Sunday, February 15, 2009

It is not About Doing Something, but the Right Thing

The majority I speak to are excited about Barack Obama and his sweeping legislation that is going to possibly change this economy for decades to come. They are excited because they argue that something -- anything -- needed to be done. This type of logic does not serve well in any other aspect of our lives. For example, we don't praise the heroic efforts of the person who poured gasoline on a burning building, or the person who avoided rush hour traffic by driving on a shoulder, or the person who attempts to forget about his problems through alcohol. In the real world, we know there are rules to almost everything. There are also rules to the economy: some things work, other things do not work.

There are two basic views of government. One sees the best government doing as little as possible and being focused on protecting individuals from other individuals and our country from foreign adversaries. The opposite extreme is that government should play a pervasive role in every aspect of our lives and that it should be the primary driver of our economy and society. The vast majority who have an opinion fall some where in between. Far more than those with an actual opinion have no real view at all. Those people are my concern here.

This uniformed majority are the same people who are driving Barack Obama's extremely high approval ratings. They don't really know what they are doing, or what they believe, they are merely very sincere. They think some action is, at least, action. But the actions of this administration will take generations to pay off and they promise to make things far worse than better.

The majority of countries around the world are moving away from more government as an answer to economic problems. Although still Communist, China's economic success has been due to areas of decentralization. This is true, also, for India's famous bureaucratic country. Maybe the best example to the United States is Ireland.

For decades, Ireland was little more than a Third World country. It was uncommon for Europeans to face starvation in the 19th century, but it was a major problem on the Emerald Island. On the economic front, Ireland had the highest tax rates among industrialized nations. This is not the case any more. Ireland dramatically lowered its highest tax rates to around 10 percent and for over a decade it has had one of the fastest growing economies in the world. Countries that have moved towards government solutions and high taxation are only seeing more economic problems. Japan has had chronic economic problems for over two decades (and the highest corporate tax rates in the world). The US now has the second highest and we are quickly catching up in terms of economic woes.

We all know that businesses have to work hard to attract customers, and states have to work hard to attract businesses, but don't countries have the same responsibility as well? Ireland seems to understand that and, in light of the "something" our government did this past week, it is clear the US does not.
Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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