Lies, Damned Lies, and Scandinavian Girls

One of the things that everyone knows is that, in addition to producing tall, blonde women with the morals of alley cats, the Great Scandinavian Socialist Experiment provides a quality of life superior to that produced by the crass, grasping, capitalism run amok of, say, the United States. Sure, tax rates are ruinously high, but the poor (for example) are well cared for rather than being consigned to the outer darkness of poverty, disease and despair, as they are in the United States.

Not so much, it turns out.

James K. Glassman today takes a look at "The State of Working America," an annual report prepared by the Economic Policy Institute. That organization thinks it would be a great thing if America were a lot more like Europe in general, and Scandinavia, in particular.

Glassman points to this chart, intended by the EPI to show that there is an enormously greater disparity of incomes in the United States (click to enlarge):



He goes on to explain:

Now given all the adjustments that have been made to the figures this is actually showing us something very interesting indeed. The use of PPP means that we've adjusted for price differences, by using US median income as our measuring stick we've given ourselves a view of the actual incomes, not just the relative incomes, of the poor and the rich in each country.


How we're supposed to read this is that the USA has a very uneven income distribution, that the poorest 10% only get 39% of the median income, that the richest 10% get 210%. Compare and contrast that with the most egalitarian society amongst those studied, Finland, where the rich get 111% and the poor get 38%. Shown this undoubted fact we are therefore to don sackcloth and ashes, promise to do better and tax the heck out of everybody to rectify this appalling situation.


But hang on a minute, that's not quite what is being shown. In the USA the poor get 39% of the US median income and in Finland (and Sweden) the poor get 38% of the US median income. It's not worth quibbling over 1% so let's take it as read that the poor in America have exactly the same standard of living as the poor in Finland (and Sweden). Which is really a rather revealing number don't you think? All those punitive tax rates, all that redistribution, that blessed egalitarianism, the flatter distribution of income, leads to a change in the living standards of the poor of precisely ... nothing.

Read the whole thing HERE.

It's worth noting that the data on which the chart is based does not appear to include the value of transfer payments from the Government to those in the bottom 10th percentile. Glassman's point is therefore potentially smaller than it might at first appear to be. If one wishes to know whether the poor are, all things considered, better off in Finland than in the United States, one would need to know the value of food stamps, health care, welfare, social security and the like paid to these people by their respective governments.

Notwithstanding that objection, the data most certainly shows that while the rich in the United States earn more than their Swedish counterparts, the Finnish poor don't earn less. We thus see played out the normal consequence of socialism and central planning, whether applied to the economy or the public schools: "Equality" is achieved not by making everyone (more) wealthy, but by making everyone poor.

And those Swedish chicks are way too pale and skinny, too.