America's economic outperformance

[SeattleCPA]

I know the usefulness of pointing to stuff behind a paywall is limited. But this article in the Economist is really relevant to many of the discussions here:

https://www.economist.com/briefing/2023/04/13/from-strength-to-strength

If you have subscription, well worth reading. If you live close to a library, maybe worth the visit. If you need something to read this week and have an extra $8 bucks, this issue definitely worth grabbing. It might even be worth the fiddling of trying their free month subscription.

To quote one blurb that gives you the theme, after pointing out that America has been the world's largest economy since the 1890s and is still much larger than China's when looking at market exchange rates, it says this:

More astonishing, and less appreciated, than its ability to hold its place in the world as a whole is the extent to which America has extended its dominance over its developed peers. In 1990 America accounted for 40% of the nominal gdp of the g7, a group of the world’s seven biggest advanced economies, including Japan and Germany. Today it accounts for 58%.

One other quote. While explicitly acknowledging the the variability in economic outcomes, the piece points out that most people make a better living in America than in the often touted developed economies of Europe. For example, the article shares this observation:

In ppp terms the only countries with higher per-person income figures are small petrostates like Qatar and financial hubs such as Luxembourg. A lot of that income growth was at the top end of the scale; the ultra rich have indeed done ultra well. But most other Americans have done pretty well, too. Median wages have grown almost as much as mean wages. A trucker in Oklahoma can earn more than a doctor in Portugal. The consumption gap is even starker. Britons, some of Europe’s best-off inhabitants, spent 80% as much as Americans in 1990. By 2021 that was down to 69%.

The explanation for all the good economic output is productivity and size.

[bacchi]

An Ode To America...

I have some quibbles with the piece but, overall, it addresses the whys and hows and whens.

Not addressed:

1) Global warming and climate related disasters.* Major hurricanes reduce GDP temporarily (and, stupidly, increase GDP due to the cleanup) but increase the cost of business permanently. It might also sink Florida's economy in 20 years. Meanwhile, out west, Vegas and Phoenix and LA will take the brunt of the water cuts from the Colorado. That, though, might help with...

2) Migration. Will fewer people move because they're reluctant to lose their 30y locked mortgages, which the rest of the world doesn't have? If they do move, they'll have less purchasing power and consumers run a large part of the economy.


* While Europe has droughts and heat, it doesn't have hurricanes causing $100B of damage every few years.


Eta: It'd be interesting to see a similar piece about, say, Germany. "While Germany has lost PPP compared to America, it still maintains strong labor protections, universal health care, and 14 weeks of paid maternity leave."

[SeattleCPA]

An Ode To America...

I have some quibbles with the piece but, overall, it addresses the whys and hows and whens.

Not addressed:

1) Global warming and climate related disasters.* Major hurricanes reduce GDP temporarily (and, stupidly, increase GDP due to the cleanup) but increase the cost of business permanently. It might also sink Florida's economy in 20 years. Meanwhile, out west, Vegas and Phoenix and LA will take the brunt of the water cuts from the Colorado. That, though, might help with...

2) Migration. Will fewer people move because they're reluctant to lose their 30y locked mortgages, which the rest of the world doesn't have? If they do move, they'll have less purchasing power and consumers run a large part of the economy.


* While Europe has droughts and heat, it doesn't have hurricanes causing $100B of damage every few years.


Eta: It'd be interesting to see a similar piece about, say, Germany. "While Germany has lost PPP compared to America, it still maintains strong labor protections, universal health care, and 14 weeks of paid maternity leave."

The data does seem to suggest that those are trade-offs US had made.

I keep pointing this out but I'm also struck with parallels between asset allocation formulas that mostly hold risky equities and the US economy that makes people bear more economic risk. On average people do better working in a higher risk situation. But you do get more inequality of outcomes.

And then does that mean that an economy that dials down the risks people bear works in effect like a portfolio that loads up with bonds? You get a tighter distribution of outcomes. So more equality. Less variability. But nearly everybody ends up with less.

[LaineyAZ]

But does everyone really get less?

Trying to navigate this hyper-capitalist society while keeping your own little household life raft afloat is becoming increasingly less doable.
It's what makes people blame "the other" for their inability to manage everything and embrace more authoritarian leadership - that's the negative outcome I see playing out in real time.

[ysette9]

I think it makes a lot of good points, but makes the mistake of more money = better. Yes, the US spends more on education and healthcare and groceries than other members of the G7, but we don’t get more for it. In fact, we get less.

Yes, Americans make more money which they can in turn spend more than someone in France. But spending 50% more for groceries of lower quality… is that really a win? Similarly spending 50% more on a healthcare system that produces lower quality of life indicators in every respect is not a win, it is waste and inefficiency.

[dividendman]

I think it makes a lot of good points, but makes the mistake of more money = better. Yes, the US spends more on education and healthcare and groceries than other members of the G7, but we don’t get more for it. In fact, we get less.

Yes, Americans make more money which they can in turn spend more than someone in France. But spending 50% more for groceries of lower quality… is that really a win? Similarly spending 50% more on a healthcare system that produces lower quality of life indicators in every respect is not a win, it is waste and inefficiency.

The big problem with capitalism and market economies is the same problem with democracy, it requires people to have knowledge to operate efficiently. Market economies should get things extremely efficient where we pay less for more than structured economies, but as we can see that doesn't happen. The biggest reason is that people are obsessed with sticker price (easy to measure) and don't really care about quality (hard to measure). This makes people pay more in the long run. Also, people don't even look for lower prices on the same items... so it's not as efficient as it should be in a theoretical market economy.

On the flipside, it is great at creating oodles of wealth for people who have wealth, since they can easily trick the plebs.

[stoaX]

Thanks for suggesting the article.  I get a couple of free reads of The Economist before the paywall kicks in so I'll check it out.

[Gremlin]

Articles like this, https://confrontingpoverty.org/poverty-facts-and-myths/americas-poor-are-worse-off-than-elsewhere/ and threads like https://forum.mrmoneymustache.com/welcome-to-the-forum/health-insurers-are-inhumane/ demonstrate that the USA is an economy first and a society second.  Unlike most other first world countries.

I'm more than happy to invest in an economy.  But I'm especially happy that I live in a society.

[SeattleCPA]

But does everyone really get less?

Trying to navigate this hyper-capitalist society while keeping your own little household life raft afloat is becoming increasingly less doable.
It's what makes people blame "the other" for their inability to manage everything and embrace more authoritarian leadership - that's the negative outcome I see playing out in real time.

The article says (and BTW the Our World in Data website suggests too) that almost everyone gets more in US.

I.e., if you look at disposable income by decile in the US using that link and compare to one of the big developed economies in Europe, most deciles in US higher than in say Sweden. The lowest ten percent in US may be lower. You don't want to be really poor in US. But the second decile may be higher. The third decile probably higher, etc.  Ditto for fourth, fifth, six, etc. The eighth and ninth deciles? Those seem to be way higher. But again to generalize, almost every decile earns more in US.

This is not to say that flattening the range of outcomes wouldn't be better. Maybe it would be. But it appears to mean that almost everybody ends up with less.

[SeattleCPA]

I think it makes a lot of good points, but makes the mistake of more money = better. Yes, the US spends more on education and healthcare and groceries than other members of the G7, but we don’t get more for it. In fact, we get less.

Yes, Americans make more money which they can in turn spend more than someone in France. But spending 50% more for groceries of lower quality… is that really a win? Similarly spending 50% more on a healthcare system that produces lower quality of life indicators in every respect is not a win, it is waste and inefficiency.

Regarding healthcare, doesn't the article say that while we in US usually think our education system is terrible, it's actually pretty good? E.g., fifteen of the world's top 20 universities are in the US. And while the educational system sure seems inefficient, we spend a lot more (37% more) than the average developed economy. Further, the only country in world with higher completed tertiary education degrees is Singapore. I read the article to say that actually, for good students, the US does an awfully good job.

Regarding healthcare, agree that US system is extremely expensive. It seems to me too like we spend way too much. But I wonder if it isn't inaccurate to say it produces lower quality of life indicators in every respect. I looked for some data to support or rebut that at our world in data website. Could not easily find any. PS I'm glad US healthcare system was able to quickly develop a COVID vaccination.

[SeattleCPA]

On the flipside, it is great at creating oodles of wealth for people who have wealth, since they can easily trick the plebs.

Agree that the system is very good at creating oodles of wealth for, say, the top ten percent and top one percent.

But the data show that most everybody enjoys a higher income. The average American enjoys a higher income than the average European, for example. But so does the average working class person. And so does the upper-middle class person.

Compare income by deciles using that Our World in Data website and this shows up.

I'd argue stronger criticism of the US-style free market economy is that you do not want to be in the bottom ten percent. If you're there, you'd rather be in Europe.

[SeattleCPA]

Articles like this, https://confrontingpoverty.org/poverty-facts-and-myths/americas-poor-are-worse-off-than-elsewhere/ and threads like https://forum.mrmoneymustache.com/welcome-to-the-forum/health-insurers-are-inhumane/ demonstrate that the USA is an economy first and a society second.  Unlike most other first world countries.

I'm more than happy to invest in an economy.  But I'm especially happy that I live in a society.

Agree that US relative to other developed economies really emphasizes the economy. (That link I've shared a couple of times in responses to posts lets someone look at disposable income by decile by country... and you'd want to poor in Sweden or Germany rather than US.)

I also think your point (?) about investing in the US economy is a good one. I have long held a chunk of my equity allocation in international stocks. Thinking was those high valuations in US can't continue. Also smug in the "goodness" of theory behind that choice. But the Economist article suggests a rationale for the high valuations: US economy grows faster. Thus, seems like it should show a higher CAPE 10.

[ChpBstrd]

People in the U.S. work longer hours than people in Europe. Compared to Germans, people in the US work 500 more hours per year. It would be some kind of tragic miracle if a hundred million workers each putting in 500 extra hours per year failed to produce faster economic growth and higher earnings.*

https://ourworldindata.org/grapher/annual-working-hours-per-worker

...the USA is an economy first and a society second.  Unlike most other first world countries.

I agree. The mentality in the U.S. is to work harder than your peers so that you can have a bigger house and a bigger car than your peers. That is the point of life for many Americans, and so it is not surprising they accomplish what they set out to do. Of course, they're paying for all this stuff in terms of life satisfaction, family cohesion, health, and personal growth.

Sociologists and historians have noted that the US was founded by immigrants fleeing the feudal systems of Europe, but once the old social caste system was abolished they invented capitalism and consumerism to provide a new way of being better than one's peers. There comes a point though, when capitalism/consumerism becomes just as impoverishing and dissatisfactory as the old feudalism. What difference does it make to work 60 hours for plastic electronic devices and an SUV rather than working 60 hours to enrich the local lord?

*Note that it is not impossible for more hours to yield lower outcomes. People in Mexico work almost 500 hours per year more than people in the U.S. and yet lag in earnings and growth. Even people in infamously laid-back Jamaica work much longer hours than Americans.

[bwall]

Fellow Economist subscriber here.

I also found the article to be full of pleasant surprises. In the past 20 years or so I've heard much wailing and lamenting in the USA about how we're falling behind China, the BRICs, or whatever. The article puts into good perspective that the USA is keeping pace with these other economies on a global scale. It's the other developed economies that are not keeping up due to a mix of stagnant populations, smaller domestic markets, less dynamic economies and less hospitable business climate.

In a related article they point out that, adjusted for Purchasing Power Parity (PPP), average incomes are higher in Mississippi than in France (!)  https://www.economist.com/leaders/2023/04/13/the-lessons-from-americas-astonishing-economic-record

No country is perfect, of course, as the article mentions and others upthread have pointed out. But, these statistics confirm that with a minimalistic MMM lifestyle, it is possible to save some serious money.

[JGS1980]

https://www.youtube.com/watch?v=gzX695XcKgc

Billy Bragg sang eloquently about this:

Be nice if we could have our cake and eat it
Though that's impossible to do
But too many have invested in this outcome
They simply can't afford for it not to come true

We ceded too much power to the market
Let it decide what's right or wrong
Now everyone seems willing to lend credence
And truth is so devalued, it's going for a song

Not everything that counts can be counted
Who holds the markets to account?
Not everything that counts can be counted
Not everything that can be counted counts
People have had enough of experts
And their inconvenient facts
Here's what the media really won't tell ya
Exactly who it is that's taking control back

All opinions are equal
In the free market of ideas
And truth is nothing more than an opinion
That's the garnered the most likes, provoked the loudest cheers

Not everything that counts can be counted
Who holds the market to account?
Not everything that counts can be counted
Not everything that can be counted counts

There isn't really any room for dreamers
If you have principles, that's nice
The market isn't interested in values
Except for those it can define as price

All bow to the power of the market
Till it throws up a different face
If you're not white or male or compliant
The system is designed to keep you in your place

Not everything that counts can be counted
Who holds the market to account?
Not everything that counts can be counted
Not everything that can be counted counts

[Sanitary Stache]

Thanks for sharing! Many of the themes of recent discussions in this article. And so many valuable mustachian opinions.  Excellent point about the US being a market and not a society.

The under riding assumption of "Americans are getting richer because they are getting more productive more quickly than workers in other rich countries".  Is an incomplete assessment of where the wealth comes from.  All this wealth is at the expense of people and the environment. "Productivity" is a classification and it doesn't care what is being produced.  This piece manages to look down on the negatives from the increased productivity, but still fetishize the dominating position the increased productivity has provided.

Addictive brain washing advertisements. Improved technology to extract carbon based fuels.  More wasted resources.  Higher rates of tertiary education, at the cost of education debt shackles. Exporting lower values aspects of manufacturing, at the cost of weak supply chains.

Dynamism allows workers to follow the opportunity, but separates families and exacerbates child-hood care needs and elder care needs.  Huge costs that are dealt with by families staying together.  The dynamism America has is exploitative and requires the "idealized consumption pattern" @ChpBstrd wrote about in the https://forum.mrmoneymustache.com/profile/?area=showposts;u=48119 thread. Dynamism allows managers to fire employees and show short term profits, doing more with less and burning out the employees.

America is getting richer at the expense of its people's livelihoods,

Vast numbers end up chucked to the side: a combination of drugs, gun violence and dangerous driving has led to a shocking decline in average life expectancy in America."

“Economics is not a morality play,” says Adam Posen of the Peterson Institute for International Economics, a think-tank. “It would be nice if we could design policies that solve inequality and promote growth at the same time, but regrettably there are only a few policies that do both. Cruelty does not prevent an economy from growing.”

The ending is rough,

The diagnoses are that China is getting ahead, or that immigrants are a menace, that large corporations are bastions of woke power and free trade a form of treachery.  Their folly is all the more striking because it betrays a lack of appreciation for the bigger economic picture, and just how good America has it."

It is like the article itself is missing the fact that culture wars are a product of the real problem of treating a society like a market and exploiting the population to earn a profit.

[SeattleCPA]

People in the U.S. work longer hours than people in Europe. Compared to Germans, people in the US work 500 more hours per year. It would be some kind of tragic miracle if a hundred million workers each putting in 500 extra hours per year failed to produce faster economic growth and higher earnings.*

https://ourworldindata.org/grapher/annual-working-hours-per-worker

...the USA is an economy first and a society second.  Unlike most other first world countries.

I agree. The mentality in the U.S. is to work harder than your peers so that you can have a bigger house and a bigger car than your peers. That is the point of life for many Americans, and so it is not surprising they accomplish what they set out to do. Of course, they're paying for all this stuff in terms of life satisfaction, family cohesion, health, and personal growth.

Sociologists and historians have noted that the US was founded by immigrants fleeing the feudal systems of Europe, but once the old social caste system was abolished they invented capitalism and consumerism to provide a new way of being better than one's peers. There comes a point though, when capitalism/consumerism becomes just as impoverishing and dissatisfactory as the old feudalism. What difference does it make to work 60 hours for plastic electronic devices and an SUV rather than working 60 hours to enrich the local lord?

*Note that it is not impossible for more hours to yield lower outcomes. People in Mexico work almost 500 hours per year more than people in the U.S. and yet lag in earnings and growth. Even people in infamously laid-back Jamaica work much longer hours than Americans.

Part of the reason Americans enjoy higher income is working longer hours. But the other reason stated in the article is our productivity is way higher. Those two factors combine.

[SeattleCPA]

Fellow Economist subscriber here.

I also found the article to be full of pleasant surprises. In the past 20 years or so I've heard much wailing and lamenting in the USA about how we're falling behind China, the BRICs, or whatever. The article puts into good perspective that the USA is keeping pace with these other economies on a global scale. It's the other developed economies that are not keeping up due to a mix of stagnant populations, smaller domestic markets, less dynamic economies and less hospitable business climate.

In a related article they point out that, adjusted for Purchasing Power Parity (PPP), average incomes are higher in Mississippi than in France (!)  https://www.economist.com/leaders/2023/04/13/the-lessons-from-americas-astonishing-economic-record

No country is perfect, of course, as the article mentions and others upthread have pointed out. But, these statistics confirm that with a minimalistic MMM lifestyle, it is possible to save some serious money.

A number of MMM-relevant actionable insights. And that's a good one. If you're going to earn or maybe invest? You want to be working in or investing in an economy that pays more not less.

[SeattleCPA]

Thanks for sharing! Many of the themes of recent discussions in this article. And so many valuable mustachian opinions.  Excellent point about the US being a market and not a society.

The under riding assumption of "Americans are getting richer because they are getting more productive more quickly than workers in other rich countries".  Is an incomplete assessment of where the wealth comes from.  All this wealth is at the expense of people and the environment. "Productivity" is a classification and it doesn't care what is being produced.  This piece manages to look down on the negatives from the increased productivity, but still fetishize the dominating position the increased productivity has provided.

Addictive brain washing advertisements. Improved technology to extract carbon based fuels.  More wasted resources.  Higher rates of tertiary education, at the cost of education debt shackles. Exporting lower values aspects of manufacturing, at the cost of weak supply chains.

Dynamism allows workers to follow the opportunity, but separates families and exacerbates child-hood care needs and elder care needs.  Huge costs that are dealt with by families staying together.  The dynamism America has is exploitative and requires the "idealized consumption pattern" @ChpBstrd wrote about in the https://forum.mrmoneymustache.com/profile/?area=showposts;u=48119 thread. Dynamism allows managers to fire employees and show short term profits, doing more with less and burning out the employees.

America is getting richer at the expense of its people's livelihoods,

Vast numbers end up chucked to the side: a combination of drugs, gun violence and dangerous driving has led to a shocking decline in average life expectancy in America."

“Economics is not a morality play,” says Adam Posen of the Peterson Institute for International Economics, a think-tank. “It would be nice if we could design policies that solve inequality and promote growth at the same time, but regrettably there are only a few policies that do both. Cruelty does not prevent an economy from growing.”

The ending is rough,

The diagnoses are that China is getting ahead, or that immigrants are a menace, that large corporations are bastions of woke power and free trade a form of treachery.  Their folly is all the more striking because it betrays a lack of appreciation for the bigger economic picture, and just how good America has it."

It is like the article itself is missing the fact that culture wars are a product of the real problem of treating a society like a market and exploiting the population to earn a profit.

Your thoughts reflect one point of view. But some would see lots of good coming from the economy.

Also I will say again that not everyone but almost every makes more here.

One can fairly and reasonably criticize pieces of the system. But I'd argue there's a lot of good that flows from the productivity.

[SeattleCPA]

The ending is rough,

The diagnoses are that China is getting ahead, or that immigrants are a menace, that large corporations are bastions of woke power and free trade a form of treachery.  Their folly is all the more striking because it betrays a lack of appreciation for the bigger economic picture, and just how good America has it."

It is like the article itself is missing the fact that culture wars are a product of the real problem of treating a society like a market and exploiting the population to earn a profit.

Just so I understand, you're arguing that the culture wars are a function of a free market economy?

[Sanitary Stache]

Not strictly as such. No.  I would not argue that a it is a requirement of a free market economy to exploit its population or that a free market economy treat profit and growth as the ultimate purpose. 

I am saying that the culture wars are a function of the US economy, or at least the outlines of what the economy is that are defined by how money moves around (generally from the poor to the wealthy).

Simple definitions online are defining a free market economy as governed by supply and demand without regulatory intervention.  I would *suggest based on not very much knowledge* that the US does not have a free market economy (neither would I want there to be one).

No doubt there is a lot of good from the productivity.  But so is there a lot of bad.  Humans can't do anything without causing harm, the way of life described by the US economy is not seeking to do as little harm as possible.  Doing less harm doesn't even appear to be an operating condition.

[Scandium]

The ending is rough,

The diagnoses are that China is getting ahead, or that immigrants are a menace, that large corporations are bastions of woke power and free trade a form of treachery.  Their folly is all the more striking because it betrays a lack of appreciation for the bigger economic picture, and just how good America has it."

It is like the article itself is missing the fact that culture wars are a product of the real problem of treating a society like a market and exploiting the population to earn a profit.

Just so I understand, you're arguing that the culture wars are a function of a free market economy?

Well they kind of are. They culture wars are pushed by capital owners (using said capital and control of the media) to pit groups of workers against each other to prevent them from taking collective action towards a more equitable distribution of excess value from labor. Class struggle is a function of a free market, and the culture war are a tool in that. Just shooting union organizers like they used to do has become frowned upon, so they needed better, more subtle, methods.

[dang1]

..

..you'd want to poor in Sweden or Germany rather than US.)

maybe poor in a more affordable place, in a more welfare state, like California Central Valley

[ChpBstrd]

I suspect our questioning of the value of economic growth would sound crazy to a person 100 years ago, when only rich people had indoor plumbing, electricity, or telephones, when a typical person had only 4-5 sets of clothes, and when the growth of American children was actually stunted by chronic malnutrition and deep material poverty.

Back then, the problem was not enough goods available to meet everybody's needs. We've thoroughly solved that problem. For the past 20 years the most exciting growth markets have been in the categories of time-wasters (iphones, social media, streaming, gaming), status symbols (SUVs, pretty trucks, McMansions, fashion), and luxuries (travel, restaurants, hotels, video doorbells, sweets).

Now our shortages are time, family cohesion, social cohesion, meaningfulness, clean air, clean water, clean soil, and attention. From a modern perspective, it seems fair to ask: Why we aren't producing more of these things, and why we are still so singularly focused on producing (and consuming) more Wal-Mart shit?

The answer is that the things we lack cannot be sold to us, and we look to advertisements to set our life's ambitions.

In a related article they point out that, adjusted for Purchasing Power Parity (PPP), average incomes are higher in Mississippi than in France (!)  https://www.economist.com/leaders/2023/04/13/the-lessons-from-americas-astonishing-economic-record

But who among us would rather be a Mississippian than a Frenchman? The Mississippian could lose everything if they need hospital care, they have minimal retirement security if stock markets don't cooperate, they are at many times greater risk of death by homicide, their food is unhealthy, and because of the way their society is structured much more of their income must be spent on transportation.

The French are rioting because they might have to retire at age 64 instead of 62. The Mississippian will be lucky if they can retire years later than that, but unlike the Frenchmen at least they think they have it made.

[bwall]

History has provided a number of examples of free market economies that didn't devolve into culture wars. (19th Century British empire, extraterretorial Shanghai (until 1949), Hong Kong (until recently?) ), etc.

History has also provided a few examples of economies that did devolve into culture wars but don't really have free market economies (post-colonial Africa, Apartheid South Africa, Colonial Latin America, and, arguably, Ukraine today ("which side are you on?") or Northern Ireland up until 1998, where the pub you frequented, the kind of beer, or whisky (Jameson or Dewars) you ordered in that pub, were all political statements (perhaps still is today. Dunno).

So, while I'd love to see the culture wars end immediately, but I see religion as the main driver of the culture wars in the USA, not the economic system. YMMV.

[Scandium]

History has provided a number of examples of free market economies that didn't devolve into culture wars. (19th Century British empire, extraterretorial Shanghai (until 1949), Hong Kong (until recently?) ), etc.

Using the phrase "free market" about the period of the East India Company is pretty hilarious. And no, of course there wasn't a culture war (though I'm not sure I'd accept that as a fact), because only rich people in power decided government and economic policies! There was no need for culture war to distract the general populace, because they had no power. Culture war is most necessary when you can no longer coerce the population using physical violence.
Though in America the constant threat of falling into destitute poverty, through aggressive debt, lack of social safety net etc, also serve this purpose. If you can't eat if you don't get your next paycheck you can't strike to protest the inhumane conditions at the meat packing plant. (oh, and also using illegal labor so you can threated to report them, forgot about that one)

[SeattleCPA]

But who among us would rather be a Mississippian than a Frenchman? The Mississippian could lose everything if they need hospital care, they have minimal retirement security if stock markets don't cooperate, they are at many times greater risk of death by homicide, their food is unhealthy, and because of the way their society is structured much more of their income must be spent on transportation.

The French are rioting because they might have to retire at age 64 instead of 62. The Mississippian will be lucky if they can retire years later than that, but unlike the Frenchmen at least they think they have it made.

I wonder about that. I mean, yes that's what we'd guess. But it looks like the median household income is MS is nearly double the median household income in France.

And then if you apply the Social Security PIA formula, it looks to me as if Mississippian's household income in retirement matches the Frenchmen's working income.

[SeattleCPA]

There was no need for culture war to distract the general populace, because they had no power. Culture war is most necessary when you can no longer coerce the population using physical violence.

I wonder if we're using different definitions of "culture war." I'm using a Wikipedia definition I think. And with that, it's hard to call something a "culture war" when for example you have people from both ends of the political spectrum arguing the same position.

Though in America the constant threat of falling into destitute poverty, through aggressive debt, lack of social safety net etc, also serve this purpose.

BTW I agree with the downside risk element. I think that's clear from the article and the data. Not sure if that's really a risk every American bears. I kinda of doubt it. But many do bear the risk. The article was extremely explicit about that. (I think they labeled it as "cruelty.")

[bwall]

History has provided a number of examples of free market economies that didn't devolve into culture wars. (19th Century British empire, extraterretorial Shanghai (until 1949), Hong Kong (until recently?) ), etc.

Using the phrase "free market" about the period of the East India Company is pretty hilarious. And no, of course there wasn't a culture war (though I'm not sure I'd accept that as a fact), because only rich people in power decided government and economic policies! There was no need for culture war to distract the general populace, because they had no power. Culture war is most necessary when you can no longer coerce the population using physical violence.
Though in America the constant threat of falling into destitute poverty, through aggressive debt, lack of social safety net etc, also serve this purpose. If you can't eat if you don't get your next paycheck you can't strike to protest the inhumane conditions at the meat packing plant. (oh, and also using illegal labor so you can threated to report them, forgot about that one)

What better way to describe the era where private companies trafficked opium in violation of local laws and at market prices than 'free market capitalism'? The East India Company (and others) were running illegal drugs from India to China, blatantly and flagrantly and no laws in India, China or Britain would stop them. The British then attacked the Chinese after the Chinese outlawed opium imports and threw the opium from the ships/warehouses into the sea. The Chinese had to pay the private British companies the full value of the opium they destroyed.

Britain also took land, today called Hong Kong, from China for having the temerity to attempt to stop the import of opium. Jardine Matheson (still in business today), David Sassoon & Co, and The East India company, all got fabulously rich trafficking opium to China.

So, if privately owned corporations (run by shareholders, not the government) trafficking highly addictive drugs isn't free market capitalism, then I'd be very interested to read the argument why that's not the case.

[Scandium]

History has provided a number of examples of free market economies that didn't devolve into culture wars. (19th Century British empire, extraterretorial Shanghai (until 1949), Hong Kong (until recently?) ), etc.

Using the phrase "free market" about the period of the East India Company is pretty hilarious. And no, of course there wasn't a culture war (though I'm not sure I'd accept that as a fact), because only rich people in power decided government and economic policies! There was no need for culture war to distract the general populace, because they had no power. Culture war is most necessary when you can no longer coerce the population using physical violence.
Though in America the constant threat of falling into destitute poverty, through aggressive debt, lack of social safety net etc, also serve this purpose. If you can't eat if you don't get your next paycheck you can't strike to protest the inhumane conditions at the meat packing plant. (oh, and also using illegal labor so you can threated to report them, forgot about that one)

What better way to describe the era where private companies trafficked opium in violation of local laws and at market prices than 'free market capitalism'? The East India Company (and others) were running illegal drugs from India to China, blatantly and flagrantly and no laws in India, China or Britain would stop them. The British then attacked the Chinese after the Chinese outlawed opium imports and threw the opium from the ships/warehouses into the sea. The Chinese had to pay the private British companies the full value of the opium they destroyed.

Britain also took land, today called Hong Kong, from China for having the temerity to attempt to stop the import of opium. Jardine Matheson (still in business today), David Sassoon & Co, and The East India company, all got fabulously rich trafficking opium to China.

So, if privately owned corporations (run by shareholders, not the government) trafficking highly addictive drugs isn't free market capitalism, then I'd be very interested to read the argument why that's not the case.

Because I thought free market required minimal government intervention. When you have the british state and navy supporting and underwriting the business, and as you say going to war to preserve the market interest, I wouldn't call that "free". Though I suppose it's an extreme form of capitalism; where the capital has taken over the government and use it to it's commercial end (iraq war, cough cough). Or modern government withholding foreign aid to prevent anti-tobacco laws in developing countries, or allowing Nestle to abuse limited water supplies. Is this "free market"? Honestly I don't know. I don't think it's "free" in that sense, but to your point yes it's the natural endpoint of unrestrained capitalism, so maybe it is?

[dang1]

"what was good for our country was good for General Motors, and vice versa"

[Gremlin]

Articles like this, https://confrontingpoverty.org/poverty-facts-and-myths/americas-poor-are-worse-off-than-elsewhere/ and threads like https://forum.mrmoneymustache.com/welcome-to-the-forum/health-insurers-are-inhumane/ demonstrate that the USA is an economy first and a society second.  Unlike most other first world countries.

I'm more than happy to invest in an economy.  But I'm especially happy that I live in a society.

Agree that US relative to other developed economies really emphasizes the economy. (That link I've shared a couple of times in responses to posts lets someone look at disposable income by decile by country... and you'd want to poor in Sweden or Germany rather than US.)

Whilst the bolded is definitely true, I'm at the other end of the income and wealth distribution and I'd never choose the US.

Being a high income earner and wealthy whilst living in a society, rather than an economy I get to experience the full benefits that society has to offer.  My utilisation of these benefits often well exceeds those at the 'safety net' end of the spectrum, simply because high income and wealth often equates to free time in my country.  Being wealthy in a well functioning society has many benefits.

I am safe.  My wife is safe.  My kids are safe.  Violent crime (and crime in general) is much, much lower here than in the US.  I live in a city of several million people.  There is not a single street in the entire city that I would avoid at any time of the day or night due to not feeling safe.  Schools are safe.  My kids have never had to undertake an 'active shooter drill' at school.  Parks are safe and clean and utilised. 

I have access to cheap, high quality, clean and safe public transport.  It's fast, efficient and well maintained with excellent patronage.  The US has one of the lower patronages of public transport anywhere in the first world.  In some cases it's not safe.  In some cases it's not clean.  Or of high quality.  In some cases it's expensive.  But it typically drives patronage away from being universal.  It puts people into cars, which creates traffic congestion and pollution.  Consequently, there is no city of a comparable size, anywhere in the USA, that has lower levels of air pollution than where I live.  Most are significantly higher.  I travel to the US semi-regularly and I can literally taste the difference when I breathe.

I have access to cheap, reliable and high quality healthcare.  Now and forever.  No mucking about with "in network/out of network".  If I'm sick, I will be helped.  Medications are cheap if/when they are needed - insulin is not a luxury item in my country.  The chances of anyone in my country being bankrupted by a medical bill is essentially nil.  Unlike CopperTop's father (https://forum.mrmoneymustache.com/welcome-to-the-forum/health-insurers-are-inhumane/, and many others in the US, I know that I will be treated with dignity and respect as I age.  I will also have access to affordable, high quality aged care should the need arise.

My kids have access to free, high quality, universal primary and secondary education and very heavily subsidised tertiary education.  The funding and therefore quality of their education doesn't depend on their post code.  The lack of systemic disadvantage exacerbated by education drives that lower crime rate and accelerates living standards at all parts of the wealth spectrum.  My kids will come out of Uni with no debt as education here is seen as an enabler for the entire nation, rather than a profit source.  In contrast, I have a good friend in Allentown, PA who is sending his daughter to university in the UK, because it's cheaper than sending her to university in New York.  That's not a measure of a properly functioning education system.  Pricing of education, pharmaceuticals, aged care and healthcare in the US drive GDP, but this can be to the detriment of living standards.

I live in a country that has much higher food quality standards than the US.  No high-fructose corn syrup anywhere to be seen on the supermarket shelves.  Plentiful supply of affordable fresh fruit and vegetables.  Cheese that tastes like cheese.  Milk that's really fresh milk.  Bread that's not loaded with sugars.  All of these differences are driven by the excessive commercialisation of the food supply chain in the US and a race to high margin, low quality products.  Great for GDP metrics.  Rubbish for consumers.

I also live in a country with a living minimum wage and fair protections for employees (guaranteed sick leave, minimum four weeks leave, mandated parental leave, etc).  Nor is there a political environment here that enables angertainment, culture war and magnifies social difference.  Violent protest is not normalised.  This again mitigates social disadvantage and the problems that come of it.  As above, those problems are not just impacting those experiencing social disadvantage.

I'm sure there are parts of the US that live well.  Give me the level of social cohesion we have here any day.

[Log]

History has provided a number of examples of free market economies that didn't devolve into culture wars. (19th Century British empire, extraterretorial Shanghai (until 1949), Hong Kong (until recently?) ), etc.

History has also provided a few examples of economies that did devolve into culture wars but don't really have free market economies (post-colonial Africa, Apartheid South Africa, Colonial Latin America, and, arguably, Ukraine today ("which side are you on?") or Northern Ireland up until 1998, where the pub you frequented, the kind of beer, or whisky (Jameson or Dewars) you ordered in that pub, were all political statements (perhaps still is today. Dunno).

So, while I'd love to see the culture wars end immediately, but I see religion as the main driver of the culture wars in the USA, not the economic system. YMMV.

Just to posit another theory to chew on: I think culture wars (not just in the contemporary USA, but across across the world and across recent history) are pretty fundamentally driven by the urban/rural divide. I took a class in grad school on the music of social movements, and we talked about several US-based social movements as well as some in Africa and east Asia. Every single one of them could be understood in some sense as an urban/rural conflict, and I haven't been able to unsee that framing ever since.

Cities are engines of economic productivity, filled with educated and cultured people. Ever since the industrial revolution, rural areas have been experiencing brain-drain as intelligent young people get educated and head to the city for opportunity. This generates a lot of resentment from rural people who feel they're not sharing in the rising wealth generated in the city, and that they feel they're being laughed at as ignorant/un-cultured.

As urban people garner a sense of moral superiority from education, the rural people need to have a way to rationalize some way in which they're actually the morally superior ones, and that's a big source of their clinging to religion. This sense of moral superiority on both sides then heightens the stakes. But the origins, as I see it, are in the urban/rural divide.

"what was good for our country was good for General Motors, and vice versa"

This quote continues to explain so much, and absolutely horrify me, every time I'm reminded of it. The US is captured by the ideology of auto companies and traffic engineers, and by the dream of cheap gas forever.

[SeattleCPA]

Articles like this, https://confrontingpoverty.org/poverty-facts-and-myths/americas-poor-are-worse-off-than-elsewhere/ and threads like https://forum.mrmoneymustache.com/welcome-to-the-forum/health-insurers-are-inhumane/ demonstrate that the USA is an economy first and a society second.  Unlike most other first world countries.

I'm more than happy to invest in an economy.  But I'm especially happy that I live in a society.

Agree that US relative to other developed economies really emphasizes the economy. (That link I've shared a couple of times in responses to posts lets someone look at disposable income by decile by country... and you'd want to poor in Sweden or Germany rather than US.)

Whilst the bolded is definitely true, I'm at the other end of the income and wealth distribution and I'd never choose the US.

Being a high income earner and wealthy whilst living in a society, rather than an economy I get to experience the full benefits that society has to offer.  My utilisation of these benefits often well exceeds those at the 'safety net' end of the spectrum, simply because high income and wealth often equates to free time in my country.  Being wealthy in a well functioning society has many benefits.

I am safe.  My wife is safe.  My kids are safe.  Violent crime (and crime in general) is much, much lower here than in the US.  I live in a city of several million people.  There is not a single street in the entire city that I would avoid at any time of the day or night due to not feeling safe.  Schools are safe.  My kids have never had to undertake an 'active shooter drill' at school.  Parks are safe and clean and utilised. 

I have access to cheap, high quality, clean and safe public transport.  It's fast, efficient and well maintained with excellent patronage.  The US has one of the lower patronages of public transport anywhere in the first world.  In some cases it's not safe.  In some cases it's not clean.  Or of high quality.  In some cases it's expensive.  But it typically drives patronage away from being universal.  It puts people into cars, which creates traffic congestion and pollution.  Consequently, there is no city of a comparable size, anywhere in the USA, that has lower levels of air pollution than where I live.  Most are significantly higher.  I travel to the US semi-regularly and I can literally taste the difference when I breathe.

I have access to cheap, reliable and high quality healthcare.  Now and forever.  No mucking about with "in network/out of network".  If I'm sick, I will be helped.  Medications are cheap if/when they are needed - insulin is not a luxury item in my country.  The chances of anyone in my country being bankrupted by a medical bill is essentially nil.  Unlike CopperTop's father (https://forum.mrmoneymustache.com/welcome-to-the-forum/health-insurers-are-inhumane/, and many others in the US, I know that I will be treated with dignity and respect as I age.  I will also have access to affordable, high quality aged care should the need arise.

My kids have access to free, high quality, universal primary and secondary education and very heavily subsidised tertiary education.  The funding and therefore quality of their education doesn't depend on their post code.  The lack of systemic disadvantage exacerbated by education drives that lower crime rate and accelerates living standards at all parts of the wealth spectrum.  My kids will come out of Uni with no debt as education here is seen as an enabler for the entire nation, rather than a profit source.  In contrast, I have a good friend in Allentown, PA who is sending his daughter to university in the UK, because it's cheaper than sending her to university in New York.  That's not a measure of a properly functioning education system.  Pricing of education, pharmaceuticals, aged care and healthcare in the US drive GDP, but this can be to the detriment of living standards.

I live in a country that has much higher food quality standards than the US.  No high-fructose corn syrup anywhere to be seen on the supermarket shelves.  Plentiful supply of affordable fresh fruit and vegetables.  Cheese that tastes like cheese.  Milk that's really fresh milk.  Bread that's not loaded with sugars.  All of these differences are driven by the excessive commercialisation of the food supply chain in the US and a race to high margin, low quality products.  Great for GDP metrics.  Rubbish for consumers.

I also live in a country with a living minimum wage and fair protections for employees (guaranteed sick leave, minimum four weeks leave, mandated parental leave, etc).  Nor is there a political environment here that enables angertainment, culture war and magnifies social difference.  Violent protest is not normalised.  This again mitigates social disadvantage and the problems that come of it.  As above, those problems are not just impacting those experiencing social disadvantage.

I'm sure there are parts of the US that live well.  Give me the level of social cohesion we have here any day.

To be fair, you should really disclose where you live. Country and city.

[Scandium]

To be fair, you should really disclose where you live. Country and city.

Under the username it says New Zealand, I assume that's where they live. I've never been so can't say much about it, I've just heard they have a whole fence made of toothbrushes.


ops; sorry that was a different poster *facepalm.
I stalked Gremlin's posts; going with Australia. The country next to the toothbrush fence one, close enough

[ChpBstrd]

To be fair, you should really disclose where you live. Country and city.

I think it's more fun to guess. Based on the info provided, they could be in Japan, Australia, South Korea, New Zealand, Taiwan, the UK, the EU, Switzerland, parts of Canada, etc.

The guessing helps one to realize what an outlier the US has become. No bullet trains. Limited access to quality medical care. No retirement security for most. No safety. The US really rides the line between developed and developing nation. We have characteristics of Nigeria and characteristics of Luxembourg.

[dang1]

..

..

.. I'm sure there are parts of the US that live well.  ..

sound like South Orange County and North San Diego County (with Camp Lejeune Marine Corps Base separating them)


US is a big country, with variance among the regions (https://en.wikipedia.org/wiki/American_Nations). A dominant is autonomous individualism coupled with turbocharged capitalism; for the most part, freer to become wealthy, or fail. (cue Midnight Train to Georgia by Gladys Knight & the Pips, lol)

It’s not for everyone

[Michael in ABQ]

The US is also blessed by arguably the best geography/climate in the world. Notably all the navigable rivers, lakes, and the intercoastal waterway along the Gulf and Atlantic coasts. Those make a huge difference in the cost of transportation for bulk goods. The wide range of climates allows production of nearly every type of crop - especially grains which are easy to store and transport. Natural resources of every kind are relatively abundant - oil & gas, minerals, timber, fish, etc.


Another aspect to consider is that the US is made up primarily of people whose ancestors were willing to take risks and were probably at the far end of the bell curve for individualism. It's not surprising that has carried forward into the economy and society today. Most of us can trace our ancestors back to someone who was willing to leave behind everything they knew to immigrate - with full knowledge that they would have to support themselves once they got there without the benefit of their existing support systems (i.e. extended family, etc.).

[Gremlin]

To be fair, you should really disclose where you live. Country and city.

Under the username it says New Zealand, I assume that's where they live. I've never been so can't say much about it, I've just heard they have a whole fence made of toothbrushes.


ops; sorry that was a different poster *facepalm.
I stalked Gremlin's posts; going with Australia. The country next to the toothbrush fence one, close enough

I'm in Australia.  If you stalk my posts further you can possibly pinpoint me more than that.  I've worked in various countries around the world over the years.  One thing that continues to amaze me is the extent to which the US's lack of minimum societal standards, standards that are table stakes just about everywhere else, has been normalised.  It's almost as if it's a badge of honour.

As investors, Mrs G and I try to invest ethically.  That's relatively easy to do for most first-world investment markets.  Most Euro-centric ethical funds will tick the box.  As will a Japanese one or an Australian or NZ one.  In our experience, it's much harder to do in the US.  We still invest in the US, but it's challenging to maintain the right ethical lens on our investments there.

Worker exploitation is rife, by (non-US) first world standards.  Some of the US's most successful outperformers from an investment perspective don't pay their staff a wage that enables them to live above the poverty line.  Or the casualisation of the workforce means that worker protections, considered basic everywhere else, are completely undermined.  Yet this exploitation is so normalised in the US economy that several US-centric 'ethical' funds don't filter it out.

When we invest in the US, we have to pick and choose where we do it.  There are definitely a number of industries where the US is leading innovation and/or has a natural competitive advantage.  But exploitation is also a recurring theme.  Do we invest in a pharmaceutical company that exploits weak consumer protections in the US by charging its US customers fifty time more than its customers elsewhere for the same drug?  Do we invest in consumer packaged goods businesses that exploit weaker food standards and oligopoly rules in the US than elsewhere, who load US consumers with low quality, high margin foods and use their market dominance to restrict supply of better quality and cheaper products from customers?  Do we invest in the US banks that are the biggest funders of fossil fuel developments in the world, who are exploiting differences in how Scope 3 emissions are reported in the US compared to other developed nations?  Do we invest in US health insurers that underwrite policies that exploit customers to such an extent that they wouldn't pass minimum regulatory standards in any other first world country?  Do we invest in US industrials that have exploited weak environmental protection laws and knowingly pumped residual 'forever' chemicals into their local environments for decades, giving them a competitive advantage over their international rivals?  Do we invest in US consumer packaged goods businesses that are among the largest producers of plastic waste in the world and who actively lobby to avoid having to change their polluting practices, whilst exploiting 'greenwashing' rules, weak by international standards, enabling them to spruik their enviro-credentials? 

Exploitation is so normalised in the US economy that we could do all of those, simply by buying into one of the largest US-centric "Ethical" ETFs available to us.  Filtering through this sort of cr*p is exhausting, but we don't want our money contributing to sh*t like this.

As an investor, my experience is that with these sorts of companies filtered out, our US portfolio hasn't delivered us outperformance relative to other markets.  Diversification?  Yes.  But not really outperformance.  So from my perspective, any outperformance appears to be a function of exploitation, rather than exceptionalism.  I acknowledge that it's a small sample size and YMMV.

[dang1]

"Inside the current landscape of socially conscious investing"
https://www.marketplace.org/2022/07/06/inside-the-current-landscape-of-socially-conscious-investing/

I suppose, strip mining is maybe a no-no

[Scandium]

To be fair, you should really disclose where you live. Country and city.

Under the username it says New Zealand, I assume that's where they live. I've never been so can't say much about it, I've just heard they have a whole fence made of toothbrushes.


ops; sorry that was a different poster *facepalm.
I stalked Gremlin's posts; going with Australia. The country next to the toothbrush fence one, close enough

I'm in Australia.  If you stalk my posts further you can possibly pinpoint me more than that.  I've worked in various countries around the world over the years.  One thing that continues to amaze me is the extent to which the US's lack of minimum societal standards, standards that are table stakes just about everywhere else, has been normalised.  It's almost as if it's a badge of honour.

As investors, Mrs G and I try to invest ethically.  That's relatively easy to do for most first-world investment markets.  Most Euro-centric ethical funds will tick the box.  As will a Japanese one or an Australian or NZ one.  In our experience, it's much harder to do in the US.  We still invest in the US, but it's challenging to maintain the right ethical lens on our investments there.

Worker exploitation is rife, by (non-US) first world standards.  Some of the US's most successful outperformers from an investment perspective don't pay their staff a wage that enables them to live above the poverty line.  Or the casualisation of the workforce means that worker protections, considered basic everywhere else, are completely undermined.  Yet this exploitation is so normalised in the US economy that several US-centric 'ethical' funds don't filter it out.

When we invest in the US, we have to pick and choose where we do it.  There are definitely a number of industries where the US is leading innovation and/or has a natural competitive advantage.  But exploitation is also a recurring theme.  Do we invest in a pharmaceutical company that exploits weak consumer protections in the US by charging its US customers fifty time more than its customers elsewhere for the same drug?  Do we invest in consumer packaged goods businesses that exploit weaker food standards and oligopoly rules in the US than elsewhere, who load US consumers with low quality, high margin foods and use their market dominance to restrict supply of better quality and cheaper products from customers?  Do we invest in the US banks that are the biggest funders of fossil fuel developments in the world, who are exploiting differences in how Scope 3 emissions are reported in the US compared to other developed nations?  Do we invest in US health insurers that underwrite policies that exploit customers to such an extent that they wouldn't pass minimum regulatory standards in any other first world country?  Do we invest in US industrials that have exploited weak environmental protection laws and knowingly pumped residual 'forever' chemicals into their local environments for decades, giving them a competitive advantage over their international rivals?  Do we invest in US consumer packaged goods businesses that are among the largest producers of plastic waste in the world and who actively lobby to avoid having to change their polluting practices, whilst exploiting 'greenwashing' rules, weak by international standards, enabling them to spruik their enviro-credentials? 

Exploitation is so normalised in the US economy that we could do all of those, simply by buying into one of the largest US-centric "Ethical" ETFs available to us.  Filtering through this sort of cr*p is exhausting, but we don't want our money contributing to sh*t like this.

As an investor, my experience is that with these sorts of companies filtered out, our US portfolio hasn't delivered us outperformance relative to other markets.  Diversification?  Yes.  But not really outperformance.  So from my perspective, any outperformance appears to be a function of exploitation, rather than exceptionalism.  I acknowledge that it's a small sample size and YMMV.

If you want to do that fair enough, no harm (except financial), but I'm not convinced by the "ethical investing" thing myself. And I'm pretty bleeding heart, I use toothpaste tables to avoid plastics, and compostable ziplocks for gods sake! But whether or not I invest in shares of amazon does nothing for, or against, their business. I'm not "giving  money" to the company. Not buying a $10 book from amazon has more impact on their business than me not buying thousands in amazon stock..

Ethical investing seems to me to be some combination of marketing tactic from fund managers, and sale of Indulgences for rich, guilty liberals.

[Gremlin]

I respectfully disagree. 

The share price is ultimate barometer for a lot of business decisions with questionable ethics.  The share price is determined by a market of buyers and sellers.  If a pharmaceutical decides to send the price of insulin to the moon, they'll be doing it with a view to push their share price higher.  They'll be making much larger margins on what is essentially a captive market.  Luxury pricing for an essential good.  But it definitely comes at a social cost.  The profits go to the business, the cost of the damage is socialised.

As an investor, I sleep well knowing that my investments don't generate me a return whilst unleashing that kind of misery on others.  But I also know that, if these businesses don't care about their customers, they DO care about their share price.  I don't expect my decision alone to make a difference.  But I absolutely believe that if enough investors decide that this kind of exploitation is not acceptable, then the share price will be impacted in a negative way as the market of buyers and sellers is diminished.

(I also think that as various standards, such as environmental, become more homogenous worldwide, some of the international arbitrage that US companies have achieved due to weak local standards will be a drag on US businesses and their economic performance moreso than their international peers.  That's a different, but related, topic)

EDITED TO ADD:  Btw, I actually agree with you @Scandium regarding your description of 'ethical' funds as a marketing tactic, but mainly with respect to the US market.  When digging deeper than the surface claims, what passes for 'ethical' in the US looks quite a bit different to 'ethical' in other markets, in my experience.  In Europe, an ethical fund is exactly what I'd expect it to be, in the US there's every chance it's a greenwashing label.

[TheAnonOne]

Being generally above average in the US basically puts you on top of the entire world as far as lifestyle goes.

If you have say, a $200k+ HHI, which isn't really that uncommon in the USA, nor did I personally find it that hard to do, you can basically have anything you want, any size house, any car, any trips, experience travel to any nation with an extremely powerful passport, and even FIRE extremely fast.

Given that we are on a FIRE forum, that last point is critical, and MUCH harder to accomplish, even with the same income in most parts of the world (due to laws, taxes, investment opportunities, etc).

For what MMM is aimed at, the USA is #1, even if you end up moving elsewhere post-FIRE.

On a personal note: I love it here, you can basically have any type of life in the borders of the USA, tropical, desert, city, unlimited access to outdoor hobbies (ATV through forests? Mountains? Race cars? Multi-day road trips? Beaches? etc etc etc). That gift is truly lost on most.

[dang1]

"not that American capitalism is perfect. My point is that there is a tension between economic dynamism and economic security. For reasons deeply rooted in our culture, the American brand of capitalism has always been tilted toward dynamism, with freer markets and smaller welfare states.
But over the past many decades, Americans have experimented with ways to provide more security without smothering the capitalist turbo that produces growth and social mobility. This has been the great project of the center-left and the center-right. It has worked and it continues to work.
Between 1990 and 2019, American social spending rose from 14 percent of G.D.P. to 18 percent. In part because of this government support, poverty hit an all-time low in 2021"
https://www.nytimes.com/2023/04/20/opinion/american-capitalism-good.html

'murica!, lol

[elysianfields]

I think it makes a lot of good points, but makes the mistake of more money = better. Yes, the US spends more on education and healthcare and groceries than other members of the G7, but we don’t get more for it. In fact, we get less.

Yes, Americans make more money which they can in turn spend more than someone in France. But spending 50% more for groceries of lower quality… is that really a win? Similarly spending 50% more on a healthcare system that produces lower quality of life indicators in every respect is not a win, it is waste and inefficiency.

Regarding healthcare, doesn't the article say that while we in US usually think our education system is terrible, it's actually pretty good? E.g., fifteen of the world's top 20 universities are in the US. And while the educational system sure seems inefficient, we spend a lot more (37% more) than the average developed economy. Further, the only country in world with higher completed tertiary education degrees is Singapore. I read the article to say that actually, for good students, the US does an awfully good job.

Regarding healthcare, agree that US system is extremely expensive. It seems to me too like we spend way too much. But I wonder if it isn't inaccurate to say it produces lower quality of life indicators in every respect. I looked for some data to support or rebut that at our world in data website. Could not easily find any. PS I'm glad US healthcare system was able to quickly develop a COVID vaccination.

One could also argue that the legacy admittance policies giving children of alumni have a leg up in accessing the top universities help perpetuate and accentuate the problems of wealth and income inequality.  The exorbitant cost of higher education also winnows out access for those with more modest means while providing export income because wealthy foreigners can pay for access for their children.

In short, we invest vast sums into education and healthcare, which works well for the upper echelons of the socioeconomic rankings and provides pharmacological advances, but often short-changes those in lower groups.  Other countries clearly do much better in providing equality of educational opportunity and healthcare access.

[ysette9]

I think it makes a lot of good points, but makes the mistake of more money = better. Yes, the US spends more on education and healthcare and groceries than other members of the G7, but we don’t get more for it. In fact, we get less.

Yes, Americans make more money which they can in turn spend more than someone in France. But spending 50% more for groceries of lower quality… is that really a win? Similarly spending 50% more on a healthcare system that produces lower quality of life indicators in every respect is not a win, it is waste and inefficiency.

Regarding healthcare, doesn't the article say that while we in US usually think our education system is terrible, it's actually pretty good? E.g., fifteen of the world's top 20 universities are in the US. And while the educational system sure seems inefficient, we spend a lot more (37% more) than the average developed economy. Further, the only country in world with higher completed tertiary education degrees is Singapore. I read the article to say that actually, for good students, the US does an awfully good job.

Regarding healthcare, agree that US system is extremely expensive. It seems to me too like we spend way too much. But I wonder if it isn't inaccurate to say it produces lower quality of life indicators in every respect. I looked for some data to support or rebut that at our world in data website. Could not easily find any. PS I'm glad US healthcare system was able to quickly develop a COVID vaccination.

Personally I find it important to distinguish between absolute ranking and average. Yes, the US has the most top universities and the best innovative medical advances and specialists, but that doesn't reflect that average person's experience. On school, picking at random Cal State East Bay in California vs. Université de Rennes, France. Both are fine but not remarkable schools. Cal State East Bay is $6,995 a year for CA residents. Université de Rennes is 170 euros/yr for undergraduates. An average university student is going to be way better off in France than California for approximately the same degree.

On healthcare, we can look at some objective outcomes across countries.

• Maternal mortality - US  21 per 100,000 births (France 7.9)
• Fetal mortality - 6.3 per 1,000 births (France 4.4); highest of 27 developed countries (https://en.wikipedia.org/wiki/Infant_mortality) (
• Life Expectancy - US 77.28 years (rank 51) (France 82.18 rank 15)
• Various cancer outcomes are ranked by country and the US does well in a small number but in the majority it doesn't break the top 10 (https://en.wikipedia.org/wiki/List_of_countries_by_quality_of_healthcare)

WHO has ranked health care systems by country and lists the US as 37 on overall health system performance, though #1 on expenditure per capita (winning!). (https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000)

[TheAnonOne]

I think it makes a lot of good points, but makes the mistake of more money = better. Yes, the US spends more on education and healthcare and groceries than other members of the G7, but we don’t get more for it. In fact, we get less.

Yes, Americans make more money which they can in turn spend more than someone in France. But spending 50% more for groceries of lower quality… is that really a win? Similarly spending 50% more on a healthcare system that produces lower quality of life indicators in every respect is not a win, it is waste and inefficiency.

Regarding healthcare, doesn't the article say that while we in US usually think our education system is terrible, it's actually pretty good? E.g., fifteen of the world's top 20 universities are in the US. And while the educational system sure seems inefficient, we spend a lot more (37% more) than the average developed economy. Further, the only country in world with higher completed tertiary education degrees is Singapore. I read the article to say that actually, for good students, the US does an awfully good job.

Regarding healthcare, agree that US system is extremely expensive. It seems to me too like we spend way too much. But I wonder if it isn't inaccurate to say it produces lower quality of life indicators in every respect. I looked for some data to support or rebut that at our world in data website. Could not easily find any. PS I'm glad US healthcare system was able to quickly develop a COVID vaccination.

Personally I find it important to distinguish between absolute ranking and average. Yes, the US has the most top universities and the best innovative medical advances and specialists, but that doesn't reflect that average person's experience. On school, picking at random Cal State East Bay in California vs. Université de Rennes, France. Both are fine but not remarkable schools. Cal State East Bay is $6,995 a year for CA residents. Université de Rennes is 170 euros/yr for undergraduates. An average university student is going to be way better off in France than California for approximately the same degree.

On healthcare, we can look at some objective outcomes across countries.

• Maternal mortality - US  21 per 100,000 births (France 7.9)
• Fetal mortality - 6.3 per 1,000 births (France 4.4); highest of 27 developed countries (https://en.wikipedia.org/wiki/Infant_mortality) (
• Life Expectancy - US 77.28 years (rank 51) (France 82.18 rank 15)
• Various cancer outcomes are ranked by country and the US does well in a small number but in the majority it doesn't break the top 10 (https://en.wikipedia.org/wiki/List_of_countries_by_quality_of_healthcare)

WHO has ranked health care systems by country and lists the US as 37 on overall health system performance, though #1 on expenditure per capita (winning!). (https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000)

Massive asterisk *** here on MOST "usa bad" stats is that, if you remove really rural areas, most of the discrepancy goes away.

You could also filter out the "deep south".

...and I get it, it feels like cheating to do those things but, point being, you can be "American Dream Rich" and have similar outcomes to EU countries by just living near a metro, and not in the deep south.

...but it isn't any more cheating than specifically choosing France over, say, Ukraine, Latvia, etc.

[ysette9]

Once upon a time I read an amazing article that I have never been able to find again. It delved into maternal health and fetal health and found exactly that. The blue states that had policies that prioritize women and women’s health had outcomes on infant and maternal mortality on par with Western Europe. The red states that don’t value women and had restrictive policies reducing access to healthcare had dramatically worse outcomes. It is literally dangerous to your health and well-being to live in those states.

So your point is true while also being shameful. If you take out the blue states then how much worse just the red state health outcomes be without that averaging effect? That is unacceptable and a travesty of human rights. It feels gross to just asterisks away a large portion of the US population.

[deborah]

Canada and Australia have significantly more very remote country than the USA.

[ROF Expat]

Being generally above average in the US basically puts you on top of the entire world as far as lifestyle goes.

I'm not sure I'd agree with that statement.  As an American who has lived in both the US and a lot of countries overseas and who has good friends from all over the world, I'd compare my lifestyle with that of my upper middle class colleagues from other developed countries as "different" but not necessarily "better." 

Yes, my salary after taxes is higher than most of my European colleagues, but after you factor in what I pay for health insurance and what I have to save for University expenses, the difference isn't so big.  Yes, my house and car are a lot bigger than those of my Japanese colleague in Tokyo.  On the other hand, my colleague in Tokyo has great public transportation and only uses his car on weekends anyway.  And what value do you attach to living in a megacity that is still so safe that 7-year-old kids can commute to school on public transport or run errands without an adult? 

As was pointed out in an earlier post, I am the descendant of people who emigrated in search of a better life, so I come from  highly individualistic, risk-taking stock.  Because of that, America's often outlying economic and social positions usually work  for me.  But, they often horrify people from other cultures.  My European and Japanese colleagues might like the idea of early retirement or $3.50 per gallon gas, but they find things like our tolerance of gun violence aimed at children and our unwillingness to care for the elderly to be repulsive.