Richter Scale

Europe as a Figment of the Republicans’ Imagination

Is the Republican Party’s castigation of Europe nothing more than a political diversion tactic?

Takeaways


  • When millions of Americans are thrown off unemployment rolls, throwing rhetorical bombs about Europe's "socialist" ways is a deplorable diversionary tactic.
  • An industrialized society that lacks a true sense of solidarity at home must ask itself this: Do we even qualify as a society?
  • For all their love of the rich, Republican leaders apparently aren't talking to the real money — at least not when visiting Europe.
  • Welfare benefits in Europe have been trimmed back considerably. Not that congressional Republicans would have noticed.
  • Europe is not about the cradle-to-grave welfare state, but something else. Call it the "not-ready-to-cave" social market economy.

Republican congressmen, evidently, are not a traveling bunch. Or they don’t go to Europe when on so-called CoDels (congressional delegation trips).

Or, if they do go to Europe, they don’t open their eyes. Or they just talk to Europeans who are eager to please them, by confirming the Republicans’ stereotypes.

A cradle-to-grave welfare state? Let’s avoid at all costs turning the United States into another Sweden? Those are nice ideological clichés, but well off the mark.

To see just how outdated these Republican visions — spouted by some of the Republicans’ top leaders — are, let’s take the Wallenbergs as crown witnesses.

The Wallenberg family, as you may know, is very rich. Some people say they own Sweden. I remember a recent conversation with one of the two leading Wallenberg brothers in which he told me that the family was moving much of its vast financial wealth back into Sweden.

“Come again?” I asked in disbelief. “Yes,” he explained, “the new government has changed the tax laws, and it is now attractive for folks like us to hold our wealth at home.”

For all their love of the rich, Republican leaders apparently aren’t talking to the real money, at least not when visiting Europe. Otherwise, one must surmise, they would have figured this one out.

They would also know that Sweden’s conservative government, in office since October 2006 and recently reelected, actually has managed to turn around the economy and is projecting a budget surplus for 2011.

Those, of course, are the very things Americans, of either political stripe, can only dream of. Intriguingly, they should be dreaming about places like Sweden, rather than vilifying them.

Another reason to dream about Sweden, yes, “socialist” Sweden, would be that, in the early 1990s, the country suffered from a severe banking crisis. And yes, back then, it did have stifling welfare policies that handicapped economic performance.

But guess what? Rather than talking and talking, and blaming each other across party lines, the Swedes got to work under the previous government, systematically dug themselves out of the banking crisis, reshaped the economy — and are now doing quite well, thank you.

What, one wonders, is it in the psyche of America’s elites, especially the conservative ones, that makes them vilify Europe?

Given the opportunity, they do like to see the sights. But they do not seem to be inclined to take in any of Europe’s ideas and principles.

At this juncture, one must surmise that it is "policy envy." Take unemployment. In much of Europe, it has not exploded, in contrast to the United States.

Along with France and Sweden, Germany, America’s other poster child for the welfare state, has seen unemployment decline sharply, from five million to just three million now.

In contrast, the U.S. performance on this score has been dismal.

How about budget discipline? Well, the Europeans have a fight on their hands to rein in welfare costs — but they do fight.

So, in Europe, it’s not cradle-to-grave welfare, but something quite different that rules the roost. Call it the “not-ready-to-cave” social market economy.

Cave in front of whom? In front of moneyed interests, of course. Well-off people in Europe are man- (and woman-) enough to pay their fair share of taxes — unlike their American brethren, who cry wolf at the prospect of their internationally very low taxes moving back to previous, slightly higher levels.

For rich Americans, the strategy of crying wolf works, as evidenced by the deal President Obama just negotiated with congressional Republicans to extend all the Bush-era tax cuts — including the cuts for the top 2%, which Obama had previously vowed to end.

But what about welfare benefits in Europe? Aren’t they still outlandish? They are still high, but have been trimmed back considerably in most countries.

Not that congressional Republicans would have noticed. To them, the entire continent is still a bunch of unreconstructed Euro-Socialists.

What’s curious about this is that Republicans are generally eager to have other nations follow U.S. leadership. Well, on this account, the Europeans actually did do so. When the United States started to trim benefits under Bill Clinton, the Europeans were put on notice that they needed to shape up their act.

And shape up they did. Benefit levels are now much lower, and the unemployed in Europe face a lot of pressure these days to do their utmost to get working again. Low benefit levels, to a large extent copied from the United States, are a powerful incentive.

Thus, in terms of claiming manifestations of U.S. leadership (and European followership), it apparently very much depends on the issue. “Follow us on NATO, Afghanistan, Iraq, etc. That’s what we see as vital,” the refrain goes.

"But if you Europeans follow us Americans on welfare-state trimming, we’ll just ignore that — at least if we're Republicans." Strange thing.

Now, on one account, the Europeans are still much more social-minded than the Americans — but again, it is not a manifestation of the presumably European love for cradle-to-grave benefits.

Rather, it’s rooted in the European conviction of keeping people out of the grave.

What am I referring to here? The absolutely disgraceful way in which the U.S. Congress deals with the fate of America’s true underclass — the long-term unemployed.

Basically, nobody has ever gotten rich or comfy on the U.S. unemployment dole. But when that meager benefit pay does run out, it is often off to soup kitchens and living on the street.

That is especially true in areas of the country and in industries where people never had an opportunity to build up any assets or savings.

Despite the extension of unemployment benefits President Obama negotiated with congressional Republicans, Americans are limited to, at most, 99 weeks of benefits.

Consider that, according to the U.S. Labor Department, one in four of the U.S. unemployed have been out of work for more than a year, while 10% have been unemployed for at least two years.

If jobs were available and the long-term unemployed refused to take what’s available, that would be a completely legitimate reason to limit benefits to 99 weeks.

But that’s not the case. For most of the long-term unemployed, jobs just aren’t to be had — not anywhere. To cut off their already-spartan benefits if jobs on a broad scale still aren’t available after two years is downright inhumane.

And it’s definitely not something Europeans would do. Not even Republicans’ favorite European, the miserly, stringent, stern Maggie Thatcher, the British prime minister from 1979 to 1990, would have done that.

Europeans, economists and politicians alike understand that paying the financial equivalent of pure life support to the destitute will not only keep them out of the grave, but serves an eminently important macroeconomic purpose.

It’s simply the most effective stimulus program, bar none. Those “automatic stabilizers” are costly in a time of crisis, but not so if one considers the alternative: personal despair and a partial dismantling of society’s very fabric.

At a time when millions of Americans face continuing social hardship, throwing rhetorical bombs about Europe’s "socialist" ways may be an understandable diversionary tactic, but it is not an acceptable one.

An industrialized society that does not have that much of a sense of solidarity at home must ask itself a completely different question: Do we even qualify as a society?

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About Stephan Richter

Stephan Richter is the publisher and editor-in-chief of The Globalist. [Berlin/Germany]

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