Alexander Ryking

“It’s part of a working relationship; It’s a tit for tat,” [Seattle native-turned Berlin café owner Cynthia Barcomi] says during an interview at her Kreuzberg café. “If I want people to work well for me and if I want them to be satisfied with me as an employer, I have to offer them something that’s more than just the minimum wage.”

This attitude toward healthcare — which seems so foreign in the US — gives Germany a competitive advantage, Barcomi and other businesspeople say. A healthy workforce is a more productive workforce and recent German statistics would back that up. The country has relatively low unemployment and in many sectors the economy is booming.

But in the US, which spends more than any other developed nation on healthcare, an increasing number of businesses are “less competetive globally because of ballooning healthcare costs,” according to an article published by the Council on Foreign Relations in March. Indeed, despite the ample spending on healthcare, the system remains inefficient, and the US ranks with Turkey and Mexico as the only members of the Organization for Economic Cooperation and Development (OECD) without universal heath coverage, it adds.

The 17-nation Eurozone or the 27-nation EU should issue jointly backed bonds to provide social safety net support to the financially weak nations, to raise demand for them and get their economies going, while reducing the extreme financial pain and sacrifice that now jeopardize social stability…

[W]hat’s needed in Europe is fiscal stimulus, a more accommodative ECB, social transfers from rich states, higher wages in many nations, a change in the silly EU agreement to keep deficits absurdly low, and industrial policy to gear capital investment across the continent, free of prejudice and nationalistic tendencies. The elections may bring some of this about. Then, once policies are working to support growth and reduce financial burdens as tax revenues rise, the financial markets will at last respond constructively. They must be waited out for now.

To put it most simply, what’s needed is the will of the government of the people to ignore the financial markets and stop treating them like a more rational government than democracy itself.

Justin Fox has an interesting post documenting something I more or less knew, but am glad to see confirmed: People aren’t very receptive to evidence if it doesn’t come from a member of their cultural community. This has been blindingly obvious these past few years.

Consider what the different sides in economic debate have been predicting these past six or seven years. If you got your views from, say, the Wall Street Journal editorial page, you knew – knew – that there was no housing bubble, that America in 2008 wasn’t in recession, that budget deficits would send interest rates sky-high, that the Fed’s expansion of its balance sheet would produce huge inflation, that austerity policies would lead to economic expansion.

That’s quite a record. And yet I’m well aware that many people – including people with real money at stake – consider the WSJ a reliable source and people like, well, me flaky and unbelievable.

In this country, prosperity does not trickle down; prosperity grows from the bottom up. And it grows from a strong middle class out. That’s how we grow this economy. And that’s why I’m always confused when we keep having the same argument with [Republicans] who don’t seem to remember how America was built. They keep telling us, well, if we just weaken regulations that keep our air and water clean and protect our consumers, if we just cut everybody’s taxes and convert these investments in community colleges and research and health care into tax cuts especially for the wealthy, that somehow the economy is going to get stronger — and Ohio and the rest of the country will prosper. That’s the [Republican Party’s] theory.

Ohio, we tested this theory. Take a look at what happened in Ohio between 2000 and 2008. It’s not like we didn’t try it. And instead of faster job growth, we had the slowest job growth in half a century. Instead of broad-based prosperity, the typical American family saw their incomes fall by about six percent. Outsourcing, rampant; phony financial profits all over the place. And instead of strengthening our economy, our entire financial system almost collapsed. We spent the last three and a half years cleaning up after that mess. So their theory did not work out so well. Maybe they haven’t been paying attention, but it didn’t work out so well.

And instead of kind of stepping back and saying to themselves, well, maybe this didn’t work so well, maybe we should try something different, they decided to double down. Instead of moderating their views even slightly, you now have Republicans in Washington and the ones running for President proposing budgets that shower the wealthiest Americans with even more tax cuts…

Ron Unz, publisher of the American Conservative, put this idea in my head, and the more I think about it, the better it seems. Unz was writing in the context of the politics of immigration; he’s worried that the U.S. government’s current strategy of walls and deportations is alienating Hispanics from the Republican Party and will eventually destroy the GOP… [T]hen Unz argues that a high minimum wage would be a self-enforcing deterrent against abusive employers seeking cut-rate help. Jobs for the undocumented would dry up. Those who hold onto their jobs — the vast majority of low-wage workers and especially those with U.S. citizenship, English fluency, experience, and skills — would gain a big advantage…

The plan isn’t just good for Republicans — it’s good for the economy. What would workers do with the raise? They’d spend it, creating jobs for other workers. They’d pay down their mortgages and car loans, getting themselves out of debt. They’d pay more taxes — on sales and property, mostly — thereby relieving the fiscal crises of states and localities. More teachers, police, and firefighters would keep their jobs.

Would this hurt competitiveness? Not at all.