly much to chew on there.
My major hesistancy in this comparison remains that Denmark is a tiny country with a homogenous population(5M versus 300M). It runs the risk of being a statistical outlier in my mind.
We have a pretty dynamic population. And I’m dipping into a area of ignorance here (pardon me), but i have read one part of the reason health care is more complicated in the U.S. then elsewhere is that different ethnicities have greater propensities towards different illnesses, meaning the more multi-cultural you become, the more complicated the health issues become. Have a small, homogenous population is a good first step towards having a more efficient health care structure.
But it is interesting to research nonetheless and I do appreciate you thoughtfully dropping by to offer your perspectives. It’s given me something to think about. I’m interested in learning more about Denmark.
Here’s an excerpt from a USA today article I just read in googling about Denmark:
http://www.usatoday.com/money/world/2007-03-06-denmark-usat_N.htm
“People in other European countries are wondering: ‘What is happening in Denmark?’ ” says Anita Vium, chief economist of the Economic Council of the Labour Movement, a labor think tank here. “We have people coming to study it. The European Union has looked at it. They want to know what we are doing.”
They often leave disappointed, say Vium and other Danish economists, bankers and government and industry leaders, who acknowledge that their model is not easy for other European nations, or the USA, to replicate.
Many European nations are not willing to pay the political price to free their labor markets, privatize some companies and build work incentives into their welfare benefits, they say.”
“At the same time, Denmark embraces free trade, competition and little government ownership or involvement in business.
Denmark has the least amount of government red tape and the shortest start-up time for new businesses in the EU, according to measurements by the Organisation for Economic Cooperation and Development, a Paris-based confederation of the 30 largest industrial democracies that is a watchdog against economic and governmental corruption.”
What is interesting is it sounds like Denmark is different from the other, big government European countries. It sounds like a true hybrid of free market ideals and socialism, something France and others may find trouble replicating.
Probably one of their strenghts, per the article above, is that workers can be fired with little notice. People tend to think this is inhumane, but it is actually good for business (and the economy). In contractions, businesses need to cut costs quickly.
As someone who favors free markets and leans toward libertarianism, I am not opposed to some level of a basic social safety net, for the reasons you give. I don’t know that I have ever blogged about this viewpoint (I’m saying this for the benefit of our regular readers). I think the Great Depression taught us the benefits of having at least some social safety net, in terms of unemployment assitance, etc. My biggest argument is that it needs to be coupled with incentives to get back into the workforce- to provide accountability to the people who use it. Therefore, I believe it needs to be limited- in terms of the amounts of benefits provided and the duration over which they are provided. In short, it shouldn’t be more lucrative to remain unemployed than it is to be employed.
More thoughts from the article:
“The Cato Institute based in Washington rates Denmark as one of the freest nations in the world in its 2006 rankings of countries’ economic freedom. Denmark ranks 17th, along with Germany, of 130 nations. Hong Kong is first, the USA third, Great Britain sixth, France 24th along with Sweden, and Italy, 45th.
And, says Cato global policy analyst Marian Tupy, France, Italy and other European nations can learn from Denmark: “Leave the economy alone.”
But while Tupy applauds Denmark’s free-trade and free-enterprise policies, he gives low marks to the big state-provided health, education and child care programs, wondering whether they could be offered less expensively by the private sector. And he questions whether the high taxes are a disincentive for some people to work.
Some Danes, such as Christina Moeller, think so and say the Danish workers paradise isn’t for them.
Moeller, 30, who is in the oil shipping business in London, says taxes are a big reason she’s unlikely to ever return to Denmark. She earns more and pays less in taxes in Britain. And she says her prospects of moving up the economic ladder are greater than at home.
She also says Denmark’s social-welfare system has an insidious effect on her countrymen and women: It saps individual motivation.
“The mindset of most Danes is: How can I get more out of the system?” she says. “The system doesn’t make you competitive. You cannot always do what (job) you want to do. It’s not going to bring you a high life. It’s a security system.”
Interesting perspective from that last commenter. That would be a fear of mine under such a system. The system would be a disincentive.
See – my fear under such a system is not what it does in the first generation or second generation of its existence. But what it does for every generation after that. At some point, there a sense of entitlement seeps in. Whereas under a system closer to our own, where personal initiative would be demanded of each successive generation, I think there is much more lasting chance of prosperity.
I believe the social democratic models are an interesting historical experiment. They remain relatively new, from my understanding having started cropping in full force beginning the 19th century and having become the massive statist behemoths that they are in the last century. Now, as birth-rates decline and the populations age, it will be interesting to see if they are sustainable over the long-haul.
I still believe a system that rewards individuals for their personal efforts and places a minimum of obligations on them in the forms of taxes, etc. is the most likely to withstand the test of time. A system that confiscates the rewards of success and distributes them evenly throughout will have a tendency to breed dependency, entitlement, and lethargy in my view.
I enjoy the discussion. I’m sure you have more on this topic. Thanks again for dropping by and providing such an eloquent discourse on national socialism. This is truly an enjoyable debate.
Jorge- see? We are attracting good debate to this site. I enjoyed dcjnor’s discussion as well.
#20- I still am curious your thoughts on the fact that the top wage earners in this country pay 60 – 65% of the personal federal income taxes taken. I know Warren Buffett talks a lot about a small handful of hedge fund managers that pay 15% capital gains taxes on their earnings. But I’m talking more broadly than that. I just have not been convinced they pay substantially less taxes then anyone else.
Tennessee Paul,
Have you ever heard of a measure called the Gini coefficient? Neither had I until I went looking for information to answer your comment.
Here’s the explanation for it along with data regarding the Gini of different countries and how the Gini of the US has gotten out of sync with those of other first world countries in the past few decades.
http://en.wikipedia.org/wiki/Gini_coefficient
You say that income distribution is a lognormal curve, not a Gaussian curve. For anyone “listening in” on this discussion, here’s a description of the lognormal distribitution:
http://www.bordalierinstitute.com/target1.html
“Let’s take the income size distribution of any country. There are very few very rich billionaires, there are few rich millionaires, there are many middle class peope and the remaining vast majority are just plain poor. This inequality can be described by a mathematical distribution, which yields a straight line in log-log coordinates. (Pareto law).”
What that means is that if you were plotting income versus proportion of people having that income and started with the “rich” income, you would find there were 10 times as many having an income 1/10th of that, 100 times as many having an income 1/100th of that, 1000 having an income 1/1000th of that, and so on and so on.
This site has some good graphs. See how it’s squashed toward the left?
http://www.brighton-webs.co.uk/distributions/lognormal.asp
I’ll bet most folks think that the distribution of income in the US is instead Gaussian, in which there are many more middle income folks and about the same very small number of poor as rich.
A Gaussian distribution looks like this:
http://en.wikipedia.org/wiki/Normal_distribution
Now, here’s information on income distribution in the US. Note the squash to the left?
http://en.wikipedia.org/wiki/Household_income_in_the_United_States
Here’s information on Denmark.
http://earthtrends.wri.org/pdf_library/country_profiles/eco_cou_208.pdf
I’m having trouble finding exactly analogous data, so I’m adding the 8.6% earning less than $10,000 and the 13% earning $10K to $20K, calling them the bottom 10%, the bottom quintile and estimating that their average income is the averate of $5000 and $15,000, so $10,000. On the other end, I’m taking the top 4 income groups ($80-90K, $90-100K, $100-150K, and $150-200K) which add up to 21.2% as the top quintile. To get their average income, I’m averaging 85, 95, 125, and 175K and I come up with $120k. So the top quintile earns on average 24 times what the bottom quitile earns. in Denmark, the bottom quitile earns 9.8% of the income and the top quintile earns 35.4% of the income. So on average, in Denmark, the top quintile earns 3.5 times the lowest income. That’s a huge difference.
What I would love to find is what the Gini means in terms of whether a country is closer to lognormal or Gaussian.
Remember Adam Smith said that the highest earner in a company should earn no more than 6 times what the lowest earner earns.
It disturbs me that if you look at the map of Ginis and note the countries that have Gini coeffients as high or higher than that of the US, you find that we are not in good company, and if you note the countries with lower Ginis, that’s where you find the good places to live. Does it not disturb you?
djcnor: I’ll have to look at this more indepth later as I don’t have a lot of time right now. But, if I’m looking at the correct graph you are commenting on, Wiki’s Gini graph, then I don’t see what is so disturbing. The three most populus countries on the planet have similar values and these three countries are in the center of the chart.
Secondly, the change in distribution of income is lognormal, as you have so nicely provided all the links for the distributions for other readers. What lognormal distributions entail is an exponential growth mechanism. Having not gone through all the data yet I can merely speak off the model and how I know it will work. A large system with a lognormal distribution will show an exponentially greater disparity than a small system. It’s the nature of the model. There is also another portion to income distributions, I can’t remember what it is called, but it was named after the man who discovered it. As incomes are distributed lognormally, there is a lognormal distribution of the highest wage earners. So if you can get a detailed enough chart you should see a lognormal curve, then in the tail as it tappers out, you’ll see another smaller lognormal curve in the high incomes.
Anyway, I need to get going. Thanks for the discussion and links. I’ll have a more indepth response later.
I’ve enjoyed the debate with djcnor as well. I’ve gotten a little busy but their is still much to be debated on. And I agree with the comment, “The most well articulated argument for democratic socialism I’ve heard in a long time.”
I’d like to point back to what was in the link djcnor provided which pointed out that the Danish way of thinking: it is more sensible to have a secure life than to take big risks. I think this is the largest single differentiator between the two systems.
Also, I’d like to acknowledge that perhaps I’m misunderstanding this “buying group”. What I have issue with is the transfer of wealth. A road system doesn’t transfer wealth to one group it is for the benefit of the nation as a national security project. The same as the military its not a transfer of wealth it is national security issue. We wouldn’t want private roads that could allow or disallow military transportation or a particular type of shipping etc. The same for military we wouldn’t want to outsource our entire military defense to private corporations. Now granted I’m sure contracts are awarded and some projects are started to “give jobs and transfer wealth”. But this is the nature of a system not being perfect (no system is perfect except Gods). We have to be vigilant against the corruption of any system run by man.
What a buying system sounds like to me though is something that does tax one group more then another to support all groups equally. But perhaps I misunderstand this “buying group” that your discussing.
It’s sounds kind of like health care in the states which is already socialized in a real sense. I’m a Chief Financial Officer for a medical facility so I know more then most on this. Medicare/Medicaid provide services to the less fortunate but because the are administrated by the government their are problems. The government mostly dictates capitated costs. (i.e. every year the government says we’ll pay $109.96 for services rendered.) This is acually the number my facility gets. It doesn’t matter how much those services cost us to render that’s how much they pay. Now what we have to do then is shift costs to the private pay insurance customers or provide services cheaper somehow (sometimes impossible) or very often not provide those services at all. Doing this drives the costs up to private pay insurance – a hidden tax. What gives the government in the US for example the right to provide Medicare/Medicaid? They don’t have this right. Medicare/Medicaid are hidden taxes that inflate costs and rob from those that have private insurance because costs are shifted to them. A “buying system” like this doesn’t serve like a road or a military. Even if a more fair system was designed how do the poor pay for it? They don’t. Just like the poor don’t pay for the military or the roads. The middle and upper and poor benefit from this system. Though and are willing to cover those costs. What do I benefit from Joe Blow getting free health care? Nothing. What do I beneft from having a strong military or public roads? A lot. You most likely will say that I benefit by helping mankind. But this goes back to my orignal comment as to what if I rob you to feed my family. Resources should not be distrubted by need. Health care is not a right.
I have major issue with the following comment:
“Europeans have finally learned that in the end, what your safety really depends on is the good will of your neighbors, and they have acted to foster that.”
I disagree with this completely (but in all kindness) this assumes that human nature is good – a Frankenstien worldview if you will. Not a Biblical worldview at all. I agree that one should act to foster good will with neighbors whole hartedly but I also think that human nature is fallen and to assume it isn’t is a risky assumption. Literally last night one of our neighbors house was broken into the old woman was tied up and the old man was beaten half to death. What did they do to not-foster good will? These our our neighbors they were a nice old couple. It is the same with 9-11. An act like 911 or the one in the story linked above are not the “fault” of the victim. They are the fault of mankind. I didn’t go buy a book to understand the mind of criminal. I went to the gun store. $389 for a .38 Special. What did the Jews do to not-foster good will? I think that argument is false in it makes a dangerous assumption on human nature. What fosters good-will in Europe currently is both Europe “playing nice together” and America (and Russia) carrying big guns.
Also, what did the Danish people as a whole due to not-foster good will and get their embassy in Pakistan bombed last year? There are powers at work in this world for good but their are also powers at work for evil.
As for the back yard issue I’m like most Americans and not city folk. I grew up in the country and live in the country. Their is plunty of open land in my state and it’s cheap. Nice 24 acres with a 2,400 square foot home for under $250k with a view of the mountains that is breathtaking. It’s not so hard if one imagines.
I think we aren’t to far off from agreeing on what is “right” or the ends. Where we are different, I think, is how we achieve the same ends. I think we are different on the means.
As for Stephen’s opinion that Denmark is an outlier, I agree. Denmark is a coastal country that depends HEAVILY on trade. The US trades a lot but we have trade deficits and we cannot at this time (due to our debt) afford to be protectionist.
Stephen, it’s stunning to me that a person who is capable of a discussion of such high financial concept can’t understand a concept that is so simple. Do you know more than Warren Buffet regarding the tax structures exploited by and the financial habits of the moneyed elite? I mean he is the second richest man in the world! He manages the money of the richest people in the world? His closest and dearest friends on earth are the richest people in the world! His track record regarding successful investment is arguably the greatest of anyone’s in the world! His many, recent dissertations regarding this matter where he clearly talks about all of the executives (millions) who structure their incomes so that the lions share of their income can be taxed at capital gains (lower) rates is exactly what I am talking about here! This clearly amounts to the moneyed elite not paying your fair share, period, that is his point! Just because the moneyed elite use their influence ($$$) to influence politicians to enact legislation to make these income distinctions legal does not make it fair or just or right (or Christian or American)or good for this society. In fact, it has proven to be just the opposite! LOOK AROUND! HELLO!!! The only income redistribution going on here and especially since Bush destroyed the world economy is again going from the middle class, working class and working poor to the moneyed elite via a terribly unfair and unbalanced tax system!
WHY IS THE GOVERNMENT INVOLVED TO THE EXTENT THAT IT IS IN CORPORATE AMERICA AND WALL STREET??? WHY??? ANSWER THAT QUESTION!
Here’s the concept, (FACT) WARREN BUFFET MADE $48,000,000 dollars last year and paid 17% on that income without doing anything special regarding filing for taxes and his secretary made $60,000 last year and paid 31% on that income, yes Warren paid more in taxes, but at half the percentage regarding taxes, that is un-American, un-Democratic, un-Christian, it is NOT FAIR AND IT HURTS OUR SOCIETY AND IT NEEDS TO STOP! Again, look around!!! That is my opinion, Warren’s opinion and the opinion of the ABSOLUTE and I mean ABSOLUTE majority of the human beings living on this planet!!! Your mindset on the matter is a poison that breeds inhumanity and criminal behavior! Look around for God’s sake; open your mind, heart, eyes, ears, etc. How much more evidence and proof do you need to understand how damaging the culture you support is and has been to this country, the world and the human race?
That you could suggest that this gross inequity and it’s horrible outcome is anything but unfair, unjust and inhumane is in my opinion, INSANE! That you say with a straight face that it is being unfair to the moneyed elite, that they pay their fair share is, INSANE! That you would suggest it’s the best thing for our society, this planet or the human race is, again, INSANE!
I am through with this issue I can’t explain it any more simply or make my point any more clearly than I have, and if you don’t see the writing on the wall, well, there’s nothing I can say other than…INSANE!
[...] democratic socialism, Denmark, economics, Freedom I’d like to provide a link to a American Missive post again. More importantly then the post however is the detailed debate that takes place between [...]
JC,
Warren Buffet is a bad case. Regardless of his tax bracket he has given more then half his wealth to charity. If that income had gone to the government it would have been wasted by Bush and Obama giving it to Wall Street and failed car companies. What is insane about that? How much money do you give to charity?
The reason Buffet pays less in taxes is because he placed his income at risk by investing in companies. This income is being taxed at the corporate level and then being taxed at his level. How much taxes did the corporations he control pay in taxes (what percentage) and then add his 17% on top of that and then compare the numbers. Your comparing apples and oranges.
You say the outcome is unfair, unjust, and inhumane? And somehow it’s the governments job to make the world fair, just, and humane? This sounds like wealth envy to me.
One at a time! One at a time! (And thanks very much for the compliments!)
Stephen,
Denmark is in some ways an outlier. Every country is in one way or another. Denmark’s population has become very rapidly more diverse in the last 30 years. According to this reference:
http://www.migrationinformation.com/Profiles/display.cfm?ID=485
“Today, nonnaturalized Asian and African immigrants and their descendants constitute six percent of the Danish population, whereas in 1980 they made up just one percent.”
When I was there in 1992, they were trying to rapidly absorb large numbers of Muslim refugees from the war in Bosnia, and I was hugely impressed by their strategy. For example, they had noted that while the men went out and got jobs of one sort or another and began immediately integrating into Danish society, the women tended to stay within their own enclaves, and when they did come out, they stuck out because of their distinctive dress. To change this,they researched what skills the women had and found they were highly skilled in textile arts. So Denmark seed granted a new clothing company. Danish designers were given the task of designingm in collaboration with the new immigrants, a line of clothing and home furnishings that featured their textile skills,that fulfilled the dress requirements for Muslim women, and that also fit Danish dress tastes and trends. Thus in one swoop, they employed the women, making them taxpayers rather than a drain, showed appreciation for what they offered, got them into interaction with Danes specifically discussing the cultural differences (thus building both understanding and language skills), and addressed them as a new local market, an opportunity for Danes to make money. Absolutely brilliant!
Regarding being fired without notice. If that comes without the serious detriments that unemployment carries in the US (bankruptcy, loss of home, loss of healthcare, loss of good education for your kids), and with the opportunity for nearly free retraining or further education, and it lasts longer than unemployment is likely to, and you country has an unemployment rate of 1 to 3%, you don’t tend to mind it that much. Would you?
Regarding the development of an entitlement attitude. Personally, I have nothing against a certain level of entitlement. Europe is tending toward considering healthcare, a roof, food, education, and a certain level of safety as rights that go along with being human. That’s fine with me. I don’t mind rights coming with obligations, though.
Also remember that Denmark makes starting a business very easy and quick. My experience in the time that I was there did not lead me to think that Danes were at all lazy. They do look at getting the most in benefits for the taxes they pay in. All folks do. They use the system to help them fulfill their own ambitions rather than to do nothing. There is a difference.
FreedomThinker,
I’d like to point out that the military and defense provides much more benefit to those among the haves than the have-nots, who have little to be defended and who might find themselves in a better situation than they had been with no defense, especially if the cost of defense is used to justify not having universal healthcare and a quality of safety net equivalent to that of other first world nations.
The whole advantage of insurance is buying healthcare as a bigger buying unit, and the biggest is all the people of the nation. Although Europe is already going beyond that to all EUer being provided for in all other EU countries. You should hear what Brits who have gone on holiday and had some medical problem have to say about their encounters with the US system. It’s not good.
And you DO benefit when Joe Blow gets free healthcare. First of all, many diseases are contagious and do not respect any kind of border. If you treat Joe Blow, you may well save one of your own having the same health problem. Not treating him leads to Typhoid Mary type events. Second, if he does not worry about the cost, he gets treated early and gets preventive treatment. Both of those keep down costs. Even if the cost is passed along to you, it’s much less than if treatment is delayed. Third, delays end in disablements and deaths, and you end up supporting the families harmed. I could go on. There is all kinds of evidence that universal healthcare systems perform better and are more cost effective than the US system. I have some posts on my blog about that.
Regarding the safety depends on your neighbors’ good will disagreement. Yes, there will always be some undeserved bad actions, but you have to look at what is behind them and how human’s work. Hate is almost always based on ignorance. People hate what they consider as different and strange, they hate stereotypes: gays, Jews, blacks, fat people. Why? Because they see each member of the group as having whatever characteristic they have built into their stereotype of the group. Breaking the stereotype breaks the hate. Gayness ceased to be hateable once people discovered that they already knew and liked individual gay people that, low and behold, didn’t fit the stereotype they had held. I had a professor in college who had been a freedom rider. This was 1968-72, so we students were getting involved in protests, and he taught us several of the techniques he had been taught to defuse violence. They sound crazy, but they work because they make the person confronting you see you as a person rather than a stereotype. For example, if they were confronted by someone threatening them with a gun, the response was “Wow! Is that a Colt? My grandpa had a colt, but there was something different about the handle. I wish he’d left it to me. Can I see yours?” Such stereotypes are the basis of attacks like 9/11 as well. And you don’t break the stereotype by attacking. You break it by acting out of sync with it.
Just popped back on real quick and noticed this: that the military and defense provides much more benefit to those among the haves than the have-nots, who have little to be defended and who might find themselves in a better situation than they had been with no defense
I’d disagree with this entirely as this statement seems to imply the discourse and value of life is based entirely on the sum of possessions. Even the premise of this statement was phrased as a matter of “have” and “have not”. I’ve run into this with conversations with others who’s sum total of possessions is larger than mine. Their premise was “I can understand having to pay higher taxes for more police and security as I have a greater investment in the society than those who have less than me.” This is exactly what is being argued in the quote above. I believe this entire mindset is wrong and lends itself to a class system.
“Hate is almost always based on ignorance.” I disagree with this. Hate can be based on ignorance but hate can also be based on knowledge. I’d say for example that Islamic hate is seldom based on ignorance but a deeper understanding of their own religion. Of course their are some blind haters but the more they learn in their own religion the more they hate. They are being fed by their own people what is bad information. This is not our fault it is their own fault for not seeking the means neccessary to expand their minds. The 9-11 attackers weren’t uneducated morons and they’d even lived in the states for some time being emmersed in our culture. This knowledge didn’t deter them.
Again my neighbor’s that were attacked and robbed. What was the attackers understanding of those neighbors? Was he ignorant of their age, their vulnerability, their kindness, their good nature, was he ignronant of knowing the difference between what is right and what is wrong? No, he fed off of that as the 9-11 attackers fed off our weakness and openness.
I understand the argument between the bigger buying group. But this is already the case once a population get’s so large it’s actualrial calculation is the same as the actual population size. There aren’t any actual cost savings here. The cost savings come at the provider level. Increased access or more spending do not decrease costs this is just a fact. A foreign visitor would probably have to utilize an emergency room as opposed to a family physician or specialist so I don’t see how this is relevant. Their are some cost savings issues that need to take place with emergency room utilization and the uninsured. But the solution is not more access and more spending the solution is at an opperational provider level.
Also, you have a VERY wrong assumption. Preventative treatments do not decrease costs. They increase costs. Which comes into the Joe Blow argument. I don’t benefit by him getting treated. If the disease comes to me I get treated. And if he dies of the disease I shouldn’t have to support his family he should have had life insurance to take care of his own family. If he didn’t love his family and didn’t take care of them why is this my responsibility. I should never be forced to care for a Joe Blow that didn’t love his family enough to provide for them. Which again goes to the disease. If Joe Blow can’t afford health care he should be allowed to treat himself or enter into a payment arrangment with a hospital or Dr. office to pay back for his costs. If he can’t pay or has bad credit they should be allowed to attach his property or garnish his wages. Not attach my property and garnish my wages. I get taxed WAY WAY to much as is. If I pay more into the healthcare tax in Denmark for example will I recieve better service? I should recieve better service because I paid more. For example If I sell you a TV and because you earn more I charge you more is that fair?
Don’t get me wrong. The US healthcare system is not cost efficient. This is because of government interference and the easy of lawsuits and demands of our population. However, their is no evidence that I have EVER seen for Universal Health Care working better for those that pay into it. It is a house of cards. I’ve seen great effectiveness in the health system with my family being cared for when sick at the best clinics in the world for their ailments. This system WORKS great. Who it works great for is the matter at debate. The system works great for those that can pay – as it should. Why would I want to lessen the benefits that I recieve to give the benefits to somebody else because they “need” it more? What the focus should be on is teaching people how to fend better for themselves not giving them a freer lunch.
As for the military argument. This is a lost argument on your side completely. As I already admitted that the haves pay the majorty share of the taxes! Somebody that doesn’t have anything doesn’t pay taxes into the military industrial complex. So they don’t have any argument to put against money going to this because they aren’t the ones paying taxes. In this since perhaps I should be for private Mercenary Armies that look at for my haves and the have nots can get what is coming to them. But I’m not that cold hearted.
I’m actually not cold hearted at all, I give to charity, volunteer in my community, and help take care of the poor and sick. And my wife is more giving then me. And my children even donate a portion of their allowance to charity. It’s just I don’t like being forced to do these things by the government.
[...] http://americanmissive.com/2009/03/28/mark-steyn-obamas-false-choice/#comment-1859 [...]
Jorge – as always, your passion is greatly appreciated. But Freedom Thinker made a fantastic counter argument regarding the taxation of corporate profits, prior to the taxation of capital gains. Curious your thoughts there.
Also- for readers of this blog- I wanted to point to the non-partisan Congressional Budget Office report, which has the most recently available data on effective tax rates and the tax burden each income tax group bares. That data is through 2005.
Anybody who has ever filled out a tax return knows that by the time they are done and they have put in all their deductions, etc. and have gotten their refund (if any), then it is the total, net taxes you have paid as a percentage of your total income that reflects your effective tax rate.
And as the CBO shows, the top wage earners in this country also have the highest effective tax rates (actual taxes paid as a percent of their income for the period).
And per the CBO, the highest quintile of wage earners in this country (top 20%), both individuals and businesses, pay 67% of all federal taxes.
Meanwhile, the lowest 40% pay approximately 5% of the tax burden. Individuals in this category even get money redistributed back to them through the tax code.
Jorge – you should be delighted by this. Progressives throughout the years have won this debate you are waging with us over and over again. That’s why the tax burden is so unequally yoked to the top wage earners in this country. And the CBO data shows a trend that burden continued to increase in the Bush years.
For my part, I’d rather rely on the data produced by the congressional budget office, which has access to the full array of IRS tax information and who’s charter is inherently non-partisan, then rely on Warren Buffet, himeslf a statistical outlier and a partisan Democrat.
For my part, this debate is once again closed.
Here’s the source.
http://www.cbo.gov/ftpdocs/88xx/doc8885/EffectiveTaxRates.shtml
Tennessee Paul (29),
Those three most populous countries you are talking about are not first world countries. I think the US should be held to first world standards, especially since it’s been industrialized a lot longer than those countries. Don’t you?
Yes, the distribution is lognormal, but log normal, as shown in one of my references, can take different shapes, regarding just how heavily left-biased it is, which I think is what the gini measures. Do take a very good look at what the gini measures.
djcnor: So I was looking at the correct graph. That’s good to know
First, when it comes to income distribution and the gini coefficient, and thus to “class mobility” —my initial inquiry— the premise should be clarified. I do not believe income inequality is inherently bad. Likewise, I do not believe income equality is inherently good. I could labor under the idea, like so many others, that the ultimate goal of the government is to grant income equality, however I believe this to be an inappropriate application of government power. I read the US constitution and bill of rights when it says “All men are created equal” as meaning ‘equal under the law’, as I view the purpose of the government to provide civil peace through fair application of just laws as well as provide national defense from outside aggressors who threaten the freedom and security set forth by the constitution and provided under these laws (hence every citizen in the country has an equal stake in the defense of the nation, regardless of sum total of possessions).
Back to the discussion of income inequality and mobility:
Mr. Henderson goes on to explain that unfairly mandated equalities/inequalities are to be avoided. Natural distribution of income will lend itself to inequitable income levels. However, so long as these inequalities are the results of a free system, the societies members are free to change and thus inspire innovation, hard work, and productivity. Hence it is good.
As to the Gini coefficient I was surprised when I read more about it that it is based upon the Lorentz distribution to describe the inequity found in a lognormal distribution.
Looking at the raw data of the Gini values the US Gini value rests right in the center of all of the countries I could find ranked (126 total). Within a half standard deviation of the US is Hong Kong, Singapore, Israel, Italy, UK and Russia. Within one standard deviation of the US is France, Netherlands, Canada, Belgium, Switzerland, Ireland, Greece, Poland, Australia as well as others. Based upon this data, this perspective, and acknowledging that I do not hold a view that the role of the government is to provide income equity, I still do not see much to be distrubed concerning the ranking of the US. Third world, as well as first and second world nations are distrubted throughout the rankings.
Rounding out the top ten countries by Gini index are the (1) Azerbaijan, (2) Denmark, (3) Japan, (4) Sweden, (5) Czech, (6) Norway, (7) Slovakia, (8) Bosnia, (9) Uzbekistan and (10) Finland.
I had looked into another topic concerning the US infrastructure about two months ago when I had read about the ‘inequality’ of broadband access compared to the rest of the modern world. I found that, with the exclusion of Canada (ranked 37th in global population and 2nd in total land mass), the US was equal in population to the sum of every country above it and 3.5 times larger in land mass than the sum of every country above it yet it was still ranked in the top fifteen in the world in terms of broadband internet access. At any rate I found it interesting, thought I’d share the link incase you are interested. Placing the countries in comparison in terms of population and land mass provides a different perspective when it comes to demands for a change in infrastructure. I find too many are too eager to point to countries such as Luxembourg as a goal for the US while not realizing that that country contains less than a tenth of the population of the city of Los Angeles in barely twice the area of the city.
FreedomThinker (31),
I had several paragraphs of a reply written when I accidently hit the wrong key, changed pages, and lost it. I’ve got other things I need to work on right now and into the evening, so more tomorrow.
I get very busy at the start of a month.
I look forward to your response and will give you the last word on the debate (for my part). As when I get to come back to commenting (in depth that is) it will probably be a week or so down the road. And I will probably have moved on to newer subjects. I would like to close with adding I greatly appreciated the excellent debate. And AmericanMissive.com for providing the forum.
Once again we are in completet disagreement on the matter ad Warren Buffet is the perfect example. The issue isn’t what he gives to charity not is it a forgone conclusion that the avenue would be any more efficient in any way than the government.
This statement too is incomplete and as such it conclusion is incomplete:
“And per the CBO, the highest quintile of wage earners in this country (top 20%), both individuals and businesses, pay 67% of all federal taxes.”
The question then Stephen is what percentage of the taxable wealth do they possess and what percentage of the overall income do they draw.
Again I disagree with both you and Thinker completely on this matter.
The question then Stephen is what percentage of the taxable wealth do they possess and what percentage of the overall income do they draw
Could you clarify how this question “what percentage of the taxable wealth do they possess” relates to the tax rate question?
While I’m exhausted from the strenous debate with dcjnor, I can take a minute to answer this easily enough.
JC, I assume Buffets money will be used more efficiently because when Buffet invests he picks good investments, giving to charity is much the same thing. And as you pointed out Buffet is a good picker of where to put his money.
Also, I assume Buffets money will be used more efficiently because I actually know who he donated to – the only person who is a better picker of where to put their time and money then Buffet.
You avoid the main part of my argument though. Why don’t you give me the tax rate Mr. Buffet’s company paid in taxes before he got his share and then add his 17% in I’m still waiting to hear what that number is?
[...] more difficult to do.) Particularly when in previous discussions I have pointed out that the U.S. basically subsidized much of Europe’s socialist economiesthrough maintaining a strong military. This is important but politically. I don’t like [...]
OK, FreedomThinker (31),
The reply I owe you for when you come back.
You are wrong in saying that if Muslims learn more about their religion, they become more extreme. The most respected Islamic religious leaders, and I’m talking most respected within Islam, would tell them very clearly that violence against those of other religions is not acceptable. On the other hand, if they are restricted in their resources and in the learning they have had, then they are likely to have been taught a form of Islam (mostly funded by the Saudi madrasas) that is a rather extreme version. This version includes the idea that they should keep within their own community and not associate with those of other religions, thus remaining ignorant about those “others”. If they step outside that, they quickly find that “others” are no worse as people than their own, and are unlikely to find reason to do violence against strangers.
As for your neighbor, it is interesting that even your own description includes stereotypes of older people (vulnerable). What I am saying is that if they knew your neighbors as Mr. and Mrs. Harris who used to give us cherry tomatoes and call them “tommy-toes” when we were kids (or some such), they would have chosen different targets, targets they could still think of as some stereotype rather than the non-stereotype that every living person is.
I’m glad you understand the bigger buying group argument. But you are dead wrong about early treatment and preventive treatment not saving money. There is hardly a medical problem that is not more easily treated, and less expensively treated, if caught early. I can’t even think of one at all. Can you? (Oops, you’re not going to post an answer.) Never mind. The math has been done and it is true, which is why universal healthcare systems emphasize that.
And no, many Brit vistors have relatives or friends in the US and visit their doctors. What they were alarmed about were the costs of even simple problems, and the amount of tests they ended up paying for.
As for your diatribe regarding what should happen to someone who has the misfortune of not earning enough to provide for his family as you think he should, it shows a huge lack of empathy and knowledge of just how easily you could find yourself in his place. I just can’t conceived of such a lack of compassion. Is your circle so restricted that you do not know anyone you care about who would be in that situation in the face of a big medical problem? Impossible, since half the bankruptcies in the US are caused by medical expenses. Charity didn’t solve all those problems.
What I am saying is that if they knew your neighbors…they would have chosen different targets
This seems a bit optimistic. Date rape still occurs despite the familiarity between the two people. Family on family crime occurs all the time, in fact a brother just decapitated his sister in front of the police the other day. It didn’t seem to matter that he knew them and grew up with them and was related to them.
Tennessee Paul,
I didn’t write the bit about the military as clearly as I intended. I do mean that the rich benefit more than the poor from the military because they have less to protect. They also end up losing a larger proportion of their group’s lives in any armed conflict. Furthermore, if the conflict actually comes to the land, it is also the poor, the women, and the children that are casualties. The UN has researched and found that 95% of the casualties of any armed conflict are the women and children of the land on which it takes place. And those are the poor. Just as in Iraq, the rich pick up and go elsewhere for the duration, or at least send their women and children out of danger.
Can you tell me what benefit to the poor of the US the wars in the last 60 years have been?
djcnor: “benefit to the poor of the US the wars in the last 60 years have been?”
This is an argument over just war and unjust war. I believe there is a distinction between the two and I would like to clarify the difference I am discussing: national defense does not necessarily equal war. However, the statement I was refering to of yours was a statement impling national defense mainly benefits the rich at the expense of the poor. I disagree for several reasons. Regardless of sum total of possessions, every man living in America enjoys the freedom of America. The way of life of America. National Defense is to defend this freedom and way of life. The purpose of the defense of the nation is to sustain the nation. It is for this reason that the rich and the poor benefit equally.
Secondly, I disagree with this persistent view of life through sum total of possessions. It is an antiquated class world view which lends itself to overlooking the real needs of people and hoisting up money, riches and wealth as the savior of mankind.
Third, after our prior discussion on the lognormal distribution of income, it does not surprise me that “poor” are more prone to be casualties of conflict than “rich.” As the lognormal distribution shows, there are exceedingly fewer “rich” than “poor.” In addition to this, the majority of wars in the world take place in poor countries. Aside from the US conflicts there are ongoing conflicts all over sub-saharan Africa, South Pacific, Asia, and even Eastern Europe which the US and other “rich” nations have nothing to do with. So this statistic, while sad, is not surprising to me.
In the end, these numbers of war casualties and the atrocities of war lend me to believe more in the need for a strong national defense so as to prevent these wars from coming to the homeland. War is not pretty, and should be avoided at all costs. But the truth of the matter is, it cannot be avoided every time. One must be prepared for that time when war comes to you, whether you choose it or not.
Tennessee Paul,
Some income inequality is not a bad thing. Inequality to the extent that has developed in the US over the last 50 years is a bad thing. Use the gini to see that by looking at the countries closest to the US gini.
Let’s use the average of the 3 ginis included in the table. For the US, that’s 40.8 and 45, so 43 on average. I find Burundi, Iran, Kenya, Nicaragua, Nigeria, and Turkey closest to that. The disparity in lifestyles between the rich and the poor in the US is as great as it is in these countries. Meanwhile, the EU, including eastern European members is 30. It’s not surprising to find Europe with lower income disparity, but India? At 37? You have seen the pictures of how the rich and how the poor live in India. What did you think of it? Would you say that the rich of India compete on a level playing field with the poor of India? Well, you can think that or worse of your own country, because it’s true.
Differences that large mean that the playing field is anything but level and thus mean that merit is not really the determining factor of success in that system. Differences that large foster attitudes like Marie Antoinette’s, foster the rich and even the affluent stereotyping the poor, and I see a whole lot of that going on in various discussions. Go to a poor neighborhood and you’ll hear plenty of stereotyping in the other direction, too. And that fosters violence and lack of understanding of all kinds. Time after time in history, it has led to revolution.
Let’s see, a standard deviation would include 68% of all the nations. A half a standard deviation is about 1/3 of all nations. I’m not asking for absolute equality. I think Adam Smith’s idea of a 6 to 1 ratio is about right. Canada’s and France’s and India’s and Ireland’s and New Zealand’s and Switzerland’s ratios of top 20% to bottom 20% is about that, and that brings the gini down to mid/low 30′s where it was, almost, for the US in the 50′s and 60′s. That’s all I ask.
I disagree. I do not see the disparity of income in the US as bad. I suppose I could be persuaded to view it that way, but it will take more than some one stating it for me to believe it.
Could you provide the gini table you are referring? This is the table I reviewed for my analysis: http://www.swivel.com/data_sets/spreadsheet/1002131. It contains 126 countries. What I could find on Wiki was sparse and incomplete.
I also found, through links on Wiki, that 83% of the US population lives above the median income level. The median income level in the US is somewhere around 45K. I can’t find it for Nicaragua, Nigeria, Kenya, and so forth, but —maybe I’m going out on a limb here— I think the US median income is considerably higher than those countries. I also would not be the least bit surprised to find that energy, appliances and services in America are more readily available for normalized and adjusted levels of less than is found in these countries. A Gini measurement should not be used as a means to measure quality of life between two countries.
The issue I have with the term “level playing field” is that it usually inspires politicians, protestors, and others to demand the inappropriate actions and processes. I’m a baseball fan, so I’ll use baseball terms for my analogy. I hear the cry of an unlevel playing field and then see people point to the disparity in homeruns (HR) between players and/or teams. The solution is inevitably to take homeruns away from the individuals or teams who hit them and hand them over to the individual or teams who did not hit them. This solves nothing. It decreases the incentives to hit homeruns. And it destroys the integrity of the game while doing nothing to “level the playing field.” All this has done is put those who implemented the HR redistribution process in the light of HR envy. They did not seek to level the playing field. They only sought to have more HRs.
Perhaps this is not your solution, and I do not mean to project it on to you. But this is the reason for my hesitence concerning certain phrases. They tend to be linked tightly to inappropriate solutions, at least here in the US.
Agh, I can’t help responding. I know of people in my circle that could have a bankruptcy due to medical problems. My parents I’ve already provide for to assure they are cared for as they age. It’s called long-term care insurance. My family also has insurance. As for friends in my circle that are vulnerable it is their responsibility to care for themselves not mine. This doesn’t mean that I wouldn’t do everything in my power to care for somebody with financial support. I would, but what I don’t like is somebody (the government) dictating whom I am to care for. This is my point. You take my desire to care for those of my choosing as a lack of empathy which is misunderstanding my point. I’m saying I want to show empathy for whom I choose and your saying you want me to show empathy for whom somebody else chooses.
I also feel misunderstood in regards to the neighbor perspective. I was writing questioning what potential ignornace the criminal could have had of the neighbors situation, which is not my own perspectives on those neighbors. Are you saying that if the neighbors had done more to make treats for people they wouldn’t have been robbed? I don’t see how making treats for neighbors keeps one from getting robbed. Or are you saying if everybody was taught that old people like to make treats for people nobody would rob old people? Or if all stereotypes were eliminated in all minds then there would be no crime (is this possible)? I guess I’m not understanding the point here, sorry.
As for the question, that prodded me to respond. I suppose we need to define terms. Prevention and treatement. You use the word “prevention” but mean early treatment. I use the word “treatment” but mean death. In other words it is cheaper to let the person die then treat the disease. Treatment is expensive if you view treatment as treating the disease. I actually can’t argue that prevention is truly “more expensive” then the treatment. What I can say is that the consequences of heart disease, lung cancer, HIV if not treated are death. Death is cheaper then the treatment as the “treatment” of these things is very expensive and you are right in that regard.
Another point (in case you really meant prevention), is preventative measures for these things are nothing the government can and should control. The treatment of a disease is expensive. But prevention is more expensive because it’s really impossible for the government to implement prevention.
How is the government going to control costs by “preventing” heart disease, lung cancer, HIV, etc. The preventative measures for these activities are healthy eating, excercise, avoiding intervenous drug use, safe sex, and not smoking. This is well documented. No matter how much the government spends on “preventative” medical care (i.e. early treatement) it’s up to the individual to choose their own lifestyle. This is is why I say the government can’t control costs by increasing access or spending more. This is the reason I find the argument that preventative care is less expensive then non-preventative care to be scary. If you want preventative care you’d be supporting a government to force people to not smoke, not do drugs, conduct safe sex (I’d like to see them control that), exercise, or eat healthy. Can you imagine where a government health care system leads – rationed food, dictated morality, forced excercise, etc.
If you truly wanted to control costs your food, your excercise habits, your sex life, and your methods of entertainment would be dictated by the government. These are actual “preventative measures” not the preventative misnomer used so often.
It should be the right of a person to smoke, it should be the right of a person to pay for heart surgery if they can afford it, it should be the right of a person to die from HIV if they engage sex or drug use that leads to the disease.
It is not the right of a person to force me to pay for their heart surgery because they ate to many McDonald Big Macs at the store because they were under the perception that Big Macs are cheaper then vegetables because they set on the couch watching TV and being brainwashed by 1,000 of commercials instead of excercising.
I’m way too behind in answers to do much more today, but I just have to say you’d better check the meaning of “median”. By definition, 50% earn abouve it and 50% below it. Perhaps you mean mode or average?
Data set:
2
2
3
3
3
3
3
3
3
3
3
3
3
5
5
10
10
The median is 3 in this data set 83% of the values are at or above the median value. Mean or average is 3.9. The median is the middle number in a list of numbers.
Or mean?
Yes, and in the set of numbers that is the list of incomes in the US, half are above and half are below by definition. You cannont possibly be saying that 11/17ths of those numbers that are the list of US incomes are the same number as is necessary for your 83% number to work.
Whoops. Went back to double check and realized I breezed over some key words in the information when I did my quick research and response. It was 50% of median value. So in the US it would be 83% of the population is at or above 22.5K (45K being the general figure I’ve found for the US median income. Multiple sources have different values, all being approximately 45K).
However, it still stands that a data set can have 83% of its values equal to or greater than the median value
Seriously though, the comparison of third world countries to the first world via Gini value does a great disservice to all countries involved. Denmark is below Azerbaijan. Should Denmark strive to have the same quality of life as is found there? Likewise Denmark is in the neighborhood of Bosnia and Uzbekistan. In my reading and researching of Denmark, there is much to be proud of for that country, but no one would trade it for Azerbaijan, Bosnia or Uzbekistan. There is an obvsious difference in quality of life which simply isn’t shown when viewing Gini values.
I am curious as to whether any study has been done to determine what “gini” value is sustainable long term. From the Gini chart the values obviously change over time. I’ll have to run through some of my economic journals and see if a more indepth analysis has been done than is provided on Wiki.
That dataset I posted is actually a lognormal distribution of values complete with the high-value lognormal pulse. Didn’t even mean to do that.
I’ve found a site that gives both the mean and the median household incomes for the year 2005.
http://factfinder.census.gov/servlet/STTable?_bm=y&-qr_name=ACS_2005_EST_G00_S1901&-geo_id=01000US&-ds_name=ACS_2005_EST_G00_&-_lang=en
The median is $46,242, the mean $62,556. If I look at the accompanying table, that puts 27.7% in the groups above the group that contains the mean and 53.5% in the groups below the group containing the mean. The mean falls in the middle of that group containing it, and that group contains 18.9%. Adding 9.5% to above and to below, that makes 63% below the mean and 37.2% above the mean. Better round it off to 37% to come out even.
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