Hong Kong remains world's freest economy: report

             Australia and New Zealand have a more free market than the United States. Interestingly, I am told Australia has not suffered the effects of this the worst depression since the first great depression of the 30’s.  The standard used to rate these economies are economic openness, trade, the efficiency of domestic regulators, and the rule of law.

            The United States has been shedding manufacturing jobs for more than three decades. The idea that sending labor intensive jobs to China is a win-win situation because the US will be able to retrain common laborers to do higher skilled jobs has turned out to be a disastrous policy.

            In fact the US has withdrawn subsidies and tax benefits for private domestic R&D, while China has increased its emphasis. Furthermore, for US companies to do business in China, they must agree to turn over their intellectual properties as the price of admission.

            As for trade, the US has a miserable record and is indebted to China, Euroworld, Japan, Canada and Mexico, just to name a few. The result is the devalued dollar and high core inflation.

            The belief that our domestic regulators have not contributed to the decline of a production economy is absurd.  The Environmental Protection Agency [EPA], the Occupational Safety and Health Administration [OSHA], together with burdensome taxation have combined to force companies to move their production facilities to the Far East.  Take for example IBM. On January 9, 2010, 01:50PM it announced that it would move its state of the art 45-nanometer bulk process integrated circuit technology to Semiconductor Manufacturing International Corp. [SMIC], which is headquartered in Shanghai, China.

 Together these factors are not a synergy for a successful recovery. 

            The rule of law was happily disregarded by President Obama who chose not to honor the property rights of bondholders of General Motors in favor of non secured creditors, those being former union member workers.  We can hardly say that the US has a free economy now, especially since Mr. Obama chose to assume control of two of the three auto manufactures and a large segment of the insurance and banking industry.  These are events one might expect from a totalitarian government, but not one that should occur in our democracy.

            "The US government’s interventionist responses to the financial and economic crisis that began in 2008 have significantly undermined economic freedom and long-term prospects for economic growth," the report said.

            Anyone who believes that the current economic disaster was simply caused by easy money does not understand the economy and how important production is to it for acquiring national wealth, and anyone who believes that government stimulus will fix the economy is ignorant of the truth about the New Deal programs of Franklin Delano Roosevelt and how they failed to bring America out of the depression.