
The U.S. Is Lagging Behind Many Rich Countries. These Charts Show Why - MilnerRoute
https://www.nytimes.com/interactive/2020/07/02/opinion/politics/us-economic-social-inequality.html
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coldtea
To move forward as a country you need to care about and build public
infrastructure - from roads, and science, to health all the way to city parks
and internet.

Companies and private moguls wont create good infrastructure out of charity,
and what little they will create, it will be created to be milked as much as
possible, and milked as much as possible. Think cost-cutting and short/mid-
term profit, not vision and future thinking.

And having the state "incentivizing" private companies to build such
infrastructure (paying, cutting taxes, letting them reap the profits, create
oligopoliges, etc), as opposed to build it itself or pay companies to do it
(but design, control, and run it as a public infrastructure) is even worse...
Kind of like why Korea or some such countries have the fastest internet on the
world, and places like New York despite 10+ million densely packed citizens
don't, after trillions given from the state to telcos...

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jeffbee
The counterexample to your claim is New York's Central Park, which has been
funded by private donors since 1980.

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jellicle
The city hired a non-profit to manage the park. The vast majority of funds
spent in Central Park come from the taxpayer. The main reason for the setup is
so that the city will have plausible deniability when rich people want to use
part of the park for their own endeavors (weddings, galas, etc.). You
certainly aren't pretending that Central Park is some sort of privately
provided amenity, are you?

~~~
jeffbee
Not sure which Central Park you are referring to but in New York City the
private Central Park Conservancy raises the vast majority of the park's normal
operating funds and over the last 30 years has provided virtually all of the
capital for renovations.

[https://www.city-journal.org/html/set-parks-
free-11996.html](https://www.city-journal.org/html/set-parks-free-11996.html)

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controversy
The article didn’t really articulate a causal relationship. It appears to be
more “here are some differences, therefore they explain it”. I’m not
discounting the validity of these being the cause, but at the same time this
article doesn’t prove or really infer it from the graphs.

~~~
MilnerRoute
I thought it pinpointed at least a few specific causes for the differences...

 _" The share of Americans in unions has plummeted from 35 percent in the
mid-1950s to about 10 percent today. The rate is even lower — about 6.2
percent — for private-sector workers. The decline has happened largely because
employers have become more aggressive about keeping out unions and government
policy has made it easier for them to do so. The decline in unionization is
one reason that the share of total national income flowing to corporate
profits has risen — and the share going to worker pay has declined. The trend
is starker in the U.S. than in Europe."_

~~~
koheripbal
That conclusion the article makes is not supported by the data - it's just
speculation.

In my opinion, the decline in worker unions has been largely due to the
relocation of factories abroad.

A nation without its own manufacturing based and non-existant import
protections will of course lose union jobs.

Europe has high import tariffs that protect their own agriculture and
manufacturing base (as well as raise the cost of goods). ...but that's the
trade off.

Blaming some sort of corporate culture seems agenda-driven speculation.

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YetAnotherMatt
>Europe has high import tariffs

The EU has a weighted import tariff of 1.79% vs 1.66% in the US. For
comparison, China is at 3.83% and Japan at 2.51%. Canada, New Zealand and
Australia are all lower than the US, at 1.52%, 1.18%, and 1.27% respectively.

[https://en.wikipedia.org/wiki/List_of_countries_by_tariff_ra...](https://en.wikipedia.org/wiki/List_of_countries_by_tariff_rate)

This is mostly 2017 data, which means the recent US-China tariff war could
very well have resulted in the US having a higher weighted import tariff than
the EU by now.

~~~
koheripbal
Kudos for looking up real data - but it's hard to say how much of these
numbers are for manufacturing.

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NovemberWhiskey
This is really a terrible article; the worst kind of anec-data.

e.g. Yes, the U.S. does spend a large GDP share on health care; and you can
make legitimately make the argument that it gets poor value. However, the
single comparandum relied on is overall life expectancy.

Union membership dropped from over 30% in the early 1950s to about 12% by
2000, during which time the U.S. labor share was pretty much range-bound - but
the article ignores that and simply asserts that the change in union
membership is the cause.

That chart on "hours worked per year" is based on OECD data published with the
following health warning: "the data are intended for comparisons of trends
over time; they are _unsuitable for comparisons of the level of average annual
hours of work for a given year_ , because of differences in their sources and
method of calculation" ... emphasis is mine.

Original source here: [https://data.oecd.org/emp/hours-
worked.htm](https://data.oecd.org/emp/hours-worked.htm)

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DeonPenny
These seem to very much cherry picked states.

Like CEO pay ratio. How does that in anyway correlate to a better life. if you
look at gdp per capita growth in places like germany who have only grown from
45k to 47k since 2008. The US grew from 45k to 62k. Thats an insane jump and
its lead is getting bigger not smaller..

The US also has more CEO per capita, more startups per capita, more unicorns
per capita which is a more apt reason CEO pay is higher. The CEO in the US are
generally better and their companies make more money than European counterpart
especially startups.

You can apply this to shares of economy going to workers pay too. Is the US
pie just bigger. If so why does share matter.

Whats the annual average wage? If the minimum wage is low but the average wage
is high which is is why does it matter where the bottom is.

Some of this is correct like incarnation rate, but a lot of seems to point to
where other first world countries have got it wrong when you look at the
results you really care about.

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jeffbee
The manner in which GDP per capita goes up is not helpful: rapid inflation of
health care and housing costs. GDP per capita is not increasing over a short
term in Germany and Austria but everyone has a home and health care.

~~~
DeonPenny
I think GDP matter in that it reflects the ability of a country to create
resource. How ever how each country feels like using it is their prerogative.
I doubt German citizen would complain if they had another 20k per year on
average.

I think the issue is that values in those different countries are very
different.

Theres much less freedom in terms of housing and income in Germany which makes
it easier to have equality of outcome. By the very definition of a free
society the free-er you are to succeed, the free-er you are to fail and to the
sadness of most people, the distribution of success is a pareto distribution
and not a normal distribution .

The usually doesn't want to do this mostly because 1. limiting freedom comes
with Germany's very obvious downside. 2. The belief of a lot of Americans is a
Government of the US scale typically implements those things poorly. We have
states that would comparable but in general the idea is the bigger the
governmental body the dumber it and simpler their tasks need to be so that it
can't mess it up.

~~~
jeffbee
That scans like a bunch of right-wing word salad.

Germans would not be any better off if they each got an extra 20k/year and
their health care and housing costs were also 20k/year higher. This is the
core flaw of GDP, well-known among economists since GDP was invented. It does
not measure well being.

~~~
DeonPenny
I didn't mean they would lose 20k in health and housing. They would still have
that plus 20k. I was just simply explaining a different perspective.

Also I don't think dismissing something that differs from your ideas is a good
way of going about things. Regardless if it is right or not theres a reason
why those idea subsist. I don't think that there is a mistake that cultures
with both right and left ideas seem to thrive. I don't think our ancestors
were dumb

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mnm1
This is to be expected for a country and empire in massive decline. The US
should be compared to countries like Brazil and Argentina, not European
nations and Canada. That would be a much more apt, apples to apples,
comparison at this point. The US was an outlier in the western hemisphere in
terms of prosperity. Argentina, at one point, was too. It seems to me that
western hemisphere countries (maybe to a lesser extent Canada) have similar
problems: vast inequality, massive corruption (including legal corruption in
the US), racial tensions, immense poverty, etc. Some like the US and Argentina
managed to be massively wealthy at points but were unable to solve their
underlying, foundational problems. If we are to look anywhere for our future,
it would be a country like Argentina, that was once one of the richest nations
in the world but no longer is. That seems to be the inevitable future in the
US also due to its intractable political system, anti-intellectualism culture,
the lack of empathy or compassion in the culture, the rising cost of all
necessities, the falling life expectancy, massive racism, horrific legal (as
opposed to justice) system, etc.

In the US, you can't always get what you need (healthcare, decent job, etc.),
but if you try sometimes, you might just get what you want (a big screen TV,
iPhone, etc.).

~~~
fortran77
Aren't Greece, Italy, Spain, Portugal, etc "countries and empires in massive
decline?" They've been in massive decline for several hundred years, but once
were great (i.e., vast, large) empires.

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Game_Ender
Does anyone know why articles like this don't start all their graphs at 0? The
information is persuasive enough without fudging things with poor axes. For
example health expenditure as share of GDP graph starts at 8% and goes 18%,
bounding the data very closely and magnifying the difference by several times.

A graph that start at zero

    
    
             Italy     USA
      0        *        *
    
    

How it was presented in the article:

    
    
      Italy     USA
        *        *

~~~
koheripbal
Because they are trying to push an agenda - and work their graphs and data
backwards from the conclusion they want you to draw.

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koheripbal
These charts most certainly do not show _why_.

They throw a lot of numbers around, but they don't establish causality
anywhere.

~~~
sameers
Part of the reason you can't show a _why_ at this level is that each of these
graphs have too many confounding factors. The lower level of life expectancy
for example is owed partly to how the demographics of the US are different
because of the more open immigration policies relative to some OECD countries
(like Japan and Korea, e.g.) The greater expenditure on healthcare is owed
partly to higher levels of obesity, which is a complex outcome from levels of
wealth, hours worked, access to food, availability of childcare etc.

One simple way of saying this is that the US is a much bigger, more diverse,
country than at least some of the countries it gets compared to. So the
comparisons are not entirely "fair."

I'd be interested to see a comparison of the individual (US) states
interspersed with the OECD countries - at least some states might break out
and compete with the higher echelon of OECD countries on some of these
metrics.

What is "fairer" is to compare the US to itself, across generations. The work
that Robert Gordon did in this regard is extremely powerful, showing how,
post-1970, the US has not been able to maintain various economic equity
indicators. As someone else commented, this could be attributed to a shift in
buying power from the "consumer class" to the "investor class," a shift that,
contrary to the myth of "trickle down economics" does not lead to more
accumulation of capital. Instead, it tends to flow to financial assets and
international investment which don't raise domestic demand as much as if you
had put that money into individual paychecks.

Then there's the gradual decline in new firm formation as well, which adds to
this mess - again, this is a comparison within the US, and is "fairer" in
assessing what's going wrong.

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camgunz
A lot of people are saying these charts don't support the claim, but they do.
Time and money are political power in the US, and if you're working longer
hours for less money, while also paying for more health care, you have less
political power.

What's interesting is that no one's disputing the premise, that time/money =
political power. That's deeply anti-democratic, but here we are.

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danols
The U.S. is the modern & real life version of the emperor has no clothes. It
will be a grim day when the majority of the population wakes up and has no
choice but to accept this reality.

~~~
koheripbal
...well that's the agenda point the article is certainly trying to spin.

It doesn't really establish that, since the causality between these data
points is entirely speculation.

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voisin
Nearly every one of these charts shows the inevitable result of “me thinking”
overcoming “we thinking”. This is a feature, not a bug, of very specific
values that have informed decision making for nearly 40 years.

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jeffbee
The question this makes me ask is how can California, or any state, separate
itself from what is obviously the ongoing decline of the nation.

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LatteLazy
The charts do not show why.

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eddhead
So the article basically says how much less socialist the US is, when it never
made such claims. Hooray!

