What Obama Can Learn from "Old Europe"

The inauguration of the 44th president looked like the most dramatic debut since the Beatles arrived in New York. But now it's time for Team Obama to produce results. For three of President Obama's top priorities -- energy and climate change, health care, and jumpstarting the economy -- he would do well to look toward "old Europe" for guidance.

Energy and the Environment
The European Union recently displayed global leadership by enacting its 20-20-20 Plan: agreeing to cut human-produced carbon emissions that contribute to global warming at least 20 percent by 2020. They will do this by ramping up renewable energy technologies to 20 percent of energy usage, as well as by implementing far-reaching conservation measures and enacting the world's most ambitious carbon-trading program.

Displaying an important principle that will be crucial to any global climate agreement replacing the Kyoto Protocol, the richest European nations will contribute a greater share toward combating climate change.

Importantly, the EU has not allowed the recent economic crisis to thwart its drive. EU Commission President José Manuel Barroso told the BBC, "The financial crisis is not an excuse. On the contrary, we can make it a win-win situation. We can create more green jobs; we can promote more investment in the low-carbon economy of the future."

Indeed, the European wind and solar industries are creating thousands of jobs, many of them in rural areas where job creation can be difficult. Germany's economy has received a major boost from a massive investment in the renewable energy sector. Tens of thousands of Germans are employed in the wind-turbine industry. Germany's entire renewable energy industry -- including wind, solar and biomass power - included 249,300 jobs in 2007, a 50 percent jump from 2004. On a per capita basis, that is comparable with creating 1 million U.S. jobs.

A study by the German government predicts that by 2020 there will be 400,000 domestic jobs in the renewable energy sector. Other EU nations are enjoying similar economic surges; in Portugal, a massive solar plant is bringing jobs and development to the traditionally poor Alentejo region, 125 miles southeast of the capital Lisbon. The business of wind, solar and other renewables is growing deep roots in fertile European soil, and Europe is leading by example. In a friendly challenge to then President-elect Obama, Barroso said, "Our message to our global partners is: Yes, you can ... especially to our American partners."

Health Care
Similarly on health care, the Obama administration can learn from what has worked in Europe. The World Health Organization (WHO) rates European countries as having the best health care systems in the world, spending, on average, far less than the United States for universal coverage and quality results. France has the top-rated health care system, while the United States is ranked 37th -- just ahead of Cuba and Slovenia. In the Czech Republic, a proposal to introduce a $2 co-payment per office visit nearly toppled the government, as health care is considered a basic right in the social contract.

The United States ranks 28th in the world in infant mortality, at seven deaths per 1,000 live births, tied with Poland and Slovakia, and substantially higher than Sweden (3.4 deaths), France (4.3 deaths) and Germany (4.5 deaths). In life expectancy, the United States ranks 29th, its 77 years lagging behind Italy (81 years), France (80 years), Sweden (81 years) and Germany (79 years), and about the same level as South Korea (76 years) and Cuba (77 years). The United States has fewer per capita physicians, nurses and hospital beds, fewer MRI and CT scanners than the average for other advanced nations, and has the highest rate of medical errors (receiving the wrong medication, incorrect test results, a mistake in treatment or late notification about abnormal results). And of course, the U.S. has some 45 million Americans without health care, with that number rising as more Americans join the ranks of the unemployed and lose their employer-based health care.

In addition to providing better health coverage, Europe also manages to spend less. According to the WHO, the United States spends the equivalent of 16.5 percent of its economy on health care, about $6,100 per person, compared to an average 8.6 percent in EU countries. France spends just $3,500 per person, or about 10.7 percent of its economy. As Dr. Christopher Murray, director of WHO's Global Program on Evidence for Health Policy, says, "Basically, you die earlier and spend more time disabled if you're an American rather than a member of most other advanced countries."

How do the European countries manage to provide better health care than most Americans receive for about half the per capita cost? While there are differences from nation to nation, there also are some broad generalities to point to, as well as national specifics. These give us a pretty good snapshot that should be instructive to the Obama administration as they grapple with a health care system that is continuing to hurt American workers, businesses, and increasingly will hurt American competitiveness in the global economy.

The first overriding difference between American and European healthcare systems is one of philosophy. The various European healthcare systems put people and their health before profits. It is the difference between health care run mostly as a nonprofit venture with the goal of keeping people healthy and working, or running it as a for-profit commercial enterprise. For example, UnitedHealth Group CEO William McGuire received an obscene $124.8 million in compensation in 2005. He's just one of many grossly overcompensated kingpins of the U.S. health care industry. If nothing else, the U.S. health care system provides a valuable tale illustrating that corporate profits and affordable, quality universal health care are not a viable mix.

The second major difference between American and European healthcare is in the specific institutions and practices that flow from this philosophy of "health comes first." Contrary to stereotype, not every country in Europe employs government-run, "socialized medicine." Unlike single-payer Britain or Sweden, France, Germany and other nations have figured out a third way hybrid with private insurance companies, short waiting lists for treatment and individual choice of doctors. This model is based on the principle of "shared responsibility" between workers, employers and the government, all contributing their fair share to guarantee universal coverage. Health care is mandatory: everyone pays what they can afford into the health care fund so that everyone can receive health care.

A similar health care plan now is used in Massachusetts, and has been proposed by Governor Arnold Schwarzenegger in California, but with two essential differences: in France and Germany, the private insurance companies are non-profits. Doctors, nurses and health care professionals are paid well, but you don't have corporate health care CEOs making hundreds of millions of dollars. Generally speaking, the profit motive has been wrung out of the system.

The second key difference is in the area of cost controls. In France and Germany fees for services are negotiated between representatives of the health care professions, the government, patient consumer representatives, and the private nonprofit insurance companies. Like in America's publicly financed Medicare system (which provides health care to the retired and elderly), the negotiations establish a national agreement for treatment procedures, fee structures and rate ceilings that prevent health care costs from spiraling out of control. In the end, this not only benefits personal health, but also has been good for European businesses, which aren't exposed to the soaring health care costs that have plagued American businesses.

Economic Stimulus
The Obama administration also could take notes from how the Europeans are jumpstarting their economies. Europe sometimes is criticized for its lack of unity, but sometimes that multi-headed hydra affords certain advantages. Having so many powerful nation-states allows each nation to act as a laboratory for the others, learning from each other's successes and shortcomings.

For example, during the massive financial meltdown in the fall of 2008, as markets reeled and the US announced a $700 billion bailout plan, Europe was harshly criticized for its initial failure to craft a continent-wide bailout. Eurosceptics saw it as another example of Europe's disunity and weakness.

But that was a rush to judgment. Each country initially tried its own bailout formula, and less than two weeks later the British strategy under Prime Minister Gordon Brown emerged as the most effective. Much of the rest of Europe followed, as did the United States in a change of tactics from Secretary of the Treasury Hank Paulson's original plan, which had proven to be so ineffective.

The European plan also includes tighter controls over the bailout money, equity in the banks, reductions in dividends and concessions from the bankers (including restrictions on executive pay in some countries), all of which were lacking from the US bailout. And Europe already has enacted a fiscal stimulus worth hundreds of billions of dollars at the continental and national levels, while Americans still await Obama's plan. Europe is looking relatively light on its feet, while the U.S. has looked flatfooted.

With a half billion people, Europe is the largest, wealthiest trading bloc in the world, producing nearly a third of the world's economy -- as large as the U.S. and China combined. While its critics have derided Europe as a land of "creeping socialism," in fact Europe has more Fortune 500 companies than the US, China or Japan.

Like the United States, Europe is fighting to pacify the rising economic floodwaters. But something about Europe and its "social capitalism" seems particularly well-suited to this make-or-break century challenged by a worldwide economic slump, global warming and new geopolitical tensions. Team Obama would do well to take notes.

Steven Hill is director of the Political Reform Program at the New America Foundation. His book "Europe Rising" will be published by the University of California Press in September 2009.

Different versions of this article have been published in the Prague Post, Hürriyet Daily News & Economic Review (Turkey), Providence Journal, Santa Monica Mirror, Truthout, OurFuture.org and other places.

 

Comments

[quillsinister]

Excellent article, Mr. Hill.

I've been stationed in Europe for two years now and I have been overwhelmingly impressed by how the Europeans approach life in general. The people here are vastly healthier and happier than the majority of my countrymen back home. I invite any skeptics to find a way to spend a significant amount of time over here and see for themselves.

That isn't to say that Europeans are perfect. Obviously nobody has quite hit that mark yet. However, there are many things we can learn from the European approach to our common issues. I am an advocate of adopting effective solutions wherever they're found.

[SeenItBefore]

We just returned from a England/Fr­ance/Italy trip. I am here to tell you returning to Texas was such a downer, we went to Mexico for three weeks to garner enough courage to head back and continue our lives.

The point about taxes is well taken, as a combination of taxes here and mandatory insurances (another tax) puts us over the average tax rate in France, and for our money, we get NADA! They get health care, sustainable pensions, decent housing and mostly free education. WE GET NADA!

By the way, Social Security, government, private and union pensions, mutual fund and stock/bond dividends, and belonging to a credit union are all benign forms of socialism.

What the current crop of congresspersons and all the so-called conservative talking heads need is for people to stop listening and their attitudes and viewpoints will change instantly.

[mikekopac]

german unemployment rate
close to 8 percent

http://mjperry.blogspot.com/2008/01/it-could-be-worse-we-could-have.html

it should be a bit higher now

[ROWSSC]

There are several lessons we can learn from Old Europe, 20% unemployment, muslim ghettos protesting for sharia law while destroying autos and property, an all out assault on traditional values and culture, draconian tax schemes and the impending collapse of law and order to name a few.

[mikekopac]

Here are the EUROSTAT European Union Unemployment Rates


http://epp.eurostat.ec.europa.eu/pls/portal/docs/PAGE/PGP_PRD_CAT_PREREL/PGE_CAT_PREREL_YEAR_2008/PGE_CAT_PREREL_YEAR_2008_MONTH_10/3-01102008-EN-AP.PDF

some highlights
Netherlands 2.6 percent
France 8 percent

Euro Zone average 7.5 percent

The figures are from the Spring and Summer and will be higher now. maybe up a point or two

ROWSSC...could you please provide us with the statistics for your 20 percent European Unemployment figure Thnx

[worddiva]

The European Commission forecasts a 10 percent unemployment rate for the Eurozone in 2010. Same rate as what's being predicted for the U.S. next year.

http://sg.news.yahoo.com/afp/20090119/tts-eu-eurozone-economy-recession-509a08e.html

[mikekopac]

Europe, the place where there is the "all out assault on traditional values"

Lets look at the divorce rates

http://www.nationmaster.com/graph/peo_div_rat-people-divorce-rate

The US of A leads the world with 4.5 per 1000 people

Great Britian 3.8 per 1000 people

Italy .27 per 1000 people

[Angelus2007]

Not a great example with Italy, Catholics by and large are not granted divorces in strong Catholic countries (Italy being one of the if not most traditional Catholic nations in the world) many Italians will cheat, or live with their bad marriage rather than divorce. Some Italian priests won't even give you a marriage if you have been divorced.

[mikekopac]

I live in Pennsylvania. My taxes.....When you add in my state, school and local taxes.... I pay close to 50 percent.

In Europe I would pay the same, or a little more, and I don't have to worry about my healthcare bill or saving for college for my kid. Healthcare and post secondary education are rights in most European countries

[TheBlackCat]

You obviously have not been to Europe recently. And haven't read anything about Europe, ever, that wasn't published on Rush Limbaugh's website. I lived in Amsterdam until a few months ago. The quality of life is so much better than it was out and out depressing having to come back to America when my visa expired.

[jaglon]

I have long complained that one the leading problems with healthcare in this country is the 'for-profit' motive. It just does not work; not for something that is a basic right. The republicans using the scare tactic of 'socialism' with regards to healthcare has got to stop. The republicans are firmly in the pockets of the health insurance and big pharma lobbys. The republican view is that unless you are working you are not entitled to any healthcare. Meanwhile, our congressman and women receive some of the best health benefits in the country, courtsey of us, the taxpayor. I, as a taxx payor, question whether they deserve this good healthcare since most of them seem to be working for the lobbyists whose interests run counter to the tax payors.

I was/am a supporter of Obama but I have long thought that his support for corn based ethanol was half baked. It is a gift to the corn lobby. The problem with energy in this country is that the price of gas is based on demand. When demand is low, no one seems interested in energy independence. 'Too expensive' say the republicans in the usual short-sighted way. I guess gifting the middle-east with billions of our money is less expensive. Then when the price of gas goes through the roof everyone, jumps on the energy independence band wagon, only to jump off when the price goes down. We are indeed heading for third-world status.

[ROWSSC]

Could you please direct me to the clause in the constitution that states health care is a "basic right"? thanks: ROW

[mikekopac]

Republicans were against Social Security in the 1930s

Ask anyone who collects how important it is to them. Thank God for FDR.... NOW THE POINT

where is Social Security defined or given to us as a right in the Constitution

[sheila]

the most important part of their energy and environmental policy is their ENORMOUS RATEPAYER GENERATION PROGRAM THROUGH FEED IN TARIFFS. how could you leave that out? the entire political spectrum supports payments to property owners who produce clean power on their roofs, and feed into the grid. they clearly understand that massive centralization of energy production is NOT the only way forward, and aggressively pursue rooftop solar, microwind and other point of use solutions through loan programs and generous payments to ratepayer generators. THIS is the key to their success, and most of their jobs. they would install far more rooftop solar - the programs are always oversubscribed - if they hadn't given a handout to Big Energy in the form of caps on the ratepayer-generator programs.

meanwhile US of Big Energy focuses entirely on Big Energy Boondoggles which will rip off ratepayers, taxpayers and slaughter millions of acres of our wilderness, spike GHG emissions steeply and ruin property values, while creating fewer jobs, and disenfranchising the public. genius. WE have all the capacity needed, right on our roofs, to generate 100% of the US' electricity needs cheaply, efficiently and independently - and deserve a shot at doing it. so why are we still building "infrastructure" that will kill the planet and bankrupt us?

LOANS and FEED IN TARIFFS for ratepayer generators are the solution.

[dougdl]

I just don't believe it. 100% of our electricity needs! France is a part of old Europe. Why do they get 80 percent or more of their power from nuclear energy?

[Angelus2007]

Because when people use stats to back of their point in regards to Europe, they can pick and choose which countries are better.

Someone will say, France, Germany and Switzerland are ahead of the US in widget safety, while forgetting to mention Spain, England and Italy are last.

Then in the next example will say Spain, England and Denmark are ahead of the US in whatits production.

With many nations there will usually be some nations better and others worse in any given category, so pick and choose.

[lysistrata]

It will take many more articles just like this one to educate the American public. For generations they have been indoctrinated that socialism is a bad thing and is against the interests of the people while capitalism is just looking out for their best interests. They don't know what a social market economy is, it is just a boogie man to them because Rush Limbaugh tells them so.

The fact that Republicans don't feel any shame to criticize the allocation of money in the stimulus plan for schools and repairs of the Mall in DC speaks for itself. What can be wrong with spending money on school buildings and repairs in the Capital of the nation?

Our children should be in well kept buildings to learn and our Capital is our visiting card to the rest of the world, should we not want to be proud of it?

And if it creates jobs, so much the better. The free market will not do it on its own, it takes a GOOD government to do it.

[schatsie]

And they get 6 weeks of vacation, sick time as needed and even spa treatments and decent pensions (in Austria they are getting 57% of their salary.) and they have more entrepreneurship with more regulation....

The benefits that the pampered and privileged get here,,,screw the rest of us....

[irisda]

I hope this gets more attention. European countries are doing many things right, and conservatives in the US are demonizing them because of their socialist roots. None of these systems are perfect, but we're seeing how they're copping better than though. Certainly better than the US, and they've taken right decisions at the right time. I agree that the Obama administration should look at what the Europeans are doing and learn. We live in a globalized world, it would be a shame if we didn't make use of that.

[PlugINCarsRule]

We need to utilize everything in out power to reduce our dependence on foreign oil including using our own natural resources.OPEC will continue to cut production until they achieve their desired 80-100. per barrel. The high cost of fuel this past year seriously damaged our economy and society. Oil is finite. We are using oil globally at the rate of 2X faster than new oil is being discovered. We need to take some of these billions in bail out bucks and bail ourselves out of our dependence on foreign oil. Jeff Wilson has a really good new book out called The Manhattan Project of 2009 Energy Independence Now. He explores our uses of oil besides gasoline, our depletion, out reserves and stores as well as viable options to replace oil.Oil is finite, it will run out in the not too distant future. WE need to take some of these billions in bail out bucks and bail America out of it's dependence on foreign oil. The historic high price of gas this past year did serious damage to our economy and society.If all gasoline cars, trucks, and SUV's instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. WE should never allow others to have that much power over our economy again. Every member of congress needs to read this book.