Here are some interesting stories from The Economist:
1. With each generation, Britain becomes more and more libertarian:
Young Britons are classical liberals: as well as prizing social freedom, they believe in low taxes, limited welfare and personal responsibility. In America they would be called libertarians.
More than two-thirds of people born before 1939 consider the welfare state “one of Britain’s proudest achievements”. Less than one-third of those born after 1979 say the same. According to the BSA, members of Generation Y are not just half as likely as older people to consider it the state’s responsibility to cover the costs of residential care in old age. They are also more likely to take such a hard-hearted view than were members of the famously jaded Generation X (born between 1966 and 1979) at the same stage of life.
“Every successive generation is less collectivist than the last,” says Ben Page of Ipsos MORI, a pollster. All age groups are becoming more socially and economically liberal. But the young are ahead of the general trend. They have a more sceptical view of state transfers, even allowing for the general shift in attitudes (see first chart).
Polling by YouGov shows that those aged 18 to 24 are also more likely than older people to consider social problems the responsibility of individuals rather than government. They are deficit hawks (see second chart). They care about the environment, but are also keen on commerce: more supportive of the privatisation of utilities, more likely to reject government attempts to ban branding on cigarette packets and more likely to agree that Tesco, Britain’s supermarket giant, “has only become so large by offering customers what they want”.
2. Some argue that monetary policy “errors,” are intentional, as policymakers cater to various special interest groups. I’ve never understood that argument. If, as I claim, most academic economists are very misguided about monetary policy, and obviously have no axe to grind, why would we expect a bunch of government bureaucrats to do better? Are government employees that much smarter than economists?
In any case, the conservatives at the Riksbank are about to drive their fellow conservatives out of power:
In the pair’s jousts, Mr Reinfeldt casts his rival as a political gamble, given the unanswered question of which other party the Social Democrats might draw into a putative government. But Mr Lofven has stronger ammunition: he refers to the government’s lacklustre economic results, and promises to tackle unemployment vigorously. “Nothing is more important than this,” he says.
Swedish unemployment is flat at 8.7%, as the economy struggles with faltering demand from the euro zone and a strong currency.
So much for self-interest.
3. It’s natural to be a bit skeptical when you hear about a new right-wing party in Germany, but this one doesn’t sound bad at all:
WHEN a German newspaper in January headlined the success of populists across Europe and their absence in Germany, Frauke Petry thought: “We are here, but nobody sees us yet.” Two months later the Alternative fÃ¼r Deutschland (AfD) party, which calls for the euro to be broken up, started making news. These days its leaders (Ms Petry is one of a triumvirate) are on television talk-shows. Euroscepticism, or at least scepticism of the euro, has a voice. Germany’s Christian Democrats have for decades seen off all foes on the right. This is a worrying new one.
AfD is a strange group of rebels. It is a movement mainly of professors, not revolutionary students. Its policies have seemingly little in common with Eurosceptics elsewhere. Unlike Nigel Farage’s UK Independence Party, it wants to stay in the European Union. Unlike Geert Wilders’ Freedom Party in the Netherlands, its driving force is not resentment of Muslims and immigrants. Unlike Beppe Grillo’s Five Stars Movement in Italy, it does not seek to smash a corrupt political class. And unlike radicals of all stripes in France, Germany’s new sceptics embrace markets and liberalism. “They cannot call us crazy,” says Ms Petry.
4. The curse of The Economist. They put Abe on a cover story entitled “Is it a Bird? Is it a plane? No . . . It’s Japan!” That was the May 18-24 edition. The Nikkei peaked at 15,627 on May 22, and it’s now at 12,877, down 2750.
5. And this made my head spin:
EUROPEANS like to blame America for their crisis.
Really? At the risk of sounding like the Ugly American:
1. Did we force them to create the euro?
2. Did we tell the ECB to run a tight money policy?
3. Did we cause the Irish and Spanish housing bubbles?
4. Did we tell the Greek government to lie about the size of their debts.
It’s not just that America is innocent if my theory of the crisis is correct; I can’t think of ANY theory that would imply America is responsible for the euro-crisis. Can you?
6. And don’t you wish that you too could live in a post-ideological country?
SAINT GORAN’S hospital is one of the glories of the Swedish welfare state. It is also a laboratory for applying business principles to the public sector. The hospital is run by a private company, Capio, which in turn is run by a consortium of private-equity funds, including Nordic Capital and Apax Partners. The doctors and nurses are Capio employees, answerable to a boss and a board. Doctors talk enthusiastically about “the Toyota model of production” and “harnessing innovation” to cut costs.
Welcome to health care in post-ideological Sweden. From the patient’s point of view, St Goran’s is no different from any other public hospital. Treatment is free, after a nominal charge which is universal in Sweden. St Goran’s gets nearly all its money from the state. But behind the scenes it has led a revolution in the relationship between government and business. In the mid-1990s St Goran’s was slated for closure. Then, in 1999, the Stockholm County Council struck a deal with Capio to take over the day-to-day operation of the hospital. In 2006 Capio was taken over by a group of private-equity firms led by Nordic Capital. Stockholm County Council recently extended Capio’s contract until 2021.
. . .
Sweden has gone further than any other European country in embracing the purchaser-provider split””that is, in using government money to buy public services from whichever providers, public or private, offer the best combination of price and quality. Private firms provide 20% of public hospital care in Sweden and 30% of public primary care. Both the public and private sectors are obsessed with lean management; they realise that a high-cost country such as Sweden must make the best use of its resources.
St Goran’s also acts as a hare for Capio, one of Europe’s largest health-care companies, with 11,000 employees across the continent and 2.9m visits from patients in 2012. Sweden is Capio’s biggest market, accounting for 48.2% of its sales (France comes second with 37.6%). The firm performs 10% of all Swedish cataract operations, and much more besides. Capio thinks it can make huge savings in other countries by transferring the lessons it has learned in Sweden. The average length of a hospital stay in Sweden is 4.5 days, compared with 5.2 days in France and 7.5 days in Germany. Sweden has 2.8 hospital beds per 1,000 citizens. France has 6.6; Germany, 8.2. Yet Swedes live slightly longer.
Capitalists under the bed
Spreading efficiency will not be easy, however. Europeans instinctively recoil from private companies making money from health care. British placards protest against modest reforms with pictures of fat cats helping the health minister to disembowel a patient labelled “NHS” (National Health Service).
7. I bet the French do:
The French left has long been split between those, such as Pierre Moscovici, the finance minister, who see themselves as Social Democrats in tune with Germany or Scandinavia, and a wing embodied by Arnaud Montebourg, the industry minister, that still draws on anti-capitalism, the Socialist Party’s founding doctrine. A protÃ©gÃ© of Jacques Delors, Mr Hollande is commonly linked to the pro-European moderates. But, even in office, he refuses to say so. When asked at his press conference if he would acknowledge that he was a Social Democrat, Mr Hollande paused and then replied: “I am a Socialist.”
“The tragedy of the Socialist Party is that it keeps putting off its rupture with the revolutionary left,” argues Arnaud Leparmentier, a journalist at Le Monde. This leaves Mr Hollande ruling in deliberate ambiguity. He will not make the case for a more Scandinavian left, for fear of provoking a backlash. So he pursues reforms with one hand, while throwing red meat to the left””persisting with the 75% top tax rate, keeping Mr Montebourg in government””with the other. In practical terms, this means all reform is constrained. A new labour-market law, for instance, gives flexibility over hours and pay to employers of lower-paid workers, but also raises costs through a compulsory health contribution. Mr Hollande’s aides call this reform through dialogue and consensus. Jacques Attali, a Socialist grandee, says the result so far is “extraordinarily limited”.
As I expected, Hollande is starting his Mitterrand-style U-turn. BTW, here’s what I said when he was elected:
The French just elected
Leon BlumFrancois Hollande, who is committed to fiscal policies aimed at boosting AD and reducing AS. Good luck with that.
A long post, but I saved you 3 hours reading three issues of The Economist.