Source of graph: online version of the WSJ article quoted and cited below.
(p. A17) . . . is there evidence that stimulus was behind America’s recovery–or, for that matter, the recoveries in Germany, Switzerland, Sweden, Britain and Ireland? And is there evidence that the absence of stimulus–a tight rein on public spending known as “fiscal austerity”–is to blame for the lack of a full recovery in Portugal, Italy, France and Spain?
A simple test occurred to me: The stimulus story suggests that, in the years after they hit bottom, the countries that adopted relatively large fiscal deficits–measured by the average increase in public debt from 2011-17 as a percentage of gross domestic product–would have a relatively speedy recovery to show for it. Did they?
As the accompanying chart shows, the evidence does not support the stimulus story. Big deficits did not speed up recoveries. In fact, the relationship is negative, suggesting fiscal profligacy led to contraction and fiscal responsibility would have been better.
(p. A17) American liberals sometimes hold up Sweden as a model of social order, equality of the sexes, and respect for parental responsibilities. Its welfare state offers excellent free or subsidized prenatal care, 480 days of paid leave for both natural and adoptive parents, and additional leave for moms who work in physically strenuous jobs. Swedish parents have the option to reduce their normal hours (and pay) up to 25% until a child turns 8.
But all this assistance comes at a steep cost. At 61.85%, Sweden has the highest personal income tax rate in the world. That money pays for the kind of support many American women would welcome, but it comes with pressure on women to return to the workforce on the government’s schedule, not their own. The Swedish government also supports and subsidizes institutionalized day care (they call it preschool), promoting the belief that professional care-givers are better for children than their own mothers.
If a mother decides she wants to stay at home with her child beyond the state-sanctioned maternity leave, she receives no additional allowance. That creates an extreme financial burden on those families, and the pressure is social as well. A 32-year-old friend told me that she was in the park with her 2-year-old son, when she was surrounded by a group of women who berated her for not having the boy in day care.
(p. B8) The blockchain technology that underpins cryptocurrencies such as bitcoin could change the way property deals are done and recorded more than any other new technology, real-estate and technology experts say.
And Sweden’s nearly 400-year-old land mapping and registration authority is likely to become one of the first government agencies to test using blockchain technology for conducting property sales.
The Lantmäteriet expects to conduct the first such transaction in the next few months and is shortlisting volunteers who want to buy or sell a property using the blockchain system. “From the technology point of view, we are quite ready,” said Mats Snäll, Lantmäteriet’s chief digital officer.
Proponents of blockchain say the technology would make recording and transferring titles faster and much more efficient. Transactions that today take months to complete could take days or even hours, they say.
Blockchain technology also is practically bulletproof when it comes to fraudulent transactions, experts say.
(p. B5) Ingvar Kamprad, born on a farm in the rock-strewn Swedish region of Småland, got his start as a merchant at around age 5 by buying matches in bulk and reselling them to neighbors.
He went on to pull off a rare feat: Creating a global retailing powerhouse, the furniture chain IKEA, with over 400 stores, in a business that generally has defied globalization. IKEA’s furniture has delighted bargain seekers for decades and made millions of dorm rooms and first apartments habitable, despite maddening the many customers who found the assembly instructions baffling.
. . .
One of his most successful notions was that furniture could be shipped and warehoused much more cheaply in disassembled form.
. . .
Rival retailers in Sweden, shocked by IKEA’s low prices, pressured furniture makers to cut off supplies to Mr. Kamprad’s company. That served only to make IKEA stronger as Mr. Kamprad found he could buy furniture much more cheaply from Polish plants. The search for foreign suppliers also helped IKEA turn itself into an international company.
. . .
Mr. Kamprad remained a penny-pincher, flying economy class and lecturing his employees that waste was sinful, according to “Leading by Design,” a 1999 biography by Bertil Torekull.
(p. A1) Mr. Persson, 35, sits in front of four computer screens, one displaying the loader he steers as it lifts freshly blasted rock containing silver, zinc and lead. If he were down in the mine shaft operating the loader manually, he would be inhaling dust and exhaust fumes. Instead, he reclines in an office chair while using a joystick to control the machine.
He is cognizant that robots are evolving by the day. Boliden is testing self-driving vehicles to replace truck drivers. But Mr. Persson assumes people will always be needed to keep the machines running. He has faith in the Swedish economic model and its protections against the torment of joblessness.
“I’m not really worried,” he says. “There are so many jobs in this mine that even if this job disappears, they will have another one. The company will take care of us.”
. . .
(p. A8) The Garpenberg mine has been in operation more or less since 1257. More than a decade ago, Boliden teamed up with Ericsson, the Swedish telecommunications company, to put in wireless internet. That has allowed miners to talk to one another to fix problems as they emerge. Miners now carry tablet computers that allow them to keep tabs on production all along the 60 miles of roads running through the mine.
“For us, automation is something good,” says Fredrik Hases, 41, who heads the local union chapter representing technicians. “No one feels like they are taking jobs away. It’s about doing more with the people we’ve got.”
(p. 24) Implants have been a major advance in dentistry, liberating millions of elderly people from painful, ill-fitting dentures, a diet of soft foods and the ignominy of a sneeze that sends false teeth flying out of the mouth. But addressing those problems was not Dr. Branemark’s initial intent.
At the start of his career, he was studying how blood flow affects bone healing.
In 1952, he and his team put optical devices encased in titanium into the lower legs of rabbits in order to study the healing process. When the research period ended and they went to remove the devices, they discovered to their surprise that the titanium had fused into the bone and could not be removed.
Dr. Branemark called the process “osseointegration,” and his research took a whole new direction as he realized that if the body could tolerate the long-term presence of titanium, the metal could be used to create an anchor for artificial teeth.
. . .
. . . , Dr. Branemark’s innovation was poorly received. After Dr. Branemark gave a lecture on his work in 1969, Dr. Albrektsson recalled, one of the senior academics of Swedish dentistry rose and referred to an article in Reader’s Digest describing Dr. Branemark’s research, adding, “This may prove to be a popular article, but I simply do not trust people who publish themselves in Reader’s Digest.”
As it happened, that senior academic was well known to the Swedish public for recommending a particular brand of toothpick. So Dr. Branemark immediately rose and struck back, saying, “And I don’t trust people who advertise themselves on the back of boxes of toothpicks.”
(p. A13) . . . even as the single-payer system remains the ideal for many on the left, it’s worth examining how Britain’s NHS, established in 1948, is faring. The answer: badly. NHS England–a government body that receives about £100 billion a year from the Department of Health to run England’s health-care system–reported this month that its hospital waiting lists soared to their highest point since 2006, with 3.2 million patients waiting for treatment after diagnosis. NHS England figures for July 2013 show that 508,555 people in London alone were waiting for operations or other treatments–the highest total for at least five years.
Even cancer patients have to wait: According to a June report by NHS England, more than 15% of patients referred by their general practitioner for “urgent” treatment after being diagnosed with suspected cancer waited more than 62 days–two full months–to begin their first definitive treatment.
. . .
The socialized-medicine model is struggling elsewhere in Europe as well. Even in Sweden, often heralded as the paradigm of a successful welfare state, months-long wait times for treatment routinely available in the U.S. have been widely documented.
To fix the problem, the Swedish government has aggressively introduced private-market forces into health care to improve access, quality and choices. Municipal governments have increased spending on private-care contracts by 50% in the past decade, according to Näringslivets Ekonomifakta, part of the Confederation of Swedish Enterprise, a Swedish employers’ association.
(p. A11) President Obama has declared the Affordable Care Act a success–a reform that is “here to stay.” The question remains, however: What should we expect to come out of it, and do we want the effects to stay? If the experiences of Sweden and other countries with universal health care are any indication, patients will soon start to see very long wait times and difficulty getting access to care.
. . .
Rationing is an obvious effect of economic planning in place of free-market competition. Free markets allow companies and entrepreneurs to respond to demand by offering people what they want and need at a better price. Effective and affordable health care comes from decentralized innovation and risk-taking as well as freedom in pricing and product development. The Affordable Care Act does the opposite by centralizing health care, minimizing or prohibiting differentiation in pricing and offerings, and mandating consumers to purchase insurance. It effectively overrides the market and the signals it sends about supply and demand.
Stories of people in Sweden suffering stroke, heart failure and other serious medical conditions who were denied or unable to receive urgent care are frequently reported in Swedish media. Recent examples include a one-month-old infant with cerebral hemorrhage for whom no ambulance was made available, and an 80-year-old woman with suspected stroke who had to wait four hours for an ambulance.
Other stories include people waiting many hours before a nurse or anyone talked to them after they arrived in emergency rooms and then suffering for long periods of time before receiving needed care. A 42-year-old woman in Karlstad seeking care for meningitis died in the ER after a three-hour wait. A woman with colon cancer spent 12 years contesting a money-saving decision to deny an abdominal scan that would have found the cancer earlier. The denial-of-care decision was not made by an insurance company, but by the government health-care system and its policies.
“The economy ‘will remain challenging for a long time,’ says IKEA Chief Executive Mikael Ohlsson.” Source of caption and photo: online version of the WSJ article quoted and cited below.
(p. B3) MALMO, Sweden–IKEA is poised to embark on a global spending spree, but its departing chief executive says red tape is slowing how fast the home-furnishings retailer can open its pocket book.
With the company set to report record sales on Wednesday, CEO Mikael Ohlsson said the amount of time it takes to open a store has roughly doubled in recent years.
“What some years ago took two to three years, now takes four to six years. And we also see that there’s a lot of hidden obstacles in different markets and also within the [European Union] that’s holding us back,” he said in an interview recently at an IKEA store on Sweden’s western coast.
. . .
IKEA plans to invest €2 billion in stores, factories and renewable energy this year. But the company fell €1 billion short of its goal of investing €3 billion in new projects last year, largely because of bureaucratic obstacles, he said. For 10 years IKEA has tried unsuccessfully to relocate a store in France, for example. The company also is challenging German policy dictating what can be sold and where, saying the rules are out of sync with EU legislation.
“It’s a pity, because it can help create jobs and investments at a time when unemployment is high in many countries,” Mr. Ohlsson said. A new IKEA store creates construction and store jobs for about 1,000 workers, he said.
. . .
The company’s highest-profile headaches have come in India, an untapped market where IKEA wants to open a first store in at least five years and roll out an additional three soon thereafter.
The wonderful clip above is from Hans Rosling’s TED talk entitled “The Magic Washing Machine.”
He clearly and strongly presents his central message that the washing machine has made life better.
What was the greatest invention of the industrial revolution? Hans Rosling makes the case for the washing machine. With newly designed graphics from Gapminder, Rosling shows us the magic that pops up when economic growth and electricity turn a boring wash day into an intellectual day of reading.
(Note: I am grateful to Robin Kratina for telling me about Rosling’s TED talk,)
(Note: I do not agree with Rosling’s acceptance of the politically correct consensus view that the response to global warning should mainly be mitigation and green energy—to the extent that a response turns out to be necessary, I mainly support adaptation, as suggested in many previous entries on this blog.)