Sunday, July 03, 2005

The American Dream in Denmark

In honor of Independence Day, let us consider the American Dream, the idea that through intelligence and hard work you can move up from the social class of your parents. It still exists . . . in Scandinavia and Canada. From the Ottawa Citizen:

"Turns out, the American dream is playing out more strikingly north of the 49th parallel, says Canadian economist Miles Corak, editor of a recent book exploring generational mobility in Europe and North America."


and:

"'The U.S. dream is probably more relevant here than it is the U.S.,' Corak said.

Among rich countries studied, Corak said, Canada ranked with Denmark, Norway and Finland at the top of the pack in terms of intergenerational mobility. The U.S., the United Kingdom and France are the least mobile."


It must pain the 'wingers to think that their cherished mythology of the infinite possibilities of American upward mobility now only exists in lands controlled by gay commies. The article gives the specifics:

". . . one-fifth of the income advantage is inherited across generations in Canada. In the U.S. and the U.K., almost one-half is inherited.

Corak also cites U.S. research showing that almost one-half of children born to low-income parents become low-income adults, which means they fall in the bottom 25 per cent of income distribution. In the U.K, the tally is 40 per cent.

Children in high-income families, about four in 10, tend to become high-income adults in the U.S. and U.K., he said.

By contrast, there is significantly more movement between generations in Canada.

Corak says studies show that for every 100 people born at the bottom rung, one-third end up at the bottom, and almost one-fifth end up at the top.

For every 100 people born at the top in Canada, only one-third remain at the top."


The death of the American Dream in America has been rather quietly noted in the American press. It is entirely a matter of tax policy and government investment in access to education. Jon Talton of the Arizona Republic gets it:

"In magisterial work for the New York Times, reporter David Cay Johnston has documented the rise of the hyper-rich, the top 0.1 percent of income earners. These 145,000 people are leaving everyone else far behind, even those who would be considered wealthy. From 1980 to 2002, the latest year where data are available, the share of total income earned by the hyper-rich more than doubled. That earned by the bottom 90 percent of taxpayers declined.

Johnston's research also makes it clear that the new nobility was the chief beneficiary of the Bush tax cuts. Those helped create a deficit that will, we are told, force cuts to Social Security and college aid, among other programs.

Speaking of college aid, Jackson watchers also probably missed news that the federal government has changed the rules for Pell Grants. That, combined with declining state support for universities, will keep a record number of Americans from getting a college education.

These facts show some of the reasons the Wall Street Journal recently looked at the data and concluded that upward economic mobility has largely stalled in the United States. This historic ability to get ahead through hard work is the 'American dream.'"


The United States became the world's most wealthy nation through years of prudent reinvestment in its human capital. Since Reagan - and clearly accelerating under Bush - it has been clear American public policy to squander its advantages through ruinous tax cuts and a reduction in social spending. How does this play out in the real world? Toyota recently passed up significantly higher subsidies offered by southern American states to build a car plant in the Ontario town of Woodstock. Why?:

"'The level of the workforce in general is so high that the training program you need for people, even for people who have not worked in a Toyota plant before, is minimal compared to what you have to go through in the southeastern United States,' said Gerry Fedchun, president of the Automotive Parts Manufacturers' Association, whose members will see increased business with the new plant."


and (my emphasis in bold; you have to laugh):

"Several U.S. states were reportedly prepared to offer more than double that amount of subsidy. But Fedchun said much of that extra money would have been eaten away by higher training costs than are necessary for the Woodstock project.

He said Nissan and Honda have encountered difficulties getting new plants up to full production in recent years in Mississippi and Alabama due to an untrained - and often illiterate - workforce. In Alabama, trainers had to use 'pictorials' to teach some illiterate workers how to use high-tech plant equipment.

'The educational level and the skill level of the people down there is so much lower than it is in Ontario,' Fedchun said.

In addition to lower training costs, Canadian workers are also $4 to $5 cheaper to employ partly thanks to the taxpayer-funded health-care system in Canada, said federal Industry Minister David Emmerson."


The knuckle-dragging hillbillies need 'pictorials'. These are the people Bush refers to as his 'base'. I could frankly care less about the stupidities of American public policy, except for the fact that it serves as such a bad influence in the rest of the world. In Canada, the 'wingers constantly use the example of American policy as the right example for Canada. The U. S. doesn't tax its rich people so Canada shouldn't. The U. S. doesn't have a functioning health care system so Canada shouldn't. The U. S. doesn't provide access to proper education for poor people so Canada shouldn't. This race to the bottom, leaving everybody poor except for a tiny hyper-rich plutocracy, is just plain stupid. The plutocrats wouldn't even go along with it except for the fact that they have found, through the miracle of 'free trade', that they don't need American economic prosperity to be rich. They can find their workers, and their consumers, elsewhere. Now that American public policy is actually costing Americans money and jobs, do you think they will grow some brains and go back to the old policies that made the United States the wealthiest country in the world? No chance! Happy Independence Day!

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