(Economic freedom, that is.)
Canada rises to Top Five in world economic freedom ranking as U.S. plummets to 18th
What’s the source of this inflammatory headline? Not Fox News? Not the Darth Koch Brothers. No, it’s a Canadian newspaper, the National Post.
Canada has taken its place among the Top 5 countries with the most economic freedom, according to a new Fraser Institute report — now leaps and bounds ahead of the United States thanks to the gradual shrinking of the Canadian government since the mid-1990s as America’s just got bigger.
The annual Economic Freedom of the World report, released Tuesday, has Canada tied in fifth place with Australia — up one spot from last year. Hong Kong remains at the top, Singapore’s next, then New Zealand.
Meanwhile, the United States, once a “standard bearer” of economic liberty among industrial nations, spiralled 10 spots from the 2011 rankings to 18th place — its lowest position ever, and a huge drop from its second place spot in 2000.
Imagine if you’re an international entrepreneur. You’re looking for a place to build a business, invest and create jobs. Or, you’re an American who’s looking to expand operations in a place where you can make a decent profit and not get hassled too much by the government.
Would you choose the United States, or Canada? From the same National Post article:
And as the size of Canada’s government continues to slightly shrink due to slowed growth in government spending post-recession and America’s continues to expand, this indicator could eventually make us the industrialized world’s new leader on economic freedom, said Fraser Institute president Niels Veldhuis.
“What we have in front of us is a marked opportunity,” he said. “We can significantly exceed the U.S. in economic freedom over the course of, I would say, the next five to 10 years. The question for Canadians is are we going to seize the opportunity or are we going to let the opportunity go by?’’
A big inhibitor on economic freedom—or, for that matter, all kinds of freedom—is government regulation. Well, while economic freedom sinks in the US, the regulation business is booming! The Canadians aren’t the only foreigners who’ve noticed. From The Economist, a British magazine:
The home of laissez-faire is being suffocated by excessive and badly written regulation
Here’s what the magazine has to say about one of the Democratic Party’s proudest achievements, the Dodd-Frank financial regulation law:
Consider the Dodd-Frank law of 2010. Its aim was noble: to prevent another financial crisis. Its strategy was sensible, too: improve transparency, stop banks from taking excessive risks, prevent abusive financial practices and end “too big to fail” by authorising regulators to seize any big, tottering financial firm and wind it down. This newspaper supported these goals at the time, and we still do.
But Dodd-Frank is far too complex, and becoming more so. At 848 pages, it is 23 times longer than Glass-Steagall, the reform that followed the Wall Street crash of 1929. Worse, every other page demands that regulators fill in further detail. Some of these clarifications are hundreds of pages long. Just one bit, the “Volcker rule”, which aims to curb risky proprietary trading by banks, includes 383 questions that break down into 1,420 subquestions.
Hardly anyone has actually read Dodd-Frank, besides the Chinese government and our correspondent in New York (see article). Those who have struggle to make sense of it, not least because so much detail has yet to be filled in: of the 400 rules it mandates, only 93 have been finalised. So financial firms in America must prepare to comply with a law that is partly unintelligible and partly unknowable.
I do have to disagree with The Economist in one area. I’m pretty sure many others have read Dodd-Frank by now—entrepreneurs, especially. IMO the USA’s new economic freedom ranking (“We’re Number EIGHTEEEENN!!!“) is evidence of that.
Speaking of regulations, what about the Affordable Health Care Act, AKA Obamacare? Remember when then-Speaker Nancy Pelosi famously said (I paraphrase here) that we’d have to pass the bill to find out what’s in it.
Well, we’re starting to find out what’s in it. This came out last week.
Feds need 18 pages to define ‘full-time’ for Obamacare
One of the most-anticipated new federal regulations governing which companies will be required to provide health insurance under Obamacare has finally landed–with a thud.
In the latest indication of how complicated putting the Affordable Care Act into action will be, the Department of Health and Human Services and Internal Revenue Service issued 18-pages of regulations just to describe what a “full-time employee” is. Of note, to the Feds a full-time employee works an average of just 30 hours a week, not the normally accepted 40 hours.
The IRS rule is key because companies with more than 50 full-time employees must provide health insurance under Obamacare, or be fined. Business groups have been warning that small companies might try to replace full-time workers with part-time help to avoid being forced to offer health insurance in 2014, but the 30-hour full-time definition is likely to undermine those plans.
The lengthy 18-page definition caught some in the business world by surprise. “It’s scary,” said Randy Johnson, the U.S. Chamber of Commerce senior vice president for labor, immigration, and employee benefits. “It’s just a small example of two words under our healthcare law of 2,700-pages,” he said, adding: “It says to me things are awfully complicated.”
Businessmen-and-women don’t like to be surprised. They prefer to set up shop in places that welcome, not penalize, them.
So, dear reader. Who will you vote for in November? More economic activity, or more regulation? Check out these links as you think about that:
Number of Months with National Employment Above 8%. Under ALL presidents from Truman to George W. Bush: 39 months total. Since then—43 months and counting.
On Monday, the New Yor Federal Reserve’s manufacturing index dropped to its lowest level since the recession ended, surprising economists and signaling a further slowdown in both factory orders and employment.
Top 10% of all earners paid 71% of federal income taxes in 2009. (And, that was BEFORE Obamacare and Dodd-Frank. Imagine what the future holds for successful people in America…)
And THOSE links were just from this past week!