The Decline of Freedom

You want to know why our economy is basically in its second lost decade? Try this:

Economic freedom in the United States has plummeted to an all-time low. According to the Economic Freedom of the World: 2012 Annual Report, co-published today with the Fraser Institute, the United States’ ranking has dropped to 18th place after having ranked 3rd for decades up to the year 2000. The loss of freedom is a decade-long trend—the United States ranked 8th in 2005—that has accelerated in recent years.

Virtually every U.S. indicator has seen a deterioration. Government spending and regulations have grown, the rule of law and protection of property rights have weakened, and foreign investment and non-tariff barriers have increased. Authors James Gwartney, Robert Lawson, and Josh Hall note some of the reasons for the decline, including the war on terror and the growth of crony capitalism.

As the graph below shows, the United States now has a lower economic freedom rating than it did in the 1970s.

Here are the the top 10 free economies: Hong Kong, Singapore, New Zealand, Switzerland, Australia, Canada — yes, fucking Canada — Bahrain, Mauritius, Finland and Chile. Notice something? All those countries are prosperous. Mauritius may sound strange, but it’s the best run and most democratic country in Africa. Supposed Libertarian paradise Somalia was not rated because they basically don’t have a government.

You can look at the in-depth report here. After reaching a peak in economic freedom in 2000, the last decade has simply been terrible. We’ve gone from 34th in size of government — bad enough — to 61st. From 9th in property rights to 33rd. From 18th in free trade to 42nd. From 2nd in regulation to 17th. Furthermore, this report is only through 2010. It only covers the Bush years and the first two years of Obama. So Sarbanes-Oxley, which I think bears more blame for our economic plight than anything else, is included. But Obamacare and Dodd-Frank have yet to kick in.

The Left is going on about how we’ve had a lost decade during which tax rates have been the lowest in history. Fair enough. But, as usual with the Left, they are missing the point. As Daniel Mitchell notes, low taxes are good, all things being equal. But they are not a magical elixir. George Bush and Barack Obama cut taxes. But they also increased regulation, stood in the way of free trade and massively grew government. It’s not that low taxes didn’t help or that cutting taxes now would help. It’s that there are other and, in this case, more powerful currents pushing us back.

Look at the above list. Canada and Australia aren’t exactly tax havens. Both have universal healthcare and the associated taxes. But because they have done other things — kept regulations sensible, kept government within its means, supported freed trade and free enterprise — they’re doing better than we are.

Just a moment. I’m still wrapping my head around this. Canada. Fucking Canada. The fucking maple-syrup chugging socialized-medicine having, “eh”-saying Dudley Do Right hockey fans in the frozen wasteland to our North are freer than we are.

Fucking. Canada.

OK. I’m back.

Now is this must be a reason to vote for Mitt Romney, right. Eh … maybe. Or maybe not:

Yet discussion of economic freedom seems curiously missing from the presidential campaign. President Obama, in fact, would further restrict economic liberty. He proposes a host of new subsidies and regulations. And don’t forget that the largest parts of Dodd-Frank kick in next year.

Meanwhile, when it comes to defending economic liberty, Mitt Romney has spent most of his time in a defensive crouch. He occasionally breaks form to promise he won’t really reduce taxes on the wealthy, won’t cut Medicare, and wants to keep some parts of Obamacare. He’s actually running ads attacking the president for not confronting China over trade.

Neither of these dim bulbs is talking about free trade. Neither is talking about deregulation except in the most vague terms. Neither has been mentioned Sarbanes-Oxley. Neither has talked about reining in Eminent Domain. Neither has proposed a plan to break up the big banks and control corporate welfare, as John Huntsman did.

Would Romney and a Republican Congress fix things? The last time the GOP had all the power, we sank from 2nd to 8th and eventually landed at 15th. Obama and a Democratic Congress dragged us down to 19th in just one year (with more falling to follow). Gridlock would keep things from getting worse, but won’t repeal SOX or expand free trade.

Frankly, I think it’s going to have to come down to us. Regardless of which of these guys in Air Force One come January, we are going to have to make this is an issue, just like we did with SOPA. We are going to have to put our politicians in a position where they simply have no choice but to cut it out. We did that in 2010 with the budget: Congress has exercised the first budget restraint in a decade. But our next target has to be regulation.

Because if we don’t get control of things, we’ll sink even lower. And we’ll continue to stagnate.

Comments are closed.

  1. richtaylor365

    It is interesting that you mention Canada. Back in the early 90’s they were in exactly the same position we are in now, a lowered credit rating in the face of unprecedented and crippling federal debt. The newly elected government made this their top priority, not only did they tackle previous spending sacred cows (total program reductions or eliminations, cuts to civil service, wage freezes, transfers of some responsibilities to provinces making decisions more local) but instead of just limiting the pace of spending growth, Canada drastically shrank the size of its government. It worked, and in 6 years not only were they producing surpluses but they got their credit rating elevated to where it was before.

    No less then a duplication of this process will do it for us, a complete change in course is required. We know for a fact that Obama does not have it in him, that is a given. Whether Romney is up to it, I don’t know, but what I do know is if it is to be done at all, Obama must be defeated, it really is that simple.

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  2. Seattle Outcast

    If Obama/Jarrett’s “fundamental restructuring” of American society proceeds much further, we’ll be ranking behind China in the near future…

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  3. Section8

    Supposed Libertarian paradise Somalia was not rated because they basically don’t have a government.

    :)

    Frankly, I think it’s going to have to come down to us.

    Exactly. This is why I hope Romney wins and the Tea Party people protest twice as much if he doesn’t push for the free market fiscal conservative way of things, and they should send a message from day one. The GOP won’t give us anything of value if they don’t have to. So while it was good people organized to keep Obama in check, they’re going to have to work twice as hard to get the GOP to actually do something of substance. That’s ok though, the opportunity just needs to be there. Obama doesn’t have to appease those who are considered “Tea Party”, but Romney does. So yes, the GOP is still crazy, but those most likely to back the GOP from the fiscal side know they are crazy this time, and would be more willing to put pressure on them. To me that’s a big change from the past.

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  4. Santino

    Fucking. Canada.
    OK. I’m back.

    Get over it!! :)

    It is interesting that you mention Canada. Back in the early 90’s they were in exactly the same position we are in now, a lowered credit rating in the face of unprecedented and crippling federal debt.

    This was preciptiated by a VAT that was introduced by the Conservatives (introduced at 7%, and has been lowered to 5% by the current Conservative government). This lead to their downfall and they did not recover until that last few years (the party split and reunited in the interim). However the Liberal government kept on cutting costs and won 3 consecutive majoirty elections.

    The problem is It may be political suicide to do the right thing.

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  5. Miguelito

    Supposed Libertarian paradise Somalia was not rated because they basically don’t have a government.

    Please stop falling for that fallacious comparison. Libertarians (and I don’t count myself one really, though I’m probably close) don’t believe in NO gov’t, only limited gov’t. Somalia is, if anything, in anarchy. Which is one reason why it always irks me when the uber liberals love to talk about how Somalia is where libertarians should go. No, really, the anarchistic twats at the occupy stuff and protesting at the G8 (and all the G* meetings really) should go to get what they’re actually asking for.

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  6. Hal_10000 *

    We’ve been on the decline since 2000, MY. Bush was President for a lot of those years. The decline has been a little sharper under Obama and the worst is yet to come.

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  7. Seattle Outcast

    Which is one reason why it always irks me when the uber liberals love to talk about how Somalia is where libertarians should go.

    You mean they actually believe that pile of shit? I thought Moogoo was just being his normal stupid self…

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  8. Iconoclast

    We know for a fact that Obama does not have it in him, that is a given.

    Obama’s campaign add, the one that starts with, “It was a promise made long ago…” with a picture of LBJ signing a bill into law, and ends with the insipid, “I’m Barack Obama, and I approve this message”, clearly shows that Obama is all about maintaining entitlement gravy trains which we can no longer afford, and using scare tactics in an attempt to secure votes. Romney may have gotten the 47% figure wrong, but he has their collectivist attitude nailed; they will vote for Obama because he will “keep” that “promise” which probably never should have been made in the first place.

    Besides, 85% of all statistics are made up on the spot anyway…

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  9. CM

    Here are the the top 10 free economies: Hong Kong, Singapore, New Zealand, Switzerland, Australia, Canada…

    You can take our hobbits, but you can never take our freedomesess.

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  10. AlexInCT

    Supposed Libertarian paradise Somalia was not rated because they basically don’t have a government.

    You mean what leftards say is a libertarian paradise right? Seriously, why must it be that libertarians that disapprove of the bloated and useless giant government, one that because it is expected to provide everything takes away all your freedoms and wealth, suggesting this behemoth be rolled back some, immediately lead to the accusations that they are anarchists that want no government whatsoever? I mean all the libertarians I know say that their choice is for a smaller government: one that is limited to what the constitution says it should provide. None of them want it to be every man for himself. Even the damned anarchists. I know you were trying to be cute about the leftard’s stupidity Hal, but this shit where anybody that doesn’t want the existing collectivist bloat immediately is categorized as wanting no government whatso ever, pisses me off to no end.

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  11. CM

    You mean what leftards say is a libertarian paradise right? Seriously, why must it be that libertarians that disapprove of the bloated and useless giant government, one that because it is expected to provide everything takes away all your freedoms and wealth, suggesting this behemoth be rolled back some, immediately lead to the accusations that they are anarchists that want no government whatsoever? I mean all the libertarians I know say that their choice is for a smaller government: one that is limited to what the constitution says it should provide. None of them want it to be every man for himself. Even the damned anarchists. I know you were trying to be cute about the leftard’s stupidity Hal, but this shit where anybody that doesn’t want the existing collectivist bloat immediately is categorized as wanting no government whatso ever, pisses me off to no end.

    You do realise that continually categorising ANYONE to the left of you as a supporter of the deaths of millions of people under Communism (etc etc etc ad nauseum) is EXACTLY the same thing……right?

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  12. AlexInCT

    You do realise that continually categorising ANYONE to the left of you as a supporter of the deaths of millions of people under Communism (etc etc etc ad nauseum) is EXACTLY the same thing……right?

    Not even close. First off all, there is a huge difference between anarchism and limited government. The left’s idea of an utopian state is one where government protects you from the consequences of your choices and actions, absolving you from responsibility for serious things, which implies that government will have to also control all aspects of your life, including life & death.

    Totalitarian leftist governments vary only in how open they are about their doings. Look at how Team Obama has been conducting business, and you will see that they don’t even try hard to hide when they are doing their stuff. The law is a tool to serve their causes and friends, government spending a vehicle to redistribute wealth to their supporters and friends, and thanks to a complicit media, Obama which makes what Nixon did like something minor, keeps getting away with Chicago gangster tactics.

    Besides, if you only focus on the people that leftist utopian government carried out to its logical conclusion killed, you will also miss out on the billions they kept in prison states where they told them they where guaranteeing their social needs in return for absolute and unwavering commitment and support to the all powerful state.

    There is no middle road with collectivists: they and their utopian vision demand an ever growing and more powerful state, one that has a constantly growing need for more revenue to keep buying these people’s support, and in the end the only way said state survives is by controlling everything and making everyone miserable. Because that is the only plausible solution for this scheme.

    But you can keep pretending there is an equivalency between the people that think small government means Somalia’s anarchism and the people that can see that the left’s abdication of freedom in order to avoid responsibility, by definition, requires an ever expanding and more totalitarian state: one which eventually treats its citizens like drones.

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  13. CM

    The left’s idea of an utopian state is one where government protects you from the consequences of your choices and actions, absolving you from responsibility for serious things, which implies that government will have to also control all aspects of your life, including life & death.

    But suggesting that EVERYONE on the left believes this IS DOING EXACTLY THE SAME THING. It’s deliberately misrepresenting what people think to try and portray someone as your ‘enemy’.

    I believe the vast majority of people seek a moderation and balance between the ideas of the far-right and the far-left. Very very few are even remotely close to either end of the spectrum. Instead of pretending otherwise, which makes you appear as a nutter, why not just concentrate on the specific arguments to make your case?

    But anyway, I realise that none of this is going to make a blind bit of difference. You’ll keep doing it anyway. I’m just saying that you shouldn’t need resort to such obvious nonsense all the time.

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  14. ilovecress

    Hang on Alex – on one hand you’re saying that you’re annoyed that ‘leftards’ are misrepresenting your view by assuming you want anarchy.

    And on the other hand you’re positiing that the left all want a totalitarian government.

    First off all, there is a huge difference between anarchism and limited government

    And there is a huge difference between thinking that a public healthcare option would be good for the country and totalitarianism.

    Look at how Team Obama has been conducting business, and you will see that they don’t even try hard to hide when they are doing their stuff. The law is a tool to serve their causes and friends, government spending a vehicle to redistribute wealth to their supporters and friends, and thanks to a complicit media, Obama which makes what Nixon did like something minor, keeps getting away with Chicago gangster tactics.

    Nothing about this is left wing. What you are describing is corruption.

    There is no middle road with collectivists

    And there we have the reason that discussion with you is futile Alex. You simply refuse to beleive that I (who you have deemed a collectivist) don’t secretly want ‘an ever more powerful state.’ Arguing against an opponent you made up is so much easier.

    So as you have decided that I want a totalitarian state, I’m going to decide that you want to live in Somalia.

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  15. AlexInCT

    Hang on Alex – on one hand you’re saying that you’re annoyed that ‘leftards’ are misrepresenting your view by assuming you want anarchy.

    And on the other hand you’re positiing that the left all want a totalitarian government.

    WTF? Has your reading comprehension gone to pot? May I recommend you go back and read what I point out? Do I have to type slower for the distinction to sink in?

    If you can show me how getting limited government will somehow lead to no government and then Somalia style anarchy, be my guest. I on the other hand can point you to the history of the last century, where that promised socialist utopia created some of the most horribly evil prison states, holding billions hostage to tyrants. and murdered over one hundred million people.

    This country grew prosperous and powerful after having limited government for over 100 years. Limited government works. The last 70, where government grew out of control, mostly to create socialist utopia, is destroying it, I should add as well. Socialism doesn’t work out in the long run because you run out of other people’s money, and without exception, as it runs its failed course, we get tyranny. I am under no illusion that as today’s socialists bankrupt the western democracies, that they do so without any remorse, because they expect to keep that power when things go to shit.

    Nothing about this is left wing. What you are describing is corruption.

    Right, because Team Obama is not a Chicago machine collectivist gang that is hell bent on getting so many people on the government dole to forever seal their grip on power. They must be right wing and stupid people like me are not smart enough to see socialism is right wing.

    But suggesting that EVERYONE on the left believes this IS DOING EXACTLY THE SAME THING. It’s deliberately misrepresenting what people think to try and portray someone as your ‘enemy’.

    I see you missed the point on purpose as well, CM. I am not saying that everyone on the left believes in tyrannical government, I am saying that the NONSENSE that the left believes in, the core principles, have ALWAYS resulted in tyrannical government. Collectivism doesn’t work unless the government that assumes the mantle of protecting people from any negative consequences also limits and controls what they are allowed to do and how.

    You are welcome to pretend that’s a generalization and that this bullshit works, even pointing out to your own country as proof, but then again, this shit has not run its natural course there yet. Give it a few decades. Watch Europe over the next couple too. Hopefully we can get rid of these assholes and prevent the US from doing the same, but Obama has basically wiped out 5 decades of buffer that we had to watch Europe implode, in less than 4 years, and made our implosion a thing of the near future as well.

    We can keep going in circles if you want, but I think my point was very clear. It isn’t about what people think or say, it is about what happens when you do limited government vs. collectivist hell-hole: one works fine despite the attempt to pretned that it leads to anrachy, the other implodes sooner than later. That’s the point.

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  16. ilovecress

    But what you’re saying Alex is that the slippery slope argument applies to the left, but not the right.

    You’re also arguing that limited government is an absolute concept – when not even everone on this site agrees to what the optimal size of this Government is.

    I beleive in limited government. But your definition of limited Government is different than mine. And I’m happy to talk about the differences we both have – but to dismiss anything to the left of your specific viewpoint as on the slippery slope towards the October revolution is as ridiculous as calling any Libertarians Somalia lovers.

    I do get what you’re saying Alex – you’re that because letting the Government take over the means of production has led to some truly horrific situations before we should be wary of going down that path. I get it. My point is that dismissing all other viewpoints as inevitably leading to that conclusion reduces the chances of coming up with solutions to the problems faced by the US and the world economies – i.e. debt.

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  17. Mississippi Yankee

    You can take our hobbits, but you can never take our freedomesess.

    But when Peter Jackson actually does take the hobbits away will your economy implode? BTW, I’m just spit-balling with that question.

    Please don’t link me bro!

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  18. CM

    What cress said.

    I see you missed the point on purpose as well, CM. I am not saying that everyone on the left believes in tyrannical government, I am saying that the NONSENSE that the left believes in, the core principles, have ALWAYS resulted in tyrannical government.

    That’s ok then, as I don’t believe in NONSENSE.

    Is this your way of saying you don’t have any friends in life?

    As opposed to the friends I’ll have in death? ;-)

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  19. CM

    But when Peter Jackson actually does take the hobbits away will your economy implode? BTW, I’m just spit-balling with that question.

    Please don’t link me bro!

    So long as we still have a decent earthquake a year, we should be fine.

    It’s Friday afternoon at 4pm, i.e. no-link o’clock.

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