Economic Freedom Makes Good Things Happen

The new Index of Economic Freedom was published today. The United States improved its ranking over last year. If you look at the report about our country, you see we had a very good year. What drags us down the most is fiscal burden, which is the cost of government. (Raising taxes, BTW, does not improve this score.) Unfortunately government has grown under George W. Bush and we clearly need to cut spending. We also do relatively poorly on the government intervention scale.

The good news is that for the first time most of the countries of the world are either free or mostly free. Twenty countries are classified as free and, adjusting for preferences in culture, climate or space, you wouldn't mind living in any of them. Freedom and prosperity go together. With the exception of the U.S., UK and Australia, the top ten are small and more easily managed countries. Hong Kong is nearly perfect in many categories. China (which is mostly unfree) still has not imposed its system on the former British colony. Estonia is the country of future prosperity because of the good choices its leaders are making, including a flat tax.

The worst countries are no surprise. Twelve countries are repressed. They are run by individual fools or groups of them working as oligarchs. North Korea scores a perfect "worst" in every category. Iran, Burma and Zimbabwe follow close behind. Venezuela, mismanaged by Hugo Chavez, is dropping like a stone and looks poised to overtake Libya in the bottom five. Both countries prove that natural resources don't mean prosperity. In fact, to the extent that resources help keep the Kleptocrats in power, they might be a curse.

Posted by Jack at January 4, 2006 11:07 PM
Comments
Comment #110303

Here is the Heritage/WSJ definition of economic freedom:

“Economic freedom is defined as the absence of government coercion or constraint on the production, distribution, or consumption of goods and services beyond the extent necessary for citizens to protect and maintain liberty itself. In other words, people are free to work, produce, consume, and invest in the ways they feel are most productive.”

That strikes me as an absurd way to define ‘economic freedom.’ It looks a lot more like a measurement of the extent to which countries will allow one person to exploit the surplus value of another person’s labor.

Isn’t it curious that countries such as Hong Kong and Singapore earn top grades for ‘economic freedom’?

In historical terms, it’s also curious that the most ‘economically free’ countries have practised colonialism or directly benefited from it. They almost all exhibit racial and cultural homogeneity. The economically free countries which did once possess multiple cultures or races have undergrone genocidal processes to unify & purify their ‘economically free’ countries.

For some reason Somalia does not seem to be listed. But according to the Heritage/WSJ criteria for ‘economic freedom, Somalia would seem to be a perfect example.

Here are the Heritage/WSJ criteria:

Trade policy
Fiscal burden of government,
Government intervention in the economy,
Monetary policy,
Capital flows and foreign investment,
Banking and finance,
Wages and prices,
Property rights,
Regulation,
Informal market activity.

Venezuela, which is actually doing something to alleviate the corruption, concentration of wealth, disparity of distribution, and the suffering of the poor, is naturally roundly condemned by the Heritage/WSJ folks.

In many parts of the world, freedom is not just defined as ‘freedom to,’ but ‘freedom from.’

Posted by: phx8 at January 5, 2006 12:16 AM
Comment #110308

phx8- Well stated. Thank you for defining the actual criteria used in this article.

Jack- Anyone can set up arbitrary (as in whatever you think is right regardless of reality) criteria for what makes a country “free” or prosperous, but you have to consider all the variables. Usually, when Bush talks about Americans prospering, he is not talking to those who are negatively impacted by his policies, which are far more than benefit from them. Most people, it seems, who subscribe to the “less taxation” path to social wellbeing either ignore or try to justify the negative impacts such a path has. It’s either trickle-down absurdism or righteous condemnation of those who can’t seem to lift themselves out of poverty. Many of the following comments will likely be this. You can always tell when someone is being righteous rather than objective by the harsh tone, the quoting of erroneous “facts”, and the lack of acknowledging ALL the variables. Also, they will take feedback such as this and turn it in a mirror like fashion back on the critique, claiming it has all the qualities of the feedback given. Read the following and see…

Posted by: Jonathan at January 5, 2006 1:38 AM
Comment #110309

I tend to agree with the arguments about the criteria. They are arbitraily picked. I see economic freedom as being able to put to use the
gifts God gave you and using them to one’s own best potential. I do know that an individual’s prosperity does NOT come from goverment handouts.
I grew up for my first 11 years as a welfare kid.
No matter what “gifts” the state gave and increased, my mother struggled to keep the house together. It wasn’t until she pulled herself up by getting a job and being damn good at it that our lives improved. HUGE lesson for me. Now with two kids of my own. I have things that my mother only dreamed of having. I own my house. My car is paid for. I’m able to give to my children that which my mom was unable to give to me. I can say this because of the freedoms granted me under the Constitution. I can say this because unlike a small group of people out there in this country, I WORK for what I and my family has instead of expecting the Big Brother (for those of you in Rio Linda - that’s “the Government”) to
give me handouts.

Make all the criteria you want. The bottom line is it’s your life. You’ll have bad patches along the way. It’s how you deal with them that determines your happiness. Same for one’s own prosperity. I’m not rich. 2005 was the first year I earned over 30k in a year. I think I’ve got it good. Others may see me as impoverished.
Money isn’t everything. It’s just a tool to improve how you live.

Posted by: Shawn at January 5, 2006 2:10 AM
Comment #110311

Shawn,
Good post. In a way, I’m being obtuse by questioning Jack’s article. But I do get worked up about attempts to define ‘freedom’ in economic terms, whether Marxist, Socialist, or Capitalist.

Posted by: phx8 at January 5, 2006 2:20 AM
Comment #110331
The good news is that for the first time most of the countries of the world are either free or mostly free.

Jack, when you say “free” you mean economic freedom as defined by the right-wing Heritage Foundation think tank that published this index, right?

It doesn’t surprise me that Singapore is #2 (I live there). Here’s the first paragraph from the Heritage Foundation’s review of the Lion City:

In 2005, the Hong Kong–based Political and Economic Risk Consultancy (PERC) selected Singapore’s judicial system as the best in Asia. Opposition politicians rightfully criticize Singapore’s judicial system for its record of siding with prominent politicians, but foreign investors are more concerned about commercial law and the efficient way police handle nonpolitical crimes.

There’s freedom… and then there’s freedom as defined by right-wing think tanks and the WSJ.

Posted by: American Pundit at January 5, 2006 8:15 AM
Comment #110332

The error you commit, along with the Wall Street Journal and Heritage Foundation, is that of reification. Despite being 111th, and one of the most despotic countries in the world, China has one of the fastest growing economies in the world. Additionally, the UK, having a much more stringent regulatory environment, a dole system, government administered healthcare, and much higher real tax rates on individuals and corporations, actually outranks us.

People like you would point to the UK and say, “This isn’t the way a market is supposed to run.”

The trouble comes when we start trying to substitute numbers for real world observations in human enterprise. Numbers can represent something in an organization, but logic and indexes like this can’t necessarily tell you what. To paraphrase Morpheus from The Matrix: Unfortunately, nobody can be told how the economy is working. We have to see it for themselves. We have to observe the economy in action. Is it distributing wealth equitably, or is upper management and executive HQ hoarding it at the top? Are people able to do more with their money as far as the necessities go, or less. What’s going on on the ground in the places where the numbers are looking good?

In a market where speculators are at the helm, a number of these issues can go unresolved. Just keep in mind this one strange fact: The year that Enron went belly up, it scored one of the highest PE ratios it ever had. The Reason? For all its earnings that year, Enron had the lightest workforce loads it had ever had. By the measure that most Wall Street companies are guaged nowadays, the failed company was one of the most productive in the world.

Capitalism works, but it has to work in the real world.

Posted by: Stephen Daugherty at January 5, 2006 8:20 AM
Comment #110355

No one disputes that on measures of “economic freedom” the United States fares very well. But economic freedom can only go so far in making a decent society for its citizens.

We have a virtually unregulated free market health care system in this country and yet 15 percent of the people in this country do not have access to affordable health care (the percentage is even higher if you exclude from the calculation those people who quality for “non free market” health care like Medicare and Medicaid). That’s a free market for you. I guess if one of them suffers a stroke or gets hit by a car he’ll shop around in the free market for a while until he finds a doctor willing to stop the bleeding at a price he can afford.

Steve K

Posted by: Steve K at January 5, 2006 10:30 AM
Comment #110373

How does the economic freedom measure rank against quality of life, life expectancy and education measures?

I don’t have the time to find the links (running into a meeting), but I seem to recall that a number of countries that rank lower than us on this scale are also rated to have better educated populations with longer, better lives.

I know the Heritage foundation worships laissez faire as religious dogma, but even our history has proven that unlimited economic freedom leads to concentrated wealth in the few.

Posted by: CPAdams at January 5, 2006 11:20 AM
Comment #110378

In general

A free market (broadly defined) is a necessary but not sufficient condition for freedom in general. Different sorts of indices are produced on globalization, competitiveness etc. The same countries appear near the tops of these lists. If you look at the places that are best to live, these are also the same countries.

If you were to list the places you would most like to live as the average citizen, the Economic Freedom Index would provide a rough order of preference. If you look at both ends, I would consider living in any of the top ten free countries, while living in any of the bottom ten unfree countries would be like a prison sentence. Some of you might disagree with me in theory, but none of you can honestly do so in a real world. If any of you really wants to permanently move to Burma, Iran or North Korea, I am sure we can take up a collection.

The free market works better in practice than it does in theory. In theory, socialism and central planning work very well. It is almost impossible to assail their efficacy if you are not allowed to bring up real world comparisons.

Under socialism you have the right to lots of things you can’t get in practice. Under the free market you don’t have the right to get some of the things you need and want but you can usually actually get them. That is why socialism is beloved by theorists, but practical people prefer the free market.

Stephen

Enron. What was Enron’s main business? Energy arbitrage. What made that business possible? Government regulations of the energy market. How did the authorities know something was rotten at Enron? The market told them. When did Enron build its empire? During the Clinton Administration. When was the firm investigated and brought to justice? During the Bush Administration. Was much of what Enron did illegal? Yes. Does anyone in the business community or the Bush Administration defend what Enron did? No. So to sum up, we agree Enron was bad and that what they did was illegal. The market reigned in Enron and then the authorities found out. A free market doesn’t promise that mistakes will never be made or that people will always be honest. It promises that the system will correct. In that it is better than all the alternatives.

Posted by: Jack at January 5, 2006 11:44 AM
Comment #110402

Jack,

what’s great about free markets is that they are self-regulating. what’s terrible about socialism is that oversight is a nightmare with bureaucrats and the lack of efficient response makes it clumsy and unresponsive. agreed.

what’s not great about free markets is the exploitation of have nots by the haves. what’s good about central planning is that there are important societal functions should not be profit driven. governments are also good at providing a safety net, where free markets couldn’t be less interested.

even the index contradicts itself on what ‘free’ is. in a perfectly free market, wages are driven by market valuation of labor. it is fair to assume that any job offering minimum wage would probably pay less without government intervention, driving down wages(nice little conundrum).

Without reservation I agree that the countries near the top would be much better to live in than the countries near the bottom.

However, your main post was touting our improvement in the rankings. My point is that there are other criteria - quality of life, life expectancy, level of education - which climbing would better reflect on our nation overall.

We are 11th in economic freedom but 3rd in GNP per capita (I guess we didn’t need more economic freedom to climb that list).

We’re 13th in access to affordable higher education, 46th in lfe expectancy, 2nd in asylum seekers, 2nd in dustrial pollution. We don’t make the top ten in gender equality or infant mortality.

There’s room to climb in many areas that are not economic.

Posted by: CPAdams at January 5, 2006 12:58 PM
Comment #110408
If any of you really wants to permanently move to Burma, Iran or North Korea, I am sure we can take up a collection.

The free market works better in practice than it does in theory. In theory, socialism and central planning work very well. It is almost impossible to assail their efficacy if you are not allowed to bring up real world comparisons.

This is one of those bogus straw man arguments for free markets. No one in this forum claims that Burma, Iran or North Korea are good places to live. It’s just plain crap to compare the U.S. to those countries.

The accurate comparison is the U.S. to countries like Sweden, Germany, Austria, New Zealand, and so on. It’s those countries that recognize — unlike the Heritage Foundation — that free markets do not solve all of a country’s ills, and that a certain measure of government intervention makes for a better society.

Steve K

Posted by: Steve K at January 5, 2006 1:24 PM
Comment #110410

Rankings are always tough.

I disagree about the industrial pollution. The U.S. is one of the least polluted countries I have ever been. Take a deep breath in any place in Europe that is not near the ocean or in Scandinavia and you know what I mean. Most of the rest of the world is far worse. We get criticized because of CO2 pollution, which is not really pollution. It is high, but it is also in line with our portion of the world GDP.

In many of the indicators, the U.S. does worse because of theoretical concerns. I recall a health index that did not actually measure health but instead used proxies such as government-mandated health care provided.

I like a practical measurement. We can measure inputs, outputs or results. Let me give a small example. I go to Gold’s Gym, which is near my office. I have developed a workout that lasts only 20 minutes. I get in and I get out fast and it works. The other day I was talking to a fat guy. When I came in he was sitting on the bench breathing heavily and when I went out he was still there. He made the comment that I didn’t work out much. Now the test at Gold’s Gym is whether or not you can pick up the weights. The amount of time you spend there doesn’t matter. He was measuring inputs, when only the results count. Long way around to say, but many of our non-economic measures rely on proxies just like this. By those sorts of rankings, the fat guy who takes two hours to do his workout is in better condition than the one who takes twenty minutes.

Even life expectancy is a hard one when you talk about government. So much is culture, lifestyle and genetics. The people of Scandinavia live longer than Americans in general, but they live about as long as their cousins in Minnesota. I believe if the price of gas forced people to walk more our averages would improve for life expectancy. What do we do?

Posted by: Jack at January 5, 2006 1:29 PM
Comment #110414

Jack-
My question is, just how useful is it? If you’re claiming pure free markets are the most successful, you have to deal with the fact that Hong Kong (officially a part of #111 on the list) and the UK (A country with higher taxes, more regulation, and socialized medicine) outrank us.

Perhaps the problem is with how the Right defines economic freedom.

As for Enron?

Enron. What was Enron’s main business? Energy arbitrage. What made that business possible? Government regulations of the energy market.

Not regulation, as much as Deregulation. Under former laws, where the utilities were more state run than private, Enron’s depredations would not have been possible. See: California.

How did the authorities know something was rotten at Enron? The market told them.

First, the collapse of the company should have never been the first sign that the SEC needed to start investigating. You don’t start inspecting the building after the roof’s caved in. Unfortunately, the Republicans took the statutory power and manpower necessary for the government to get ahead of this malfeasance away from them.

When did Enron build its empire? During the Clinton Administration. When was the firm investigated and brought to justice? During the Bush Administration.

The Congress writing the laws during the majority of that period was Republican, and the president was someone who repeatedly compromised with the Republicans on issues of deregulation.

Moreover, Enron’s fall was the result of disclosures about the finances and accounting, and the situations with those things went way back. What was most scandalous about Enron was not their illegal actions, but what they were legally permitted to do.

People in the Business community and the current administration no longer defend the actions at Enron for obvious reasons. That said, many people in the business community and the White House were not only defending but advocating the way Enron was doing business, right up to the point Enron took its nose dive.

Even now, reforms have been minimal. The problem with your vision of a deregulated market working ever onwards towards perfection is that it can only close the barn door after the horses have already gone out, and the disincentive it gives from cheating, fraud, and other bad behavior is dependent on the ephemeral memory of the last mistake.

There are some practices where its just in our best interests to write up a law and forbid things. By taking that route, we can avoid the financial stress of millions repeating stupid mistakes and greedy practices when memory fades, and by doing that provide a much more secure environment to both guage and engage risks. A foundation of security encourages the creative spirit.

Current law seems to me to be too unwieldy- we need more elegant, more effective compliance procedures and regulation. I want a system that works, not one too mire by corruption or ensnared by arbitrary rules to work.

Posted by: Stephen Daugherty at January 5, 2006 1:35 PM
Comment #110455

Jack,

practical measurements? Since when is infant mortality an impractical measurement?

My point was that the economic freedom rank is a bit of a “so what?” measurement. We’re 13th in EF but 3rd in per capita GNP - which is more important? We’re 13th in EF but 46th in life expectancy - which is more important?

One other point: economic freedom doesn’t represent economic equality. Economic equality measures how we are all doing relative to each other and how the poorest are doing versus the wealthiest.

In the US, the richest 10% have 15.9 times more wealth than the poorest 10%. In this measure we are 135th of 177 nations.

The richest 20% have 8.4 times as mush ast the poorest 20% have. That places us 132nd of 177 nations.

In our country, the poorest 10% have 1.9% of the income. That puts us on par with, on the one hand, Hong Kong, Singapore, UK and Australia (other economic freedom leaders), but also with Malaysia, China, Iran, Gambia and the Dominican Republic.

This matters because economic inequality means we clearly have two Americas and when we speak of the blessings of our country, we need to remember that not everyone has fair access to those blessings.

It’s not that our infant mortality is high (it’s not), it’s that we have the lowest along with 3rd world infant mortality - it’s just a matter of your zip code.

Repeating the great news as proclaimed by the Heritage Foundation and the WSJ only serves to emphasize an accusation often made by Democrats and Liberals - that when the right talks about ‘economic freedom’ and ‘prosperity’, they mean for wealthy, not for everyone.

Posted by: CPAdams at January 5, 2006 4:14 PM
Comment #110456

CPAdams,, If you are so concerned about economic prosperity for all the poor, than why do’nt you give them all your money. Thats the dems solution take from the rich give it to the lazy. People are poor because that is what they choose to be.

Posted by: philipZ at January 5, 2006 4:30 PM
Comment #110458

CP

Economic equality is not important to me. I care more about opportunity and the general prosperity. I know that is a difference in our priorities. You know if you have two unemployed guys and one of them gets a good paying job, you just have increased inequality. Making people equally poor is easier than making them equally rich.

Stephen

I don’t advocate a pure free market. I have written on many occasions that the free market (as opposed to capitalism) requires the rule of law, some government regulation and even some redistributive programs. The question for me isn’t even how much, but what kind.

Government programs must work within the context of the market. I don’t mean that as a normative statement, but rather just an observation. It is analogous to a farmer working within the context of nature. You can grow bananas in Minnesota if you want, but the resources it takes is not worth it. To the extent government can work within markets, it is successful. The market will limit some things governments might want to do.

Socialism is old fashioned idea that it is possible for one entity (the government) to understand and regulate the economy. This is just not possible. And there are some things you cannot do simultaneously. For example, pushing the minimum wage very much above the market level is not compatible with higher employment for the less skilled. Let me add that where I live nobody much makes minimum. New hires at fast food places make $7.50, so you could raise our minimum wage to about $7.50. But if you raise it beyond market it costs jobs.

The U.S. system creates more jobs (and more jobs per capita) than most other countries. The Germans and the French live with unemployment rates that we would find unacceptable, nearly twice the U.S average. It is the trade off for their more “secure” job environments.

And BTW, I also was not only advocating for the U.S. system. I mentioned Estonia as a good decision country and places like the UK, New Zealand and Denmark also do well. The economic freedom is important. There are different roads to that goal, as long as you are going the right way.

ONE more thing re Enron. You point out that while Clinton was President, the Republicans were making most of the laws concerning business.

Does that mean that Republicans get most of the credit for the boom at the end of the 1990s too? If you blame them you should also credit them.

Posted by: Jack at January 5, 2006 4:35 PM
Comment #110486
How does the economic freedom measure rank against quality of life, life expectancy and education measures?

I don’t have the time to find the links (running into a meeting), but I seem to recall that a number of countries that rank lower than us on this scale are also rated to have better educated populations with longer, better lives.

I don’t know, but North Korea does have a higher literacy rating than the United States, being that the US is near the top and North Korea is dead last.

Posted by: Jean-Marie Le Pen at January 5, 2006 6:55 PM
Comment #110494


World History - as it really happened.

Humans existed as members of small bands of nomadic hunter/gatherers. They lived on deer in the mountains during the summer would go to the coast and live on fish and lobster in winter.

The 2 most important events in all of history were the invention of beer and the invention of the wheel. The wheel was invented to get man to the beer. These were the foundation of modern civilization and together were the catalyst for the splitting of humanity into 2 distinct subgroups: Liberals and Conservatives.

Once beer was discovered it required grain and that was the beginning of agriculture. Neither the glass bottle nor aluminum can were invented yet, so while our early human ancestors were sitting around waiting for them to be invented, they just stayed close to the brewery. That’s how villages were formed.

Some men spent their days tracking and killing animals to B-B-Q at night while they were drinking beer. This was the beginning of what is known as “the Conservative movement.”

Other men who were weaker and less skilled at hunting learned to live off the conservatives by showing up for the nightly B-B-Q’s and doing the sewing, fetching and hair dressing. This was the beginning of the Liberal movement. Some of these liberal men eventually evolved into women. The rest became known as ‘girliemen.’

Some noteworthy liberal achievements include the domestication of cats, the invention of group therapy and group hugs and the concept of democratic voting to decide how to divide the meat and beer that conservatives provided.

. Modern liberals like imported beer (with lime added), but most prefer white wine or imported bottled water. They eat raw fish but like their beef well done. Sushi, tofu, and French food are standard liberal fare.

Another interesting revolutionary side note: most of the liberals women have higher testosterone levels than their men. Most social workers, personal injury attorneys, journalists, dreamers in Hollywood and group therapists are liberals. Liberals invented the designated hitter rule because it wasn’t “fair” to make the pitcher also bat.

Conservatives drink domestic beer. They eat red meat and still provide for their women. Conservatives are big-game hunters, rodeo cowboys, lumberjacks, construction workers, firemen, medical doctors, police officers, corporate executives, athletes, and generally anyone who works productively. Conservatives who own companies hire other conservatives who want to work for a living.

Liberals produce little or nothing. They like to “govern” the producers and decide what to do with the production. Liberals believe Europeans are more enlightened than we are. That is why most of the liberals remained in Europe when conservatives were coming to North America. They crept in after the Wild West was tame and created a business of trying to get MORE for nothing.

Here ends today’s lesson in world history:

It should be noted that a Liberal may have a momentary urge to angrily respond to the above before forwarding it. A Conservative will simply laugh and be so convinced of the absolute truth of this history that it will be forwarded immediately to other “true believers.”

While it may be true that these facts are mildly distorted, I’ll bet you ended up with a smile ~~~ I did….




Posted by: howard at January 5, 2006 7:26 PM
Comment #110502

Hey Jack,
Thanks for the article. It isn’t bad and it gives me an economic studying tool.

What do you think of the French (haven’t read on Germany yet) policy of adjusting minimum wage based on the cost of living? The idea behind it intrigues me.

Howard,
That was an asinine post and it shows YOU don’t know your history. It wasn’t a bad satire by the way. Let’s examine….

Other men who were weaker and less skilled at hunting learned to live off the conservatives by showing up for the nightly B-B-Q’s and doing the sewing, fetching and hair dressing. This was the beginning of the Liberal movement.

Obviously, you don’t understand the formation of liberalism. Liberalism has always been a permissive form of liberty. They haven’t changed much over time; they are still the same at the core, just different now (whereas liberals back then were white/western supremacists to an extent, despite bashing bigotry and relative things like that, liberals today tend to play the shyster anti-racist card, when they are really just anti-white, for the most part, at least, anti-majority.) Most of the Founding Fathers were liberals. Ha, that ‘girlieman’ Thomas Paine, a hardcore leftist, started the American Revolution (with “Common Sense”) and saved it with a series of letters known as the “American Crisis” (which Washington was so touched by, he demanded it for it to be read in Valley Forge.) It isn’t about who has a penis and who has a vagina; you only make your case look silly with such a strawman. What liberals are about is siding with the minorities who bring the majority down and cozying up with the enemy. It isn’t a secret; liberals, at least in modern times, hate themselves and are completely Nihilist on issues such as race, culture, tradition and heritage, which the literati is quick to pound a guilt-trip into the majority about.

Another interesting revolutionary side note: most of the liberals women have higher testosterone levels than their men.

That depends; most liberal women are inherent and ‘fair’ pacifists. The feminists can be scary. I won’t disagree.

Modern liberals like imported beer (with lime added), but most prefer white wine or imported bottled water. They eat raw fish but like their beef well done. Sushi, tofu, and French food are standard liberal fare.

Wow, I spoke to a center-right Republican today who drank a few Coronas on New Years Eve, with lime, at that.

White wine is good; you should try it so you don’t have a heart attack by fifty.

Well, if the liberals are drinking that type of water, maybe us Conservatives should too. After all, they are more educated (which is why they dominate everything but the elected represenatives.)

Meh, you’re jealous that the French (arguable with the Italians) are superior in culinary skills. They didn’t see Iraq as their war; get over it. Otherwise, it’s the ‘girliemen’ Conservatives who will hold grudges like that girl in middle school.

Liberals believe Europeans are more enlightened than we are. That is why most of the liberals remained in Europe when conservatives were coming to North America. They crept in after the Wild West was tame and created a business of trying to get MORE for nothing.

Sure they are more enlightened than us, but the liberals have it for the wrong reason. Neither side understands Europe or European politics. Liberals have this delusion that they are pacifist hippies with socialism. That isn’t the case. Norway, I believe, is the only nation in Europe that is, by definition, socialist. I could be wrong. I know they have the biggest nanny state. Conservatives have the same view, which only proves that Republicans and Democrats are two sides of the same coin (I love Pat Buchanan.) Throughout Europe, there are popular far right parties which would make the current Republican party look akin to John Kerry after his Vietnam stint. You will never hear the Republican party advoate the abolishment of all Moslems in the nation. The French National Front does and they could very well score an upset in 2007 (they have a 24% approval rating right now and if they keep it up, the National Front will only get more popular; only 39% of the French oppose them, meaning 61% will consider them and 1/3 French people describe themselves as racist, which I approve of because the fact is they will be the first, by majority, with the current trends, to counter LIBERAL Cultural Marxism, something the Republican party sold out to many moons ago.) In summary, neither side has the right idea about Europe. The problem is the right-wing and left-wing form coalitions and perform a cordon sanitaire. That means the far right will get beat just about every time.

Don’t forget; Edmund Burke wrote “The Reflection on the Revolution in France” and his book outlines Conservatism, and boy, the Republican party is far away from that form of Conservatism. I recommend reading that. Most need a lesson.

Also, the United States has always been really good on social equality (hard to believe and the liberals will hate me for this, as if I care, but Tocqueville even commented on such in the 1830s. No nation in the world, at least as far as being voluntary, hath ever bent over backwards for minorities like the Americans have and good for them, if that’s what they want. I do get mad when liberals want to scream about the KKK and racism, when the US has been the most progressive western nation in history (more so than the Europeans as a whole lot are bigoted racists, which again, I don’t disagree with.) The US gets a very bad rap for racism (the left-wing Joe McCarthyism), when racism is viewed as worse than pedophilia in this country. The United States, in its founding, was fairly liberal, very much so at that, with a few Conservatives who were too afraid of the British Empire. Europe has been fairly right wing, with a difficult deal of liberalism since World War II, after the ultra right-winger like Hitler was defeated. It only caused Europe to turn completely liberal, Marxist and allowed the left to put forth a police state in all of the nations (England included.) A few of those nations had a right-winger here and there, but the latest Conservative in England said he’ll support an open-borders policy (yikes, that’s asking for disaster), so people wonder why many are starting to vote for the National Front and the British National party, for example.

While it may be true that these facts are mildly distorted, I’ll bet you ended up with a smile ~~~ I did….

Sure, I get the satire and it is funny, but I do feel as a European far rightist, some Republicans have to be put down to reality and realize that they have sold out to liberals by and large (if that’s what you wanted, fine, but the Republican talking point seems to be otherwise.) Also, if you don’t want to read up on the current tide in Europe, others can. As for history, I wouldn’t be surprised if you thought the Founding Fathers were hardcore Neocons; the record must be set straight whether you really know it or not. If you do, others can learn.

Anyhow, Jack, I look forward to the reply, as I’m really going to hit hard on economic studies this year.

Posted by: Jean-Marie Le Pen at January 5, 2006 8:01 PM
Comment #110508

Jack-
Frankly, I think electronics deserves most of the credit for the boom. After all, the boom started right after Clinton put the Tax hike in motion. Does he deserve credit for that boom? No, not necessarily, though he does deserve credit for maintaining a sensible fiscal policy, getting us to the point where we were in some manner of surplus.

The Republicans? While I don’t dispute that some of their policy was good for business in the short term, in the long term it’s created a culture of corrupt expectation and lazy management, people who believe its the job of the American people to make them rich, not their job to do things for other and acheive wealth as a result of that.

The thought of the last generation has been too focused on money, too focused the economic side of society, to the point where not only is the quality of life degrading, but the underlying characterof life that helps us maintain our economic drive is being destroyed. We’re leveraged to the eyeballs in nearly every sector to maintain this growth. At some point America is going to pull a hamstring and is going to endure a period of forced economic rest.

The only thing I can see getting us out of this is another technological boom, but I think that will take time to develop, and our current situation might prove a drag on it, to the point where we may not necessarily be the technological center of things.

At some point, we Americans have got to stop being weenies about paying the bills, and just buckle down and do it before its forced on us. There’s a good reason France and Germany are as they are. They are nations that were once important, once world leaders, but which destroyed themselves with their dreams of power. We are no less fallible than they are. It would do us well to remember that.

Posted by: Stephen Daugherty at January 5, 2006 8:44 PM
Comment #110521

Jean-Marie Le Pen

I had economics in B-school but I am not an economist. I had a lot of trouble with the calculus required in the micro-economics.

The thing that I learned about economics is the trade off. When you gain something, you often lose something. You can’t have everything you want. Ecology and economics have the same root. Everything affects everything else.

The French (and many other Euro economies) protects jobs. This means that those who have jobs are well off. Established workers are taken care of. New workers or those who want to change jobs suffer. Unemployment in France hovers around 10%. American unemployment reached that level only during our worst post-war recession in 1982. The U.S. economy has created millions of jobs since 1982. The French economy has created almost no net jobs in the same time. Our economy grows about twice as fast. It is innovative and adaptive, but less secure.

So your choice is the slow moving dream of security that you get in France or the fast moving opportunity you get in the U.S. For me there is no doubt about the choice. I am glad to be an Americans and I am glad we have the system we do.

Let me hasten to add that France is not a bad place to live. It has a market economy, just not as open a market economy as we enjoy in the U.S. A rational person could prefer either depending on his particular values.

There are many worse socialist in the world. It has been said that socialism is for losers and the free market is for winners. This statement has many meanings. Loser interpret to mean that it protects the weak. Winners see it differently.

Stephen

I agree that short term politics have less to do with the economy than politicians like to say and many people like to believe. I just think that it is ironic to give Clinton credit for the good economy of the late 1990s and then blame the Republicans for any abuses. You have to pick up both ends of the stick.

Posted by: Jack at January 5, 2006 9:56 PM
Comment #110594

Jack-
The points of balance between economic interests and other interests is neither permanently set nor always known. Because of that, I think the assumptions of where economically viable approaches lie, in terms of pollution, employment, and technology.

You can’t necessarily control an economy directly with legislation but we would be foolish to suggest that certain policies might not help or hurt disproportionate to their size. Clinton and the Republican Congress are equally responsible for the legislation that deregulated the systems meant to head off the fraud and accounting trickery that in turn helped to destroy the bull market from the 90’s. But the push for deregulation and the push for lower amounts of disclosure came from Republicans in the 90’s, who justified it on economic grounds.

I think sometimes economic booms can be partly the result of unsustainable practices, and in turn be unsustainable themselves. I believe that our current economy is working in spite of Republican policies, not because of them, and if we were to clean up the system, and put in a more efficiently enforceable systemt than that of Sarbanes-Oxley, the system could recover from the crisis of trust and confidence that the fraud of the early part of this decade created. As long as people think they’re going to get mugged if they invest in the market, they are not going to invest in greater numbers.

Posted by: Stephen Daugherty at January 6, 2006 7:52 AM
Comment #110615

Stephen

I think you overestimate how much the government can affect the economy. In the long run, policies make a great deal of difference. It is what separates the U.S. from Zimbabwe, for example. But in the short term it is less decisive.

The bull market didn’t end because of scandals. It just had become overvalued so that fear overcame greed. I wish it was possible to predict market behavior, but it is not. A saying I learned in B-school was that those who try to time the market perfectly end up with holes in their shoes to match those in their heads.

What the government can do is create a consistent rule of law environment with effective, but light, regulations. Government must also create the infrastructures needed by business. That is government’s role. Of course this is much easier in theory than in practice. What government must always avoid doing is trying to manage innovation or direct business. Government is not competent to do that.

Think of who is in government and consider the differences between how government and business work.

In a democratic system, politicians have to appeal to a wide number of people. Most people want to get things but they are less enthusiastic about working for them. Most people also believe that they are above average (which is impossible)and entitled to more than they have. Politicians have to play to this fantasy in order to keep their jobs.

In a business, managers have to satisfy owners who want to make money. The also want things, but they know they have to compete and innovate to get them. You don’t need to be popular to make money and innovate. In fact most innovators would never be elected to anything because of their prickly personalities. Most businesses might think they are above average, but at the end of the day they have a balance sheet that tells them how they really stand.

You need a dynamic between the two. If you leave business alone, many will maximize profit by consuming common goods. Government has a duty to protect the common good. On the other hand, government will try to make private goods into spoils for its constituents. Remember the story of the goose who laid the golden eggs? It is like that.

In the U.S., we had a decent balance from about 1945-1970. We lost it from about 1970-1982 and got it back. It shifts back and forth. That is natural.

We have to respond to conditions. Our system went to hell in the 1970s when faced with global competition and changes in our relationships with technologies. The big automakers, for example, had developed a partnership with big labor to produce big, low quality cars that they sold to a public that had little choice. The energy crisis brought in competition from Japan and Europe that upset this relationship. You can’t have it back, even though a lot of people would like that kind of stability. The French and Germans are facing this kind of restructuring right now. Their regulated industries don’t produce the benefits people want. Those who have jobs or own these industries would like to keep things as they are. They talk about justice. What they mean is protection.

Our next big challenge is demographic. We are not facing up to it yet and that may crash our system in a couple of years.

Posted by: Jack at January 6, 2006 10:20 AM
Comment #110678

Adam

I found this re economic freedom and life expectancy. They go together too.

http://www.nationmaster.com/plot/eco_eco_fre/hea_pro_of_not_rea_60/flag

Posted by: Jack at January 6, 2006 1:33 PM
Comment #110830

Jack-
I don’t believe that a government can control an economy and have it be healthy, if that’s what you’re thinking. I would leave the market to guide most operations. For me, regulation is about setting the ground rules then letting things run themselves. My premise is that appropriate regulation keeps the system from doing self-destructive things, the way appropriate law and order prevents society from doing the same.

My point is much the same, I just don’t trust the market to to keep people honest. I trust it to keep people motivated. Sometimes positively, sometimes negatively. The market acts for behavior the way water does for any solid container- it conforms to what it allows.

Fact is, right now, we allow trade with nations that allow unfair advantages to their capitalists. They allow them to grow rich off of near slave labor. Not only does this reflect badly on our society, it sets us up in a position where the economic misery of others is the condition for our economy’s wellbeing. It gets us into a vicious circle of undermining domestic jobs simply on the basis of the artificially low labor costs.

Take a good long look at the Middle East, and understand the consequences of such long term parasitism on both ends of the bargain. Sooner or later, The point is not to keep all jobs here, but to insist on equality of trade of some kind, one that can have us able to send stuff the other way.

Posted by: Stephen Daugherty at January 6, 2006 11:32 PM
Comment #111008

Economic Freedom Makes Good Things Happen

Tell that to GM and Delphi workers. Tell it to IBM workers. Tell it to the steel workers and the families of the dead miners. Tell it to the 42 million Americans without health insurance who pay from 50 to 150% more for medical care than insured folks do. Tell it to my 15 year old daughter who is appalled that Republicans doubling her tax debt by the time she is 18 and able to enter the work force. Tell it to the 10’s of thousands who are dying or injured by the sweet and cozy deals made between Bush’s Food and Drug Administration and the pharmaceuticals hiding negative test results. Tell it the millions of elderly on fixed incomes who are going to lose their homes as a result of skyrocketing property taxes due to hyperinflationary development companies buying land cheap and marking it up 1 to 300% when creating their subdivisions.

Economic freedom does indeed make good things happen under the right circumstances. Unbridled and unregulated greed however makes very bad things happen for many while fatcatting a few. Can anyone say Abramoff fast 3 times. How about GM? Can anyone say 12 dead miners all in a row real fast? Economic freedom without responsibility or coerced ability to respond appropriately, can kill, and does every day. Can anyone say the FDA Loves Pharmaceuticals, and Pharmaceuticals get horny everytime the initials FDA are stated pantingly fast?

Economic freedom can create some very nasty results if not checked and balanced. America has had the best record in history of managing that balance. Until, Bush became president with a Republican Congress that is. Then things like Katrina, Iraq, Abramoff, outsourcing, Americans spying on Americans, and national debt making indentured servants of future generations of workers all began to happen, in the name of deregulation and economic freedom. New Gingrich wants to turn our immigration enforcement over to Visa and Master Card. Yep, that’s what he said on C-Span this morning. Can you believe these Republicans? I can’t.

Posted by: David R. Remer at January 7, 2006 4:10 PM
Comment #111221

Pork spending makes good things happen too! But, it doesn’t necessarily make it wise.

Pork Spending is part of politician’s Economic Freedom to spend tax dollars to insure reelection. But, let’s look at what tax payers get for their pork.

According to Senator Tom Coburn of Oklahoma, the US Congress added about 14,000 earmarks to bills in 2005, totalling $27 billion. (Earmarks are pork spending, federal dollars for local projects.)

What this means is, 49 state’s taxpayers will pay 26.5 Billion more in taxes just so their state could get a few Million for a new Rain Forest exhibit.

And this goes on year after year, decade after decade. Folks, your paying out for pork in 49 other states just to get a little pork for your state. This is like buying lunch for the 49 other people in the cafe’ so you won’t feel guilty about eating lunch yourself.

In other words, for a $10 lunch, you are paying a $500 tab. No surprise our national debt is on track for 10+ Trillion Dollars by 2008.

Sorry, folks, my 15 year old daughter wants this to stop while she still has hopes of bringing home some of her paycheck for herself.

Economic Freedom be damned. I want to see some economic RESTRAINT!!!

Posted by: David R. Remer at January 8, 2006 3:32 PM
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