Responding to Ross Douthat’s latest column, Jamelle raises an interesting question:
And finally, I wonder how Douthat explains away Northern Europe’s high economic growth rates and robust welfare states?
I’m no economist, but I think this has something to do with the fact that government in Northern Europe, while large, is effectively limited and rather efficient. Denmark, for example, enjoys low trade barriers, a largely unrestricted labor market, and excellent protections for civil liberties. If I thought Obama was about to embark on the Denmark-ization of America, I’d probably be a lot more sanguine about the next four to eight years. Instead, our European trajectory seems to point south, with trade barriers slapped on as a sop to political constituencies, a health care reform package that hinges on subsidizing massive insurance corporations (regulatory capture, anyone?), and a stimulus bill that handed out goodies to just about every special interest imaginable. In other words, our political future looks more Mediterranean than Scandinavian, which should worry just about anyone familiar with Greek, Italian or Spanish politics.
Jamelle persuasively argues that taxation can be effective at reducing income inequality, but that’s only one half of the equation. The point of redistributive taxation isn’t to soak the rich – raising taxes, after all, imposes economic penalties. The larger goal is to improve the lot of poor and middle class citizens through redistributive programs. If the effectiveness of those programs is compromised by the Democratic Party’s core constituencies – teacher unions, the pro-immigration lobby – then perhaps it’s time to reconsider the scope of the Left’s political ambitions. This, to me, is one of Douthat’s better arguments, and I’m not sure that Jamelle has refuted it yet. If we are going to tax only to spend irresponsibly, I’d rather not tax at all.
