Comment du Jour

USA Slips Again Globally in Economic Freedoms Survey

There used to be an advertising slogan,   “ We’re number two but we try harder.”   Perhaps in the spirit of the times we should now revive the  phrase and proclaim, “We’re number twelve, but it’s somebody else’s fault.” 

Thus when viewing the world’s freest economies, the U.S. has slid from number six to twelve in the Index of Economic Freedoms.  And that’s since President Barack Obama assumed office in 2009.  So who’s to blame?  The rising BRICS’s, (Brazil, Russia, India, China, South Africa), George W. Bush,  or the ever elusive economic recovery?

The Index of Economic Freedoms jointly sponsored by Washington’s Heritage Foundation in partnership with the Wall Street Journal rates 178 countries worldwide.   In fairness since the survey started twenty years, ago, many more economies have been getting freer as the shackles of state socialism have fallen away in Eastern Europe and even much of the Third World.   So in one sense, other countries are doing better and good for them.  But sadly we in the United States have not been doing nearly as well as we once did; shame on us.

The Index rates countries using a comprehensive formula of  Rule of Law, Regulatory Efficiency,  Limited Government, and Open Markets.  The Index then focuses on issues of property rights, freedom from corruption, business freedom, labor freedom, financial freedom, regulation efficiency, limited government and open markets.   Each country is ranked through this exhaustive but serious template.

So let’s look at the Top Ten to which the USA used to belong to.  Hong Kong, Singapore and Australia are in the top three followed by Switzerland, New Zealand and Canada.   No surprises here.  Rounding off the top ten list we see Chile as number seven, then Mauritius, Ireland, and Denmark.

So some of the European states rates very well indeed. 

Estonia, a Baltic state, which was still part of the Soviet Union until 1991, is number eleven followed then by the United States.  

So what is pulling down America’s grades?   The Heritage survey states that

the slip is “primarily due to deteriorations in property rights, fiscal freedom, and business freedom.”    Describing the overall decline in economic freedom, the report adds there have been “particularly large losses in property rights, freedom from corruption, and control of government spending.”

Sadly,  the United States is the only country to have seen a loss of economic freedom for seven years in a row.

The report adds, “Substantial expansion in the size and scope of government, including through new and costly regulation in areas like finance and health care, has contributed significantly to the erosion of U.S. economic freedom”.  Clearly, the American economy needs investment clarity and serious incentives so that the spirit of enterprise may thrive.  Today, Big government is indeed part of the problem, not the solution.

Canada, scoring sixth internationally, is viewed as the freest economy in North America.   The survey offers the accolade, “A transparent and stable business climate makes Canada one of the world’s most attractive investment destinations.”

Going back to the list, we see the UK at 14th, the Netherlands at 15th,  followed by Germany at 18,  and the Czech Republic 26th.  

France only scores 70th globally, a reflection of on increasingly state dominated economy under the current Socialist administration.

Yet some of the mega economies such as the BRIC’s mentioned at the onset don’t rate so well.  Take Brazil at 114, Russia at 140,  India 120 , or China at 137.   Here we see statistically high growth economies but places mired in corruption, cronyism and dismal  levels of transparency.  

Though South Africa’s economy rates at 75^th and Moderately free,” the other four above BRIC’s rate as “mostly unfree.”   Thus, despite high growth rates,  China’s economy is viewed as hampered by “The Communist Party’s  ultimate authority throughout the economic system undermines the rule of law, and institutionalized  cronyism remains pervasive.”

Not so unpredictably at the bottom of the list the Most “repressed” economies we find Zimbabwe, Cuba and North Korea.

The good news remains that more countries are now prospering economically; the sad news is that the USA can and should be doing so much better.  

Comment du Jour

East Europe Still Ranks High in Cigarette Smoking

In the half century since the landmark anti-smoking health reports, cigarette smoking
has declined dramatically in much of the world--especially in the USA and Canada.

Still there are some outlier places where smoking remains high.  Serbia and Bulgaria love to puff away with
over 2,800 smokes annually; Greece, Russia, and Ukraine round off the top five list according to the World Lung Association.

The United States has seen a big drop in active smokers from an average of 33 percent of men and 28 percent of women in 1980, to 17.2 percent of men today and 14.3 percent of women.  Canadians who saw 42 percent of men smoking back in 1980 and 34 percent of women, now are down to 16.7 percent of men and 12.8 percent of women, according to the Journal of the American Medical Association (JAMA) .

In both countries high cigarette taxes and per pack prices have had an effect in reducing sales.
In New York City a pack of 20 cigarettes costs over $11 which in Virginia the same pack would be just over $4.    The USA ranks 32nd in the percentage of smokers globally.

Surprisingly even France  has seen a considerable drop in smoking from 41 percent of men in 1980 to 34.4 percent today.   In 1980 over 34 percent of French women smoked, a number which has fallen to 27.7 percent today.  Interestingly France has seen very tough anti-smoking regulations regarding bars and public places.

Comment du Jour

Looking Ahead at the World in 2014

It’s that time to consult the snow globe and try to peer ahead at some of the key stories, crises and opportunities which await the world as we prepare for a new year.  Indeed 2013 has been marred by new levels of violence, humanitarian disasters, and a perceptible lack of leadership from the USA on the foreign policy front.   

So what are we looking at in the year ahead?

Sadly the Middle East remains in the forefront of senseless and often religious violence.  Syria’s civil war continues unabated;  as a nexus of competing proxy forces, Islamic fundamentalist fighters, and the widening humanitarian disaster befalling the civilian population.  Though the Obama Administration nearly blundered into an active military role in this fight, the seething hatreds and sectarian divides will not be solved by Washington but by the Syrians themselves.  

The upcoming UN sponsored Syria peace conference in Switzerland allows for this.

In his Christmas Message from the Vatican, Pope Francis pleaded for all sides in this conflict to allow humanitarian access to civilians.  He stated “Too many lives have been shattered in recent times by conflict in Syria, fueling hatred and vengeance. “  He also called for peace in Iraq, where 37 Christians were killed in Christmas day violence. 

Indeed in our world of hypersensitivity and feigned caring, few people seem to notice the plight of ancient Christian communities in Iraq, Syria or Egypt. 

In Africa the news is sadly mixed.  The French helped topple an Islamic fundamentalist insurgency in Mali which had threatened to turn the country into a “Taliban style” fiefdom. 

In Western Europe, the undertow of unemployment and stagnant economic growth continue.

Static socialist policies don't help the situation.

Germany has a new government with Chancellor Angela Merkel heading into a third term.  Though Merkel's CDU/CSU parties won a resounding victory in the September elections, they fell a few seats short to form a conservative government in the Bundestag. Thus after three months of horse-trading Merkel's CDU formed a Grand Coalition with the Social Democrats, the SPD.  High flyers in the new Cabinet include Germany's first female Defense Minister from the CDU, as well as a return of the SPD's Frank-Walter Steinmeier as Foreign Minister.

 Greece holds the six month Presidency of the European Union and the Baltic state of Latvia has adopted the Euro as its currency. 

Elections to the European Parliament will be held in late May. 

Elsewhere in Europe,   Ukraine’s political crisis will continue as the country looks to Western Europe or to Russia.   Naturally Moscow has played hardball with this former Soviet republic but at the same time the opportunity of closer ties with the democratic European Union may eventually prove stronger. 

With the approach of the Sochi Winter Olympics, the host country Russia is on best behavior, releasing imprisoned dissidents and stressing soft power.  

Meantime Brazil will host the Football World Cup in June; European teams like Germany, Portugal and Spain are serious contenders to win the World Cup.   

 Samuel Huntington’s “Clash of Civilizations,” remains  seminal reading.  The thesis is basically that clashes between countries will not occur along purely ideological divides as in the Cold War, but along religious and civilizational fault lines as we currently witness throughout Africa, South Asia, and even Europe if we view the Balkan conflicts or contemporary Ukraine.

In many of these cases a vacuum of clear U.S. policy or its retreat from the world, have allowed for lost opportunities or lessened influence.  

Comment du Jour

Happy New Year 2014!!!!

Health, Happiness and Prosperity to our Readers!