Since many of the politicians in Washington want America to be more like Europe (including complete government‐run health care instead of the partially government‐run health care system we have now), it’s worth contemplating what that would mean for the economy.
America today is richer than Western Europe. Indeed, per‐capita living standards are about 30 percent higher in the United States — and that’s according to the statists at the Paris‐based Organization for Economic Cooperation and Development (see page 6 of this report). And we have been growing faster, which presumably should not be the case according to convergence theory (see Annex Table No. 1 of this OECD database).
It also seems that Europe’s economy is more likely to endure a double‐dip recession. Bloomberg reports:
Europe’s economy may be coming unstuck from the global recovery as governments to the south of the region struggle to reverse budget deficits and consumers in the north pull back spending. After the 16‐nation euro economy almost stagnated in the fourth quarter, data this week showed the weakness reaching into 2010. …“Europe is where we see the biggest risk of a double dip at the global level,” said Julian Callow, chief European economist at Barclays Capital in London. “Europe has been lagging and we’ve continued to see better numbers in Asia and now the U.S.” …“There are tentative signs that the U.S. economy may be pulling ahead from Europe,” [UBS strategist Nick] Nelson said in a Feb. 23 report… “The sovereign debt crisis in Europe’s periphery reinforces drags on euro‐area growth,” said Michael Saunders, an economist at Citigroup in London.
Left‐wing populists genuinely seem to believe that the economy is a fixed pie, so even though they are fundamentally wrong, their fixation on redistribution is understandable. After all, given their inaccurate view of the world, robbing Peter is the only way to lift Paul. What is more mystifying is why the (presumably) thoughtful left wants America to be more like Western Europe, where living standards lag America and the gap grows wider with each passing year. The only logical conclusion is that they are so fixated on differences in income (or, less charitably, are so resentful of success) that they are willing to make poor people worse off if they can impose even greater damage on rich people. As Winston Churchill noted, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”