February 2, 2013
WE ARE ALL THIRD WAY NOW:
Sweden has reduced public spending as a proportion of GDP from 67% in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%, and scrapped a mare's nest of taxes on property, gifts, wealth and inheritance. This year it is cutting the corporate-tax rate from 26.3% to 22%.Sweden has also donned the golden straitjacket of fiscal orthodoxy with its pledge to produce a fiscal surplus over the economic cycle. Its public debt fell from 70% of GDP in 1993 to 37% in 2010, and its budget moved from an 11% deficit to a surplus of 0.3% over the same period. This allowed a country with a small, open economy to recover quickly from the financial storm of 2007-08. Sweden has also put its pension system on a sound foundation, replacing a defined-benefit system with a defined-contribution one and making automatic adjustments for longer life expectancy.Most daringly, it has introduced a universal system of school vouchers and invited private schools to compete with public ones. Private companies also vie with each other to provide state-funded health services and care for the elderly. Anders Aslund, a Swedish economist who lives in America, hopes that Sweden is pioneering "a new conservative model"; Brian Palmer, an American anthropologist who lives in Sweden, worries that it is turning into "the United States of Swedeamerica".
IT'S NOT A SCAM WHEN THE "EXPERTS" ARE THE DUPES:
How do we decide what makes one wine better than another? Expectation-influencing variables like a label and price make a big difference--just as they do for other "experiential goods" like food or hotels. With wine, however, blind taste tests by experts are supposed to eliminate those external cues. But it turns out the experts may be no more reliable than the rest of us. In these data points, drawn from his new book, Mind Over Mind: The Surprising Power of Expectations, journalist Chris Berdik takes a sobering look at our double vision.
THE SUN ALSO RAISES:
The Earth has been getting warmer -- but how much of that heat is due to greenhouse gas emissions and how much is due to natural causes?A leaked report by a United Nations' group dedicated to climate studies says that heat from the sun may play a larger role than previously thought."[Results] do suggest the possibility of a much larger impact of solar variations on the stratosphere than previously thought, and some studies have suggested that this may lead to significant regional impacts on climate," reads a draft copy of a major, upcoming report from the U.N.'s Intergovernmental Panel on Climate Change (IPCC).
THE UNFALSIFIABILITY IS THE POINT:
You can hardly blame physiocists for wanting to be freed from the constraints of science, the way their biologist brethren have been.Does science have a "beauty" problem? David Orrell, a mathematician and consultant, argues that it does--or, at least, that some of its practitioners are in thrall to ideals involving "elegance," "symmetry," and "unity" that are beckoning them down false paths. [...]His book arrives at a vulnerable moment for physics: during the "Higgs Boson Hangover," as Slate dubbed it. The discovery of the Higgs boson particle helps to complete and confirm the existing Standard Model of physics, but the Large Hadron Collider that produced it has not provided any evidence for the newer theories in physics that have been vying for attention.Today the grandest quest of physics is to render compatible the laws of quantum physics--how particles in the subatomic world behave--with the rules that govern stars and planets. That's because, at present, the formulas that work on one level implode into meaninglessness at the other level. This is deeply ungainly, and significant when the two worlds collide, as occurs in black holes. The quest to unify quantum physics (micro) and general relativity (macro) has spawned heroic efforts, the best-known candidate for a grand unifying concept presently being string theory. String theory proposes that subatomic particles are not particles at all but closed or open vibrating strings, so tiny, a hundred billion billion times shorter than an atomic nucleus's diameter, that no human instrument can detect them. It's the "music of the spheres"--think vibrating harp strings--made literal.A concept related to string theory is "supersymmetry." Physicists have shown that at extremely high energy levels, similar to those that existed a micro-blink after the big bang, the strength of the electromagnetic force, and strong and weak nuclear forces (which work only on subatomic levels), come tantalizingly close to converging. Physicists have conceived of scenarios in which the three come together precisely, an immensely intellectually and aesthetically pleasing accomplishment. But those scenarios imply the existence of as-yet-undiscovered "partners" for existing particles: The electron would be joined by a "selectron," quarks by "squarks," and so on. There was great hope that the $8-billion Large Hadron Collider would provide indirect evidence for these theories, but so far it hasn't.Like other critics of string theory and its variants, Orrell argues that it is basically unfalsifiable.
$500 BILLION OFF THE TOP:
Veronique de Rugy of the Mercatus Center at George Mason University, using data compiled by Winslow Wheeler of the Project on Government Oversight, observes that the figures usually adduced to present spending on "defense" or "national security" understate by a long shot actual federal spending that is appropriately put under such labels. The figure most often cited is the "base" budget of the Department of Defense, which was $535 billion for FY2012. But military and defense expenditures go well beyond that, including such things as the development of nuclear weapons, which is done in the Department of Energy, or training of foreign military forces, which come under the international affairs section of the federal budget. Add in all those other things and the total is more like $930 billion rather than $535 billion. And that's just current expenditures, not taking into account follow-on effects such as additional interest to be paid on the national debt.Probably the most egregious bit of military-related budgetary legerdemain has been the practice of keeping the operational costs of the wars in Iraq and Afghanistan separate from the main Pentagon budget, as if those costs should not count as much because they are, well, sort of temporary. And so the base budget figure continues to get cited as "defense spending" even though it excludes the main, and costliest, activities in recent years of the U.S. military.
THE REFORM PARTY VS THE REPEAL PARTY
In states as diverse as Wisconsin, Indiana, Ohio, Nebraska, Michigan, New Jersey, Texas, and a half-dozen others, Republicans have been implementing impressive -- even miraculous -- reforms.In pro-Obama Wisconsin, Governor Scott Walker beat back a historic attack from organized labor. And Michigan -- Michigan! -- recently became a right-to-work state, which I'm pretty sure is mentioned in the AFL-CIO's bylaws as a sign of the end times.I think an overlooked part of the story is the fact that Americans tend to see federal and local governments differently. At the local level, people seem to have a better grasp that it's their tax dollars at work. They are far more sensitive to tax increases and more easily outraged by spending boondoggles. They understand the importance of sustainable economic growth.This fact benefits Republicans, although state-level Democrats tend to be more fiscally responsible at the local level as well. (Rahm Emanuel is far more fiscally responsible as Chicago's mayor than he ever was as Obama's chief of staff.)Meanwhile, what gets Republicans elected at the local level gets them in trouble at the federal level. Again, there are many reasons for this. But I think one of them is that we've come to see the federal government as some sort of mystical entity empowered to right all of the wrongs in society. If there's a problem, there "should" be a federal response, the costs or feasibility of that response be damned.While Romney's infamous riff about the "47 percent" was profoundly flawed, the simple reality is that millions of people who do, in fact, pay federal income taxes do not care about those tax dollars in the same way they care about their local tax dollars. This is true of people who get more from the federal government than they pay in, but it's also true for millions of affluent voters as well.
WE'RE JUST ARGUING ABOUT THE PACE OF THE THIRD WAY:
Is Sweden a Red State? (Walter Russell Mead, 2/01/13, Via Medea)
Then came a set of reforms right out of the playbook now being used by Republican governors across the U.S.:
A centre-right coalition opened up the universal welfare state to choice and competition, using private companies and people power to improve quality and efficiency. State funding for education was reformed to follow the pupil, rather than the service, meaning that schools had to compete for custom for the first time. In healthcare, the private sector was invited to set up hospitals, GP clinics and even ambulances. [...]
Competition has delivered better services. At Kunskapsskolan, a private free school chain, children take greater responsibility for their own learning; setting their own goals, class schedules and recording progress online. The 10,000 pupils taught in its 33 schools consistently outperform the national average. Private healthcare companies have helped the Swedish healthcare system keep up with rapid change.
The reforms have made believers out of everyone. Sweden's powerful Municipal Workers' Union declared in 2001, "Competition between the various providers can promote and promulgate improvements in both productivity and quality."