Europe

Lane Kenworthy has a nice post listing some of the things about Sweden that might be surprising—here are some of my favorites:

....

Surprises for the left

1. The country has a strong work ethos. The welfare state is generous, but most able-bodied Swedes of working age are expected to be employed. During the 2000s the Swedish employment rate has averaged about 74% of the working-age population, two percentage points higher than in the United States. The share of working-age Swedish households with no employed adult is 5%, the same as in the U.S.

....

Surprises for the right

1. Sweden has a competitive economy. In the World Economic Forum’s 2007-08 “competitiveness index,” Sweden placed 4th out of 131 nations. It has been in the top ten, often among the top five, throughout this decade. Like the other Nordic countries (Denmark, Finland, Iceland, and Norway), Sweden has been successful at adapting to the shift from manufacturing to services and to a more globalized and competitive economic environment. These economies have done particularly well in high-tech industries. This owes to, among other things, high-quality educational systems, excellent public infrastructure, heavy R&D investment, and commitment to adaptation.

2. High mobility. For a long time the consensus view among researchers was that egalitarian countries such as Sweden have low inequality but also little mobility, whereas the United States has more inequality but also greater opportunity for upward and downward movement. Recent findings suggest this is wrong. Mobility in Sweden, both between generations and over the life course, is at least is great as in the United States and likely greater.

3. The poor are well-off absolutely, not just relatively. Critics of high taxes and generous government benefits sometimes imagine that these destroy economic growth, so that countries like Sweden have low inequality but also low absolute living standards. In fact, the incomes of those at the bottom of the distribution in Sweden are similar to those of their American counterparts. And Swedes work far fewer days and hours to get those incomes. They also enjoy more plentiful and higher-quality public services, from schools to child care to health care to public transportation to roads and parks.

4. Sweden is heterogeneous. Those skeptical about the applicability of Swedish policies and institutions often argue that to the extent Sweden “works,” it’s because it has an extremely homogeneous population. That was likely true half a century ago, but these days Sweden’s immigrant (foreign-born) share is virtually identical to America’s, at about 13% of the population. What effects this may have over the long run are hard to anticipate, but it’s been that way for more than a decade now.

According to social surveys, Denmark is the happiest country in the world, a fact that apparently isn't sitting to well with some people at the NYT. In a piece that should have ran in the National Review, Carter Dougherty tries to make the case Denmark is going to hell in a handbasket as young, highly educated workers "flee" to avoid the country's top marginal tax rate of 63 percent.

CEPR's Dean Baker and Time's Justin Fox have debunked the piece in recent blog posts. Baker notes that the net rate of the "net rate of departure is supposedly 1000 people per year, approximately 0.002 percent of the population" and that "the article presents little evidence that the economy is suffering from this exodus."

Denmark currently has a 3.6 percent unemployment rate. Its economy is projected to grow by 3.5 percent in 2007. The article warns us that growth will fall to 1.0 percent over the next three years. (The main reason for the projection of slower growth is a U.S. style housing market crash. Denmark's central bankers were no smarter than Alan Greenspan.) Of course, since Denmark's population is barely growing, that translates into about 0.7 per capita growth, the number that economists usually care about. That's not great, but not exactly a nightmare.

In terms of sustainability, Denmark has a budget surplus of more than 2 percent of GDP (equivalent to $280 billion a year in the U.S.) and a debt to GDP ratio of around 26 percent. Its current account surplus is also in excess of 2 percent of GDP.

In short, if Denmark is suffering because a relatively small number of highly educated workers find the tax rate too high, there is not much evidence in the data.

Fox concludes that the inclusive Danish welfare state has bolstered the country's economic growth:

.... tight-knit culture and the hugely expensive Danish welfare state both seem to have contributed in a big way to the country's impressive economic success over the past 15 years. So maybe encouraging immigration by cutting taxes (and with them the size of government) isn't the best possible solution to Denmark's labor shortage. What is? Having more kids, I guess.

Given the weak evidence for Dougherty's "something is rotten in Denmark" thesis, and since the NYT piece was presented as a news story, it should have at least acknowledged that plenty of experts view Danish tax policy as an asset rather than a liability.

While I'm on the topic of conventional wisdom that is wrong, New America's Steven Hill has a great op-ed in today's WaPo that dismantles five of the most conventionally held wisdoms about Europe's economy, including the CW that Europe is the "land of double-digit unemployment":

Half of the E.U. 15 nations have experienced effective full employment during this decade, and unemployment rates have been the same as or lower than the rate in the United States. Unemployment for the entire European Union, including the still-emerging nations of Central and Eastern Europe, stands at a historic low of 6.7 percent. Even France, at 8 percent, is at its lowest rate in 25 years.

That's still higher than U.S. unemployment, which is 4.6 percent, but let's not forget that many of the jobs created here pay low wages and include no benefits. In Europe, the jobless still have access to health care, generous replacement wages, job-retraining programs, housing subsidies and other benefits. In the United States, by contrast, the unemployed can end up destitute and marginalized.

... and that the European "welfare state" harms its economy:

Beware of stereotypes based on ideological assumptions. As Europe's economy has surged, it has maintained fairness and equality. Unlike in the United States, with its rampant inequality and lack of universal access to affordable health care and higher education, Europeans have harnessed their economic engine to create wealth that is broadly distributed.

Europeans still enjoy universal cradle-to-grave social benefits in many areas. They get quality health care, paid parental leave, affordable childcare, paid sick leave, free or nearly free higher education, generous retirement pensions and quality mass transit. They have an average of five weeks of paid vacation (compared with two for Americans) and a shorter work week. In some European countries, workers put in one full day less per week than Americans do, yet enjoy the same standard of living.

Europe is more of a "workfare state" than a welfare state. As one British political analyst said to me recently: "Europe doesn't so much have a welfare society as a comprehensive system of institutions geared toward keeping everyone healthy and working." Properly understood, Europe's economy and social system are two halves of a well-designed "social capitalism"—an ingenious framework in which the economy finances the social system to support families and employees in an age of globalized capitalism that threatens to turn us all into internationally disposable workers. Europeans' social system contributes to their prosperity, rather than detracting from it, and even the continent's conservative political leaders agree that it is the best way.

My only quibble: "workfare state" is too narrow of a characterization. In the American vernacular workfare conjures up images of individuals being forced to wear orange jumpsuits and clean up parks in exchange for narrowly means-tested subsistence benefits. A better characterization might be "work support" state, but even that is probably too narrow to capture the essence of the European approach, one which I'd argue views work as a means (working to live) rather than an end (living to work).

PS: As Dean Baker correctly points out, Hill's piece is especially notable because the WaPo has been bastion of conventionalism when it comes to Europe. As Baker puts it: "This is a bit like Pravda in the Soviet days printing a column on the merits of capitalism. The Post should be applauded for finally overcoming its ideological aversion to the European welfare state and allowing some difference of opinion on this issue."

An editorial in today's NYT notes that the United States devotes relatively little, as a share of its economy, to public social expenditures:

You would think that we were living in the lap of the Nanny State. One of the most puzzling facts of the political debate is how much traction Republicans still get from their calls to cut taxes and public spending, and how timorous Democrats are in arguing against them.

The United States has long had one of the most meager tax takes in the industrial world. America’s social spending — on programs ranging from Medicare and Social Security to food stamps — is almost the stingiest among industrial nations. Among the 30 industrialized countries grouped in the Organization for Economic Cooperation and Development, only four — Turkey, Mexico, South Korea and Ireland — spend less on social programs as a share of their economy.

The data the NYT is relying on is from the OECD Factbook 2007. Here's more detail:

PS: I made the chart using the new Numbers spreadsheet program in Apple's latest version of iWork. I've only started testing it out, but so far I like what I see.

The European Anti-Poverty Network is an indepdent network of NGO's working to reduce poverty and social exclusion in Europe. They recently put out a great position paper on "flexicurity", which is European for an "integrated strategy to enhance, at the same time, flexiblity and security in the labour market." Their director sums it up in a press release:

“The security we need cannot be summarised by secured transitions between jobs!”, declared Fintan Farrell, EAPN Director. “What we need instead are policies implementing an inclusive labour market, contributing to the fight against in-work poverty and discrimination, and allowing access for all to quality sustainable employment”.

He added: “These policies should go along with high levels of social protection and respect of fundamental rights—notably human dignity, the right to engage in work and the right to social assistance. ....

Timothy Egan compares Italy and the United States in yesterday's NYT:

With Independence Day just passed, a good nationalist shouldn’t be afraid to [ask] .... who lives better, us or them?

In Italy, this was a regular parlor game when friends came to visit. Inevitably, after a few days of taking in our new world — a village public school for the kids, neighbors who opened the doors of their ancient homes to us, a lengthy siesta every afternoon — our houseguests would side with the Italians. I would counter for the U.S.A., to keep the argument alive.

The Italians won on health, family and food. The United States was better on race and opportunity.

With health care, the anecdotal often carried the argument. One day, a tenant farmer named Sergio, our neighbor, woke with a terrible eye infection. He was full of pain, unable to see. Sergio got world-class care in Florence. After three days of attentive fussing in the hospital, he came home entirely well and without a bill.

Had he showed up at any American hospital — poor, no insurance — well, good luck. Especially in a place like Texas, where 30 percent of adults lack health insurance and what can pass for medical care is a get-in-line form of triage.

But even with insurance, Americans are stuck with what may be the worst of all systems: one that lets a handful of corporations make life-and-death decisions, with incentive to dump and deny.

Little wonder that the United States ranks 37th in effectiveness of health care. Italy ranks 2nd. This is a country that can’t form a government to last longer than the soccer season, and yet, they make our medical system look barbaric.

If our system doesn’t kill you — see the infant mortality and life expectancy rates, bringing up the rear — it can put you in the poorhouse. Medical catastrophes are the leading cause of bankruptcy, and most of those are people who have some insurance, clinging to the frayed edge of the middle class.

O.K., so what about leisure? Americans spend nearly a third of their disposable income on good times, baby. But we can’t relax. Sorry — no time. Lunch averages 31 minutes. And the U.S. ranks dead last among 21 of the world’s richest countries when it comes to guaranteed days off, according to the Center for Economic and Policy Research.

Most Americans don’t even use their allotted days of leisure. The Italians take 42 vacation days a year — No. 1 in the world. The average American takes 13.

A quarter of Americans receive no vacation at all. And it’s not like we don’t need it: one in three are chronically overworked. We even work 100 hours a year more than the Japanese.

President Bush has it figured out, with his month off at the ranch. But for a profile in clueless, Bush set the mark when he lauded as truly American some citizen who told him she had to work three jobs. Ain’t that something?

Ah, but what about taxes? Europeans pay more than we do, to fund that free health care. Take that, Euro-trash, while lying on the beach. And yet, our tax system is approaching Gilded Age disparity. Listen to Warren Buffett, the third richest man in the world. Last year, he was taxed at 17 percent of his taxable income, he said last month. His receptionist paid nearly twice that, at 30 percent.

Where America shines is with our multiracial society and the easy access to opportunity. It was jarring to listen to otherwise thoughtful Tuscans denigrate Ethiopian immigrants or even their Sicilian countrymen.

....

I'm not so sure about the "easy access to opportunity"—maybe in comparison with Italy, but recent research on economic mobility, some of which is summarized in our paper on low-wage work in the United States, shows that opportunity to move up the economic ladder isn't plentiful as conventional wisdom would have it:

Studies of this kind of ... intergenerational mobility ... find that children who are born into low-income families in the United States have much less chance of moving up as adults than children who are born into better-off families have of maintaining their status or moving up. Moreover, many advanced economies, including those of Canada and the nations of Scandinavia, have significantly more intergenerational mobility than the United States.

Late last week, the 27 leaders of the nations that compose the European Union reached agreement on an outline of new rules to govern the European Union. Although they're not calling it a constitution anymore or trying to consolidate the various treaties governing the EU into a single document, the new agreement preseves much of the language from the planned EU constitution.

I was particularly struck by the agreed-upon treaty language that would specify the European Union's values and objectives (you can find the original text at page 24 of the conclusions document from the meeting):

1. The Union's aim is to promote peace, its values and the well-being of its peoples.

2. The Union shall offer its citizens an area of freedom, security and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with respect to external border controls, asylum, immigration and the prevention and combating of crime.

3. The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.

It shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child.

It shall promote economic, social and territorial cohesion, and solidarity among Member States.

It shall respect its rich cultural and linguistic diversity, and shall ensure that Europe's cultural heritage is safeguarded and enhanced.

....

4. In its relations with the wider world, the Union shall uphold and promote its values and interests and contribute to the protection of its citizens. It shall contribute to peace, security, the sustainable development of the Earth, solidarity and mutual respect among peoples, free and fair trade, eradication of poverty and the protection of human rights, in particular the rights of the child, as well as to the strict observance and the development of international law, including respect for the principles of the United Nations Charter.

Of course, these aren't just European values, they're also held by most Americans. But it's still striking to see them set out explicitly and proposed as an amendment to a foundational document like the EU treaty. In U.S. history, FDR's proposed second bill of rights comes closest to this kind of comprehensive statement of positive and foundational values related to economic security. Although it uses the language of rights, the second bill of rights is really a set of goals intended to be accomplished through legislation, rather than preserved through litigation.

For a long time, liberals and progressives have made the mistake of emphasizing issues, often narrowly defined, more than broad values and principles. This has been a mistake, and one that could be rectified in part by a lifting up positive elements of our history and principles. As Cass Sunstein wrote a few years ago in a Prospect piece on the second bill of rights:

... America's principles and self-understandings help to determine our practices. For much too long, the far right has succeeded in defining the nation's principles, leading Americans and the world to see the United States through a distorted mirror—one that disserves our own history. The sooner we eliminate the distortion, the better.

I can't help myself—I'm compelled to say a bit more about this:

The flexibility of the American labor force seems to be one reason that recessions have become less frequent and unemployment is less of a problem here than in Europe, notes Jason Furman, a leading Democratic economist. In this country, fast-growing companies can hire new workers without worrying that they are making a 30-year commitment.

Furman is a smart guy and has done good progressive work on issues like Social Security, so I expect more from him than the kind of generalized dissing of Europe that one regularly hears from conservative economists, dissing that counts on conventional wisdom and Europhobia rather than facts for its resonance. There's good and bad in European economic policies and outcomes, just as there is good and bad in American economic policies and outcomes. But the advantages of US flexibility are less black and white than Furman paints them. Two facts are particularly relevant to this debate:

First, employment rates between the US and Europe aren't all that different. As John Schmitt and Dean Baker have recently shown, the employment rate among prime-age workers in the EU is 78.2, compared to 79.3 in the US, not exactly a big difference. Among prime-age men, there's basically no difference. Nordic nations like Sweden and Denmark have higher employment rates than the US.

Moreover, Baker and Schmitt note that these comparisons overstate the difference because they don't take incarceration rates into account:

Since incarceration rates in the United States are five to ten times higher than they are in European countries ... the exclusion of the non-institutional population from the comparison of employment rates has a much larger effect on the U.S. employment rates than it does on those in Europe. As we have demonstrated elsewhere, the effect of excluding the non-institutional population from estimates of the employment-to-population rate raises the overall U.S. employment rate for the population 16 and over by 0.9 percentage points; the effect for men, who make up about 90 percent of the U.S. prison population, is 1.3 percentage points ....

Second, and particularly damning in my view, income mobility is lower in the United States than in nearly all other wealthy European nations, as the chart below shows. (Based on OECD data, the chart comes from an excellent piece by John Schmitt and Ben Zipperer that examines US-Europe differences on a range of indicators.)

Furman's overgeneralization is also problematic for strategic reasons. Nobody I know of is arguing for the adoption of the French Labour Code in toto—although it's probably looking pretty good right now to the former Circuit City employees who were fired because they had the teremity to stick around until they were paid" too much" (in the $12.00 an hour sense, not in the $2.5 million sense, which is how much Circuit City's CEO makes.) But a lot of us think that policies to improve job quality and strike a better balance between work and family life—policies like paid family leave and paid sick leave that are a core part of almost all of the European economic and social models—would be a good idea, even though there is no question that they reduce employer flexibility. Unless Furman opposes paid family leave, paid sick leave, minimum wages, and other forms of labor market regulation, it would be better for him to forgo generalizations that support the case of people who do.

Last week Circuit City laid off more than 3,000 workers because they were "paid too much"—between $10 and $20 an hour. In today's NYT, David Leonhardt comments on the layoffs:

.... executives said the workers were being paid too much and that the company would replace them with new employees who would earn less. It was the second such layoff at Circuit City in the last five years, and it offered an unusually clear window on the ruthlessness of corporate efficiency.

....

The laid-off Circuit City employees worked in the company’s stores and warehouses, selling electronics, unloading boxes and the like. They generally earned $10 to $20 an hour, making them typical of the broad middle of the American work force. Nationwide, the median hourly wage of all workers is about $15.

“We just bought our first house about two or three months ago, and I’m afraid I’m going to lose it,” Alan Hartley, a car-stereo installer in the Charlotte, N.C., area told the local NBC affiliate after he’d been let go. “I’m not sure what I’m going to do. I’m hurt mainly because I love this company. I planned on retiring from it. I feel I’ve taken very good care of them, and I can’t believe they did this.”

But Leonhard suggests that there may be an upside, and cites Hamiltonista Jason Furman:

....there’s no question that corporate America is moving in the same direction as Circuit City. Companies are wringing out what they see as inefficiencies, like traditional pensions and health insurance coverage, and tying workers’ pay more closely to their performance.

It’s probably not possible to halt these changes. It may not even be desirable. The flexibility of the American labor force seems to be one reason that recessions have become less frequent and unemployment is less of a problem here than in Europe, notes Jason Furman, a leading Democratic economist. In this country, fast-growing companies can hire new workers without worrying that they are making a 30-year commitment.

Which makes me wonder if Mr. Furman has read this, from last week's WSJ article on the politics of inequality:

Even before Republicans' November defeat at the polls, some administration allies were warning that economic insecurity was eroding Republican support. A business coalition hired pollster David Winston to figure out why voters remained so dissatisfied with the economy. His focus groups of middle-income voters in Cincinnati and Pittsburgh found voters going deeper into debt to keep up with rising costs of health care and energy. Executive compensation "is getting to the point where it's obscene," said one focus-group participant.

The more politicians talked about how good the economy was, the worse these voters felt. "It's almost as if these folks are floating around in the ocean, watching the yachts and speedboats go by, thinking, 'Hey, I'm here, someone notice me,'" says Dirk Van Dongen, a co-chairman of the coalition and president of the National Association of Wholesaler-Distributors. ....

But Republican strategists largely ignored the findings. Led by Karl Rove, they wanted to avoid blunting one of their few advantages in the 2006 campaign—the economy's broad strength. ....

In other words, Republicans just lost an election because they only wanted to talk about the "broad strengths" of the economy. Dems shouldn't make the same mistake. Even if neoliberals don't want to do anything about immoral corporate behavior, they should condemn Circuit City's actions for being counterproductive and downright un-American. De Tocqueville got it right when he wrote “the notion of advancement suggests itself to every mind in America” and “the desire to rise swells in every heart”, and Circuit City's layoffs are a direct repudiation of that notion and desire.

Earlier this week, I had the great good fortune of visiting the UK as part of a U.S. delegation of academics, congressional and administration staff. Alex Beer at the UK embassy set up a terrific set of meetings and consultations for information sharing between several nations. On Monday, we all attended an international conference about welfare reform challenges organized by the UK Department for Work and Pensions. Over the next two days, we met with officials from the UK, along with visitors from Australia and New Zealand.

There is a great deal to share about these meetings regarding the role of government, best practices for employment, and social inclusion. (Plus, it was an excellent experience for the ten of us to share ideas and make plans for future endeavors across ideological lines. It is too often true that it takes an adventure out of DC for people who - mostly - live in the same place to get together in a meaningful way.)

The most striking conversations we had were all about poverty reduction, as defined in the UK and the US.

In 1999, Tony Blair established the government goal of ending child poverty within a generation. After some consultation with academics and others, the promise was defined with ambitious and specific goals: to reduce child poverty by a quarter by 2004/05, by a half by 2010/11, and to end it by 2020.

While we were visiting, the government announced the 2005- 2006 results, and relative poverty had increased over the previous year by 100,000 children.

This could be a political problem for political leaders, and indeed, the opposition is trying to make waves about it. Even the reasonable press had headlines like this one:"Blow for Brown as poverty figures increase after years of decline".

But, at least the editorial writers at the Guardian understand the difference between absolute and relative measure of poverty. In the leader the day after the announcement, the editors took pains to explain the importance of choosing the relative measure:

Certainly, the headline relative poverty measure is hard to budge, for it is a moving target: merely to stand still money has to be channelled to the poor to keep pace with rising middle-class pay. Yet, when all the research shows that it is how one's income compares to the average that drives one's health, happiness and opportunity, the target must be the right one.

Overall, the paper defended the importance of defining poverty with a measure designed to illustrate inequality and improve social inclusion. This is fundamentally different from the U.S. – where - as we have noted recently here, the poverty formula is designed to measure deprivation, based on 1950s assumptions.

Using a relative measure of poverty defined as income inequality makes it hard to eliminate the poverty, precisely because it is a moving target.

Of course, it’s not inherently bad to seek to eliminate income inequality. But making the promise of eradication is a set up for failure and likely to create a politically difficult climate for elected and appointed officials, and for funders, when observers are disappointed by outcomes that fail to match the vision. Moreover, this disappointment can lead to even more disenchantment with government solutions and could reinforce the unfortunate understanding that poverty is mostly due to poor individual choices.

Still, it’s great when the media make the kind of distinctions that the Guardian makes in this editorial defending the government’s promise:

Yet what… yesterday's figures prove beyond doubt is how strong the underlying drivers of inequality in the economy remain. In a week when it emerged that Barclays director Bob Diamond netted £22m last year, yesterday's data showed that household incomes in the lower income brackets had fallen behind. It is because the pay penalty for less skilled workers remains stubbornly high that, even with upward the trend in lone-parent employment, child poverty has now increased. In this context the measures highlighted by welfare secretary John Hutton yesterday, such as his plans to pressure more single parents into work, will not be an adequate answer. For, as the Institute for Fiscal Studies suggested, the main culprit for the bad 2005-06 figures was the failure to increase the tax credits during that year at a sufficiently rapid rate.

It is to Gordon Brown's credit that last week's budget found £1bn - in a fiscally strapped environment - to boost the child tax credit for workless and low-paid parents. That is not enough to get fully back on track, but it should mean that the direction of travel will soon be the right one again. By contrast, the Conservatives still fail to convince. Under their watch an extra 100,000 impoverished children was the rule and not the exception. As long as they suggest tax breaks for married couples will be the first claim on available resources, they will struggle to show that they can do better next time round. Despite yesterday's setback, on this issue at least, very clear water continues to divide the government from the opposition.

In the UK, like the US, people are working harder – and still the combination of wages and employment benefits doesn’t go far enough to close the inequality gap. Indeed, the gap gets wider.

Watch these pages for more lessons from the UK soon.

Sharon Lerner in yesterday's NYT magazine:

In the European Union, all countries require employers to grant parity in pay and benefits to part-time workers — allowing women more flexibility in their work lives. In Scandinavia, extensive public child-care systems offer a slot to virtually every child under 5 whose parents work.
....

Curiously, Europe’s lowest birthrates are seen in countries, mostly Catholic, where the old idea that the man is the breadwinner and the woman is the child-raiser holds strong. Portugal, Spain, Italy and Greece have among the lowest fertility rates in Western Europe. Meanwhile, countries that support high numbers of working women, like Finland, Norway and Denmark, have among the highest birthrates. How did what’s been called “the fertility paradox” come about?

One explanation is that the more traditional countries face particular challenges when their women do start to work. In these countries, the welfare of the family is still typically seen as the responsibility of individuals rather than of the government, according to Peter McDonald and Francis Castles, who are demographic theorists. And with little public support for working mothers forthcoming, women are likely to think they must choose work or motherhood. At least for now, it seems, many are choosing neither. Statistics show that women in these countries are both less likely to work and less likely to bear children than their counterparts in, say, Scandinavia.

....

With a largely hands-off approach to family policy, the U.S. spends far less than other wealthy countries on child care while guaranteeing no paid parental leave. As a result, being an employed parent may be more difficult here than in countries now experiencing even the most severe baby droughts.

I personally wouldn't have used a charity frame or 1969 as a comparison or suggested that the poverty line shouldn't increase as overall income increases, but otherwise this is a good piece by Paul Krugman. A key take away point in my mind involves the importance that the UK's child tax credit (really a child allowance) has played in reducing child poverty—if somebody tells you they have a serious plan for reducing child poverty in the United States, and it doesn't include expanding the US child tax credit and making it available to all low-income familes with children ... their plan isn't serious and they'd be better off not making any claims that it will make a serious dent in child poverty.

If you don't have Times Select, here's Krugman:

It's the season for charitable giving. And far too many Americans, particularly children, need that charity.

Jonathan Cohn has an intriguing piece in the TNR on the Danish economic model.

Over the last decade, the Danes have turned the conventional wisdom on its head by boasting not only one of the world's most expansive welfare states, but also one of its most robust economies. Given the way average American workers' wages continue to stagnate even as their burden of risk—of losing a job, of losing medical insurance—continues to rise, it looks increasingly as though the conservative triumphalism has been misplaced: It may be that Europe has something to teach us after all. And Democrats, who have come back into power promising to address economic insecurity, should be sure to listen.

....

So what have the Danes figured out that conservative American pundits haven't? "High taxes don't hurt [by themselves]," says Harvard's Richard Freeman, a highly respected labor economist who has studied Europe extensively. "It depends on what you are getting for the money." Medical care is the most obvious example of this. Danes have lower infant-mortality rates than Americans and, statistically speaking, live just as long. You can't pin that completely on the medical system (a lot has to do with poverty, diet, and so on), but it certainly suggests Danish health care is no worse than the U.S. version. Yet we Americans pay far more for our system, because it's riddled with inefficiencies as insurance companies compete with one another to enroll healthy beneficiaries, rather than finance good care.

A nice example from the folks at CEPR of research that moves beyond "policy literalism" by making a connection between economic and environmental policy:

European employees work fewer hours per year—and use less energy per person—than their American counterparts. This report compares the European and U.S. models of labor productivity and energy consumption. It finds that if all countries worked as many hours per week as U.S. workers do, the world would consume 15 to 30 percent more energy by 2050 than it would by following Europe's model.

....

If Americans chose to take advantage of their high level of productivity by shortening the workweek or taking longer vacations rather than producing more, there would follow a number of benefits. Specifically, if the U.S. followed the EU-15 in terms of work hours, then:

• Employed workers would find themselves with seven additional weeks of time off.

Earlier this year, I found myself at one of those dinner table debates with conservatives on the subject of the economy and inequality in the US. In response to the standared conservative argument that the European economy is a disaster because of unions and government intervention, I noted that the European economy—saddled as it is by unions, rights for workers, higher wages for those at the bottom, etc.—has been doing quite well ... a claim that was met merely with incredulous laughter.

Next time, I'm going to be prepared—I'll bring along these paragraphs from the Economist, which, despite the stalwart conservative bias the Economist generally brings to its reporting, actually get it right:

The main reason for the dollar's strength has been the widespread belief that the American economy vastly outperformed the world's other rich-country economies in recent years. But the figures do not support the hype. Sure, America's GDP growth has been faster than Europe's, but that is mostly because its population has grown more quickly too. Dig deeper, and the difference shrinks.