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I think what we have to understand is that to a large extent these perceptions are being driven by a wealthy elite (and their media minions) who want to redistribute income and wealth upward.

This is exactly what has happened in the United States in the last 30 years. When the post-WWII economic boom ended and corporate profitability slowed, that's when you began to get "backlash" against taxes, "excessive" government spending, regulation and "red tape", "out of control" labor unions, etc. The goal was largely to restore the incomes of the rich at the expense of ordinary working people by removing barriers to corporate profitability. The results are clear - wages, which no longer keep pace with productivity, and family incomes have hardly grown at all in the last 30 years, economic inequality has increased explosively (none of which is true of Europe), while corporate profitability is higher than ever. The fruits of economic growth are mostly being distributed to the rich because the institutions that used to guarantee a more equitable distribution of national income and wealth - labor unions, state regulation of labor and financial markets, the welfare state -- are all under attack in this country. This sounds like conspiracy theory, but take a look at Joel Rogers' and Thomas Ferguson's Right Turn: The Decline of the Democrats and the Future of American Politics for all the gory details.

Paul Volcker once let slip in the New York Times with the following statement: "The standard of living of the average American has to decline. I don't think you can escape that." Well, if your aim is to restore 1960s levels of corporate profitability in a 1970s and 1980s economy in which the economic growth rate is only 2/3 of what it was back then, of course you can't escape it. Unfortunately there was no FDR or Walter Reuther around to reply "No, Paul, the profitability of the average American corporation will have to fall, too, if we are going to share fairly the burdens of slower growth."

I'm sure the business elites in Europe would like nothing better than to replicate their "success" over here. When people like Tom Friedman bitch about "lazy European workers" and "rigid labor markets" and "the welfare state run amok," essentially what they are saying is "The standard of living of the  average German and Frenchman will have to decline. There's just no way you can escape that."

Fortunately, it seems that these people are having a harder time convincing Europeans to go along with it than they did here in the U. S.

by TGeraghty on Fri Jul 1st, 2005 at 02:14:49 AM EST
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