The first article is basically a response to the always frustrating New York Times columnist Ross Douthat’s recent statements about the relative strengths of the American capitalism system to the more European Social Democratic model used in nearly all of the original and 1982 expanded EU.  There really are no “socialist” countries in Europe despite what the Repubs will tell you.  Social Democrats are capitalistic countries that believe in regulated capitalism and a significant social safety net.  Gee, sounds good to me.  And from experience, it seems to work well.  But Ross opines:

Social democracy has its benefits, but global competitiveness isn’t one of them. As Jim Manzi points out, in an essay on “Keeping America’s Edge” in the latest issue of National Affairs, “from 1980 through today, America’s share of global output has been constant at about 21 percent. Europe’s share, meanwhile, has been collapsing in the face of global competition — going from a little less than 40 percent of global production in the 1970s to about 25 percent today.”

The always interesting Matthew Yglesias responds:

Jon Chait, for his new blog, delves in deeper and discovers a few salient points. One, Manzi is comparing US economic performance since 1980 to European performance since 1973—which is nuts. Two, Manzi is defining “Europe since 1973″ to include the Soviet Union and sundry Central European countries that spent half that period in the Communist bloc:

So, let’s look at a straight-up measure. How did the United States perform in comparison with European social democracies? Well, since 1980, the original 15 members of the European Union saw their real per capita income grow by 58%. Real per capita GDP in the United States grew by… 63%. And that measure actually overstates the difference. The European Union does not include Switzerland, Norway or Iceland — three countries that clearly qualify as European social democracies. Those three countries had 71% growth in per capita GDP since 1980 — thanks to Isha Vij of the Center for American Progress for pointing this out to me — which, if added to the EU 15, would bring the growth record of the United States and the social democracies even closer to parity.

Even more interesting to me is that though the US and the EU are pretty much at parity a key difference is the distribution of a county’s wealth.  In Europe you will find far fewer very wealthy people and far fewer very poor people.  So the difference is really in the distribution of wealth and a philosophy about how a society cares for its citizens.

Over the last 30 years in the United States, we have been indoctrinated by media, pundits, the Republican party and others that only our system creates wealth.  Closer to the truth is that we are unique in how we distribute that wealth among our people.  Rarely in Europe would you find an executive making more than say 8 times their lowest paid employee.  In the US private sector, we see orders of magnitude above this.  But we are so sure that no other system works, that the mere mention of a “European” system can kill any progress here in the US.  And the Dems are as much to blame as the Repubs.  Democrats constantly live looking over their shoulder in fear of being called socialist or a dove on foriegn policy.

We could use a little bit of adult behavior.

The other fascinating article is by one of my favorite writers, James Fallows, who has an interesting take on returning to the US after 3 years of living in China.  I can say that after my time living overseas, I have been struck by several things:  the amount of poverty apparent everywhere, the dirt of the city, the number of mentally ill people on the streets, and vast disparity of those with money and those without.  Read the whole article, its a great read.