Not Exactly A Contradiction, But...

The latest Krugman column, "The French Choice", provides a fascinating counterpoint to Krugman's column from a few weeks back, "The Dropout Puzzle".

Briefly, Krugman has been telling us for several years to ignore the signs of an improving economy and focus on the fact that the job market in the US is not as good as it was at the height of the boom.

But with the French Choice, we are advised that folks not working can be a good thing, too.

No, it's not necessarily a contradiction, and yes, the policy implications for the US are important regardless of what the French are up to.  But the two columns do present quite a contrast.

I will be keeping my eye out for reaction shots.  And don't forget the Trackback below.

UPDATE:  Jim Glass does not think the US labor market is so very weak, considering whrere we are in the business cycle (and didn't we hear whining about a "jobless recovery" early in the 90's boom?  I get one sentence of support from Prof. Krueger.)

Don Luskin hears from an unhappy Frenchman, which reminds me - direct comparisons of producitivty (which Krugman does) are a bit phony - if, for example, French regulations make labor more expensive (or harder to fire), one might expect both higher unemployment and higher productivity in France.  Just like a union job here - great work if you can get it.

Matt Yglesias really gets behind Krugman's conclusion, which is that the French welfare state is pro-family - "An interesting point. And not one wholly without basis in reality." 

OK, then, what about the low French birth rate (which troubled the French even before World War I, and is today a Europe-wide phenomenon?).  High taxes, cramped living quarters, tiny cars, limited opportunity for advancement, excellent opportunity for new college grads to be unemployed and living at home - pro-family?  [Hmm, I may want to avoid blathering about demographics from memory.  Well, their birth rate is less than the US.]

MORE:  Maybe the US is aided by the power of positive thinking.  More on French attitudes and economics at the Independent Source, who is not convinced that the Fench have "chosen" their underemployment.  Some men seek greatness, other have it thrust upon them!  And the same with unemployment, possibly.

Comments

[TigerHawk]

Not surprisingly, Donald Luskin has already flogged Krugman, through the good offices of French economist Chris F. Masse.

[Steven J.]

MORE ON THE JOB MARKET:

TOTAL PRIVATE EMPLOYMENT
SEASONALLY ADJUSTED
(IN THOUSANDS)
BUSH 2
JAN 2001 111560
JUN 2005 111783

NET == +223

(AHEM!)

CLINTON 1ST TERM
JAN 1993 90824
NOV 1996 101261
NET == +10437

[Jim Glass]

I greatly enjoy the "Regulation is Choice" angle...

The point is that to the extent that the French have less income than we do, it's mainly a matter of choice...

The study's main point is that differences in government regulations, rather than culture (or taxes), explain why Europeans work less than Americans.

Though I guess we've always known that the good Democrats over at the Ministry believe that.

[Jim Glass]

Hey, if you want to compare Clinton and Bush job markets, try being a little more comprehensive.

[Steven J.]

JIM -

Come on, don't make us click, share your spin with all of us right here!

[Slartibartfast]

Or, you could simply click the link. I know it's hard, but I'm fully confident that you can do it.

[The Unbeliver]

Be fair; Steven's union (European-style, of course) might forbid clicking links without getting double overtime.

[Steven J.]

I only click if I get two free kittens and season Yankee tickets.

[Red Chicagoan]

Not that I want to throw any cold water on Dr. Krugman's arguments (they might melt), this was an interesting piece on a "happiness" and "optimism for the future" poll done in Europe and the U.S.. Here's the link: http://www.washtimes.com/national/20050727-112657-6406r.htm

[Red Chicagoan]

I can never get that to work right. Sorry.

[John Thacker]

Steven J.:

Mr. Glass's point is that there are more economic indicators than just the payroll numbers. Anyone who has experience with the bubble in 1998-2000 knows that there were lots of people on payrolls doing jobs that couldn't possibly be sustained, and lots of dot-com ventures that were inevitably doomed to failure. (And others that were competing in the same space to be the dominant player, so someone was going to fail.) Once they did fail, those jobs vanished. I think it's a hard case to make that the late '90s employment situation with its historically low unemployment rate is a reasonable baseline to take. Current unemployment now is already low.

Since the short recession of 1992-93 wasn't preceding by anything similar to the type of speculative employment bubble, sheer changes in employment are not a good measure.

[Jim Glass]

"Matt Yglesias really gets behind Krugman's conclusion, which is that the French welfare state is pro-family"

A profoundly cynical person such as myself might suspect "pro-family" is an after-the-fact rationalization for "pro-long vacations for me", absent some evidence that vacation length is indexed by actual existence of family or some such.

In any event, as is demonstrated in data cited over at Truck and Barter (see point #3), fewer work hours on the job do not automatically translate into more leisure time to spend with the family or mistress or whatever.

E.g., that data for the US and Sweden show that while Swedes work fewer hours on the paid job they work more hours at home on "household work" that Americans pay someone else to do -- the result being that Americans actually have more leisure hours to spend on quality time in the bar, er, with the girlfriend, er, the family.

While the Swedes end up working more hours in total, not less, for both less pay and less leisure.

The people who perform the "household work" in the US are the ones who get knocked by labor regulations and high taxes out of the labor market, or into the ranks of the 10% unemployed, over there in the old country.

[Etienne]

Don't know about France, but my family in Ireland seems to have quite the sweet deal. Everybody works (booming technology industry), health care is free, efficient and top notch, no one worries about paying for college (free for everyone), the air and water are clean. They've got all of our freedoms, but parents get to raise their own kids and no one seems to have credit card debt. Sure, they don't have as many widescreen tvs, gas hogs and junk food dinners...but they don't have as much divorce, abortion, poverty, highschool dropouts or drug abuse either. I don't know how they pull it off. Maybe it has something to do with not pouring billions upon billions into nation building.Oh yeah, and they gladly pay the taxes that maintain the common good. I haven't spoken to anyone in the last ten years that admires or envies our system, and emigration to the US has dried up to a trickle.

[Lurking Observer]

So, the question that I have for Paul Krugman and those who feel like he does that places like France have the upper hand, the better choice---why is there a net outflow of population from these paradises?

As important, is there a net flow of people from France to the United States? Or are more people moving there?

It's possible, I suppose, that our benighted populace, w/ illiterate workers who must be instructed by pictures and illustrations, simply does not know about the lovely life and opportunities awaiting them in la belle France. But why do so many of them leave?

[Lurking Observer]

Etienne:

Perhaps the pouring of billions of euros into Eire as subsidies also has something to do with it? Eire, iirc, has been one of the larger recipients of EU largesse over the past decade.

And, yes, perhaps not having a very large military does have something to do with it. Living under the aegis of the United States and the UK undoubtedly has something to do w/ that, don't you think?

[Tollhouse]

By any measure, the economy is strong. So what's a newsman to do? Talk up hidden "dangers" and unknown reasons or the "New economy". Then, after your stories percolate and affirm thousands of ancedotal stories ("I've been out of work for 5 years!") poll the public.

"How do you feel about the economy?"
"I'm doing fine, but I heard that it's tough for some..."

Then trumpet that poll and the ancedotal stories as "proof" that even though by all measures the economy is great, there must be a reason that all these people think it's doing badly.... ya know?

What came first? The meme or the meme?

[Etienne]

I'm not an economist, Lurking Observer. I'm really just a lurking observer myself. I have a cousin in Britain as well, and a few more distant relatives there. They seem to have a very similar standard of living, i.e. far less materialistic than us, less driven by economic fear, more family oriented.

I'm not aware that we spend much to defend Ireland, nor that they benefit disproportionately from Euro subsidies. Just as Toyota recently chose Canada over Mississippi for its new plant because of lower health care and a more educated workforce, Ireland seems to benefit from those two factors as well.

I think what it comes down to is that the US ruling powers have rather belligerantly forbidden us from ever considering any economic structures other than rabid capitalism. It has been deemed unpatriotic for some reason to even investigate any other system, to consider if there is a more humane, rational and efficient way to allocate resources for the common good.

Not aware of the net flow of immigrants Europe:America. I'd bet it's less than it was. I know I'd LOVE to emigrate back there, but current family responsibilities preclude it. Retirement, however, that's a different story.

[MaDr]

Etienne

Would you please us the the relative tax rates (Individual & corporate) between Eire and the USA? That might be enlightening.

[Tim]

Rabid capitalism?

If only.

[Brainster]

I too am boggled that the government telling people that they can't work more hours somehow qualifies as "choice" in Paul Krugman's world.

Etienne, you really need to learn a little more about the Irish situation. Their taxes are very low compared to most of Europe, especially their corporate tax rate. Tom Friedman wrote about this in a terrific column about a month ago, called "The Way of the Leprechaun".

[JorgXMckie]

Etienne: A coupla points: 1) Eire is an island -- they can fairly easily restrict access (check out Hawaii's health care system); 2) Eire was an economic backwater up until a few years ago when they, like India, finally loosened up their markets -- that plus the fact that, oddly enough, just about all of them speak excellent, if accented, English (Thank you, William of Orange) made them a huge magnet for development (along with a generally decent workforce, etc); 3) The Irish have been fundamentally a pacifist state for years. I don't blame them, but that does mean they rely on others to keep the bad guys at bay. How do you think they would have prospered under Naziism?; 4) their current good health system is an outgrowth of points 1) and 2), otherwise it would be pretty much like the UK or some other EU country. I wouldn't trade our system for theirs, but YMMV. I for one pretty much to, say, starving to death old folks suffering from debilitating, fatal diseases in the last weeks of their lives, but it does free up resources to make excellent care available to others; 5) your Canada/Mississippi has been exploded, but did you notice the new Toyota plant going into Texas, or the Japanese auto research complex going in south of Ann Arbor, MI? Even the US can't win them all.

Finally, I always get a kick when I teach Health Policy to grads and they tell me how much better the Canadian health system is. I just assign a class project: sit in the parking lot of any major Detroit hospital and log the license plates on every car that comes in, by country. Now, explain whay at least 10$ (on many days it approaches 50%) fo the cars are Canadian? Why do you suppose they are coming to the US to pay for health care that they can get, supposedly, for free in Canada?

[Marcel]

The French don't change jobs as often as we do, but when they do so are not at risk of losing their health insurance. Many Americans are stuck in jobs because they can't risk losing health benefits; a new employer may not offer as much coverage, or deny specific coverage. COBRA only goes so far.

Capitalism is based on the free movement of capital and labor. Our labor markets are constrained because of the health care system.

[Marianne]

Jorg, many of the Canadian license plates at US border hospitals are Canadian staff. And it can't be all bad up there because Canadian women live 3 years longer, and men 2 years longer, and the infacnt mortality rate is much lower. But the Canadian health care system is not the one we should be looking at - the French one has more to offer, and is regarded by many to be the best in the world.

The French also live longer than Americans and have a much lower infant mortality rate. In France the combination of public and private health care leads to a high level of care and short waiting times, at a much lower cost than here.

[Etienne]

I have nothing against lower corporate taxes, if it actually translates into a better standard of living. I was talking about income taxes, which seemed high to me, though I don't know the rate or how it compares to the rest of Europe. Like I said, I've got British family as well, and don't see much, if any, difference in lifestyle or standard of living.

See, here's the rub. Many conservatives are able to defend capitalism with technical facts and concepts, but nothing compares to the reality of experience. I've lived in both systems. I can tell you, the popular conservative notion that "socialist" European economies are stagnant is not something people there are experiencing. They are living very fine lives, with less economic fear, with far less materialist greed, and with just as many of the freedoms we enjoy. And their family stability and health is something that would put the most faith based Americans to shame.

My point is that it's almost impossible to have a civil discourse on this topic. Wealthy, elitist conservatives have hijacked the conversation and basically decreed that there is no better economic system possible. The working class, with no understanding of even basic economic terminology, are left floundering with whatever scraps fall off the table and are only allowed to conclude that it's their basic unworthiness that makes it impossible for them to earn enough to have any family time or any dreams at all.

I always wonder why politicians refuse break down economic topics for average workers to understand, without grinding their ideological axes, so that people could be empowered to vote intelligently on the issues that most directly affect them.

[pamela]

Etienne,
Reread your paragraph beginning 'My point is...'

Now understand that you, also, friend, are part of the reason it is 'almost impossible to have a civil discourse on this topic'.

And if you don't understand my point, that, ironically, illustrates my point even better.

[Slartibartfast]

My point is that it's almost impossible to have a civil discourse on this topic.

Why, you ask?

Wealthy, elitist conservatives have hijacked the conversation and basically decreed that there is no better economic system possible.

Oh, it's (at least in part) because someone is indulging in insulting generalization. Maybe you can be a force for change, Etienne.

[Jim Glass]

"... my family in Ireland seems to have quite the sweet deal ... I don't know how they pull it off. Maybe it has something to do with not pouring billions upon billions into nation building. Oh yeah, and they gladly pay the taxes that maintain the common good."

Um, actually a big key here is that they pay one heck of a lot less in taxes than they did 20 years ago when everybody was fleeing the country.

In the mid-1980s Ireland had 17% unemployment, GDP per capita only 65% of the EU average, a past generation of average economic growth under 2%, national debt at 113% of GDP and rising in spite of a national tax burden of 45% of GDP, with government spending at 55% of GDP. The population was fleeing the country.

Facing an imminent fiscal melt-down, the government slashed spending, taxes, and regulations on business -- and kept slashing for years to come.

Since then, government spending as a share of GDP has been cut in half, and taxes by a third, to 30% of GDP, the lowest in the EU -- with the corporate rate cut from 40% to 12.5%, the capital gain rate cut from 40% to 20%, the top personal rate from 80% to 44% and standard personal rate from 35% to 22%.

The result has been tripling of average GDP growth since 1987 -- with an average 7% for the last 10 years -- reducing unemployment to as low as 4% and making Ireland one of the five richest countries in the world -- and #1 in the EU (disregarding Luxembourg) with per capita GDP 39% above the EU average. The national debt has plunged to 30% of GDP.

And the population flow has reversed, the expatriots are returning home.

All since 1986! A notable object lesson for France and Germany and Krugman that they and all their friends seem determined to ignore at all costs. (More on that score.)

[Mitch H.]

Etienne: what he's talking about is the "free rider" security problem - most of Europe outside of the UK and France get a one or two-percentage-point "bonus" in security costs due to the those two countries and the US carrying the bulk of the expense. This isn't really those other countries fault - the three countries in question do it to maintain their pretensions to world relevance - but it is a significant economic factor.

Tom - you have a problem there on French fertility rates. France is thought to have a relatively high birth-rate by European standards. Fairly miserable by American standards, but still good by post-nationalist standards, which is fair, since the French aren't quite post-nationalist, anyways. But the countries with disastrously low replacement rates are Italy(1.28), Japan(1.39), Russia (1.27), Germany(1.39), and pretty much everywhere else. I think the French fertility rates (1.85) are actually higher than the UK's (1.66).

(The US? Still 2.08, which isn't exactly stellar, either. Pakistan's 4.14.)

[Jim Glass]

"I always wonder why politicians refuse break down economic topics for average workers to understand, without grinding their ideological axes, so that people could be empowered to vote intelligently on the issues that most directly affect them. "

First of all, 9 of 10 politicians (and I'm being optimistic here) have no understanding at all themselves of the economic issues they deal with, much less the teaching capacity to break the issues down for others.

More to the point, politicians are self-interested people.

They have no interest whatsoever in educating you to be able to better vote in your own interest.

Their entire interest is in motivating you to vote for them.

To do that they will say whatever they come up with that works and that they can get away with.

The grinding of ideological axes is long-proven by test to be very effective on this score.

[Slartibartfast]

Mitch, are you thinking that higher birthrates are good?

[Lurking Observer]

How unsporting of those elitist, wealthy conservatives.

No doubt, the same lament could be heard in the 1950s, when Communism was being decried. Those nasty, wealthy conservatives caterwauling about how Communism couldn't deliver the goods, when everyone could see that socialized medicine was better at delivering the goods, everyone had jobs, and the USSR was registering higher growth rates than the West!

Or the 1960s, when North Korea's GDP was greater than poor, backwards South Korea under those wealthy generals. And China's Great Leap Forward and Cultural Revolution displayed the meaning of public support, unlike those wealthy, elitists on Taiwan.

Certainly, by the 1970s, it was clear that Tanzania and Nyerere's socialism was an alternative to the likes of Lee Kwan Yew and unfettered capitalism. What could one expect from wealthy elitists like Singapore?

Yes, Etienne, one wonders why we can't talk about a Third Way more. Erm, what is the Second Way, at this point?

Of course, one should experience it, to know what paradise is like. So, why is there a net outflow of immigrants from places like France? And is it really better, if you have a standing unemployment rate of ~10%?

[Dunno what planet Etienne is on...]

Ireland is anything but what she has described.

It is now the 2nd most expensive country in Europe after Finland.

New cars are subject to ~50% sales + registration taxation with annual road taxes (you yanks call them tags I believe) running at over 500 dollars/year for something with a 1.6 litre engine.

A 3 litre engine would be about $1500 annually.

Car insurance is the most expensive in Europe (again due to lack of competition and unwillingness to reform compensation culture by reigning in rapacious ambulance chasers) with basic cover for anyone under 30 well into 4 figures.

Speaking as someone who regularly travels between the UK and Ireland, a basket of Groceries over there is about 20-25% more expensive than the most expensive local supermarket I can shop in here.

Highly centralised with all the inevitable corruption that entails from a lazy legislature who have delegated the work of running the country to the civil service.

A rapacious over manned producer captured monstrosity leeching wealth from the productive.

This has lead to producer groups (in particular certain wholesale consortiums) buying politicians to restrict competition in the supermarket sector, through the use of bans on below cost selling, ridiculous limitations on outlet size and feather bedding of those with the right connections.

Giving Irish consumers the highest prices, the worst choice, thus providing supermarket owners with the highest margins in Europe.

Health care is *not* free. It's rationed by waiting list and one is forced to buy health insurance from just two companies for anything resembling timely treatment.

The state owned one is yet another producer captured monstrosity which has just announced premium rises of 12%.

The privately owned insurer is required by law to cross subsidise the state insurers horrendous inefficiencies in the name of 'social' cover.

The housing market is out of control, with prices spiralling far beyond the reach of mere mortals.

For a country with one of the lowest population densities in Europe, our corrupt political class passed laws which heavily restricted supply through zoning.

Well connected speculators were then able to buy the relevant permissions through bribery and make a killing.

Tax relief (section 23) has been handed to favoured millionaires to build appalling sub standard apartment accommodation throughout the country.

It is of course impossible for the press to report on this, as the libel laws are geared specifically to cover the asses of the politicians and those to whom they peddle their influence.

There is no public interest defence in Irish libel law.

Ireland does have all the social ills of any other western country. Teenage pregnancy rates are the highest in Europe after Britain, Drug abuse is serious and exists in even small towns and villages.

That's not even the half of what's going on over there.....

[Patrick R. Sullivan]

'Just as Toyota recently chose Canada over Mississippi for its new plant because of lower health care and a more educated workforce.'

And 125 million Loonies from the Canadian taxpayers.

[Connor]

Patrick, the $125 mil was about half of what was offered by Mississippi and nearby states. The Nissan plant at Canton, MS has been plagued by quality problems that the Toyota people did not want to deal with. It wasn't just the health care.

[Lance]

Etienne,

Well the point has been made, but I'll make it explicit, Ireland is a rabid capitalist state, at least if your comment that we are is to be taken at face value. Ireland has one of the five freest economies in the world according to studies by people who care about such things. I agree with you that Ireland has much to admire, I'll also agree with the previous commnentator that like here and everywhere else it has its problems. They went from a continental model to what the french refer to with dread as the "anglo-saxon" model, by which they mean me, you, the Brits, the UK, and Australia. Correspondingly they went from one of the poorest countries in the west to the second most proseperous in Europe behind Luxembourg, which is also a free market haven despite their EU loving ways. Similarly, while Blair's England is no Ireland, it is far closer to Margaret Thatchers England and Ronald Reagans America than Chirac's France or Schroeders Germany. The big fear on the continent is that the crises in the EU will mean becoming more like the Anglo-Saxons. Anyway, what this all means is if you are implying the Irish model is a good thing, I heartily agree. So would Ronald Reagan and Milton Friedman. Good to know you appreciate rabid capitalism so much. I just guess that isn't what you meant. You imagine that Ireland is doing so well relative to many other places because it is following the "european" model, but it doesn't, instead it is more like us. They slashed taxes, spending and regulation. Like us they have a lot of work to do yet to make it a paradise, but both we and Ireland are way ahead of France, Krugman's fantasies aside.

PS- Less materialistic? Just got back from Britain, I love Ireland as well, but they are every bit as materialistic as we are. You see what you want to see I guess. Next time you are in London head down to the high street shopping district, Harrod's and the other great shopping landmarks. The city is awash in shopping and consumerism. Britain is a great place, but because they have a lousy government run health program and a few too many annoying nanny state laws on what kind of toilet is adequate, etc. doesn't change the fact that their economy is much like ours and they love things as much as anyone.

[Trelaney]

Patrick - Maybe we should impose a special tariff on Canadian-made autos for unfair trading practices, based on the fact that their government subsidizes health care ... it is hurting our economy by shifting jobs that should belong to American workers. Maybe that is one reason that our states are forced to offer larger financial incentives.

[Jim Glass]

"United States 10, Canada 1 -- Canada Wins!", Krugman.

This is the first new auto plant in Canada in 20 years, while 10 have been built in the US, and Toyota's opening the 11th in Texas in 2006.

And while the Canadians have been building zero, their largest employment declines have been in motor vehicle and parts manufacturing.

So did Canada just invent its health care system last year? Or shall we say it presented the 12th most attractive site for a new auto plant in North America? And Toyota finally got that far down the list?

As to education, the comment of the day on this was posted over at the Atlanticblog econ blog...

"I am shocked, shocked that Dr. Krugman didn't ascribe Canada's superior educational system to the ability of Canadians to specify that the tax money that would otherwise be used to educate their children at public schools be directed to parochial schools instead.

"You mean he didn't use the opportunity to call for a full voucher system?"

... which also did a pretty good job covering the medical economics of the issue.

[Horatio]

What's wrong with tiny cars? There are many reasons to criticize France, but tiny cars is simply not one of them.

[Walter]

Getting back to France but not off the topic of subsidies ... The Airbus is assembled in France (with other countries contributing major sub-assemblies). Over the years the development of new Airbus aircraft has been heavily subsidized by governments,government-backed securities and subsidized export financing. Subsidies to Airbus have far exceeded any benefits that Boeing has received from our government.

[James]

Krugman is leaving out an important part of the study he quotes. The reason European goverments have regulations which encourage more free time was because they were pressured by unions to pass laws in an attempt to bolster employment. The attempts failed, and this was a residual effect. More on my blog if you are interested.

[pacified]

man o man... people attacking France! How original of you all. Get a life, fools.

[TM]

Here are links to the Friedman column on Ireland, as well as an Economist survey.

And too-rarely seen commenter DSquared put Ireland's GDP in perspective thusly:

Ireland has a high GDP because of all the foreign-owned companies domiciled there to take advantage of the tax treatment. However, this has an offsetting negative item for "factor payments overseas" in the national accounts, which means that national income for Ireland is substantially less than national product. For countries like France or Germany, national income is substantially higher than national product, and indeed, higher than Ireland's.

The tax-haven strategy has certainly worked for Ireland; growth has been great and the foreign companies expand the Irish tax base. But saying that Ireland is the "second richest country in Europe" is just wrong.

File that under "trust, but verify" - DSq is the sort who would be right about that, and it makes sense, but I have not checked it.

And I would note, mainly as a snide rejoinder to Etienne, that the Irish miracle began even before the US began nation-building in Iraq.

[Insider]

Many of you are giving Krugman far too much credit for his column which was, in a word, flawed.

Here is what Krugman should have written:

1. The French economy is stagnant and does not generate enough jobs for its citizens. The French unemployment rate is 66% higher than that of the U.S.
2. Being an unemployed Frenchman is not a choice or side affect of French worker’s spending more time with their families.
3. Most importantly, French people are not more happy or satisfied as their American counterparts as Krugman suggests. In fact, its quite the opposite.

We’ve detailed all of these arguments using many of Krugman’s same sources.

Krugman's French Connection or Les Miserables?

The only people in the world who believe the French are having happy family fun seem to live in the ivory towers of downtown New York.

[gt]

Dsquared is right that national income figures are worse than GDP figures for Ireland (due to foreign investment outflows) but it's still one of the best perfomring and ranking economies in Europe. Of the 12 euro area nations Ireland is number two measured on a gross national income per capita basis. It is now about 85% of the US level (in nmational incomeper capita) where a decade ago it was about half that.

[MaDr]

I find it curious that the Left is rarely exalting the merits of the Canadian Health Care system anymore. Could it be it's on the verge of bankruptcy and news that Canadians of means go to the USA for their medical care? Or maybe that Canadians in need of an NMR have the option of 1) a possibly long wait in a long queue, 2) head to the USA, or 3) go to their local vet. I find it astonishing that someone is now promoting the French Health Care system based upon raw statistics not taking into account, genes (still rules), diet, culture, etc.

Been in a French hospital before? Even one of their "world renown" ones? Ever seen an American OR with a window to the outside. Think about that - assuming you know anything about ORs.

[ArminTamzarian]

Government expenditures in Ireland are 39.4% of GDP.

Ireland has lower divorce and abortion rates because divorce and abortion are far more restricted there than here. Duh.

But yes, it is about the fourth wealthiest country in the world, and the second wealthiest real country.

[ArminTamzarian]

Oh, and one problem with American health care is that we have far fewer doctors than most other advanced countries.

Unions.

[Jim Glass]

Hey, Mr. Insider, that Pew Global Attitude Survey (.pdf) you link to is good catch, thanks for the reference.

Regulation as Choice seems to have brought the French so much happiness that they report being unhappier than Americans about every single thing: their incomes, jobs, families, expected futures, the direction their country is going, name it.

Add to this their their higher national debt, higher deficit, double unemployment rate, double long-term unemployment rate, lower growth rate, much worse fiscal position on future retiree entitlements ... yes, we can see why Krugman endorses French Choice! Who wouldn't?

[TM]

Re: Regulation as Choice - well, there is the view that people get the government they deserve, especially in democracies.

We voted for Reagan over Carter, and Bush over Gore (sort of). And the French have voted for a lot of their governments, too.

[Steven J.]

JOHN - "I think it's a hard case to make that the late '90s employment situation with its historically low unemployment rate is a reasonable baseline to take."

I took the early 90s. BTW, what happened to all those jobs that Bush said would be created by the tax cuts?

[James]

"I took the early 90s. BTW, what happened to all those jobs that Bush said would be created by the tax cuts?"

In "the early 90s" Clinton took office just as the economy was coming out of a recession, Bush took office just as it was going into one. Hardly an accurate comparison.

[Insider]

Thanks Jim. By the way, wgeat analysis on Krugman's Unemployment column which was built on similarly weak reasoning (his not yours). Thank you in advance for letting me lift your conclusions for our blog.

[triticale]

Is "far less material greed" perhaps a euphemism for "acceptance of the fact that they cannot afford or obtain possessions USians can have if they want them"?

[Steven J.]

JAMES - "Bush took office just as it was going into one. "

The recession ended in Nov 01. Where are all the jobs Bush promised?

[Steven J.]

JAMES - "Bush took office just as it was going into one. "

The recession ended in Nov 01. Where are all the jobs Bush promised?

[kim]

You don't count it as a job unless someone is selling(?) their labor to someone else. Pretty warped economoncs, SJ.
=================================================

[kim]

Ecomonkeyness. Is that Krugman or Kyoto?
==================================================

[Roland Patrick]

'Re: Regulation as Choice - well, there is the view that people get the government they deserve, especially in democracies.'

Tulloch and Buchannan pretty well demolished that idea.

But, gee, too bad the denizens of Semi-Daily Journal don't to read Jim Glass's analysis. Banned in Berkeley!

[Jim Glass]

Up the comments some way my cynical self wrote...

"A profoundly cynical person such as myself might suspect 'pro-family' is an after-the-fact rationalization for 'pro-long vacations for me',"

... but even I wasn't cynical enough to think the paper Krugman cited actually said that.

But over at The Chief Brief the Chief apparently believes in checking sources. So he read the paper and quotes it as describing the French Choice process as working thusly...

we argue that European labor market regulations, advocated by unions in declining European industries who argued "work less, work all" explain the bulk of the difference between the U.S. and Europe. These policies do not seem to have increased employment

So French Choice was a rent seeking policy by an interest group using political influence that failed in its stated objective.

Ah, but we like it, because we like long vacations, so after the fact it becomes a policy meant to let us spend more time with our families. (And all the unemployed it's created get to spend the whole year, 24/7, with their families!)

It seems no matter how cynical one is, one can't be cynical enough to keep up with some newspaper writers.

[kim]

It's not so much cynicism, I think, as the suspension(or lack) of the critical ability. In the recitation of facts there isn't time(or place or ability) to think of the implications.
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[Etienne]

Missed a bit of the conversation I see. Must say it's only confused me more reading through it. One guy lists all the ways Ireland is a perfectly atrocious place to live, another chimes in to agree but claims that it owes it's current happy condition to its adoption of capitalist practices. Which is it?

I'm not an economist. I find it all but impossible to follow economic posturing from those with a grasp of the subject, usually because they are condescending to the untutored and are only interested in grinding their particular axe. I only know that I've got family in Ireland, in Clare to be exact, in a small town where my uncle is both librarian and postmaster, and their lives - from schooling to health care to family life - seem markedly less fear driven and insecure than does ours here. As for the teen pregnancy rate, perhaps it's high, but ALL of Europe enjoys a lower teen pregnancy rate, divorce rate, crime rate, etc. than does the United States. So all things are relative.

Materially, they are human beings, and obviously some are driven by greed. But they just HAVE less. No dishwasher, microwave in the kitchen. One tv in the house, a small one. One small car for the whole family. One bathroom for a family of 7. It's just different, simpler. Americans, even with their "christian" pretensions, seem to regard excessive consumption as a symbol of superiority. That's a beautifully foreign concept there, and in most of the rest of the world.

An interesting take on this is provided in this book review of The Impact of Inequality , which suggests that it isn't wealth or poverty that determines the quality of a society, but the degree to which citizens share a commonality of economic circumstance. As one of the working class here in the US, I find the conclusions very compelling.

[kim]

And how is it that 'commonality' of economic circumstance determines quality, and who decides?
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[Foobarista]

You can make do with less in the US as well; if you do, you'll get to financial freedom much more quickly than if you live large. For what it's worth, we save about 50% of our income and live well below our means, although we do live "comfortably" as such things are reckoned.

But you should have the choice; I don't want the Central Committee to decide my lifestyle for me, nor do I want confiscatory tax levels and a bunch of bureaucratic prudes or Guardianistas to do essentially the same thing.

If "dreams" mean "to get goodies from the State", than I could do without such dreams. If they are to build a productive, happy, prosperous life on your own means, I'm happy to dream.

[Etienne]

Choice is good, Foo. I certainly don't want Central Committees deciding anyone's lifestyle either. But you are delusional if you think everyone in America has a choice and can independently control their economic circumstances.

As I've repeated, I don't understand economics. However, I notice that unemployment figures appear to be low right now, yet wages have not risen. In fact, real income for middle and working class has fallen somewhat. How is this explained? Doesn't low unemployment, using the law of supply and demand, lead to higher wages?

I think we are dealing right now with a VAST inequity in wealth distribution in the US, which is growing at a rapid pace. The rich are getting insanely richer, the poor and middle class are dropping like rocks. Our kids have trouble affording college, which leads to trouble escaping their parent's poor circumstance.

I notice that the well to do are very cavalier about the beauty of our system allowing everyone to determine their own fate. They ignore the reality that they are able to gift their children with every advantage, from stellar educations to unpaid internships. Meanwhile, our kids, who in many cases are of a superior quality, intellectually and character-wise, will never have that shot. It is the callous arrogance of the wealthy conservative elitists to pretend this is a level playing field.

If we are to have a truly merit based society, all kids should have an equal shot at higher education and all people should have an equal ability ot access good health care. Beyond those two factors, I don't think anyone here in the working classes is asking for any special privileges, or any government controls. It's not as if we're asking for any of the socialist welfare the corporations receive from our government - just health and education to create the kind of equal opportunity we are always being asked to be so proud of ourselves for having.

[kim]

Feeling a little put upon here? Try changing your own circumstances more easily anywhere else in the world.
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[kim]

Try changing your own circumstances in a world where there is a 'commonality' of economic experience.
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[Steven J.]

FOO - "For what it's worth, we save about 50% of our income "

Neat. About 25% of the people of Arizona are eligible for Medicaid, 20% are on it.

[Les Nessman]

"I think we are dealing right now with a VAST inequity in wealth distribution in the US, which is growing at a rapid pace. The rich are getting insanely richer, the poor and middle class are dropping like rocks."

Gee, hyperbole much?

I've been hearing that the sky is falling for years now, yet it never seems to happen.

[Paul Zrimsek]

You don't need to know anything at all about economics to realize that "have not risen" does not mean the same thing as "dropping like rocks."

And now we come to one of the paradoxes in which this subject abounds. If American workers are already spending so much money on stuff they don't really need, why is it supposed to bother us that they're not making enough money to buy even more stuff they don't really need?

[Etienne]

Well, it 's only a paradox because of misunderstanding.

I'll try, but I'm bad at this: We are told capitalism is the superior system, with unregulated capitalism the epitome, because it produces such a variety and quality of goods and services. Because of this, people have access to constantly acquiring more and better goods, although they must work longer and harder to earn them. The result is a dynamic economy.

The fuel for this dynamism is consumerism. People must be made to believe that their happiness and freedom in life depends on their acquisition of these desirable things. In my opinion, this is the first delusion. Whenever I hear conservatives complaining about the crassness of our culture, I marvel that they can't make the connection that unrestrained greed is a kind of sickness akin to unrestrained lust. Certainly American culture is infamous for the degree to which it has catered to both of these urges.

A problem arises in an unregulated capitalist society like ours is fast becoming because more and more people are being denied access to the deeper needs of life - education, health, family life - because our economy depends on them wasting their lives at low paid, low benefit jobs merely to survive. The cycle passes on to their children, with very rare escapees. Meanwhile, a select few accrues the lion's share of wealth and resources to themselves and their ever wealthier heirs. This wealth becomes a prerequisite to political power, and this power seeks only to reward its own class. The result is oligarchy.

Our society is moving now towards that kind of two tiered nightmare, with a dwindling middle class attempting to remain satiated on the bread and circuses that drive the consumerist economy.

It isn't hell on earth, that's for sure. But I'm not sure what makes it the perfect society of which man is capable, or why those who constantly congratulate themselves on their American Exceptionalism consider it so. If America is indeed exceptional in some way, I just wonder why the benefits accrue to such a select few of us, and why they are so entitled. We can't all be George W. Bush, after all, born with a silver spoon and coddled from elitist cradle to elitist coffin. The idealism that any good kid in America can grow up to be President, or even have the guarantee he can make a dignified living, has been "quaint" for some time now.

[Les Nessman]

"A problem arises in an unregulated capitalist society like ours.."

UNregulated? Again, you may have a worthwhile overall point, but the hyperbole is making it hard to take this seriously.

"..because more and more people are being denied access to the deeper needs of life - education, health, family life .."

Who is being denied access to education? I think we spend more on k-12 than we ever have so who can't get access to it? Plus, if the schools are failing, are they failing due to Capitalism or for other reasons?
Health care is now more regulated than it has ever been in this country. Has that helped or hurt it?

" they can't make the connection that unrestrained greed is a kind of sickness "

" very rare escapees. " "a select few accrues the lion's share of wealth and resources to themselves and their ever wealthier heirs. " " The result is oligarchy. "

" Our society is moving now towards that kind of two tiered nightmare "

" If America is indeed exceptional in some way, I just wonder why the benefits accrue to such a select few of us, and why they are so entitled. "

I can't believe we live in the same country.

" The idealism that any good kid in America can grow up to be President,"

Clinton, Reagan, Carter? Did they come from some priveledged background?

" or even have the guarantee he can make a dignified living, has been "quaint" for some time now. "
(cue Heart of Darkness: 'The hyperbole...the hyperbole..')

[kim]

She's just a slave to the ideas of an old, dead, white(and wrong) male European.
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[Aaron]

http://truckandbarter.com/mt/archives/2005/07/sacra_blue_1.html

Truck and Barter takes Krugman down, down, down on this BS.

The first warning is to use the productivity per hour worked as his “proof”. Taxes and regulations have forced out the low productive workers and prohibited the last two hours worked per day for the remaining. The policies have destroyed much wealth, but “per hour” things look OK, simply because all the zeros are not included in the average. It's just a statistical trick.

Furthermore, there is no “choice” about what is happening in France, unless "choice" is Newspeak for forced regulations. If it really was a choice the politicians wouldn’t need to legislate the 35 hour workweek, people would simply work fewer hours. Krugman also suggest the choice is making Europeans happier. Now here it realy starts getting amusing.

The evidence he refers to is from the Eurobarometer, a survey that among other ask life satisfaction from Eu-members. As it happens, Harris Poll asks the exact same question to Americans. Only a dismal 18% of the French describe themselves as “Very Satisfied with their lives” in this, compared to 44% of Swedes and a solid 58% of Americans. It seems that Americans are much happier than the French.

But what of the great Family Life Krugman was telling us aboubt? Actually it seems the hard working capitalists of Europe - the British and the Irish - score higher in Family life satisfaction, with 52% and 53% very satisfied, compared to 41% for the French (page 25).

[Etienne]

Les, maybe we do live in two different countries. More likely in two different classes. The kind where the elementary education is abysmal and limited to nothing but government test preparations and where each year of college education costs more than a house did twenty years ago. The kind where people pray not to get sick because they have no health insurance, where they squint behind 15 year old glasses and where their teeth ache all day long because the dental care would cost two week's pay. Yeah, Les, two different Americas. Definitely.

Clinton, Carter, Reagan, et. al...It wasn't so very long ago that it was indeed possible for an average kid to grow up to be President. But it's naive to ignore the sea change we are undergoing in our new system of one party rule. Income inequity in the US is growing rapidly. The difference between what a CEO earns and what his average worker earns is now exponential. The Republicans appear to have no other agenda than to reward the already privileged and turn us into a stratified South American type economy.

Can there be a turnaround? I would like to hope so. I have three young ones and don't want them to inherit the kind of country the oligarchs in power are working overtime to create. But as Ann Coulter herself said the other day, in a rather startlingly honest admission : "We have the media now." We all know how this works. Between right wing control of the media and their ownership of paperless voting machines, it becomes a very bleak prospect for any populist agenda to ever be returned to power.

[kim]

For a populist agenda to return to power you have to appeal to the people. It seems apparent that the modern Democratic Party has lost it's populism.

So you think accountability in voting is gone? How about paper receipts? How about voter identification?
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[kim]

I hate to get personal, but you need some advice. You are not doing your children any favor giving them the idea that they are being held down by the man.
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[Paul Zrimsek]

Well, it 's only a paradox because of misunderstanding.

I don't think so. You'd already explained quite clearly your belief that American workers are struggling for survival, and your belief that they could easily get by with less. Re-explaining both these beliefs at greater length doesn't do anything to resolve their mutual contradiction.

[Etienne]

Paul, the people struggling for survival are NOT the same ones who could get by with less. Is that so hard to understand? Did that need to be spelled out so clearly?

A great deal of the "misunderstanding" between ideologies seems willful.

[Etienne]

Kim, where did you get the idea I tell my kids they're being held down by "the man"? Never said it, as I've never done it. I'm not speaking on this blog as I would to my kids.

I agree with you though that the Dems have lost their connection to populism, mainly because they are almost as beholden to corporate lobbyism as the Repubs are. However, the Democratic message is the right one for average Americans, and I still hold some strands of hope that they'll remember that.

Repub think tanks had an epiphany some years ago, realizing they could hide their wolve's agenda in the sheep's clothing of religion. Incredibly, American "Christians" were all too willing to sell out the teachings of Christ (remember "It is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven"?) in exchange for flattery and some "faith based" cash. It's a shameful chapter in the history of a great religion, but one can only hope it will eventually be overcome. I've lost my faith in our political leadership,kim,not in mankind entirely.

[Paul Zrimsek]

Etienne, the specific examples you offered of the things you regard as useless baubles were: widescreen tvs, gas hogs, junk food dinners, dishwashers, and microwave ovens. Every single one of these is a mass-market item; some of them are bought even by welfare clients. There's simply no way the near-universal ownership of such items can be squared with your old-Marxian vision of plutocrats and proles. I've never yet run into a Vanderbilt at Burger King, and I doubt I ever will.

Oh, and son: there may be a line to be drawn between Christians and "Christians"-- but I really don't think you're the one who gets to draw it.

[jult52]

Etienne -- your complaints about the US education and health care systems are industry-specific and actually don't have a lot to do with the rest of your critique of American capitalism. You are dissatisfied with grade-school education and a health care system with soaring costs and suspect efficiency? Join me and many other right wingers. We agree with you.

And Paul Zrimsek is right to harp on the internal contradictions in your posts.

[Paul Zrimsek]

One more thought: Perhaps the most extraordinary thing about an ideology like Etienne's is the way it morally privileges what might seem to be an arbitrarily chosen point on the great curve of human wealth. What a wonderful coincidence that it should be the western Europeans of our own generation who have happened across what is, sub specie aeternitatis, the correct level of consumption-- such that even a modest increase amounts to obscene excess, while even a modest decrease amounts to subhuman deprivation!

[Etienne]

Paul, it's you that's looking for moral privilege and insists on pigeonholing me with concepts like "Marxian vision" that are completely foreign to me. I'm talking about something a lot more down to earth. We're becoming a society of haves and have nots. It is destroying our sense of common nationality. It is further being exploited by the oligarchy in power, through a cynical manipulation of cultural prejudices and vanities, to obscure their agenda of completely corporatizing our government and wresting it out of the hands of its rightful owners, the people.

jult52 makes an interesting point, one I've often found within my own circle of family and friends, that conservatives and liberals, unbeknownst to either of them, have a great deal more common ground than they think. I have noticed that more often than not it is conservatives who are complaining about our crass culture, the materialism, the greedy children, the lewdness. Yet they seem immunized against understanding that they themselves, in their yellow ribboned gas hogs and ridiculous accumulations of ever sleeker technology, are themselves the primary engine of the cultural devastation they deplore.

The idealism behind the United States was egalitarianism. It should upset everyone who considers himself a patriot to see us developing into an oligarchical society where corporate interests have priority over those of the citizens.

[Les Nessman]

Et:
"Les, maybe we do live in two different countries. More likely in two different classes."

Well, I don't know what the upper class is like; and until recently, I didn't know what the (lower?)middle class was like.

You have a litany of reasons why it is better to be rich in America than to be poor in America.

When was that not the case? Ever? In the history of the world?

[kim]

Etienne: More advice. Synthesize your life. Be the same to your kids as you are to this blog. You can't help it anyway.

Paul: Worse yet would be all the 'commonality' of economic circumstance. That describes slaves, by the way, and that may explain some of the appeal of Marxism; slavery to an idea explaining slavery to class homogeneity. What? What!

Les: Ever met a leftist with other than a 'special' view of history?
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