Norway: A Different Economic Model

(StatoilHydro's deep sea extraction simulator)

The Norweigian economy centers on one main export, oil. Their coastal shelf is full of it and the state owned oil company StatoilHydro collects more revenue than Exxon, yet due to taxes (a 78% rate) StatoilHydro has a slightly lower net profit. StatoilHydro also has some of the best technology in terms of deep sea drilling.

The state has set aside a sort of annunity fund (now over 200 billion dollars) that will keep their society wealthy into the next generation. They have not played the same cards as Dubai, which now has the worlds largest hotel, with the worlds most vacancies.

The sole negative anyone can see from the Norweigian model, is the infamous Dutch disease; The theory is that an increase in revenues from natural resources will deindustrialise a nation’s economy by raising the exchange rate, which makes the manufacturing sector less competitive and public services entangled with business interests (wikipedia). Basically; too much focus on one aspect of the economy can inflate prices and leave a country, in this case Norway without any non-oil related skills when the oil runs out.

Only time will tell what happens with Norway, but with 200 billion in the bank and only 5 million citizens, thinks as looking up. Being an American and studying here has made me realize, we could never copy this model (we are far too large) however there is something to learn.....Running a trade defecit is not a good thing, and the U.S.A. needs to start opening its mind to letting new businesses (started by natives or foriengers) open and expand more easily rather than give old dogs like GM and Chrysler a bone.

Norway: A Different Economic Model, Intro

Three days ago I arrived in Bergen, second largest city and most important port in Norway. The country is more socialist than the United States and it has been the media's golden child as the best economic model in the world amid the financial crisis.

Arriving here, I can say, the country is no doubt beautiful and clean. The society is the most educated in the world but the taxes are high and the goods expensive. Norway has a couple advantages the U.S.A. does not. First, it brings in huge amounts of Oil Revenue of its coast which it saves in a large Government operated fund. Second, only 5 million people occupy Norway.

Norway dreads the day the Oil runs out, and that is exactly one of the topics I'll be studying here during the next two weeks.

As my studies continue, I will try to analyze the successes and failures of the socialist model this country uses, and go into more detail about the system from a first hand point of view.

Starving the Beast

As state deficits increase, it is interesting to see the changes occurring at the state level in terms of officials having to become more open to business. I spoke with a professor last week who said, "its interesting what happens when you starve the beast" (of capitalism).

What am I referring to, Ohio and its Governor are now supporting the construction of a new Duke Energy power plant, the first in over 20 years. Why? It will bring lasting jobs and I'm sure it will put some money into Ohio's pocket.

A better example exists across the country in San Fransisco where San Quentin prison (pictured above) and state officials are trying to sell off public (beach front) property in order to decrease California's huge deficit.

Due to inefficiency, it is very difficult for the government to generate any revenue through any of its programs, but when the super commodity ($) is needed private investors will always heed the call and through developing whatever they can turn a profit on, feed the beast of capitalism while also paying taxes for their efforts to the state and federal government.

Inexpensive beverage options

Every weekend I go out and have one of three beers at a given (dive) bar, Miller High Life, PBR, or Natural Light. Every once in a while ill grab a Hudy Delight for $1.50 at a local joint. All of these beers are a tier of their own, shunned by many drinkers with a developed palate that even include younger folk who have found the enlightened path of foriegn (expensive) beer.

However, these "well beers" are great for the round system. When buying rounds for 3 or 4 people, a four or five dollar tab including a one dollar tip can not only make the buyer happy (for it doesn't break his wallet) but everyone else happy as well, because deep down no matter what the label says, everyone loves a free beer. And the benefit I receive from buying a cheap beer for a friend far outweighs the benefit of purchasing an expensive beer for myself.

Last weekend, I came across an interesting dilemma, at a local bar where $1 beers are served an alternative existed, $5 for all the beer you could stand. The choice seems obvious and I have made it many times and ended up getting my dough's worth, but I did not plan on staying long so I figured two beers at $1 and a tip would be enough...........my mistake.

Some of my friends went for the $5 all you could drink, and from their choices I should have as well. However this proved not to be my biggest mistake. Talking to my friend who works the door at this bar, he was angry this $5 deal was going on, as it was a way to avoid tipping all together! If you drink the $5 all you can drink, you dint have to tip since the bartenders aren't serving the beer and have been muscled out of the process! I know this seems clear as day, but it didn't even cross my mind, and it hit me like play action hits a 7 man defensive front.

So now I know, its not about the $5 up front fee, but the tipping that adds up when buying individual rounds. Maybe its like my friend said, "I would rather tip my friends than drink all I can stand out of a keg." I just don't know if I feel the same way every weekend and next time ill go for the $5 deal.

Where's the Punchline to this Joke?

Hamilton County Sheriff Simon Leis wants to purchase a $98,000 boat to protect Cincinnati/Ohio River from terrorist attacks.......

I don't even know what to say, Hamilton County already has 4 smaller patrol boats and has purchased 3.3 million worth of vehicles since 2002. The county has two helicopters, and multiple police cars that officers take home. He has cut officers in Over the Rhine as it is too costly, and done a multitude of other things a quick search can find.

The enquirer is running a poll, do you think he should get the boat, over 82 percent say NO. If that is not democracy, what is? Ohio River being attacked by terrorist sheriff? I don't have to be out of grade school to realize that is ridiculous. And if it happens, what is a 28 foot fishing boat going to do?

It's amazing to watch government officials use their institutions as companies and abuse taxpayer dollars. A perfect example of poor leadership, I think Sheriff Leis should not get the boat and should be asked to resign.

Kudos to Greg Hartmann for standing against this outrage.