In today's Washington Post, non-economist Robert Samuelson yet again reminds us of his lack of credentials by a botched discussion of the American Exceptionalism issue. He gains some brownie points by claiming that the term was first used by Joseph Stalin in 1927 when he apparently denied the argument by US Communist, Jay Lovestone, that the advanced state of the US economy precluded the need for a communist revolution with Stalin denouncing this "heresy of American exceptionalism." Stalin's skepticism is reiterated by conservative Charles Murray later in the column, who sees American exceptionalism dribbling away as American values are eroding, with Murray particularly emphasizing, with RJS supporting him, that while for our first 140 years the federal government never exceeded 4% of GDP in peacetime, "Now it regularly tops 20 percent. The U.S. welfare state resembles the Europeans."
In the first part of the column makes the case for American exceptionalism, at least based on attitudes. So, he recounts that solid majorities of Americans believe in "freedom over security" and also in free will, in contrast with various European nations where only minorities accept these. OTOH, at the end of the column Samuelson admits that there is a sharp split within age groups in the US over whether or not "Our people are not perfect but our culture is superior," with 60% of those over 50 agreeing while only 37% agree among those aged 18 to 29. Somehow Samuelson only mentions some alleged convergence of values and trends across nations without any mention of any economic factors in this outcome, curious for someone who supposedly writes on economics. Needless to say, he has missed the boat here.
So, let us start with the argument by Murray, accepted so unquestioningly by Samuelson, about the size of government in the US. It is claimed that somehow there has been some big increase in federal government size relative to GDP. However, except for the during the depth of the Great Recession, the claim here does not hold up very well, see "U.S. Federal Government Budget as a Percent of GDP Over Time ". So, since 1960, federal government spending reached a low of 17% in 1965, just prior to the Great Society expansion. However, for every year from 1975 through 1996 the share of fed spending of GDP exceeded the supposedly fatal 20%, reaching a peak of 23% in the "Morning in America" Reagan year of 1983. So, indeed, the share jumped to nearly 25% in 2009, rising slightly above in 2010, down a bit in 2011, but down to 23% in 2012, with this projected to hold about there for the next few years. Yes, this is a couple of percent above the norm for 75 through 96, but hardly some fall-off-the-cliff into European socialism, with most of those nations over 30 if not 40% on this measure. This seems pretty overblown and silly.
However, the real failure to face reality here is that Samuelson somehow misses all the recent reports and studies showing a massive decline in social and income mobility in the US, clearly associated with our ongoing and massive increase in income and wealthy inequality, see "4 Charts On Income Inequality And Economic Mobility That Will Destroy Your Faith In The American Dream".
Indeed, there is now less mobility intergenerationally and by other measures in the US than in tired old Europe, a result that has received a lot of publicity. How has Samuelson missed this important fact that obviously has more to do with the decline youth belief in the superiority of US culture than some supposed erosion of American values? The wannabe economist needs to get back to looking at economics and not bad sociology.