"The fox knows many things, but the hedgehog knows one big thing."


Glenn Reynolds:

Barack Obama:
"Impossible to transcend."

Albert A. Gore, Jr.:
"An incontinent brute."

Rev. Jeremiah Wright:
"God damn the Gentleman Farmer."

Friends of GF's Sons:
"Is that really your dad?"

Kickball Girl:
"Keeping 'em alive until 7:45."

Hired Hand:
"I think . . . we forgot the pheasant."

I'm an
Alcoholic Yeti
in the
TTLB Ecosystem

Monday, August 28, 2006

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.

Comments on "Lies, Damned Lies, and Scandinavian Girls"


Anonymous 'chesty' said ... (5:02 PM) : 

it's interesting this post conveniently ignores the important disclaimer in the report that "it is worth noting that PPPs do not account for the cost of non-market social goods, such as education, health care, or child care, which are much cheaper or completely covered by public spending in many European countries relative to the United States." no need to fuss over minor expenses like health care.

it's true that the poor in the US might get effectively the same size paycheck at the end of the month as the poor in, say, Finland. the difference is the poor in the US have the great priviledge of turning around and signing the entire thing over to their HMO, day care center, and--if they're really lucky--local community college.


Blogger Gentleman Farmer said ... (5:10 PM) : 

Wow. Comments from folks who haven't read the post. I must be famous.


Anonymous 'chesty' said ... (5:17 PM) : 

fine. i'll rephrase: it's interesting your post absurdly minimizes the important disclaimer "it is worth noting that PPPs do not account for the cost of non-market social goods, such as education, health care, or child care, which are much cheaper or completely covered by public spending in many European countries relative to the United States."

health care costs are only the leading cause of personal bankruptcies in the US. why bother assigning them any importance in a discussion of living standards and poverty.


Blogger Gentleman Farmer said ... (7:10 PM) : 

But that's not what we were discussing. We were discussing (and Glassman was discussing, and the study he cited was discussing) disparities in income distribution.

The data shows that massive Government transfers (that presumably include health care, education, other training, child care services, and so on) have not caused the lowest income group in Scandinavia to earn any more than their American counterparts. This means either that high taxes aren't translated into services for the poor, or that those services don't really do much to make the poor less poor (which is what one would have thought was their purpose).

If you're telling me instead that massive income redistribution has instead as its purpose the continued comfort (on my nickle) of the least productive segment of society (regardless of the cause of their non-productivity) then I'll pass, thanks very much.

I refer you, sir, to the most original social philosopher of his day, Mr. Alfred P. Doolittle.


Blogger Hired Hand said ... (8:13 PM) : 

the post/study/analysis makes the (extremely common) mistake of equating PPP-adjusted income with quality of life. economists will readily tell you that 'quality of life' is one of the hardest possible things to measure (since, really, you can't) quantitatively, as can easily be done with income.

it's the classic american/european tradeoff - lower productivity and (potentially) higher quality of life, or higher productivity and lower equality of income. there's a serious confusion of terms here, especially with the word 'poor'. and i wouldn't exactly say that the least fortunate in scandinavian society (or any society, for that matter) are exactly living in "continued comfort." how do you want your society treating the worst off?

on the other hand, having known him for nearly a quarter century, i didn't need a blog post to tell me GF wasn't a Rawlsian.


Blogger Village Idiot said ... (10:58 PM) : 

We're ALL Rawlsians now.


Anonymous Mel Gibson said ... (11:48 AM) : 

Can't we just blame the Jews?


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