Britain Is Once Again the Sick Man of Europe

London England
The Shard in London, England at night (Unsplash/J.J. Jordan)

During the 1960s and 70s, Britain, economically stagnant and losing its empire, was known as the sick man of Europe. With COVID-19, the sickness has returned — and this time it may be even harder to heal.

More than 300,000 cases of coronavirus have been confirmed in the United Kingdom. 41,000 Britons have died of the disease, giving the country the second-highest per capita death rate among major countries. British economic output fell 20 percent in April, the worst rate by far among industrial nations.

This comes after a decade of austerity and on top of the economic fallout of Brexit.

It was the tough medicine of Thatcherism that allowed the United Kingdom to recover from its previous bout of ill health and find a new faith in itself — “Cool Britannia” — under New Labour.

But the seeds of the current malaise were planted in the same era. Read more “Britain Is Once Again the Sick Man of Europe”

New Social Contract for the World After COVID

Miami Florida
The skyline of Miami, Florida (Unsplash/Ryan Parker)

The American economy wasn’t healthy before COVID-19. A middle-class life — the American Dream — was out of reach for most.

Social-democratic Canada and Europe prevented more people from falling through the cracks, but even there millions felt economically and culturally left behind.

A sense that the system wasn’t working for them contributed to the election of Donald Trump, the popularity of far-right nationalist parties and Brexit.

The economic impact of the pandemic can only exacerbate the divide between the well-educated and relatively well-off, who populate the major cities of Europe and North America, and the undereducated and underemployed, who live paycheck-to-paycheck in smaller cities and towns.

We need a better deal. A new social contract. Read more “New Social Contract for the World After COVID”

The American Dream Could Use Some European Inspiration

Copenhagen Denmark
Cyclists in Copenhagen, Denmark (iStock/Leo Patrizi)

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 (Sébastien 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”