The American Dream Could Use Some European Inspiration

Copenhagen Denmark
A street in Copenhagen, Denmark (Unsplash/Ethan Hu)

One can tell two very different stories about the American economy.

In one, growth is robust, unemployment is at its lowest in half a century and the stock market is booming. This is the story President Donald Trump likes to tell.

In the other, two in five Americans would struggle (PDF) to come up with $400 in an emergency. One in three households are classified as “financially fragile“. Annie Lowrey writes in The Atlantic that American families are being “bled dry by landlords, hospital administrators, university bursars and child-care centers.” This is the story Bernie Sanders and the Democrats tell: for millions of Americans on seemingly decent middle incomes, life has become too hard.

Sanders’ solution is to bring “democratic socialism” to America. He cites European countries like Denmark and Sweden as inspiration. They’re not bad places to imitate — but they have actually moved away from socialism and toward a mix of free markets and the welfare state. It is why they rank among the freest and most competitive (PDF) economies in the world.

Americans can learn from the Scandinavian experience, if they get the balance right. Read more “The American Dream Could Use Some European Inspiration”

The Sources of Populist Rage — And What To Do About It

Yellow Vests protest in Avignon, France, December 1
Yellow Vests protest in Avignon, France, December 1 (S├ębastien Huette)

Add France to populism’s list of victims.

A year ago, Emmanuel Macron’s election victory was hailed as a setback for the transatlantic reactionary movement that began with Brexit and has since led to Donald Trump in America, Jair Bolsonaro in Brazil and an anti-EU government in Italy.

The outbreak of nationwide anti-tax protests, which quickly morphed into an anti-government movement, makes clear the same forces that gave us Brexit and Trump live in France.

The consequences could be calamitous. Read more “The Sources of Populist Rage — And What To Do About It”

The Rent Is Too High, Partisanship Versus Democracy

Homes in San Francisco, California, April 5, 2010
Homes in San Francisco, California, April 5, 2010 (Jerome Vial)

Will Wilkinson of the libertarian Niskanen Center tells The Washington Post that expanding affordable housing in America’s major cities is the key to reducing inequality.

Wages have barely budged in decades, yet housing costs have soared due to restrictive zoning and land-use policies. Young and working Americans are now unable to save. Homeowners are getting richer.

Kevin D. Williamson, a conservative columnist who was recently hired and then fired by The Atlantic for his right-wing views (more on that here), has similarly argued in National Review that working-class Americans left behind in the Rust Belt need to move to the coasts. He partly blames them for staying put, but recognizes that policy plays a role.

Consider California, where so many of the jobs in the new economy are. Its housing crisis (you can buy a private island or a castle in Europe for the price of a San Francisco apartment) is entirely man-made, “a result of extraordinarily restrictive zoning and environmental codes and epic NIMBYism of a uniquely Californian variety.”

A Republican Party wishing to renew its prospects in California (which it once dominated) or in American cities could — and should — make affordable housing the centerpiece of its agenda for the cities.

More on why Republicans ought to compete in American cities here. Handelsblatt reports that Berlin fears San Francisco-style housing problems. Read more “The Rent Is Too High, Partisanship Versus Democracy”

New Social Compact: Deregulation and Universal Basic Income

Manhattan New York
View of Madison Square Park in Manhattan, New York (Unsplash/Daryan Shamkhali)

I believe that to shrink the culture gap in Western democracies — between generally well-educated “globalists” and those who feel left behind — we need a new social compact.

The twentieth century’s was built on strong trade unions, lifetime employment and health and pension benefits tied to salaried jobs. The economy, and people’s expectations, have changed in such a way that this is no longer sustainable. But we haven’t come up with a replacement yet.

The American Enterprise Institute’s Dalibor Rohac may be onto something. He calls for a “grand bargain”: serious deregulation coupled with the introduction of a universal basic income. Read more “New Social Compact: Deregulation and Universal Basic Income”

Merkel’s Answer to Populist Challenge: Shift to the Left

German chancellor Angela Merkel delivers a news conference in Brussels, March 15, 2016
German chancellor Angela Merkel delivers a news conference in Brussels, March 15, 2016 (Bundesregierung/Guido Bergmann)

Angela Merkel’s answer to the defection of right-wing voters is — counterintuitively — to shift further to the left.

Der Spiegel reports that the German chancellor recently told members of her Christian Democratic party (CDU) they need to do better on pay, pensions and housing.

They were expecting a harder line on immigration, which is the issue that galvanized the Alternative for Germany’s voters.

This new far-right party placed third in last month’s election with nearly 13 percent support.

Merkel’s Christian Democrats still won, but with only 33 percent support — their lowest vote share in over half a century. Read more “Merkel’s Answer to Populist Challenge: Shift to the Left”

Conservatives Need to Make Capitalism Work for Everyone: Davidson

London England
London, England at night, February 14, 2012 (Warren Chrismas)

It is not inequality that bothers Brits, argues Ruth Davidson, the Scottish Conservative Party leader, in the new online magazine UnHerd. It’s injustice.

People expect that the CEO of a corporation will be the highest paid person on the payroll. What they don’t accept is that FTSE 100 bosses are paid 174 times the average worker’s wage in this decade — compared to 13 to 44 times in 1980.

Especially when many of their companies have received either big fraud-related fines or bailouts from the state.

The distinction matters, because it goes to a broader point. Read more “Conservatives Need to Make Capitalism Work for Everyone: Davidson”

Smart Policies, Wrong Vision from Germany’s Social Democrats

German Social Democratic Party leader Martin Schulz, then president of the European Parliament, watches as Chancellor Angela Merkel signs a guestbook, November 7, 2012
German Social Democratic Party leader Martin Schulz, then president of the European Parliament, watches as Chancellor Angela Merkel signs a guestbook, November 7, 2012 (European Parliament)

Germany’s Social Democrats have unveiled a platform of sensible policies that should appeal to the broad middle of the country’s electorate.

The trouble is the proposals lack a convincing theme and could easily be supported by Angela Merkel’s Christian Democrats as well. Read more “Smart Policies, Wrong Vision from Germany’s Social Democrats”

Middle-Income Suburbanites Decided the Election — Again

A street in Charlotte, North Carolina, November 12, 2008
A street in Charlotte, North Carolina, November 12, 2008 (Steve Minor)

On election night, when it was starting to become clear Donald Trump would win, I wrote it had been a mistake to think Hillary Clinton could make up for losing white working-class voters in the “Rust Belt” by drawing more minority and young voters to the polls, particularly in the “Sun Belt” states.

Clinton didn’t win Florida. She didn’t win North Carolina. She didn’t make Arizona and Texas more competitive for Democrats. And she was so unpopular with white voters, especially those without a college degree, that one-time Democratic strongholds in the Northeast — Michigan and Pennsylvania — changed sides.

Looking more closely at what happened on Tuesday, though, I’m not sure this is what doomed her. Read more “Middle-Income Suburbanites Decided the Election — Again”