April 18, 2005

The Scandanavian Model is Dead

Even the NY Times finally gets it. Scandanavians are no model for an economic future. They're not even a model for Europe.

In late March, another study, this one from KPMG, the international accounting and consulting firm, cast light on this paradox. It indicated that when disposable income was adjusted for cost of living, Scandinavians were the poorest people in Western Europe. Danes had the lowest adjusted income, Norwegians the second lowest, Swedes the third. Spain and Portugal, with two of Europe's least regulated economies, led the list.

Europe itself is generally poor compared to the US and falling behind.

All this was illuminated last year in a study by a Swedish research organization, Timbro, which compared the gross domestic products of the 15 European Union members (before the 2004 expansion) with those of the 50 American states and the District of Columbia. (Norway, not being a member of the union, was not included.)

After adjusting the figures for the different purchasing powers of the dollar and euro, the only European country whose economic output per person was greater than the United States average was the tiny tax haven of Luxembourg, which ranked third, just behind Delaware and slightly ahead of Connecticut.

Longtime readers might remember that I made mention of the study last July in an article on maternity leave.

This leaves "progressives" in something of a pickle. Who will they point to as an example now? Soft-socialism hasn't installed a gulag but it has installed high poverty (by our standards) and large brain, ambition, and hard work drains. Who would ever want that?

Without an external model to point to that works, progressives have only the history of their own initiatives to fall back on and that isn't a very good record. It is domestic failure of "progressive" programs that led to the reliance on pointing to external "successes" in the first place.

The US political model relies on two poles fighting it out in an adversarial process, improving each other's work so that the country can benefit. The economic pole on the left has disintegrated to the point that the NY Times can no longer deny that the economic ideal it has pushed for decades leads to drastic increases in poverty. This implies huge changes on the horizon.

Update:VodkaPundit has a great take observing how Bernie Sanders used the "but it works there" technique on Alan Greenspan back in 2003.

Posted by TMLutas at April 18, 2005 09:20 AM