Steven Rattner's Rant Against Warren

11/05/2019 12:00am

The New York Times gives Steven Rattner the opportunity to push stale economic bromides in columns on a regular basis. His column today goes after Senator Elizabeth Warren.

He begins by telling us that Warren’s plan for financing a Medicare for All program is “yet more evidence that a Warren presidency a terrifying prospect.” He goes on to warn us:

“She would turn America’s uniquely successful public-private relationship into a dirigiste, European-style system. If you want to live in France (economically), Elizabeth Warren should be your candidate.”

It’s not worth going into every complaint in Rattner’s piece, and to be clear, there are very reasonable grounds for questioning many of Warren’s proposals. However, he deserves some serious ridicule for raising the bogeyman of France and later Germany.

In spite of its “dirigiste” system France actually has a higher employment rate for prime age workers (ages 25 to 54) than the United States. (Germany has a much higher employment rate.) France has a lower overall employment rate because young people generally don’t work and people in their sixties are less likely to work.

In both cases, this is the result of deliberate policy choices. In the case of young people, the French are less likely to work because college is free and students get small living stipends. For older workers, France has a system that is more generous to early retirees. One can disagree with both of these policies, but they are not obvious failures. Large segments of the French population benefit from them.

France and Germany both have lower per capita GDP than the United States, but the biggest reason for the gap is that workers in both countries put in many fewer hours annually than in the United States. According to the OECD, an average worker in France puts in 1520 hours a year, in Germany just 1360. That compares to 1780 hours a year in the United States. In both countries, five or six weeks a year of vacation are standard, as are paid family leave and paid sick days. Again, one can argue that it is better to have more money, but it is not obviously a bad choice to have more leisure time as do workers in these countries.

Anyhow, the point is that Rattner’s bogeymen here are not the horror stories that he wants us to imagine for ordinary workers, even if they may not be as appealing to rich people like himself. Perhaps the biggest tell in this piece is when Rattner warns us that under Warren’s proposals “private equity, which plays a useful role in driving business efficiency, would be effectively eliminated.”

Okay, the prospect of eliminating private equity, now we’re all really scared!


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