Top Ten Responses To The Norway Versus The U.S. Story
Section: Business & the Economy
After publication of our Norway vs. the U.S. story, I received a number of criticisms that seemed worth addressing. Most appear to have a conservative bent but not all.
The following are some of the feedback I received from the article.
1. The most common argument related to Norway’s oil-based economy and confusion over per capita comparisons.
“Not when you look at it on a per-capita basis. Sweden and Denmark and Finland, yeah, good argument. But Norway is an outlier even within Scandinavia. Its economy is more like Saudi Arabia.”
“Even though we produce oil, remember, we don’t export it. Norway exports it. And unlike every other oil exporter, they don’t waste it on corruption. "
From the Daily Kos
“the people own Norway’s oil. The oil profits pay for the people’s lifestyles. If American’s owned their natural resources, the people would be quite wealthy, as well.”
“Of course, their oil production is about 20x higher than ours on a per capita basis. Does that have any bearing on their economic status?”
" They’re twice as rich. Nominal GDP per Capita"
Nominal GDP per capita is an inappropriate point of comparison because it does not take into account differences in the cost of living and the results can vary based on fluctuations in the exchange rates even though they have no effect on standard of living. When you examine per person income, the differences are small: US $48,000; Norway $53,000. If US adopted Norway’s policies they could have equal or better wealth. especially when you consider the amount of wealth the U.S. has given away in wars, CEO salaries and bank fraud. Norway sells their natural gas while the U.S. burns off 30% of it’s natural gas to increase oil profits.
As noted by other Democrats,
“Much of the US’s natural resources have been auctioned off for pennies to the politically connected.” …
“while Norway has the largest sovereign pension fund in the world with over [”$600 billion":http://en.wikipedia.org/wiki/The_Petroleum_Fund_of_Norway]" …
“Norway has put most of its oil and natural gas profits for the last 50 years into the permanent investment fund. "
2. its a joke comparison which fails to account for population size amongst other important factors. Even Cuba beats the US on most of the factors listed.
This seems to be a standard conservative answer to almost everything. Given that the U.S. has a large population, it can be used for that purpose. However, a large population should only influence your economy if you have a natural resource based economy and the U.S. has a diversified economy. China has had the greatest gains in recent years with the largest population. Cuba has a similar life-expectancy to the U.S. because they have a not-for-profit health care system.
3. Norway pollutes more.
Irrelevant and not true. Norway expels 9.2 metric tons per capita of carbon dioxide. The U.S. expels 17.3.
4. I hate country comparisons because it ignores the root of the problem. Norway’s demographics is very monolithic. they don’t have the diversity, cultural history and strife that we do.
It’s important to remember that disparate attitudes in the U.S. are not part of the U.S. culture but are manufactured. Norway also works for equality. The above video discusses how Norway is creating gender equality. I noted in prior story, that putting women in positions of leadership can have significant benefits for a society.
Norway has a diverse culture and culture has nothing to do CEO salaries (see answers 10 & 1) which was the point of the article.
5. Oil-based economies have higher wages.
Actually, Norway has laws to ensure equality in pay which create higher wages. See answers number 1 and 10 about comparing the wealth of Norway to the U.S.
6. I’m oversimplifying the issue. It’s too complex.
Claiming my answer is wrong because the truth is too complex to be known is illogical. See answer number 10 as to why I believe the issue is fairly simple.
7. Norway is a constitutional monarchy. … Not a true democracy
In order to believe this one, you would also have to believe that Britain is not a democracy. Norway ranks number 1 on the Democracy Index. The U.S. ranks 19th.
8. It’s all about the pursuit of wealth and happiness and your statistics mean nothing.
Norway ranks number in happiness. The U.S. ranks 12th. :)
9. Some of my favorite comments which responded to some other criticisms.
“What unregulated markets really do: Make you justify your existence to the rich”
“The people of Norway own their oil … They get the profits, which fund social security and other socially beneficial programs. The people of the US own nothing. They don’t even get a price break on oil pumped in the US.”
“The US is the 3rd largest oil producer. Norway is 14th.”
“Their System Works For Everyone, Ours Works For The Rich And Connected”
’Better Ski Jumpers Too"
10. CEO pay isn’t that big a deal. It doesn’t influence the tax base that much.
It does influence the health of a company and the amount of money spent on the economy. In the U.S., CEO salaries for publically traded companies averaged $9.6 million in 2011 while in Norway the average is $526,287. There are about 5,000 publically traded companies in the U.S. Taking the difference between U.S. and Norway’s CEO salaries and multiplying by 5,000 you get over $45 billion dollars per year just for publically traded companies. If that money is not spent on CEOs, it’s spent on business expansion (including more jobs), higher wages, updating equipment and improving services etc. …
The ratio of CEO to worker pay in Norway is 4 to 1. In the U.S., it’s 475 to 1. Most countries are closer to Norway’s average. By having higher worker pay, you have workers investing in the economy at a higher rate which improves small business success. Small business success creates more jobs. In contrast, extra CEO pay is spent on tax havens, foreign investments and other things that largely hurt the economy.
One common piece of conservative indoctrination is to claim that CEOs reinvest the money in their businesses. In some cases, CEOs of publically traded companies make deals with the companies to do just that as it looks good for business to have the CEO invested in the company. However, CEOs can sell their company stock and because investment managers believe a diversified portfolio that includes other industries and foreign investment is safer and more lucrative, CEOs are likely to invest elsewhere including a certain portion going to investments outside the U.S.
Norway has a tax base similar to what the U.S. had in the 1960s where top income earners paid 50% in taxes. Therefore, the Norway system would increase the tax base back to the time of U.S. prosperity and world leadership.
by Todd Miller
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