Is European socialism bleeding like a stuck PIG?

The conservatives are yelling from the rooftops that we are witnessing the slow death of European Socialism due to massive spending on social programs. They say the countries bleeding the most red ink are Portugal, Ireland, Greece and Spain or the P.I.G.S. of Europe as they are known in financial circles.

Greece has run out of money and is now using German money to prevent total collapse. Portugal may be next followed very closely by Spain. Yet the European countries with some of the most socialist - that is, strong social safety networks - are Germany and Denmark, two countries where things are going just fine.

In Germany, for example, every corporation in the country is required to have half of the members of their board of directors appointed by the union representing the workers of the company - the most corporate-intrusive system in all of Europe. In Denmark, not only are healthcare and education free, but they even pay students a monthly stipend to cover food, housing, and books - all the time they're in school all the way up to PhD or MD degrees.

So what differentiates Germany and Denmark from Portugal, Ireland, Greece and Spain? Germany and Denmark never fully drank the so-called "free trade" kool-aid, and thus both have strong manufacturing sectors. Across America you'll find German cars and Danish wind turbines, as well as across those nations themselves. But walk into any store in Spain, Greece, Ireland, or Portugal and you'll find row after row of Chinese-made goods.

Twenty years of insane flat-earth free-trade policies have disemboweled the economies of the United States and numerous European countries. The US, for example, has gone from 20% GDP in manufacturing before the election of Reagan to just 11% now. Countries that don't make things don't create real wealth, and thus must turn to Goldman Sachs to help them borrow money.

And Goldman hasn't treated Greece - or the US - all that well. The reason why China is not having this problem - and neither are South Korea or Taiwan or Singapore, all countries with strong social safety nets - is because they're strongly protecting their own manufacturing sectors.

The way we used to do before Reagan's presidency and then Bill Clinton's throwing us to the tender mercies of transnational corporations by turning US trade policy over to NAFTA and the WTO. Time to reconsider protectionism.