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  • U.S. Can't Lead on Economic Freedom When It’s Retreating

    The news is out: the U.S. is falling behind on economic freedom. In the 2010 edition of the Index of Economic Freedom, the United States, for the first time, dropped out of the ranks of the free, and into those of the ‘mostly free,’ ranking eighth in the world and behind Canada in North America.

    The U.S. retreat was broad-based: it fell backward in seven of the ten areas measured. And while much of the U.S.’s decline stemmed from its response, under both President George W. Bush and President Obama, to the financial crisis, some of the burden it carries is older, and even heavier. Its corporate tax rate, at 35 percent, is high compared to most of its major competitors. Its government spending, though lower than some, has risen steadily since 2000. And though it ranks relatively highly on freedom from corruption, it is only 18th out of the 179 nations surveyed, which is far from flattering to our sense that Americans are an honest people.

    The costs of economic unfreedom should be obvious. In the U.S., it means fewer jobs and lower growth. And what is true here is true abroad as well. As the Adam Smith Institute in Britain points out, the way to minimize poverty is to promote the creation of wealth. And as the economic and political walls came down across the world over the past decades, the people of the world enjoyed both the material and moral fruits of freedom. As the Institute puts it:

    over that 36 years . . . our living standards [in Britain] have around about doubled, even while they’ve taken a 5% or so hit in these last couple of years, and global poverty has fallen by 80%. That’s the largest drop in poverty in the entire history of our species

    To its credit, the United States has led this march of freedom. It led, of course, by resisting Communism, which sought to advance political tyranny in the name of ending economic freedom. But it led even before that. After the Second World War, the U.S. rejected protectionism and sought to promote freer trade and economic liberalization among its friends and allies in Europe and Asia. Its reasoning was clear: not only is economic growth a good thing in itself, it also – as the Great Depression and the rise of Hitler showed – helps to stabilize liberal democracy. And if the U.S. was going to speak the virtues of economic freedom to others, it had to practice those virtues at home.

    Economic freedom is not, just, in the self-interest of the United States. It is in our interest as the world’s leading democratic power. The American grand strategy since 1945 has been to advance economic freedom and political freedom, and to recognize that both freedoms are closely linked. The Obama administration’s retreat on economic freedom is not just bad at home: it signals a wider disinterest in the cause of promoting freedom abroad. In short, one of the bipartisan pillars of our foreign policy – it was conceived, after all, by the Rooseveltian liberals who were in charge in the mid-1940s – has disappeared, and no one has noticed. That is a retreat from prosperity, from true liberal values, and from international leadership all in one.

    Posted in Ongoing Priorities [slideshow_deploy]

    One Response to U.S. Can't Lead on Economic Freedom When It’s Retreating

    1. EJM says:

      Correct, Mr. Bromund.

      Bush's overspending and slippage on free trade toward protectionism was problematic. But with Obama we now have a President who is either indifferent or actively hostile to both economic and political freedom. Both the deficit and debt have ballooned in just the last year to the point that it is no longer inconceivable that the USA might at some point default on its debt. Certainly the value of the dollar is being systematically undermined by artificially low interest rates and monetarization of the federal debt. We still have a moribund housing market, failing banks, and 10%+ unemployment, even after several trillion in bailouts and "stimulus." Many individual states are bankrupt and on the same track as California. Social Security and Medicare looming insolvency will become overwhelming within this decade, and Congress and the President are bashing capital and trying to push through a huge new entitlement program. We are in very serious trouble domestically, and it is getting worse. Internationally, free trade is languishing as Americans are fearful for their own jobs and the Administration has no interest in pushing it. A constitutional ouster of a Chavez-wannabe in Honduras is resisted by the American State Dept., while Chavez cozying to Iran goes unchallenged. In Iran itself a stolen election and democratic uprising is barely acknowledged by Obama, who is more eager to negotiate with the mullahs who have no interest in negotiating with him, as they close in on an Islamic bomb. Democratic friends and allies in the UK, Poland, the Czech Republic and Isreal are disrespected, pressured or ignored, while repressive post-Communist mafiosi in China and Russia are kowtowed to.

      Columnists write about the economy recovering, but what we have is more correctly termed a Retreat of the American Spirit, which I fear will not and cannot be reversed with the current President and Congress. The only ray of hope is that the American people seem to be awakening. Only they and we can deliver the change that is needed to reverse the amazing self-inflicted decline we are currently on.

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