By Kevin D. Williamson
Sunday, December 08, 2019
A nationwide series of protests, some of them violent, is
convulsing France. The proximate cause is pension reform, and the French are
having a splendid time: In news photos, the protesters are positively beaming,
and a recent BBC
report described the mood, amid the arson and destruction of property, as
“festive.”
I suspect that the American version of that will be less
festive, when the time comes.
Paul Krugman of the New York Times, who as a
columnist always has had a particularly unkeen sense of timing, in November
attacked the “Europhobia” of centrist Democrats. “Going on about how terrible
things are in France is a sure sign that you have no idea what you’re talking
about,” he wrote. I do not think France is a particularly badly governed
country, but the French are mad as hell about it, and surely their opinion must
count for something.
If you are wondering where Professor Krugman is seeing
all those centrist Democrats who were terrified of France in early
autumn, it is helpful to know that the column is one long stage whisper at
Steven Rattner, the Obama-administration Treasury official who wrote in the New
York Times that Warren is the candidate for those who “want to live in
France (economically).” Warren’s policies, Rattner wrote, would impose dirigiste
European practices on U.S. firms. Rattner, who is after all an Obama guy, is
generally supportive of New Deal–style welfare statism but fears Warren’s
intention to impose vast new
regulatory burdens and to revamp the way business functions, which could have
an even more negative effect on our economy. Many of America’s global
champions, like banks and tech giants, would be dismembered. Private equity,
which plays a useful role in driving business efficiency, would be effectively
eliminated. Shale fracking would be banned, which would send oil and natural
gas prices soaring and cost millions of Americans their jobs. And on and on.
The loudest voices in the Democratic party at the moment
belong to confessing socialists such as Alexandria Ocasio-Cortez and Bernie
Sanders, and to bitter partisans such as Professor Krugman, who insists “good
people can’t be good Republicans,” and his headline writer, who proclaims:
“Republicans Only Pretend to Be Patriots; Republicans Don’t Believe in
Democracy; The G.O.P. Goes Full Authoritarian,” etc. Conservative critics of
President Donald Trump (I am one) will recognize the dynamic at work here: The
angry us-and-them tribalists who control 98 percent of the conversation resent
the hell out of the 2 percent of us who say, “Yes, but . . . .” As though
Steven Rattner’s were a name to conjure with.
He does deserve a hearing, especially from conservatives
looking (as they should be looking) for any tendency within the Democratic
party that should be encouraged and that might provide some basis for future
bipartisan reform efforts.
Rattner is worried less about the tax-and-spend
redistribution policies in vogue among Warren et al. than he is about the socialism
— the government takeover of parts of the economy — although unlike Senator
Sanders and Representative Ocasio-Cortez, he does not choose to use that word.
He worries about the hypothetical Warren administration seizing control of most
major corporations because . . . the non-hypothetical Senator Warren proposes
having the federal government seize control of most major corporations, i.e.,
all those with $1 billion or more in revenue. As Rattner notes, Warren would require
these companies to go to the federal government and beg for permission to
operate (corporate charters currently are written at the state level). These
companies “could lose their charters if they failed to adhere to an often vague
set of principles,” he says. “That would give a President Warren enormous power
to punish companies (including putting them out of business) for not adhering
to her subjective vision of corporate responsibility.” Why bother owning the
means of production when you can avoid a lot of trouble and still treat them as
your property?
Rattner’s case against Warren contains much: new schemes
of corporate welfare and political steering in the name of “good American
jobs,” anti-trade policies far beyond what even the Trump administration has
considered, opportunistic currency devaluation, the government dictating the
composition of corporate boards, etc. Rattner is a lifelong Democrat. So was
Ronald Reagan before the Democratic party left him.
But what about the view from Paris?
The problem with comparisons between the United States
and Europe is a lack of granularity. There is no such thing as “Europe,”
economically or politically, the best efforts of the ladies and gentlemen in
Brussels notwithstanding. There are many different European systems of
taxation, of health care, of regulation, of providing welfare benefits. This
fact is reliably lost on the American Left: Van Jones, speaking on Chris
Cuomo’s program, offered the following daft claim: “In Europe, they have health
care. They don’t have health-care insurance, they have health care.”
This claim is both false and preposterous. The
British-style monopoly system is in fact an outlier, but even in the United
Kingdom and Canada people have health insurance. Health insurance forms the
basis of health-care coverage in most of Europe, from Germany to France to
Switzerland to Poland. In fact, those monstrous Europeans are way out ahead of
the Trump administration: You cannot get a Schengen-area visa without having
health insurance.
There are many models of health care in Europe, but none
of them is the one that American progressives such as Van Jones seem to believe
defines “health care in Europe.”
The lack of specificity is widespread. For example, many
progressives will point out that industrial and manufacturing workers in
Germany seem to be in pretty good shape, and that their employers are in pretty
good shape, and that Germany has much more powerful unions than does the United
States. That is all true. But it also is true that Germany’s biggest union, IG
Metall, is of a very different character from its U.S. counterparts such as the
corrupt
and feckless UAW and many
others. Of course, our progressive friends will say, “Yes, but when we say
we want more power for unions, we want more power for effective and honest
unions, not corrupt and ineffective ones.” But that is just another way of
saying, “The idealized version of what I want is ideal.” The real world
matters, too.
We hear this sort of thing very often when it comes to
taxes. In most of the wealthy countries of Western Europe, taxes are a bit
higher or much higher than they are in the United States. (Switzerland is an
exception.) In the prosperous Nordic countries, taxes are radically higher than
in the United States. But being higher is only one way in which they are
different. For example, many European countries have relatively low taxes on
business income and on capital gains. Sweden has lower corporate income taxes
than does the United States; so do Switzerland, Norway, and Denmark. By
contrast, most European countries impose substantially higher income taxes on
the middle and upper-middle classes than does the United States: Sweden’s top
rate (of nearly 70 percent) kicks in at around $100,000, but relatively few
people pay it.
Direct comparisons are in some ways difficult to make,
being either so oversimplified as to be false or so complex as to be unusable.
A lot of very happy and stable countries such as Germany, Norway, and France
collect between 45 percent and 55 percent of GDP in taxes, but then so do Cuba
and Lesotho. The gross figures do not tell us very much that is useful. France
has been recognizably France for a long time, under many different kinds of
government policies. There was an England before there was an NHS.
Professor Krugman tells us Eurosclerosis is a thing of
the past and that France’s lower per capita economic output is really only a
matter of vacation time, “a choice about work-life balance, not an economic
problem.” The BBC tells us France is “paralyzed.” The French prime minister,
Édouard Philippe, offers the very intelligent rationale (U.S. leaders would do
well to heed it) that France’s pension system is not yet in a meltdown, which
means that this is precisely the time to act, “reasonably, progressively,
without brutality, when we still have time.”
Maybe you think the lessons from Europe are that we
should have more generous health-care subsidies and more bicycle paths. Fair
enough. But maybe the lesson is that our tax system is too easy on the middle
class and that entitlement reform is best undertaken earlier rather than later.
There is much to be said for many European practices,
things to admire both for the Left and the Right in the United States. But
Rattner’s principal complaint with Senator Warren is not that she supports
larger health-care subsidies or more stable fiscal policy. It is that she would
use the power of the federal government to radically alter the legal regime in
which major U.S. firms do business, centralizing market power in Washington,
subjecting corporate boards and managers to political litmus tests, and
diminishing the property rights of shareholders. If there is a very good model
of Senator Warren’s desired policies producing the desired results, it is not
to be found in Europe, or even in “Europe.”
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