Filed under: Capitalism, Economy, Freedom, Politics, Regulation, Taxes, The United States | Tags: Economic Freedom, Free Markets / Free People, The Business Roundtable
Randal Stephenson is chairman and CEO of AT&T Inc, and the new chairman of the Business Roundtable, an association of chief executive officers of leading U.S. companies. He wrote, in the Wall Street Journal today:
No matter the topic, the debate in Washington often comes down to whether we need more government funding for social programs or less spending to reduce the debt we leave our children. But this win-lose framing completely misses the one thing required to achieve both objectives: robust economic growth.
The simple fact is that if we want to control the deficit, preserve key entitlement programs, educate our children, grow jobs, and offer upward economic mobility for everyone, we have to get our economy growing faster.
To that end, the Business Roundtable, whose member companies generate annual revenues of more than $7 trillion while employing 16 million workers, is embracing an agenda for 2014 centered on one thing—encouraging public policies that will return the U.S. to its full growth potential.
We need four basic elements, he says: Fiscal stability. Stop stumbling from one fiscal crisis to another. Uncertainty. Nobody can plan. Will U.S. default on its debt? Interest rates? Budget deal is a step in the right direction. Other three elements are 1) Tax reform. 2) Expanded trade. 3) Immigration reform.
A study in American Economic Review shows that a one-percentage point decrease in the average corporate tax rate would result in an increase in real U.S. GDP of between 0.4% — 0.6% within one year.
Today, one our of every five U.S. jobs is supported by international trade. NAFTA has been a dramatic success in our hemisphere.
They support immigration reform with a larger pool of visas for high-skilled workers, and new visa system for lower-skilled workers. I’ll go for that when a goodly percentage of the 91 million workers who have dropped out of the labor participation force. find work. These are people in the working age group, not retired or disabled, but simply working age people who have given up. They do not count as “unemployed” and receive no unemployment compensation.
The “shortage” of people trained in science, technology, engineering and math is largely a myth, and there are far more graduates than openings. I have read that business is reluctant to hire people who have been out of work for some time, on the assumption that if they were qualified they would not be unemployed. This may be true.
Business has little idea how to sort through job applicants, and high-tech companies have devised all sorts of elaborate tests to try to sort out those who will fit in. Anyone who has worked in business has met people who make you wonder how they possibly got hired. Unfortunately they sometimes occupy important positions, but that is true of any large organization, the larger, the worse the problem.
Economic growth is the remedy for poverty, inequality and unemployment. Growth fosters innovation and creativity, and the fuel for economic growth is freedom. Countries that pursue economic freedom get prosperity as a bonus.
According to the 2014 Index of Economic Freedom, just released by the Heritage Foundation and the Wall Street Journal, after seven straight years of decline, the U.S. has dropped out of the top 10 most economically free countries.
Filed under: Foreign Policy, Military, National Security, Russia, The United States | Tags: Economic Freedom, national security, We Are Less Safe
The Heritage Foundation has just released the 18th annual Index of Economic Freedom, released with The Wall Street Journal.
Economic freedom — the ability of individuals to control the fruits of their labor and pursue their dreams — is central to prosperity around the world. Heritage and The Wall Street Journal measure economic freedom by studying its pillars: the rule of law, limited government, regulatory efficiency, and open markets. Things like property rights, freedom from corruption, government spending, free trade, labor policies, and one’s ability to invest in and create businesses all factor in to a country’s economic freedom.
In 2011 economic freedom declined worldwide as many governments attempted to spend their way our of recession, which has never worked. Rapid expansion of government appears to be responsible . Government spending not only failed to halt the economic crisis, but may well be prolonging the trouble. The U.S. economic freedom score has dropped from 81.2 in 2007 to 76.3 in 2012, on a scale of 1-100.
And we are not only less free, but we are less safe as well. The administration has, for three years, followed what they claim to be a strategy of ‘retrenchment.‘ We have withdrawn from Iraq, set a deadline for Afghanistan, called off further expansion of NATO, signed arms-control treaties and now decimated the Pentagon budget.
What they have presented as a strategic vision is seen by the rest of the world as plain old weakness. Osama bin Laden was not the source of all danger in the world, and eliminating him doesn’t mean that “the tide of war is receding.” Our allies have reason to question the strength of our commitments.
Our financial difficulties are not a function of spending on the military, for the cost of being perceived as weak and indecisive can be astronomical. Americans have long believed that the last war was the last one, and that peace is the natural state of the world. Politicians, eager to have more money to spend, believe in peace dividends — money they are entitled to spend now that war is a thing of the past.
The U.S. is the only country in the world without a substantial nuclear modernization program. After Russia signed the New Strategic Arms Reduction Treaty, which unilaterally reduced U.S. forces, Moscow announced the largest nuclear modernization program since the end of the Cold War. America, meanwhile, continues on a path of unilateral disarmament now under the guise of budget constraints.
Section 1227 of the 2012 defense authorization bill prohibits spending any funds that would be used to give Russian officials access to sensitive missile-defense technology as part of a cooperation agreement without first reporting to Congress identifying the specific secrets, how they’d be used and what steps will be taken to protect data from compromise. Obama is required to certify that any technology shared will not be passed on to countries such as China, North Korea or Iran, and that Russia will not use transferred secrets to develop countermeasures and that the Russians are reciprocating in sharing.
President Obama issued a signing statement, something he had previously opposed. He said in the statement that:
he would treat these legal restrictions as “non-binding” and that “my administration will also interpret and implement section 1244 (sic) in a manner that does not interfere with the president’s constitutional authority to conduct foreign affairs and avoids the undue disclosure of sensitive diplomatic communications.
He already betrayed Poland and the Czech Republic who were to host ground-based interceptors (Poland) and missile-tracking radar (Czech Republic). Moscow objected so Obama obediently pulled the plug. Obama claimed we had a better approach that called for using three versions of the Navy’s Standard SM-3 interceptor missile that forms the backbone of its Aegis missile-defense system. The fourth phase is a missile scheduled for 2020, still on the drawing board, that would intercept hostile missiles in the “early intercept” phase. The Russians want the SM-3 secrets and Obama appears to be willing to share.
In spite of Obama’s wishful thinking and desire for nuclear disarmament, Russia continues to rearm. Russia just announced the deployment of the new RSM-56 Bluava submarine launched ballistic missile. The administration’s engagement with Russia has been well-represented with Hillary Clinton’s “reset” button. More to the point were Ronald Reagan’s words: “Trust, but Verify.”
Filed under: Capitalism, Economy, Freedom, Politics | Tags: Economic Freedom, Spending, Taxes, Unions
Economic freedom helps to create jobs. For over a decade, the Wall Street Journal and The Heritage Foundation have tracked the march of economic freedom around the world with the Index of Economic Freedom. Now there is more evidence from a state-level study from the Federal Reserve Bank of St Louis. The authors state:
Our results suggest that policy-makers concerned with employment should seriously consider the degree to which their own labor market policies, as well as those of the national government, may be limiting economic growth and development in their respective states.
Economic freedom is the fundamental right of every human to control his own labor and property. In a society that is economically free, individuals are free to work, produce, consume and invest in any way they please, with that freedom both protected by the state, but unconstrained by the state.
In economically free states, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself. (click to enlarge)
The stimulus was supposed to bring back the jobs and keep unemployment below 8.8 percent. The reality is something quite different. Long- term unemployment has been growing significantly, and the stimulus bill and other “job bills” didn’t change the trend. There are another 5.8 million workers who want employment but are excluded from BLS unemployment statistics.
Texas significantly continues to outperform the rest of the American economy, especially California. The reasons can be summed up in three little words: unions, taxes and spending. The role of unions, particularly public unions is huge in California. Texas has a relatively low rate of unionization — about a third of Californias.
Texas has had a good long run of small-government, low-tax conservatism. Texas has a trillion-dollar economy that would make it the 15th largest national economy in the world if it were a country. By one estimate, 70 percent of the new jobs created in the United States in 2008 were created in Texas. That’s economic freedom, and it works.
The Obama administration had spent lots of words on job creation, but the legislation passed has favored unions, higher taxes, and lots of spending. For example, the Democrats’ student-loan “reform” which was tacked onto the health-care reconciliation bill caused student lender Sallie Mae to close a call center in Killeen, Texas, eliminating 500 jobs.
The health-care bill itself will eliminate many jobs. Higher taxes, higher premium costs, an ineffective small business credit, and the high cost of complying with health care regulations will hinder growth of small business and make increased hiring unlikely.
The inclination and beliefs of the administration lean toward big government. Few in the administration have any significant experience in the business world, and they do not grasp the fact that government jobs are just another drain on the pocketbook of taxpayers. They are jobs, but it simply doesn’t count as job growth.
Try explaining that to a Democrat.