What is the worst economic news? It is the news of the political environment of the United States.
Robert Larson writes in the Dallas Morning News,
Newspapers and websites are filled with headlines about the latest economic crisis, whether it’s Greek sovereign debt, the Chinese stock market or the price of oil. These are all important stories. People want to know what’s going in their world.
But just as the weather forecast is more newsworthy than a scientific study of the slowly changing climate, long-term economic trends are often hidden from view amid the hullabaloo of the economic crisis du jour.
This is why the yearly release of the Fraser Institute’s “Economic Freedom of the World: 2015 Annual Report” is so important. I co-wrote this report, along with James Gwartney of Florida State University and Joshua Hall of West Virginia University.
We tracked the level of economic freedom in over 150 nations and used 42 variables to measure the degree of government interference in people’s economic lives. Countries that score high on this index are those that exhibit fiscal restraint in taxation and spending, provide a stable monetary environment, allow their citizens to trade with one another and the rest of the world, and regulate lightly. Most important, they provide sound and secure private property rights consistent with the rule of law.
The most economically free countries, as usual, are Hong Kong and Singapore, while the least free are Venezuela and Congo (Cuba and North Korea are not rated).
The United States ranked 16th, with a rating of 7.73 out of a possible 10 in the most recent year. This might not sound bad. However, it might come as a shock to discover that countries such as the United Arab Emirates, Canada with its socialized medical system and even the former Soviet republic of Georgia all rank higher.
Only fifteen years ago, the United States ranked second in the world. Only Hong Kong permitted more economic freedom. Larson lists all the things that have changed in the United States that have undermined the economic freedom we once had. There have been many changes. Basically, one law after another, one regulation after another, and one executive order after another have undermined our economic freedom in a fast-moving cascade. Everything from business regulations to government surveillance factors in.
I may be wrong, but with very few exceptions it seems our politicians don’t even recognize the problems. Instead of proposing more economic freedom as a positive good, they simply recommend some new fix that is suppose to “make America great again”—just another law or regulation. Supposedly, this one will work and all will be well.
I suspect that not only will economic freedom continue to be reduced in this country, but so will our prosperity. I would love to believe that people will notice the connection between them. But I doubt they will.