Take Germany out of the mix? Why don’t we take NY, California, and Texas out of the mix and see how the US would do?

Northern European countries, the most progressive of the bunch, are doing just fine economically. Belgium, Germany, Switzerland, Luxemburg, Denmark, Norway, Sweden, Finland. Even the Baltic states and Poland are doing better. And we (US citizens) are in no position to criticize France for deficit spending.

California and Kansas could not be more different, I agree. But 10 years ago, with conservatives shutting down the government like in Washington, California was a shambles. Now it is flourishing. Those same 10 years ago, with a relatively moderate Republican majority, Kansas was doing OK. Now it is a laughingstock. If your theory worked in practice, it would not be that way.

Also, the “red” states would be nowhere without the federal government subsidizing them. They take in more federal dollars than the “blue” states. Imagine what would happen if they lost their military bases. The Carolinas, Georgia, Alabama, Mississippi, Louisiana, and Oklahoma would be devastated. Texas (with its natural resources would hurt, but be ok). Purple states like Florida,, Ohio, and Colorado would take hard hits, but would likely do ok. Virginia would be devastated (but only because it is so close to DC). I am not sure if such an action would have as much impact in “blue” states, with the possible exception of Maryland.

So, yes, take Germany “out of the mix,” and Europe would be in trouble (as well as have a big hole in the middle). But the US would be in the same hole if you took out such a huge chunk of its economy.

I stand by my statement that government can be a positive catalyst for a better society.

Western Europe’s Economy seems to be doing OK???

Really? Take Germany out of the EU mix, and almost every country in Western Europe is deep in a downward spiral, with historically low (or negative) interest rates on Gov’t debt, large deficit spending, and sub 1% GDP growth. That’s a curious definition of “OK”.

I’m excluding the UK due to Brexit, which makes it damned hard to draw any conclusions. Ireland and Scotland exist on subsidies. Greece, Italy, Portugal, and to lesser extent, Spain, all have huge unperforming loans on their banking balance sheets and are looking for ways to recapitalize without running afoul of EU rules. Because of the single currency, they can’t deflate their way out of crisis (indeed, the poor performance of the other EU countries is depressing the value of the Euro, which helps Germany export – one of the reasons its economy isn’t tanking as badly as other large EU countries). Even France operates in perpetual violation of EU rules for deficit spending.

California and Kansas are hardly like states. There is little similarity in population, acreage, available ports, natural resources, and a host of other considerations that help determine where people have historically chosen to locate themselves and their businesses.

Gitacarver,

Really? No government intervention after WWII? What about the New Deal and other early 20th century programs, Social Security, SEC, TVA, rural power authorities, FCC, FTC, FDA, SEC… a veritable alphabet soup. That combined with empowerment of labor through unions certainly had a role. I would argue that a large reason the US flourished in the 1940s after the depression, unlike the 1880s after the depression, was government regulation made the playing field more even and enabled the consumer economy.

I do agree that we would be all be better off if businesses related to the mafia were legalized… If some entity is going to skim the cream off the top, I would rather it be paying its fair share toward the infrastructure (whatever a “fair share” might be).

“history shows that any government intervention in the market system no mater how well intentioned is far more likely to make things worse than to make things better.”

Really? Western Europe’s economy seems to be working ok.

And which economy is better right now: California or Kansas?

katall,

No, they both do not have the same ability. The ability of a government to say “you can’t go in that direction” or “you can’t harm workers” is not the same as “you have to build here,” “you have to provide these services,” or just as bad “you have to submit to government oversight and report to people who have never run a business in their lives.”

The growth of American industry during WWII and the years following was greatest because of the lack of government intervention. Companies had to compete for labor which made wages grow and opportunities for workers to increase.

It was when the government started to increasingly step in to regulate and demand they control the direction a business must go is when the decline of American companies started. Time and time again we see how regulations have stymied businesses and their growth. If you want to argue that the lack of growth of the economy and businesses is “good for society,” I wish you well with that naive argument.

I’m sorry Allen, but you are talking about wealth redistribution. You are saying that an employer must take money from their pocket to give (at the point of the government sword) to someone else.

Your own point of saying that you want the “proper distribution of profits” shows that you are talking about wealth distribution. There is just no way around that.

Furthermore, “wealth distribution” is not always a good thing. Why would you ever think that a person who works hard should not reap the benefits of their labor, and especially more benefits over someone who works less or contributes less to society?

If labor wants to control where profits go, they have the same ability as others to either start their own company or buy into the company (ie stock.)

Otherwise, you are doing nothing but talking about stealing from people.

” I am talking about the proper distribution of profits between capital and labor.”

Profits necessarily belong to capital in their entirety as they accrue only after all expenses, which would include labor costs are paid. Now if you want to talk about the distribution of gross revenue between labor and capital, that is a discussion we could have. Making that discussion about profits is economic illiteracy.

A unit of labor should be paid in accordance with the value it provides to the employer. No other formula to pricing labor is or can be sustainable.

Now, there are two different types of labor. Overhead labor does things that a business needs to function but does not directly contribute to gross revenue. Then there is labor that directly contributes to revenues. The value of these two different types of labor can not be judged by the same measures.

While you are at it consider this. If the Minimum Wage increases and as a result the cost of living increases proportionally, what good has come from the increase? Buying power remains the same or it may lessen.

” It does not follow that society cannot make laws regulating how they do so.”

Very true, but that does not make every conceivable regulation a good idea.

“If that were not the case, brothels, crack-houses, and casinos would be on every corner and (perhaps) thriving. “Society” certainly frowns on gangs and the mafia.”

And if they were legal probably not nearly the blight that those favoring prohibition would suggest.

Gangs and the mafia thrive only because of the prohibition of certain goods and services. Legalize those goods and services and organized crime perishes.

The Italian Mafia in the US has never since the repeal of prohibition(alcohol) been as powerful as it was at the height of prohibition.

We may well disagree on whether government-directed distribution of some wealth is better or worse than what happens in the market. Having a robust middle class is essential to our country’s continuance. That is my position. And, if the current system does not provide for it, we need another system.

BTW, everyone (except, maybe, communists) would agree that wealth distribution is a good thing. Even you. The question is how it should be distributed. And, to be clear, I am not talking about “wealth redistribution,” which would be taxing current wealth. I am talking about the proper distribution of profits between capital and labor.