American political pundits are quick to give advice to "Old Europe" concerning their slow-growth, high-unemployement economies. Europe, according to this Conventional Wisdom, must push forward with the neo-liberal agenda and become a free market economy like the United States. Specifically, Europe must cut taxes, reduce job benefits, cut pensions and embrace globalization. This is what the US has done, and this serves as the model for the world.
I just have one question for these purveyors of Conventional Wisdom: why have these policies NOT led to increased prosperity in the United States?
In other words, can it be that living standards are actually slipping in America?
(…)After 20 years of very small gains, the rate of improvement surged from 1995 to 2000 – only to fall back toward zero over the last four years, a reversal that puzzles analysts.
People approaching the age of 65 face a different uncertainty: smaller retirement incomes than their parents enjoyed. That is happening as the nation shifts from a system of fixed monthly pensions to 401(k)-type accounts, in which people save what they can for their own retirement. In the process, retirement income is falling from 93 percent of preretirement pay for today’s retirees to 80 percent, on average, for the next generation, according to an Urban Institute projection.
Some retirees cannot afford the pension hit, and they continue to work. The portion of the 65-and-over population that is employed has risen to 14 percent from less than 12 percent in 1995, the Bureau of Labor Statistics reports. The option to retire is slipping away, and that damages living standards.
"People need two incomes to pay what they consider basic expenses. Two of those expenses – health care and education – have risen faster than incomes, says Elizabeth Warren, a bankruptcy specialist at Harvard Law School and co-author of "The Two-Income Trap."
HEALTH problems also undermine living standards. Life expectancy at birth is one symptom. At 69.7 years in the late 1950’s, life expectancy in the United States was slightly ahead of that of Germany and France, and well ahead of Japan’s. Now Japan is far ahead at 80.5 years, compared with 78.5 in France, 77.5 in Germany and 76.5 in the United States.
Infant mortality, at more than six deaths per thousand live births, similarly trails the rates in France, Germany and Japan, according to the Organization for Economic Cooperation and Development. Height, too, is no longer an American hallmark. Average height has been stuck at less than 6 feet for a decade or more while Europeans have grown passed that mark, suggesting that they are somehow healthier.
Obesity is now a distinguishing feature. The percentage of obese American adults has doubled in the last 15 years, to 30 percent, said Kenneth E. Thorpe, chairman of the department of health policy management at Emory University’s School of Public Health.
Why should Old Europe embrace "reforms" that will only lead to shorter, less healthy, more stressful lives?
