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NY Times
April 17, 2005
PERSPECTIVE


We're Rich, You're Not. End of Story.
By BRUCE BAWER

OSLO — THE received wisdom about economic life in the Nordic countries is easily summed up: people here are incomparably affluent, with all their needs met by an efficient welfare state. They believe it themselves. Yet the reality - as this Oslo-dwelling American can attest, and as some recent studies confirm - is not quite what it appears.

Even as the Scandinavian establishment peddles this dubious line, it serves up a picture of the United States as a nation divided, inequitably, among robber barons and wage slaves, not to mention armies of the homeless and unemployed. It does this to keep people believing that their social welfare system, financed by lofty income taxes, provides far more in the way of economic protections and amenities than the American system. Protections, yes -but some Norwegians might question the part about amenities.

In Oslo, library collections are woefully outdated, and public swimming pools are in desperate need of maintenance. News reports describe serious shortages of police officers and school supplies. When my mother-in-law went to an emergency room recently, the hospital was out of cough medicine. Drug addicts crowd downtown Oslo streets, as The Los Angeles Times recently reported, but applicants for methadone programs are put on a months-long waiting list.

In Norway, the standard line is that there must be some mistake, that such things simply should not happen in "the world's richest country." Why do Norwegians have such a wealthy self-image? Partly because, compared with their grandparents (who lived before the discovery of North Sea oil), they are rich. Few, however, question whether it really is the world's richest country.

After I moved here six years ago, I quickly noticed that Norwegians live more frugally than Americans do. They hang on to old appliances and furniture that we would throw out. And they drive around in wrecks. In 2003, when my partner and I took his teenage brother to New York - his first trip outside of Europe - he stared boggle-eyed at the cars in the Newark Airport parking lot, as mesmerized as Robin Williams in a New York grocery store in "Moscow on the Hudson."

One image in particular sticks in my mind. In a Norwegian language class, my teacher illustrated the meaning of the word matpakke - "packed lunch" - by reaching into her backpack and pulling out a hero sandwich wrapped in wax paper. It was her lunch. She held it up for all to see.

Yes, teachers are underpaid everywhere. But in Norway the matpakke is ubiquitous, from classroom to boardroom. In New York, an office worker might pop out at lunchtime to a deli; in Paris, she might enjoy quiche and a glass of wine at a brasserie. In Norway, she will sit at her desk with a sandwich from home.

It is not simply a matter of tradition, or a preference for a basic, nonmaterialistic life. Dining out is just too pricey in a country where teachers, for example, make about $50,000 a year before taxes. Even the humblest of meals - a large pizza delivered from Oslo's most popular pizza joint - will run from $34 to $48, including delivery fee and a 25 percent value added tax.

Not that groceries are cheap, either. Every weekend, armies of Norwegians drive to Sweden to stock up at supermarkets that are a bargain only by Norwegian standards. And this isn't a great solution, either, since gasoline (in this oil-exporting nation) costs more than $6 a gallon.

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.

The next European country on the list was Ireland, down at 41st place out of 66; Sweden was 14th from the bottom (after Alabama), followed by Oklahoma, and then Britain, France, Finland, Germany and Italy. The bottom three spots on the list went to Spain, Portugal and Greece.

Alternatively, the study found, if the E.U. was treated as a single American state, it would rank fifth from the bottom, topping only Arkansas, Montana, West Virginia and Mississippi. In short, while Scandinavians are constantly told how much better they have it than Americans, Timbro's statistics suggest otherwise. So did a paper by a Swedish economics writer, Johan Norberg.

Contrasting "the American dream" with "the European daydream," Mr. Norberg described the difference: "Economic growth in the last 25 years has been 3 percent per annum in the U.S., compared to 2.2 percent in the E.U. That means that the American economy has almost doubled, whereas the E.U. economy has grown by slightly more than half. The purchasing power in the U.S. is $36,100 per capita, and in the E.U. $26,000 - and the gap is constantly widening."

The one detail in Timbro's study that didn't feel right to me was the placement of Scandinavian countries near the top of the list and Spain near the bottom. My own sense of things is that Spaniards live far better than Scandinavians. In Norwegian pubs, for example, anyone rich or insane enough to order, say, a gin and tonic is charged about $15 for a few teaspoons of gin at the bottom of a glass of tonic; in Spain, the drinks are dirt-cheap and the bartender will pour the gin up to the rim unless you say "stop."

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.

Most recently, the Danish Ministry of Finance released a study comparing the income available for private consumption in 30 countries. Norway did somewhat better here than in the KPMG study, lagging behind most of Western Europe but at least beating out Ireland and Portugal.

The thrust, however, was to confirm Timbro's and Mr. Norberg's picture of American and European wealth. While the private-consumption figure for the United States was $32,900 per person, the countries of Western Europe (again excepting Luxembourg, at $29,450) ranged between $13,850 and $23,500, with Norway at $18,350.

Meanwhile, the references to Norway as "the world's richest country" keep on coming. An April 2 article in Dagsavisen, a major Oslo daily, asked: How is it that "in the world's richest country we're tearing down social services that were built up when Norway was much poorer?"

Obviously, this is one misconception that won't be put to rest by a measly think-tank study or two.
 

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ze kreat ant ze onli
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In Europe everbody loves paying their taxes. Especially progressive tax systems (= the more you earn, the more you pay and if you happen to have two jobs you pay even more) are widely popular here in the western Europe. This might possibly change however. The flat tax reforms in the eastern Europe have been met with some admiration even here in Sweden. Personally, I think a flat tax would remove a lot of the incitaments for tax crimes. I feverbody payed the same it wouldn´t be many incitaments for cheating with paying less than you have to etc.
 

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Although I'm inclined to think that the US does have a higher standard of living than almost all European countries, including most of Scandanavia, this article seems biased. The author sounds like he's bitter for some reason, and I wouldn't trust that his anecdotes about things like $50 pizzas are very representative.
 

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Born to run
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Quoting what I wrote on skyscraperpage.com:

This article is quite hilarious, I must say. It sounds strange to me that this person have lived here for 6 years. He has atleast done no effort whatsoever in understanding Norwegian culture and way of thinking.

Like the thing with "matpakke". That is because norwegians like their dark bread with brown cheese on, and not a fat sandwich with 200 grams of ham on it(what do you think is most healthy?;)). This is not a matter of wealth, even Swedes redicule us for it. And the thing about furnitures, maybe we don't want to change them every second year. Throwing perfectly fine things just because it is a few years old is bad, bad, bad. Still, not a day goes by without we hear complaints about how people are more and more becoming used to the Amercan "use and throw" culture.

Then it is the issue with cars. It seems that he have not understood that everything related to cars are heavily taxed here. And there is a good reason for that! Further explanation should not be necesary on this board.

arbeiter said:
Is the standard to which all other countries should aspire the American way? Do we really need to measure happiness and wealth by SUV's and tract housing?
The essence of what I'm trying to say.

He has a few points, but most things are grossly exagerrated. And he proves the stereotype us Norwegians have towards American culture, namely that it is way too obsessed with consumerism.


Outdated libraries
Errr, FALSE!

public pools in disrepair
Partly true, but getting better

police shortages
Yet a crimerate most places in the US can only dream about. The police here do not need to carry guns...

school supply shortages
Partly true

hospitals with no cough medicine
Muahaha, What??

drug addicts in the streets
Very true. It's a cultural phenomenon though, has little to do with $$

$40 large pizzas and $15 drinks.
I buy large pizzas(enough for 3 persons to be full) for less than 100nok (15$). Pizzaplaces offering that is all over central eastern Oslo. And there are lots of italian pizzarestaurant I'm visiting, serving good pizzas for 80 nok(12-13$). Lots of chinese places have good meals in the 10-12$ range. I don't know about that drink of his, but I use to drink 0,5l beers for 33-45 nok(5-7$). I've just been to New York, and this is about the same prices as you have to pay there, when you consider that prices here are included tax, and that we don't pay anything in tip....

He seems very angry, for some reason. He has a point when he says that the phrase "we as the richest nation in the world should afford to....". This is often said by ignorant people with low IQ that want the goverment to take care of all their life. But it is not a matter of pride. Go ahead America, be richer than us, I couldn't care one bit! If anything, both we and americans should be ashamed for not sharing more of our wealth with the rest of the world. Atleast Norway gives close to 1% of it's GDP to developing countries, compared to 0,2-0,3% in the US. And privates give alot too...

He obviously does not like the way we live, so why is he here(if he is at all)? Yankee go home.

/quote

and:
The more I think of the original articles attempt to paint the Norwegian economy in black, the more hilarious it becomes. There are problems here, as everywhere else. AFAIK, Utopia is not yet created. Norwegian economy is going better than ever, and I think few economies have been healthier in the history of mankind.

We have a huge fund, wich now increases by aprox 30-35 billion US$ each year(I'm pretty sure it will be even more this year). This is about 20% of our GDP. The fund was worth 1000 billion NOK(~155 billion US$), by the end of 2004. Does the US have a proportionally similar 2.000 billion surpluss on its state bugdet? That should make it pretty clear who has the best economy.

/quote
 

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Ölm
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The article is clearly based. Instead of showing statistics it only picks out random stuff. You can always win a comparison by picking out single examples. He just compares his bad experience in Norway with his good experience in the US. Clearly if he would make it vice verse Norway would win.
 

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The point of the article is that the cost of living is high, therefore its high GDP per head when adjusted for 'cost of living' isn't that much higher than say Spain. This is why, according to the article, Norwegians spend a lot less money than say Americans and the Japanese, and have one of the "lowest buying powers in Europe." Christian, can you disprove this?
 

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Lee said:
The point of the article is that the cost of living is high, therefore its high GDP per head when adjusted for 'cost of living' isn't that much higher than say Spain. This is why, according to the article, Norwegians spend a lot less money than say Americans and the Japanese, and have one of the "lowest buying powers in Europe." Christian, can you disprove this?
Well, that's the point in PPP measurements of GDP as opposed to straight MER comparisons isn't it. Even when PPP has been taken into account Norway comes out as one of the richest countries in the world.

The guy is obviously bitter/biased and as for the $50 for a take-away pizza claim, that is just ridiculous. When I went to NYC I found it to be one of the most expensive places I'd been as a tourist and I know it costs a fortune to rent or buy accommodation there too.

Most of Europe does have less disposable income than the US but you have to balance that against the social benefits of free healthcare, less inequality and generally better public services.

Not throwing stuff away every time you feel like it seems like a responsible attitude to me, not a sign of poverty.

btw Japan isn't exactly a cheap nation either!
 

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we all know in europe that scandinavian countries have the best economic and social systems in the world, the most educated people and the most mature people (probably). They are a model for the world in every way.

the NY times is not a reliable source by the way.

and im not scandinavian
 

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It's a trashy article. The guy makes fun of a teacher for packing her lunch instead of buying it at restaurants that even HE argues are overpriced?

There's very little here but anecdotes and unfair comparisons. If anything, he's just reinforcing his own vision of what it means to be 'wealthy' (new car, new furniture, overpriced lunches, etc.).
 

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el futuro es ahora
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look whos talking the us jajajajajajajaj thats a joke ???? usa to me have a real problem everywhere , education it really bad in usa , crime , please there is no other contry whit more crime in the world, health care in usa is really bad and the cost is high ,housing in usa is bad , most of the people live in places whit really bad conditions, unemployment is higher to what the us goberment really say , homeless,portitution, drugs is everywhere in the usa , percapita, i really think that us percapita is a big lie, that really dont show what must of the workforce earn in a year, so to me usa is not the best place to live and they trying to show them self to the world as the best when its not true, sorry but thats the true.
 

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brooklynprospect said:
NY Times
April 17, 2005
PERSPECTIVE
Pretty shitty perspective, if you ask me.
 

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panamared said:
look whos talking the us jajajajajajajaj thats a joke ???? usa to me have a real problem everywhere , education it really bad in usa , crime , please there is no other contry whit more crime in the world, health care in usa is really bad and the cost is high ,housing in usa is bad , most of the people live in places whit really bad conditions, unemployment is higher to what the us goberment really say , homeless,portitution, drugs is everywhere in the usa , percapita, i really think that us percapita is a big lie, that really dont show what must of the workforce earn in a year, so to me usa is not the best place to live and they trying to show them self to the world as the best when its not true, sorry but thats the true.
I think your 'perspective' is just as inaccurate as the New York Times article! No country in the world with more crime than the USA, really???? How about Iraq, Somalia or Nigeria?? If education in the US is so terrible why do they have a higher proportion of people with university degrees than virtually anywhere else and why do people from all over the world send their kids to Harvard, Yale etc?

Most of the US population live in middle class Suburbia which is hardly 'really bad conditions' even it isn't exactly exciting ;)

Healthcare in the USis also very good (but expensive) for those who can get it. It's just bad that large numbers of the population don't have access to it.
 
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