The S Word

If you'll glance at the map at the top of this page, you will see that the United States is not the darkest shade of green. That would be the land of flying hockey pucks to the north, and most of that big peninsula sticking off the western edge of Asia. (It's called western Europe, Governor Palin.)

John McCain and the geographically challenged governor called Barack Obama a socialist because he wanted to slightly increase marginal tax rates on wealthy people. Unfortunately, Obama is not a socialist. However, by the definition of the term generally accepted in the United States, those dark green countries do indeed all have socialist systems. They all have much higher tax rates on wealthy people than we have here in the U.S. By a variety of mechanisms, their governments assure that 100% of their citizens have comprehensive health care, for which they pay little or nothing out of pocket, and that the cost is affordable to everyone. Access to higher education is based on admission by merit, not family wealth. Many of these countries provide subsidized child care for working parents. Pensions are generous, worker protections are strong, vacations are long.

Now, if you take an economics course here in the U.S., the professor will tell you that all that taxation and gummint interference in the economy necessarily means slower economic growth and a lower overall standard of living. George W. Bush said that tax cuts stimulate economic growth and tax increases stifle growth -- "It's economics 101!" And indeed it is. But it is not true. Those European countries in recent decades have had growth rates comparable to or better than the United States, and their standard of living is, in many ways, better than ours, because, well, they get all that free good stuff that we don't get. Larry Beinhart reveals that the historical comparisons in the U.S. show the same thing. High taxes are good for economic growth, and low taxes are bad.

Beinhart also says -- but I said it first, many times, as long-time readers know -- that economics is not a science, but a form of theology. Crack open that economics textbook and you'll see some lovely curves, making elegant intersections and carving the plane into graceful shapes. They look just like the curves in real scientific journals!

But there's a difference. In science, the curves are made by plotting data points. They are representations derived from reality, empirical observations. In economics, they're just something somebody made up. They look all scientific and stuff, but they're just icons, like the glass in church windows -- images to focus our faith, visions of an imagined realm.

Now, one might think, as we stare into the abyss of an economic collapse that the consensus of economists told us was impossible and cannot really be happening, that these frauds might finally be laughed out of town. But it won't happen. Ten years from now, they'll still be drawing those silly curves on the blackboard.