Losing Economic Freedom

“The U.S. is the only country to have recorded a loss of economic freedom each of the past seven years.” National Review, February  2014, p. 8

In Economic Freedom, Now We’re No. 12!

Heritage’s Index of Economic Freedom has the U.S. slipping for the seventh straight year.

By Deroy Murdock, National Review, February 2014, p. 8

The United States is on a steady skid downward. The latest milestone in America’s decline is especially demoralizing: The U.S. has slouched from among the world’s Top 10 freest economies. In fact, we’re No. 12 — down two spots from No. 10 last year.

This bad news emerges from the 2014 Index of Economic Freedom, released this morning by the Heritage Foundation and the Wall Street Journal.

“Now considered only a ‘mostly free’ economy, the U.S. has earned the dubious distinction of having recorded one of the longest sustained declines in economic freedom, second only to Argentina, of any country in the [20-year] history of the Index,” observe the report’s editors, Ambassador Terry Miller, Anthony B. Kim, and Kim Holmes, Ph.D., all Heritage Foundation scholars. “The U.S. is the only country to have recorded a loss of economic freedom each of the past seven years.” This sad, maddening interval began in 2007 with Republican George W. Bush’s reckless expenditures, brand-new regulations (including the unforgivable federal destruction of Thomas Edison’s incandescent light bulb), and the post-crisis nationalization of American enterprises. This folly continues with President Obama’s trillion-dollar annual deficits, his 24/7 red-tape factory, and the triumph of Obamacare, now blossoming in its entire splendor. 


It’s even worse than it appears: U.S. economic freedom has slid for seven years running.

Fully eleven countries now enjoy freer economies than America’s. They are:

The Most Free

1. Hong Kong
2. Singapore
3. Australia
4. Switzerland
5. New Zealand
6. Canada
7. Chile
8. Mauritius
9. Ireland
10. Denmark

Estonia is No. 11, just ahead of the United States, and Bahrain is No. 13, just behind us. (Bahrain’s relatively high rank among the 178 nations in the Index reinforces that it measures economicfreedom.)

Why is America so dull in an area where the Land of the Free should shine? Blame the ever-expanding state.

“Substantial expansion in the size and scope of government, including through new and costly regulations in areas like finance and health care, has contributed significantly to the erosion of U.S. economic freedom,” the Index states. “The growth of government has been accompanied by increasing cronyism that has undermined the rule of law and perceptions of fairness.” It also cites Obamacare as a culprit: “Implementation of the health care law passed in 2010 has hit major snags and appears to be significantly hurting job creation and full-time employment.”

The Index identifies aspects of the U.S. economy that sound downright Third World.

“Protection of property rights has been uneven, raising charges of favoritism,” the Index states. Beyond this and other strong winds of corruption, the predictability and professionalism one would expect in a serious country are becoming scarcer. “The full effects of the onerous Dodd–Frank bill, passed three years ago, have yet to be felt. A backlog of ongoing rulemakings has prolonged business uncertainty, impeding economic growth.” While many U.S businesses hate Dodd-Frank, they at least could try to endure it . . . if they only knew the rules. Instead, federal bureaucrats who often receive double the average private-sector American worker’s compensation drag their feet and miss one regulatory-publication deadline after another.

The U.S. actually is well below world norms on “fiscal freedom,” with a score of 65.8 points (out of 100), versus a global average of 77.3. America’s 48.1 points for government spending are an embarrassment, compared to the 62.7 global average. Washington’s high taxes, massive spending, and crippling national debt all uglify this picture.

So what?

The U.S. remains the world’s largest economy. Best Buy is full of low-cost high-definition TVs that are literally too big for many homes. And Americans are not on the brink of starvation — not in the least!

This all matters because economic freedom puts money in people’s pockets.

“The strongly positive relationship between economic freedom and prosperity is apparent throughout the world,” the Index states. “In every region, per capita incomes are much higher in countries that are economically free.”

The figures are remarkable and highly persuasive. Among free economies, per capita GDP stands at $45,404. For mostly free nations, it’s $37,799. Among moderately free economies, per capita GDP plunges to $16,457. This craters to $5,541 in mostly unfree countries.

Paradoxically, this number actually ticked up to $6,231 among repressed economies.

“Resource rich countries, whose economic freedom for ordinary people still remains repressed, generated a bit more per capita income due to oil and other commodity exports over the past years,” Heritage’s Anthony Kim tells me from Hong Kong. Dictatorial, oil-rich Iran and Venezuela come to mind. “However,” he says, “due to extreme wealth concentration in these resource-rich countries, these per capita income statistics need to be analyzed with caution.”

People like Obama who obsess about income inequality should consider robust economic growth the best way to boost the fortunes of all, and especially for those with the least. Rather than redistribute what little is on hand, America’s business should be a constant effort to increase the winnings on the table, well before any effort to figure out whom, ultimately, gets what — and the way to do that is to stay atop a measure like Heritage’s.

For all of America’s problems and humiliations, we can be thankful not to be among the bottom 10 nations in the Index:

The Least Free

169. Republic of Congo
170. Timor-Leste
171. Turkmenistan
172. Democratic Republic of Congo
173. Iran
174. Eritrea
175. Venezuela
176. Zimbabwe
177. Cuba
178. North Korea

The United States of America remains far from this dungeon. Alas, year after year, we burrow inch by inch toward it.

— Deroy Murdock is a Manhattan-based Fox News Contributor and a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University.

Advertisements
Tagged , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: