Is Europe transforming itself?

Column

A news item appeared on ECO Chinese Network, Shanghai, which is startling at two levels: one its subject matte for a Chinese audience; and secondly, European socialism is getting a second look. With a dateline of Stockholm Dec. 31, 2011, it is hardly the kind of reading material the Chinese communist government would want its people to think about.

It points out that left-wing socialists who "were once the natural parties of government in Sweden," have slipped in the polls to a 28 percent approval rate. This is the party that "introduced the country's famous cradle to grave lifetime welfare system" 80 years ago. Mona Sahlin, former leader of the Swedish Socialist Democratic Party made the unusual statement that, "We also have to be the party who tried to yank the party to the center but its left wing pulled harder." (This might have suffered in translation.)

Socialist leadership is concerned about its "fading appeal to the middle class." In a very telling remark Sahlin observed, "We cannot only be a party for when life is hard. We also have to be a party for people who have jobs and believe in the future."

Wow. It is rank heresy for any socialist to abandon class warfare as a political weapon and express concern for employed people who also want to believe in the future. It energizes a faithful socialist base to be reminded of their victimhood, and is the touchstone for any left-wing political campaign.

This evidence of realism is being seen throughout the Eurozone. (The now ruling Swedish center-right coalition won re-election, the first for a second term in the country's political history.)

Staying with Scandinavia, the leader of the center left party in Norway is moving to the right and angering his party faithful. A Norwegian website dedicated to news in English reports that "The conservatives may be the best positioned to run the government from 2013." (The Socialist Left party only got 6.2 percent of the vote in 2009.) I recall seeing another op-ed piece in a Norwegian online newspaper expressing the same concern for the middle class as did Sweden's Mona Salin.

The Daily Beast reports that although "Denmark has the most leftist government in all of Europe," but that may be only on paper. The government is "under fire for reneging on election promises" to its left-wing constituency according to one leftist newspaper. This has a familiar ring to it with President Obama also taking heat from his left-wing for not fully transforming the U.S. as he promised.

It may be that the European middle class will precipitate a pragmatic New Age transformation of Europe. The transformation of Europe to a dependency culture was ushered in just after World War II constantly rising taxes, government spending on entitlements and a gradually bloated public sector work force.

The middle class has been relentlessly squeezed by regressive federal taxes on gas which average $1.19 per liter as opposed to only 19 cents in the U.S. Gasoline now costs $8.17 per gallon in Britain. (We'll have an insurrection when that happens here.) But understand this. Taxes on gas fund universal health care in social democracies. Somebody has to pay for it.

Income tax rates are already confiscatory in Europe with taxes as high as 40 percent plus, to the 50 percent range for high income folks, and topped off by Denmark which seizes a 59 percent personal income tax from high earners.

And not to forget the Value Added Tax (VAT) which averages an outrageous 20 percent in Europe, and is the hidden candy store for progressive politicians to pay for big government dependency programs; and is largely responsible for government spending in Europe that consumes an absurd 50 percent of the GDP.

The German middle class may bring this to a head. The Social Democrats have slipped to 23.5 percent of all voters. As in the U.S., the middle class is angry at all politicians. They are tired of not only funding their own social programs, but also being called upon to be the Santa Claus for all of the tapped out failed Eurozone countries such as Greece et al.

This feeling of despair has resulted in the German version of the Tea Party known as the Wutbürger, or enraged citizen. It was crowned word of the year in 2010 by the German Language Society. In my view this one word speaks volumes about the sentiment of the middle class both in Europe and the U.S.

Guido Westerville, Germany's foreign minister, said in a recent speech that Europe is in crisis and is undergoing a transformation; that Germany's capabilities are limited, that structural reform is needed, and it is counterproductive to weaken stronger countries just to help weaker countries.

Isn't this the precise message the Wutbürger and Tea party types are trying to send to their out-of-control governments which are destroying the middle class? Isn't this what Sweden's socialist Sahlin meant when she surprisingly said government also has a duty to protect "the people who have jobs and believe in the future?"

The U.S. middle class should know that if the government were to take every dollar the upper 10 percent earned, it would coincidentally roughly match President Obama's 2012 budget. ($3.8 trillion adjusted gross income (AGI) versus a $4 trillion budget.) Take every dime they have earned. Then what? Still not enough. Most of the filthy rich would go broke.

That leaves the middle class to be squeezed even more. The wutbürger have figured this out.