Monday, April 27

American capitalism v. social democracy

Megan laughs at left-onomics:
I think that John Quiggin is voicing an opinion held by a lot of people on the Left: the current financial crisis has somehow discredited American-style capitalism, that the only way out of the mess we're in is to embrace a more social democratic society.

I believe that many on the left believe this [..] but as an empirical matter, it is high-test hokum.

[..] It is true that the belief in both tighter bank regulation and a larger welfare state cluster on the left, but if social democracy is some sort of preventative cure-all, how come the US economy is outperforming places like Denmark, Sweden, and Germany, not to mention the OECD as a whole? Why, if the problem is "American style capitalism", are the biggest GDP declines found elsewhere? I understand that the left finds it politically convenient to link the uninsured and the banking crisis, but this seems only very slightly less silly than blaming it on gay marriage--indeed, looking at the countries worst effected, the latter's correlation seems stronger.

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