Today’s Successful Economies

Swedes are happier and more globally competitive than the US. Is this the real secret of blondes having more fun?

I wrote a blog post a while back about heaven having fjords. I’m very much interested in economics from a development standpoint so it’s always worthwhile checking out the top performers in the world for lessons.  It is also quite apparent when you do that Libertarian and Republican memes fail and fail badly.  It’s probably why we never hear these things in corporate media.

Societies are better when the pull together instead of pull apart.  The best performing countries in economics are the same countries that have a high commitment to public education and society at large.   The high performers–in economics, in health, and in education–are the Scandavian countries with their highly progressive tax rates, intense regulation of commerce and harmful activities and emphasis on making sure the rising tide rises all the boats rather than sinking a huge number of them to the benefit of the mega yachts.  These are also countries with parliamentary systems which makes them highly democratic. They’ve been winning consistently with the advent of the global economy.  The US has lost its position as leader of the developed nations and is moving way down into the losing positions below still developing nations. We could learn some lessons from Scandinavia.

Here’s Jeffrey Sachs at Project Syndicate with some things to think about in that vein. He has written a new book called The Price of Civilization which basically outlines the missteps that we’ve taken that were primarily started as a result of the election of Ronald Reagan. For some reason, many Americans don’t want to pay for some very simple modern facilities like roads, electric grids, airports, and railways.  They prefer to buy junk from China they probably don’t need in search of happiness in the form of hoarding and consuming.

Rather than respond to globalization with more government spending on education, infrastructure, and technology, Ronald Reagan won the presidency in 1980 by pledging to slash government spending and cut taxes.

For 30 years, the US has been going in the wrong direction, cutting the role of government in the domestic economy rather than promoting the investments needed to modernize the economy and workforce. The rich have benefited in the short run, by getting massive tax breaks. The poor have suffered from job losses and cuts in government services. Economic inequality has reached a high not seen since the Great Depression.

These adverse trends have been exacerbated by domestic politics. The rich have used their wealth to strengthen their grip on power. They pay for the expensive campaigns of presidents and congressmen, so presidents and congressmen help the rich – often at the expense of the rest of society.  The same syndrome – in which the rich have gained control of the political system (or strengthened their control of it) – now afflicts many other countries.

Sweden–as an example other than Norway who can use their oil to leverage their improvements–has been called an economic miracle.  After feeling the global recession, they are now growing GDP at rates that are twice to three times the averages of most industrial countries.  They are growing 5 times fasting than the US.   So, look at their numbers  there on the CIA Factbook and marvel where under the poverty rate comes the label: not applicable. Sweden blends capitalism with a social democracy in a way that makes the swedes the 6th most prosperous country on the planet.  They are above the US who is number 10.  They are behind  Norway, Denmark, Finland, Australia and New Zealand.  They are number 23 in GDP per capita  The US is number 11. They are also highly globally competitive ranking #3 in Global Competitiveness Index after Finland and Switzerland. The US is number 1o.

The Swedes are number 9  on the human development index.  We are number 4.  Norway is  number 1.  Sweden has high marginal tax rates (sometimes over 70%), very powerful unions, immigrants, and generous vacations and work weeks.  Under Republican fairy tales, Sweden and Norway should be worse off than Haiti.  Rather than looking at countries that are achieving great things and leaving us in the dust, we are grasping at a rigid ideology that is designed to tank us.

I haven’t read the Sachs book but I’m definitely putting it on my reading list. You may recall that this is also something Fareed Zakaria examines in his TV show, in books, and at TIME magazine. Here’s a good summary from a recent Time article.

The following rankings come from various lists, but they all tell the same story. According to the Organisation for Economic Co-operation and Development (OECD), our 15-year-olds rank 17th in the world in science and 25th in math. We rank 12th among developed countries in college graduation (down from No. 1 for decades). We come in 79th in elementary-school enrollment. Our infrastructure is ranked 23rd in the world, well behind that of every other major advanced economy. American health numbers are stunning for a rich country: based on studies by the OECD and the World Health Organization, we’re 27th in life expectancy, 18th in diabetes and first in obesity. Only a few decades ago, the U.S. stood tall in such rankings. No more. There are some areas in which we are still clearly No. 1, but they’re not ones we usually brag about. We have the most guns. We have the most crime among rich countries. And, of course, we have by far the largest amount of debt in the world.

We’re in the process of watching the Cat Food Commission Redux set our priorities for our future and its basically an agenda meant to downsize the American Dream for every one except the Mega Wealthy.  I hope that the Cheddar Revolution and the Occupy Wall Street movement turn into an American Spring Movement.  We have to regain the positive momentum towards modernity before the powers that be force us all back into a pre-civil war paradigm of laws, economic servitude, and society.

Meanwhile, as I write about these healthy economies, 90% of US citizens say our economy stinks and they are pretty unhappy about it. Its time to look at some best practices of other countries and dump the ideologues that keeping making the wrong decisions for us.