Economics Discussion--Luke Warm Topic Invite

[Sour Masher]

The Hot Topic forums are dominated by the big concerns of our time, Trump, the election, coronavirus, and racial prejudices in our society, and rightly so.

But we have some folks who don't feel comfortable getting into debates about differing opinions on those issues, and I thought it might invite more dialogue and disagreement, without devolving to name calling or anger, if we went a bit more abstract in our discussion. This is still political, and still possibly contentious, touching as it does, on the underlying economic ideologies that so often inform political disagreement. But if we stick to the ideas, and not to the people who hold them (because, frankly, they are often flawed people for other reasons beyond their economic stances), maybe we can have a discussion that really sways people one way or the other. Probably not, but it still might be fun .

I'll start us off with a video that at least claims to undercut a fundamental assumption about high tax societies--that they are anti-rich. The video, in fact, argues that high tax, Nordic socialist countries are not only the best places to live if you are "poor," but also the places you are most likely to become rich, as defined by anyone with a net worth over $30 million, and even ultra rich, defined as being a billionaire. So, the countries that are taxing a great deal to ensure a high quality of life for all citizens are not in fact taking opportunity from some to accumulate vast wealth, it seems. That seems to fly in the face of a lot of conventional wisdom, and my own assumptions! Can you have your cake AND eat it too?! And if so, why don't we all want some of that Nordic socialist cake! More education for all= more wealth for all, and more folks from the bottom can work their way to the top. An educated, healthy population with a higher chance to get rich, and less poverty because of high wages for all, who can argue against that?! Of course, he also brings up a potential counter is job less to computers taking jobs. But then new jobs are created to replace the crappy ones, and it also forces innovations to do away with menial, boring work. New technology leads to more efficiency and more profit, and their unions accept downsizing and salary caps on high skilled labor, which is also good for business, because they know their is social safety net to protect those no longer needed by a company. So, yeah, counter that .

Now, I know Ted-Talks often are not founded on credible data, but they are easy to watch and respond to, and often entertaining. So I post this not as proof of a position, but as an entertaining articulation of it. And I'd like responses, by folks on both sides of things. I'd especially love to hear from those more conservative minded people, and most especially those who may have felt, since Trump has been elected, that they don't have an opportunity to argue for their way of thinking, without their argument inevitably getting conflated with the other political positions of Trump and others on the right that you may not agree with.

Basically, if you are a fiscal conservative uneasy with the economic shift of the far left movement in the Democratic party (though that is likely overstated, based on the current POTUS nominee and the vast majority of Democratic senators and congress people), I'd like you to chime in and debate those here that are left of you economically, ideally sidestepping the other problematic issues of your party at this point.

[Sour Masher]

His final line, if you don't make it to the end is "Scandinavia is a better place to fulfill the American dream than America itself." That is a mic drop line. So, if you don't wanna read my whole post above, just start here.

[GwynnInTheHall]

See this kind of stuff has no value to me--I'm not interested in becoming rich, just enjoying my life. I LOATHE money and all the ills it brings. Not to diminish the Capitalists amongst us, but fuck people who only quantify their success by how much they have--they're a large part of the reason we're in this (pandemic) situation to being with--not just because they want to rush reopening , but that they've allowed the current economic system, which is shit, to continue to exist.

see even this thread belongs in the Hit topic Forum

[chancellor]

His final line, if you don't make it to the end is "Scandinavia is a better place to fulfill the American dream than America itself." That is a mic drop line. So, if you don't wanna read my whole post above, just start here.

He’s gravely in error. I’ll quantify later.

[Sour Masher]

See this kind of stuff has no value to me--I'm not interested in becoming rich, just enjoying my life. I LOATHE money and all the ills it brings. Not to diminish the Capitalists amongst us, but fuck people who only quantify their success by how much they have--they're a large part of the reason we're in this (pandemic) situation to being with--not just because they want to rush reopening , but that they've allowed the current economic system, which is shit, to continue to exist.

see even this thread belongs in the Hit topic Forum

He specifically talks about Bernie and the one bit he says Bernie gets wrong is in not pointing out that even the rich benefit from their economic set up. If what he says is true, and if a case can be made that it is applicable to our society, I think it is an important point people on the far left should make to move their agenda, because it takes away the fear of taking from one to give to another, leaving one diminished in order to raise up another. He presents it as an everybody wins game.

[GwynnInTheHall]

He specifically talks about Bernie and the one bit he says Bernie gets wrong is in not pointing out that even the rich benefit from their economic set up. If what he says is true, and if a case can be made that it is applicable to our society, I think it is an important point people on the far left should make to move their agenda, because it takes away the fear of taking from one to give to another, leaving one diminished in order to raise up another. He presents it as an everybody wins game.

That only works if you have a willing 1% which we don't. It also relies on the premise that information is free and truthful, which again in this country they are not.

The only way for a system like his to evolve would be to scrap what we have and start over, which ain't happening.

Too many greedy, selfish people to get past and that's not just the 1%, but so many of the I think I can be a billionaire idiots that vote against their own interests in hopes of grabbing that brass ring.

[Sour Masher]

That only works if you have a willing 1% which we don't. It also relies on the premise that information is free and truthful, which again in this country they are not.

The only way for a system like his to evolve would be to scrap what we have and start over, which ain't happening.

Too many greedy, selfish people to get past and that's not just the 1%, but so many of the I think I can be a billionaire idiots that vote against their own interests in hopes of grabbing that brass ring.

Yes, but what you don't often hear from the far left in this country, like he is putting forth (and which Chance will soon refute) is a focus on how that brass ring is MORE attainable for MORE people in a system where everyone has healthcare, and everyone has free education. And labor unions don't need to be the bad guy killing innovation and business success, but can work, in a society that provides the basics, in pro-business ways. The framing of the debate in the US is very much rich vs poor, and the poor only can benefit at the expense of the rich. He is suggesting that the Nordic system actually benefits everyone--the socialist tide rises all boats. It is a more effective message, if nothing else, I think.

[chancellor]

So, some background on the topic at hand - the Nordic countries have been pushing this concept for years; especially Sweden and Finland. You'll find 2019 articles from NPR, Esquire (now a very, very liberal rag), Inc, and a couple of prominent US papers pushing this very topic. You'll find the biggest pro in the argument isn't the healthcare and isn't the education, but the program in both that allow someone to leave their job for up to six months to start a business, and if it doesn't go in the manner they planned, return to their old job. Both Finland and Sweden's operating premise is that if risk is minimized, more entrepreneurship will follow.

I'm personally most familiar with Sweden, as I've worked with people from with two major Swedish companies through most of my career.

In the 1990's, that model appeared to be gaining ground. Norway had companies develop that has extended the life of their North Sea natural gas assets by 30-40 years. Sweden developed some cutting edge robotics. Finland created Nokia. If you consider Iceland a Nordic country, their banking industry took off. Niche software companies began to develop. Productivity gains were significant. Older industries, like mining in Sweden, had something of a revitalization.

And then the tech recession of the late '90s/early 00's hit. That was to the Nordics what the '07-08 recession was to us - only swaths of their industries never recovered. Finland's unemployment climbed to around 10% and stayed mired for the most part between 7.5 - 9.5% for the next 20 years, pre-COVID. Sweden's was about a point lower. Sweden's productivity has slowed to a crawl - only about 0.2% per year since 2007. People employed in start-ups has declined continuously since 2010. (To verify, you are free to check authors such as Lars Persson and Frederik Heyman, both economics professors in Sweden). The bulk of people in Swedish start-ups is in the local service sector.

Nokia went from a company that had almost 50% of the mobile phone market in 2007 to insignificant today. In fact, their biggest market sector is now network infrastructure, but are still much smaller than at their peak.

Iceland's banking sector...well, if you noted GITH's points on greed, that about sums up the crushing disaster that was for an entire nation.

So the data clearly indicates that entrepreneurship success has gone way down over the past 20 years. Start-up employment was in a 12-year decline in Sweden.

The real debate isn't whether entrepreneurship in the Nordics is declining - the data clearly shows it has, and for a long time - but why it's happened. The pat answer, as you put in your first post, is higher taxes (or "high tax societies"). It's certainly what the rich often point to in the US. While that's an issue, my experience informs me it's much less important than the real entrepreneurship killer, and that's regulation. Employment legislation in the Nordics (and in Europe as a whole) is vastly more complex than the US. Workplace legislation for those in the EU makes the maze of OSHA and NIOSH look like child's play. Sweden, which is not in the EU, has moderately more simple workplace legislation, but is still much more complex than the US. Cost of hiring is high, but worse is the uncertainty of employee attendance. And that's key - high cost is a challenge that can be met, but uncertainty is the real enemy of business growth; most are more unwilling to take risks when the outcome hinges on factors beyond competitive control. That's why the Nordics face an increasingly unpleasant dilemma - the job destruction trend due to computerization/automation remains high, but the employment probability trend continues to decline.

[chancellor]

That only works if you have a willing 1% which we don't.

I agree with you on this point here. In defense of Sour Masher, I will say they rich in Sweden are far more bought into their system. Sure, I could point to a few who abuse the system or have dodged taxes and so on. But overwhelmingly, they do believe that good job pay and a strong social net are societal benefits they're willing to pay significantly higher taxes for, and if one is monetarily successful within that framework, that's great.

[Sour Masher]

So, some background on the topic at hand - the Nordic countries have been pushing this concept for years; especially Sweden and Finland. You'll find 2019 articles from NPR, Esquire (now a very, very liberal rag), Inc, and a couple of prominent US papers pushing this very topic. You'll find the biggest pro in the argument isn't the healthcare and isn't the education, but the program in both that allow someone to leave their job for up to six months to start a business, and if it doesn't go in the manner they planned, return to their old job. Both Finland and Sweden's operating premise is that if risk is minimized, more entrepreneurship will follow.

I'm personally most familiar with Sweden, as I've worked with people from with two major Swedish companies through most of my career.

In the 1990's, that model appeared to be gaining ground. Norway had companies develop that has extended the life of their North Sea natural gas assets by 30-40 years. Sweden developed some cutting edge robotics. Finland created Nokia. If you consider Iceland a Nordic country, their banking industry took off. Niche software companies began to develop. Productivity gains were significant. Older industries, like mining in Sweden, had something of a revitalization.

And then the tech recession of the late '90s/early 00's hit. That was to the Nordics what the '07-08 recession was to us - only swaths of their industries never recovered. Finland's unemployment climbed to around 10% and stayed mired for the most part between 7.5 - 9.5% for the next 20 years, pre-COVID. Sweden's was about a point lower. Sweden's productivity has slowed to a crawl - only about 0.2% per year since 2007. People employed in start-ups has declined continuously since 2010. (To verify, you are free to check authors such as Lars Persson and Frederik Heyman, both economics professors in Sweden). The bulk of people in Swedish start-ups is in the local service sector.

Nokia went from a company that had almost 50% of the mobile phone market in 2007 to insignificant today. In fact, their biggest market sector is now network infrastructure, but are still much smaller than at their peak.

Iceland's banking sector...well, if you noted GITH's points on greed, that about sums up the crushing disaster that was for an entire nation.

So the data clearly indicates that entrepreneurship success has gone way down over the past 20 years. Start-up employment was in a 12-year decline in Sweden.

The real debate isn't whether entrepreneurship in the Nordics is declining - the data clearly shows it has, and for a long time - but why it's happened. The pat answer, as you put in your first post, is higher taxes (or "high tax societies"). It's certainly what the rich often point to in the US. While that's an issue, my experience informs me it's much less important than the real entrepreneurship killer, and that's regulation. Employment legislation in the Nordics (and in Europe as a whole) is vastly more complex than the US. Workplace legislation for those in the EU makes the maze of OSHA and NIOSH look like child's play. Sweden, which is not in the EU, has moderately more simple workplace legislation, but is still much more complex than the US. Cost of hiring is high, but worse is the uncertainty of employee attendance. And that's key - high cost is a challenge that can be met, but uncertainty is the real enemy of business growth; most are more unwilling to take risks when the outcome hinges on factors beyond competitive control. That's why the Nordics face an increasingly unpleasant dilemma - the job destruction trend due to computerization/automation remains high, but the employment probability trend continues to decline.

Ha, my post was bait to draw you out, and it worked .

Cards on the table, I'm someone who has long wanted all those good things that progressives want for this country. Universal healthcare, especially, seems to me like it should be a basic right in a prosperous and wealthy society like ours. Still, I have financially conservative leanings, and abhor government waste, mismanagement and graft, and the idea that my earnings are taxed to feed government waste, mismanagement, and graft. But my outrage at such waste leans more toward the MIC and PIC--I find $700 toilet seats and fat military contracts to favored companies much more galling that the idea that someone, somewhere, might get a little government basic aid that maybe they could do without.

Anyway, I want more for America and especially those least able to engage in the pursuit of happiness in our society, because of inherent inequities of opportunity. I think we can do more and we must do more.....but I don't know the best way. To me, the best way would recognize the importance of not stifling entrepreneurship, and would not demonize ambition. While such things can lead to inequality, we need those dogs pulling hard on the sled to move us all forward. I think history has taught us that time and again. Greed and ambition, and the promise of wealth and glory, can push everyone to better things, but I also believe there must be regulation, an injection of morality into an amoral system. Those that benefit most from our system, the ones that forge far ahead, should be made to pay more, which they can well afford, so that more people like them are given every opportunity to be the next generation of lead dogs. That means growing up with health care, free quality education, and without the worry that industry is polluting their water and land, hurting them to get or stay ahead themselves. That means less regressive tax systems and more regulations (that make sense and are needed).

But again, I don't know exactly what it could look like, an I worry about the effects of doing it wrong on our economy, which i why the Nordic systems are appealing--they seem to offer a practical way of giving more to our people without destroying our overall prosperity. There are many models of failed socialist and communist systems. There are not a lot of models of very successful ones, but the Nordic systems seem to be good models to me. You address how their system, which focused on technological innovation, had a set back with the tech bubble. But you don't address, despite that set back, the overall higher quality of life in those countries. They higher percentage of folks who are healthy, the higher life expectancy, the much greater likelihood of moving up from the bottom quintile economically than our country. And the fact that despite higher taxes, there still seems to be lots of wealthy people and entrapanuers--as many relative to population as our own country.

[Judge Jude]

"The higher percentage of folks who are healthy, the higher life expectancy"

I suspect that has a lot more to do with much unhealthier diets among Americans, as well as being less physically active, than any other reason.

[DMT]

"The higher percentage of folks who are healthy, the higher life expectancy"

I suspect that has a lot more to do with much unhealthier diets among Americans, as well as being less physically active, than any other reason.

Huh? Isn't the definition of being healthy eating better and being more physically active?

[GwynnInTheHall]

"The higher percentage of folks who are healthy, the higher life expectancy"

I suspect that has a lot more to do with much unhealthier diets among Americans, as well as being less physically active, than any other reason.

It's what you want when healthcare is free- a healthy population to reduce burden on the Govt and taxpayers, but here in America--it's profitable to keep people infirm, at risk and unhealthy in general. Just like it's profitable to keep arresting people for bullshit, victimless crimes, putting them in jail and keeping them there.

The pattern, in America, since they brought the first slaves over was to make as much money as you can even if it's at the expense of other peoples well being, freedom or quality of life.

[GwynnInTheHall]

I'll add this--The Pandemic lockdown and the subsequent rushed re-opening wasn't just about the obviously stated--need to get the wheels of commerce turning again--it was about saving the concept of consumerism for certain industries. The longer we go without things we realize how unnecessary they are and lose that indoctrination that we DO need a new pair of jeans or shoes just to look good going out. Don't fool yourselves, keeping the people hooked on buying shit they really can do without was also a big reason they pushed us right into this--well we're here now we might as well make the best of it--sorry bout your dead parents moment in our history.

[Judge Jude]

Huh? Isn't the definition of being healthy eating better and being more physically active?

basically yes. so Americans don't eat as many healthful foods as Scandanavians, and they don't exercise as much.

in other news, Americans have poorer health results and a lower life expectancy.

but enough about economics.