Freedom & our faltering economy

Which candidate, President Obama or Mitt Romney, has the right prescription for what ails the US economy? Its a question maybe the key question that every voter should ask. But first you need the answer to a different puzzler: What went wrong?

Why did the US economy surge in the 1980s and 1990s, only to stagnate and sink in the 2000s?

Imagine if you could time travel back to 1999 and tell people then what the next unlucky 13 years held. The 99ers might well guess the Y2K problem really had crashed all the worlds computers at midnight. But once you informed them the Millennium Bug was a bust, what would you say next?

Barack Obama would tell them a story. A liberal fantasy, really. It would be a tale about how the Long Boom was manna for Wall Street but a mirage for Main Street. And finally over the past decade, all the tax cuts and deregulation and inequality finally caught up with the US economy and led to a financial crisis and Great Recession.

As Obama told a crowd in Osawatomie, Kansas, late last year, There is a certain crowd in Washington who, for the last few decades, have said, lets respond to this economic challenge with the same old tune. The market will take care of everything, they tell us. If we just cut more regulations and cut more taxes especially for the wealthy our economy will grow stronger. But heres the problem: It doesnt work. It has never worked.

And how would Mitt Romney explain why from 1981 through 2000, the US economy grew at an average annual rate of 3.4 percent and created some 42 million jobs but from 2001 through 2011, it grew at less than 2 percent, creating no net new jobs?

Since Romney is famous for loving deep dives into data, he should check out a new study from the Fraser Institute. Obama, too, for that matter.

Every year, the Canadian think-tank ranks the worlds nations on how free their economies are (or arent) based on factors such as size of government, security of property rights and freedom to trade. In the 1980s and 1990s, it listed the United States consistently as one of the freest economies in the world, typically ranking 2nd or 3rd through that entire period.

Since then, however, the US economys freedom ranking had steadily eroded to 8th in 2005, 15th in 2009 and 18th in 2010. The United States is now nestled between Qatar and Kuwait.

One problem is weakened property rights, the institute notes, such as the increased use of eminent domain to transfer property to powerful political interests . . .[and] the violation of the property rights of bondholders in the bailout of automobile companies.

Go here to read the rest:
Freedom & our faltering economy