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August 1996

The Party's Over

Comapring the financial states of Gemany and America

Read the newspapers, watch television - or worse, listen to a political candidate - these days, and you'd think the United States was awash in welfare cheats, loafers, wastrels, goldbrickers, handout-seekers, rip-off rascals and deadbeats. Americans have become lazy slurpers at the public trough, greedy scam artists always looked for angle; the can-do spirit that won the west has degenerated into a pathetic dependence on an overly generous Uncle Sugar, etc. etc..... Well, if you think things are bad in America: welcome to a place where the Welfare State, in partnership with the Good Life, has reached heights unimagined by the most avaricious chiseler in his wildest dreams. Imagine a mandated workplace that offers you six weeks of vacation, 14 paid holidays, and half-day Fridays to cap a work week that clocks in at 36 hours and where the retirement age for some is 60; a land, in other words, where your job is more like a hobby, except that you get paid for it. Imagine a wonderland of entitlements where, if you have the luck to get laid off or fired, the government will keep on paying your wages, pick up the tab for your retraining and even bribe you to have a kid or two. Imagine a caring, sharing Big Nanny that, should the pressure of dealing with such a hectic environment get you down, will send you to a health spa until your shattered nerves recover. Imagine a place where they actually have the term, vacation stress, occasioned by the terrific anxiety caused by a) deciding where to go on vacation, b) planning the vacation, c) experiencing the vacation, and d) recovering from it. We're living in it: it's called Western Europe. And a swell place it's been, too, for the past 40 or so years. In Germany, France, Scandinavia and elsewhere, liberal economic ideals have come to full flower on a continent of milk and honey. It's been a grand party, made possible by Europe's postwar prosperity, its relative cultural homogeneity and a dearly won triumph of good intentions over man's own worst instincts. In the future, the half-century nearly past will surely be looked back on as one of western civilization's humanitarian high points. Unfortunately, the party's over, the waiter is on his way over with the bill and the guests are starting to mutter that they've all forgotten their wallets. Cut social benefits? Reduce subsidies? Add work incentives? Lengthen the shop hours? Not on your life. The riots a few months ago in France, and the howls with which the trade unions greeted Helmut Kohl's recent attempt to slash Germany's luxurious benefits indicate that the changeover from benign socialism to a genuine market economy is not going to be easy. For while the Wirtschaftswunder is commonly thought of as a sterling example of Germany's transition from state socialism to capitalism, in retrospect it looks like nothing more than a transition from state socialism to ... state socialism. What else can you call it? In the rich European countries, employers and employees are pitted against each other in the most primitive ideological way, as if jobs somehow existed independent of the . Even the terminology gives the game away: Arbeitsgeber (as if a job was something to give, or withhold, on a whim) and Arbeitsplatz (as if a work place was something to be found in nature, and not created by man). Further, with NATO (meaning mostly the United States) providing the nuclear wherewithal for Europe's defense against the now-defunct Soviet Union for the past 50 years, an artificial prosperity was maintained: life can be great if you don't have to spend 30 percent of your gross national product on defense. Today, with unemployment rates well into double figures - as contrasted with an unemployment rate of under five percent in the U.S. - Europe is trying to figure out what went wrong. Each generation of politicians like to think it can repeal some of the laws of nature, such as the business cycle, but one law that has not been repealed is the Law of Unintended Consequences. The more you try to protect folks from the vicissitudes of life, the harder it's going to hit them. The more you take the work out of work, the less people are going to want to work, especially when they get paid the same amount. And the more you raise unemployment benefits, the more attractive unemployment is going to be. If German jobless benefits were cut to American levels, does anybody doubt that (for starters) the stores would be open 24 hours a day? What has saved Europe up to this point is a shared moral sensibility that it is wrong to cheat. Admirable, even remarkable. But the European system can only work when everybody plays by the rules, and that can no longer be counted on. Americans may be, as Europeans have long secretly suspected, an entirely lower moral order of mankind. But after a much-discussed period of corporate downsizing, more Americans are working than ever before, inflation is low, taxes, while high, are nowhere near European levels and, even with (gasp) only two or three weeks of vacation a year, life is pretty good. And the weather's better, too. But you could also become a millionaire. Europeans counter that while one might become a millionaire, one can also wind up sleeping under a bridge. If trading opportunity for security is a national priority, so be it. Just don't complain when it's time to pay the piper. Check please!

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