My Beauty Best Teacher

For years, the United States has been a leader in the world in economic freedom. Economic freedom is defined as having property rights protected by impartial rule of law, free trade, a sound currency, and a small limited government relative to the size of the economy. My blog supports economic freedom, and the political party that I support also pushes for policies that make economic freedom a reality- no bailouts, no government take-overs, bond holder rights that are respected, low and fair taxes, consistent regulations and rules, a restrained bureaucracy, free trade agreements with Columbia or other nations, no inflating the currency through QE or other Fed schemes, a return to the gold standard, and a limited and small government that does take valuable resources away from the private sector.

Many people oppose these policies- they seek to make the United States less free. The problem with this is that those countries that are less free also are less prosperous. By pushing for stimulus bills, czars, subsidies for green energy, deficit spending, higher taxes, inflating of the currency, or other liberal Democrat policies, our nation becomes less economically free, and the result is higher unemployment, lower income, less happiness, lower life expectancy, less clean environment, and more corruption.

I know, I know- you care about the poor people, you see Bush as a bogeyman, you hate the war in Iraq, you are passionate about the environment- it does not matter why you vote Democrat and why you are a liberal, the result is that you support policies that make our nation less economically free, and thus a lesser nation in so many ways.

This video will help illustrate it for you and you'll see what nations are economically free and which ones aren't- and hopefully this will help you to understand what sort of policies to support in our society and which political party to vote for and which ones not to.

H/T to Orlin for passing this video on to me. Thanks!

A recent report underscores the need for economic freedom, it states that it "... is the key to peace as well as to prosperity: "When measures of both economic freedom and democracy are included in a statistical study, economic freedom is about 50 times more effective than democracy in diminishing violent conflict. The impact of economic freedom on whether states fight or have a military dispute is highly significant, while democracy is not a statistically significant predictor of conflict."..."
Via Globalization Institute

Following up on my earlier post about The Horror of Disbelieving in Global Warming and Signs of the Times, Signs of Times to Come, I have to direct you to check out this speech by Vaclav Klaus, President of the Czech Republic and current head of the EU. His speech is mainly about efforts to expand and strengthen the authority of the European Union- but it is also about larger issues of freedom, responsibility, liberty, choices, and the best way to build a prosperous future. Klaus grew up in a communist society, fought against these forces, and now sees these very forces growing in our midst. Thanks to Belmont Club for pointing me to this speech.

The issue of Europe and of its future has stayed with me since the fall of communism in spite of other topical issues. It is not surprising. The undergoing weakening of democracy and of free markets on the European continent, connected with the European unification process, is a threatening phenomenon especially for someone who spent most of his life in a very authoritative and oppressive communist regime. I consider, therefore, the marching towards an ever-closer Europe (which is one of the crucial tenets of Europeism) a mistaken project. The gradual shift from liberalizing and removing all kinds of barriers towards a massive introduction of regulation and harmonization from above, the ever-expanding, overgenerous welfare system, the innovative, and more sophisticated forms of protectionism, the continuously growing legal and regulatory burdens on business, the markets undermining quasicompetition policies, the Single Currency arrangements, are all very real. They weaken and restrain freedom, democracy and democratic accountability, not to speak about economic efficiency, entrepreneurship and competitiveness.

Having said that, let me turn to two other issues I consider significant. I see another big problem in environmentalism and in its currently most aggressive form – global warming alarmism. This ideology has gradually turned into the most efficient vehicle for advocating extensive government intervention into all fields of life and for suppressing human freedom and economic prosperity. I am frustrated that this ideology has not been sufficiently challenged both inside and outside of climatology. We keep hearing one-sided propaganda, but do not hear serious counter-arguments.

The third issue, I would like to mention here today, is the current financial and economic crisis. I recently spent three full days discussing this topic at the World Economic Forum in Davos and my feeling is that the rationality and the economic science have been suppressed or forgotten. The very unpleasant, day by day deeper economic crisis should be accepted as a standard economic phenomenon, as an unavoidable consequence and hence a “just” price we have to pay for the long-term playing with the market by the politicians. Their attempts to blame the market, instead of themselves, are unacceptable and should be resolutely rejected. Their activities, aiming at “reforming” the economic system, are all very doubtful and I as said in Davos: I am getting more afraid of these reforms than of the crisis itself.

Aggregate demand needs strengthening. One traditional way to do this is to increase government spending, mostly on public infrastructure projects, on condition these are available. It would be much more helpful, however, to initiate a radical reduction of all kinds of restrictions on private initiatives introduced in the last half a century during the era of the brave new world of the “social and ecological market economy”. The best thing to do right now would be to temporarily weaken, if not permanently repeal, various labour, environmental, social, health and other “standards”, because they block human activity more than anything else. In the moment of the fall of communism, almost 20 years ago, I did not expect to experience such a degree of government intervention into my own life as I face now. I am, therefore, convinced that fighting for freedom and free markets remains the task of the day. We may be, some of us, oversensitive in this respect but I am sure it is – in principle – not about our personal oversensitivity. It is about the real dangers we see around us.

Brett D. Schaefer writes that"...To reach upper-middle-income status (gross national income per capita of $3,256 or higher), the average sub-Saharan African with an income of $536 would have to experience real compound growth in per capita income of over 5 percent for over 35 years.[11] To become as wealthy as the United States, the average country in sub-Saharan Africa must grow at 5 percent per year for nearly 90 years. Quite simply, without high, sustained levels of eco­nomic growth, sub-Saharan Africa will not close the gap with the developed countries..."He concludes that "...Foreign assistance alone cannot increase eco­nomic growth and development. Achieving these objectives requires the political will to implement policy change to expand opportunities and remove barriers to growth. Developed countries can assist development by encouraging good policy and opening their markets to developing country products, but success in development ultimately depends on developing countries’ adopting and implementing policies that promote economic freedom, good governance, and the rule of law. Only then will developing countries be on the path to economic development..."

A couple weeks ago I read an interesting article in the Telegraph- in it, longtime journalist Janet Daley suggests that the best thing that the British government can do to improve the economy and make people more wealthy and happy and free is to work really hard and be very productive in DOING LESS. The truth of the matter is that politicians have to have real guts and strength to simply say 'no, I will not spend taxpayer money trying to control people and the market,' but that may be exactly the kind of strength and guts we need today- politicians who promise to do more of less. From her article A daring idea to fix the economy: try doing less:

...the myth of government activism – the idea that intervention by the state is the answer to every economic and social problem – had been definitively routed. Apparently not: Mr Osborne and, we must assume, his boss still seem to believe that any unacceptable national situation must require direct action from them.

Or maybe they don’t believe that at all. Perhaps they just lack the political courage to admit that, in our present crisis, the best thing that the Government can do is to get out of the business of running (or subsidising, or initiating, or incentivising) things altogether – not just in the interests of saving money, but because the effects of such interference are counter-productive. What the economy is suffering from is not an insufficiency of overweening, fussy, bureaucratic initiatives that inevitably unleash an avalanche of unintended consequences, but a lack of cash in the hands of people who might spend it in ways that would actually create wealth and stimulate (in the proper sense of the word) economic growth.

If ever there was a time for radical proposals by a governing party, this is it. Rather than the imitative, mealy-mouthed shuffling of dollops of money from one departmental scheme to another, in what will inevitably look like panic in the face of rising youth unemployment and disappointing growth figures, what we need is a display of real insight and nerve...

...There is an urgent need now to rethink the whole relationship between government and populace while there is still the possibility of discussion. In Britain, Europe and America, the questions are remarkably similar. Can a free-market economy support an infinitely growing state? We will have to choose, quite soon, between liberty and the “security” of a society in which government controls the levers of economic life. Washington politicians are getting a terrible drubbing for failing to resolve their implacable differences over the size of the state (to the extent that they are unable to agree a federal budget). The US national debate may seem rough and ready to European ears – but at least they are engaging in the real argument.

She is right- the argument has been joined, and today via memeorandum I read in the Wall Street Journal an article that echo's the very ideas of Ms. Daley. From former Florida Governor Jeb Bush's article Capitalism and the Right to Rise:

...Increasingly, we have let our elected officials abridge our own economic freedoms through the annual passage of thousands of laws and their associated regulations. We see human tragedy and we demand a regulation to prevent it. We see a criminal fraud and we demand more laws. We see an industry dying and we demand it be saved. Each time, we demand "Do something . . . anything."

As Florida's governor for eight years, I was asked to "do something" almost every day. Many times I resisted through vetoes but many times I succumbed. And I wasn't alone. Mayors, county chairs, governors and presidents never think their laws will harm the free market. But cumulatively, they do, and we have now imperiled the right to rise....

....We either can go down the road we are on, a road where the individual is allowed to succeed only so much before being punished with ruinous taxation, where commerce ignores government action at its own peril, and where the state decides how a massive share of the economy's resources should be spent.

Or we can return to the road we once knew and which has served us well: a road where individuals acting freely and with little restraint are able to pursue fortune and prosperity as they see fit, a road where the government's role is not to shape the marketplace but to help prepare its citizens to prosper from it.

In short, we must choose between the straight line promised by the statists and the jagged line of economic freedom. The straight line of gradual and controlled growth is what the statists promise but can never deliver. The jagged line offers no guarantees but has a powerful record of delivering the most prosperity and the most opportunity to the most people. We cannot possibly know in advance what freedom promises for 312 million individuals. But unless we are willing to explore the jagged line of freedom, we will be stuck with the straight line. And the straight line, it turns out, is a flat line.

What Governor Bush is talking about is the same kind of thing that I personally observed during my time as a policy adviser in the state's capital. I remember distinctly one time when a young Republican 'conservative' staffer came in to work one day, upset that the car that she had recently bought turned out to have been a bad purchase. She set about writing a law that would force the state to regulate and control all sellers of automobiles in the state and then tried to convince legislators to sponsor this piece of legislation- she wanted the state to immediately do something, to step in and spend lots of money and time and effort controlling thousands of people's individual decisions just to protect several people from their own stupidity. She proposal was met with great hostility towards me, and I countered her proposal by suggesting that rather than the state doing something about used car dealers, it instead loosen regulations and fees and taxes on all car dealers, making the market more free, so that more fools like her could be separated from their money, as the hand of God in its infinite wisdom is wont to do. I wasn't joking though.

The real courage and intelligent thing to do to create a more vibrant, free market by cutting back government regulations and fees and enabling people to be people, in all their glorious faults and warts, because only by doing so can we also unleash the amazing potential for great and good things that humans contain in them. The safe, stately downward path of state control is not the path for me and is not the path that successful, free, and prosperous people- no, we choose the jagged and uneven and unpredictable path that is the path of less government regulation, taxes, fees, and supervision- that is the only true path for better protection and encouragement of life, liberty, and property.

Liberals, including those who have seized control of the modern-day Democratic Party, often talk fondly about China and its economic model. But what they fail to recognize about the economic model employed by China is  that it is inherently unsustainable because of its current methods of energy generation. Oh, I know many watermelons (people who pretend to care about the environment just to advance their statist communist desires) like to talk about China's wind power, nuclear power, solar power, or hydro-electric power, but in reality, the majority of China's energy production comes from coal.

Energy production from coal production does not have to be environmentally damaging or harmful to those who work in the industry. In nations like the United States, where there are clear property rights and freedom of labor, workers are treated better, the environment is better protected, and businesses are free to produce as much coal safely as possible in order to maximize profits. For example, there are only about 30 people killed per year in coal mining in the United States, and the United States has embraced clean coal technology which does a much better job of controlling emissions. The United States has made the difficult transition from energy generation to sustainable energy generation, and only needs to continue and expand its efforts in oil drilling, coal mining, and nuclear technology in order to become the cleanest and safest energy producer in the world.

Sadly, environmentalists in America have a different agenda. In their noble desire to make the world a better place, they are putting in place policies in America which force it and other nations to obtain energy from nations around the world that are producing energy in destructive, deadly ways. Rather than encouraging the expansion of safe, natural, and efficient methods of energy generation such as oil, coal, and nuclear, they are forcing America and nations that could be buying energy from America to turn to nations like China for energy generation and resources. And the end result of these environmentalists policies is a world that is less safe, less secure, and were more people die.

China currently generates around two thirds of its electricity from coal-fired power stations, and is the process of dramatically expanding its coal-fired capacity in recent years with the introduction of 562 new coal-fired plants- in fact, an average of two new plants were being opened every week. China uses this coal-production to satisfy its own energy needs and also export energy to other nations.

To sustain it economic growth and growing energy needs through coal power, China is paying a heavy price. Thousands of people die every year in coal pits, premature deaths due to indoor air pollution is at 420,000 per year, deaths due to outdoor air pollution is estimated at around 300,000 deaths per year, and rural populations in particular are suffering from a range of diseases related to coal production, including arsenic poisoning, skeletal fluorosis (over 10 million people afflicted in China), esophageal and lung cancers, and selenium poisoning. A report by the World Bank in cooperation with the Chinese government found that about 750,000 people die prematurely in China each year from air pollution.

China's economic model, which people like the head of the SEIU say should be the future of the United States, is unsustainable and killing its own people. It's model emphasizes state control of people and businesses and the de-humanizing of both. It is a model which stands in marked contrast to the economic model of the historical United States, a model which emphasizes little state control, more liberty given to people to make free economic choices, and strong individual and business property rights, and is a model that embraces the humanity of life. We can see the difference in the two models when we look at China's coal mining industry and electric power generation, and see the difference in the contrasting visions.

Elections have consequences- in the coming elections for US President, Senator, Representative, or even at the local level, ask yourself whether the candidate you support has a vision of the future that pushes for more state control over people's lives or less state control. Those who push for more state control will boast of the economic growth in nations like China- while ignoring the enormous cost in terms of human life and damage to the environment. Those who push for less state control over people's lives will point to the United States, which in contrast to those with state control have much better records on life, liberty, and wealth creation- although not perfect, because man is not perfect.

And for readers of my blog around the world, this applies to you as well- although China's economy is growing, there is a real cost to humanity for their growth, and in the end its statist economy will collapse like the Soviet Union's did. Only economic models that give more power to people and more freedom to individuals and more rights to businesses and corporations and individuals are successful in creating wealth in a sustainable manner while protecting life and liberty. You have a real choice to make in your nation too- state control for short term unequally distributed wealth, or less state control for longer term more equal distribution of life, liberty, and property.

For those who are interested in reading more about China and its coal production methods and coal-powered economy, I suggest you check out an article called China’s Dark Power.

Democrat President Barack Obama's economic programs can be best called "The Inside Deal." There is a long history of 'deals' in our nation, where the government expands unconstitutionally into areas where it is not supposed to be and crowds out human freedom and industry. These deals all have cool names- Square Deal, New Deal, Fair Deal, Great Society- and as Obama and his Democratic allies in Congress have jammed through considerable changes in our nation over the last year, it is appropriate that we give a name to Obama's economic policies. I hearby submit to the world that we call Obama's economic programs "The Inside Deal."

The Inside Deal is Democratic President Barack Obama's domestic economic program and is characterized by extensive government spending for politically connected groups within American society. It is aimed to reward those groups that supported Obama's campaign for the Presidency in 2010, such as labor unions, public employee unions, teachers unions, environmentalists, anti-war protesters, Wall Street, and big businesses. Some of the programs that were passed by the Democratic Congress at the time to reward these groups include the stimulus bill, the healthcare bill, and massive annual budgets.

Increasingly during the height of the Inside Deal, there is a link between who receives taxpayer money from the federal government and their political connections. Called by some crony capitalism, it is increasingly unpopular, and in the face of continuing recession in spite of (or because of) the massive deficits that marked the Inside Deal, this program was largely overturned by Republican Congressional majorities and Presidents from 2010-2020 (hopefully).

Hopefully someone will soon create a wikipedia article on this, describing Obama's Inside Deal in more depth.

The first 'deal' that was made between government and America where citizens traded their rights and liberties for the promise of 'progress' was the Square Deal. The Square Deal was Republican President Theodore Roosevelt's domestic program formed upon three basic ideas: conservation of natural resources, control of corporations, and consumer protection. Thus, it aimed at helping middle class citizens and involved attacking the plutocracy and trusts through rhetoric and expansions of federal power while at the same time protecting business from the extreme demands of the rising communists.

Democrat President Franklin Delano Roosevelt had The New Deal. This was a series of economic programs passed by Congress from 1933 to his reelection in 1936. The programs were responses to the Great Depression, and focused on what historians call the "3 Rs": relief, recovery and reform. That is, relief for the unemployed and poor; recovery of the economy to normal levels; and reform of the financial system to prevent a repeat depression. To see a list of some of the programs that comprise FDR's New Deal, see my post 1930's Are Root of All That is Wrong.

The next 'deal' was offered by Democrat President Harry Truman, who presented a 21 point program of domestic legislation outlining a series of proposed actions in the fields of economic development and social welfare, including the call for universal health care. But in the face of peace and rising prosperity, the country decided that it didn't want to accept this deal, and the boom times of the 1950's and 1960's followed.

But Democrat Lyndon Johnson was inspired by the Fair Deal, and when he became President, he tried once again to make a deal between government and society whereby people would trade their individual rights and freedoms and liberties for some sense of 'fairness' in society. He called his 'deal' the Great Society. Two main goals of the Great Society social reforms were the elimination of poverty and racial injustice. New major spending programs that addressed education, medical care, urban problems, and transportation were launched during this period. The federal government has since spent trillions of dollars on these issues, and education, healthcare, urban areas, and transportation systems are now much worse today then they would have been if the federal government would not have stuck its nose into those areas and let human ingenuity and freedom and industry work unchained and untaxed.

Obama's Inside Deal represents then just the latest in a long line of usurpation's that have the goal of reducing our rights to life, liberty, and protection of property. Like our forefathers before, it is up to us to fight and overturn these injustices, least we be reduced to a state of tyranny.

Franklin Cudjoe writes about development and economic freedom:
"...African leaders need to implement a series of reforms. They need to decentralize the power and ownership of resources, lower taxes, reduce the number of bureaucratic steps for business start ups, and establish an honest means of property acquisition while helping to define, defend and divest such property through the enforcement of contracts...Such an approach would release enormous entrepreneurial energy into wealth creation. The net effect gives power to real people who could then afford efficient and cleaner technologies or save and later reinvest in other sectors of the economy. Generally, the wealthier a country becomes, the more likely it is able to purchase food in the global market and afford more productive technologies that increase crop yields..."

Last week I wrote in my post Lessons from Economic Recessions- Introduction and Great Depression:

History teaches lessons- it allows those of us in the present to see how results in the past worked. Economic recessions are a great teaching tool for policy makers and average citizens, because they teach us how the recession may have happened and how to emerge from the recession and therefore inform us as to the policy actions that we must take and those that we as citizens must support.

In that post, I talked about the lessons from the Great Depression. The lessons that I drew from the Great Depression are based though not on just data from that event, but from other recessions that our nation has entered and exited. Most liberals simply say 'government spending got us out of the Great Depression', but when I ask them about all of the other recessions that the United States entered, they have a blank look, as they do not have any knowledge of other recessions or how we emerged from them as a nation.

One of my friends in the media should try this sometime- ask a liberal policy maker- President Barack Obama, or Nancy Pelosi, or Carl Levin, or Debbie Stabenow, or Gary Peters- ask them what lessons they have personally learned from the Great Depression. I am sure they will roll off some long-winded answer that sounds educated and learned but basically boils down to 'spend more money.' Follow-up that question with a question on what lessons they learned from the Depression of 1920-21, or The Panic of 1907, or the Long Depression of 1873–79, and you'll be sure to get blank looks from these policy makers, as they don't have any knowledge about those recessions and have learned no lessons from them. They might even snap back some response to you about how unimportant it is to learn about other recessions- but they are wrong, because if you only draw your lessons on economic policy from one recession, the Great Depression, and your lessons are wrong at that, than you are sure to be wrong about very big and important policy decisions that have real effects on our nation.

Of course, my blog should not be the source for your education- I would advise you to spend some real time studying some real economists- but at least the knowledge that I display here and the lessons that I draw here are likely more educated than those of the above policy-makers, including our Harvard-trained President of the United States. So let's discuss today the The Forgotten Depression of 1920.

The Depression of 1920–21, which was an extremely sharp deflationary recession in the United States that lasted from January 1920 to July 1921, which at 18 months in duration is longer than any of the recessions after WWII, and which saw a GDP decrease of anywhere from 3% to 7%. The recession of 1920–21 was characterized by extreme deflation- anywhere from 13% to 18% — the largest one-year percentage decline in around 140 years of data. Unemployment jumped anywhere from 4 to 6% in one year, the AT&T Index of Industrial Productivity showed a decline of 29.4%, and stocks fell dramatically during the recession. It was a very bad recession that led many in society to question the stability and future of the American system of capitalism.

At the time, Secretary of Commerce Herbert Hoover — later President Hoover- urged President Harding to consider an array of interventions to turn the economy around. Hoover, as we all know now, was a progressive Republican who believed that active government response by government officials who were smarter than the rest of us could shorten a recession and led to economic growth. Hoover advocated the same policy responses in 1920 that he implemented in 1929- increased spending by the government, increased taxes especially on the evil rich, increased regulation of businesses, bailouts for banks and 'too big to fail' companies, continued support to labor unions, and more government agencies and boards to organize and improve our existing economic system.

As you can see, the responses that Hoover advocated in 1920 and implemented in 1929 are very nearly the same policies that President Obama implemented in 2009. The results of these policies are seen today and were seen in 1929- but not in 1920 because President Warren Harding ignored Hoover and did the exact opposite as what he recommended. Whereas Hoover pushed for more government spending, Harding decreased it; when Hoover wanted more regulation, Harding put in place less; for every board of smart elites that Hoover proposed to control human action, Harding cut boards and agencies so that the common man could be more free; and Harding ignored demands to raise taxes and instead slashed taxes.

The result of Harding's more conservative approach to the severe recession of 1920-1921? The recession ended quickly and ushered in an amazing period of robust economic activity the continued throughout the 1920's as Harding and Coolidge continued conservative policies. It is no surprise that the limited government, balanced budget, low taxes, low regulation, and unleashing of human freedom led to the Roaring Twenties, an amazing period in American history of social, artistic, and economic dynamism, while the active government, increased taxes, massive government spending, and more regulation of the progressive Hoover and liberal Roosevelt led to the Great Depression.

Thomas E. Woods (author of The Politically Incorrect Guide to American History, Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse, and Rollback: Repealing Big Government Before the Coming Fiscal Collapse) recently wrote a great post on this subject called The Forgotten Recession- I advise you to read the whole article, but here are several important pieces of it:

...It is hardly necessary to point out that Harding's counsel — delivered in the context of a speech to a political convention, no less — is the opposite of what the alleged experts urge upon us today. Inflation, increased government spending, and assaults on private savings combined with calls for consumer profligacy: such is the program for "recovery" in the 21st century.

Not surprisingly, many modern economists who have studied the depression of 1920–1921 have been unable to explain how the recovery could have been so swift and sweeping even though the federal government and the Federal Reserve refrained from employing any of the macroeconomic tools — public works spending, government deficits, and inflationary monetary policy — that conventional wisdom now recommends as the solution to economic slowdowns. The Keynesian economist Robert A. Gordon admitted that "government policy to moderate the depression and speed recovery was minimal. The Federal Reserve authorities were largely passive.… Despite the absence of a stimulative government policy, however, recovery was not long delayed."...

...There was nothing at all unusual about the pattern of American wealth in the 1920s. Far greater disparities have existed in countless times and places without any resulting disruption.

In fact, the Great Depression actually came in the midst of a dramatic upward trend in the share of national income devoted to wages and salaries in the United States — and a downward trend in the share going to interest, dividends, and entrepreneurial income. We do not in fact need the violent expropriation of any American in order to achieve prosperity, thank goodness...

...Harding's inchoate understanding of what was happening to the economy and why grandiose interventionist plans would only delay recovery is an extreme rarity among 20th-century American presidents. That he has been the subject of ceaseless ridicule at the hands of historians, to the point that anyone speaking a word in his favor would be dismissed out of hand, speaks volumes about our historians' capabilities outside of their own discipline.

The experience of 1920–1921 reinforces the contention of genuine free-market economists that government intervention is a hindrance to economic recovery. It is not in spite of the absence of fiscal and monetary stimulus that the economy recovered from the 1920–1921 depression. It is because those things were avoided that recovery came. The next time we are solemnly warned to recall the lessons of history lest our economy deteriorate still further, we ought to refer to this episode — and observe how hastily our interrogators try to change the subject....

Read the whole article- the logic, the understanding, the theories, and the explanation are all in there, and go into economic terms and theories that I am only beginning to gain an understanding of.

The lessons that I drew regarding the Great Depression are supported by the lessons that one can learn from the Recession of 1920-1921- that economic recessions are worsened and lengthened by a government that takes away human liberty, treats people as numbers to manage, takes wealth and property from those who have earned it, and that in every other way violates the Founding Principles of our nation (limited government, federalism, and separation of power). It is up to policy makers to learn those lessons and to vote accordingly on future legislation facing our nation.

Keep reading my blog regularly for future posts on this subject, and I continue becoming educated and drawing lessons from other past economic recessions that our nation faced and overcome.

Not that I'm telling you anything you don't know, but I always love it when statistics generally bear out my crazy theories that the way to create a prosperous free economy is to have low government regulation and low taxes. For my unit on state and local government, I found this article on Variations in Government Aid Across the Nation that was put together by the New York Times. This report looks at welfare, unemployment, housing assistance, food stamps, health insurance for poor adults, and health insurance for poor children, and measures them from state to state.

The top states in terms of providing generous benefits to their citizens- in other words, those that take money from taxpayers and re-distribute that wealth to those who did not earn it are (in descending order): Vermont, Maine, Massachusetts, DC, Pennsylvania, West Virginia, Iowa, and Michigan.

Out of curiosity, I decided to pull up some information on GDP growth, and provided by the Department of Commerce. The results are interesting. Here are the GDP growth rates for those states, with numbers from 2006 and 2007: Vermont (2.8, 1.5) , Maine (1.9, 1.3), Massachusetts (2.9, 2.5), DC (4.1, 4.3), Pennsylvania (1.7, 1.6), West Virginia (0.6, 0.1), Iowa (2.6, 1.7), and Michigan (-0.5, -1.2).

Those states that let citizens keep their wealth and freely make their own decisions are: Colorado, Texas, Utah, Florida, Nevada, Arizona, Oklahoma, and Virginia.

Here are their GDP growth rates (2006, 2007): Colorado (4.3, 2.0), Texas (4.3, 4.1), Utah (7.2, 5.3), Florida (4.2, 0.0), Nevada (4.1, 0.6), Arizona (6.8, 1.8), Oklahoma (6.7, 4.0), and Virginia (3.2, 1.9).

As you can see, the results are pretty conclusive. States that redistribute wealth from the rich to the poor, divert money from taxpayers to nonworkers, subsidize poor quality housing, give people food, and provide government-paid healthcare are less prosperous, less successful, and less free.

Those states that follow these unsuccessful public polices have GDP growth rates significantly and consistently lower, and over several generations destroy the wealth and productivity of their citizens. If our whole nation were to adopt those same policies, our children and children's children- our posterity- would grow up less free, less happy, and less prosperous than we are today.

The conclusion, as demonstrated with this limited amount of research, is clear- our public policies should emphasize self-sufficiency, less public welfare, and lower unemployment benefits, and should keep the state out of building structures for people just because of their income status, and should teach a man to fish instead of giving him fish, and should not provide as a right of birth state-supported healthcare.

UPDATE: Today I saw a report from the Mercatus Center at Georgetown called Freedom in the 50 States: An Index of Personal and Economic Freedom. Earlier I pointed out that many of the states that provided the most social welfare services to its citizens also are less prosperous. Looking over this report, I notice that those states that provide healthcare to poor, housing subsidies, and food stamps also are less free. I guessed this fact (see above), but it's nice that my guess is now backed up in numbers that show that.

According to the rankings in the report (1 is most free, 50 is least), the least free states- the states with the most tyrrany and oppression by government- compare favorably with my list of states that had the highest social welfare.

Here are the states that provide the most social services and their rankings on freedom- Vermont (40), Maine (39), Massachusetts (43), DC (NR), Pennsylvania (20), West Virginia (33), Iowa (16), and Michigan (14). Here are the states that provide the least social services and their rankings on freedom- Colorado (2), Texas (5), Utah (11), Florida (22), Nevada (24), Arizona (8), Oklahoma (18), and Virginia (9).

There you go- states that encourage conservative values are more prosperous and more free. The data doesn't lie.

The Colonialism-Imperialism Paradigm Is Kaput
George B. N. Ayittey, Ph.D.
June 26, 2005.

Africas paradox is galling: immense mineral wealth yet inexorably mired in steaming squalor, misery, deprivation, and chaos. A few countries have sprinted ahead but Africas overall economic performance remains abysmal, lagging behind those of other regions in the Third World. The United Nations Development Program (UNDP) has warned that at the prevailing rates black Africa would take another 150 years to reach some of the development targets agreed by UN members for 2015. (Financial Times, July 9, 2003; p.1). Who ruined Africa?

The causes of Africas lack of development have always evoked heated emotional debates. On one hand are those who portray Africa as a victim of powerful external forces and conspiracies a group that may be described as externalists.On the other are those who believe that the causes of Africa's crisis lie mostly within African in the nature of government (governance) or how Africa runs its own affairs. This group may be described as the internalists.

The Externalists

The externalists believe that Africa's woes are due to external factors such as the lingering effects of Western colonialism and imperialism, the pernicious effects of the slave trade, racist conspiracy plots, exploitation by avaricious multinational corporations, an unjust international economic system, inadequate flows of foreign aid, the neo-liberal policies of the World Bank, IMF, and deteriorating terms of trade. Disciples of the externalist creed include most African leaders, scholars, and intellectual radicals. For decades, the externalist position held sway, attributing the causes of almost every African problem to such external factors.

In his book, The Africans, African scholar and historian Professor Ali Mazrui, examining Africas crises, attributed most of Africas woes to Western colonialism and imperialism. "The West harmed Africa's indigenous technological development in a number of ways" (164). Africa's collapsing infrastructure (roads, railways, and utilities) is due to the "shallowness of Western institutions," "the lopsided nature of colonial acculturation" and "the moral contradictions of Western political tutelage" (202). In fact, "the political decay is partly a consequence of colonial institutions without cultural roots in Africa" (199). Therefore, self congratulatory western assertions of contributing to Africa's modernization are shallow: "The West has contributed far
less to Africa than Africa has contributed to the industrial civilization of the West" (164). Decay in law enforcement and mismanagement of funds can be traced to Western colonialism too. "The
pervasive atmosphere in much of the land is one of rust and dust, stagnation and decay, especially within those institutions which were originally bequeathed by the West signal the slow death of an alien civilization" (204) and Africa's rebellion "against westernization
masquerading as modernity" (211). Western institutions are doomed "to grind to a standstill in Africa" or decay. "Where Islam is already established, the decay of western civilization is good for Islam since it helps to neutralize a major threat" (19).

Many African leaders also subscribed to and espoused similar views ascribing the causes of Africa's crises to external factors. In fact, since independence in the sixties, almost every African malaise was alleged to have been caused by the operation or conspiracy of extrinsic agents. This externalist doctrine totally absolved the leadership of any responsibility for the mess in Africa. The leadership was above reproach and could never be faulted. President Mobutu even blamed
corruption on European colonialism. Asked who introduced corruption into Zaire, he retorted: "European businessmen were the ones who said, 'I sell you this thing for $1,000, but $200 will be for your (Swiss bank) account'" (New African, July, 1988, 25).

In his address to the third Congress of the Democratic Union of Malian People recently, President Moussa Traore observed that, The world economy is passing through a period characterized by monetary disorder and slow trade exchanges. The worsening crisis is affecting all countries, particularly developing countries. Due to the difficult situation, which is compounded by the serious drought, socio economic life has been affected by serious imbalances
that have jeopardized our country's development growth. Debt servicing, characterized mainly by state to state debts are a heavy burden on the state budget. The drop in the price of cotton which accounts for much of the country's foreign earnings, has led to a great reduction in export
earnings" (West Africa, 16 May 1988, 876).

President Danial arap Moi accused the IMF and other development partners of denying Kenya development funds, thus triggering mass poverty (The Washington Times, June 3, 1999; p.A12). According to the Chairman of Ghanas ruling NDC, Issifu Ali, whatever economic crisis the nation was going through had been caused by external factors. He said the NDC has since 1982 adopted pragmatic policies for the progress of Ghana, adding that the macro-economic environment of 1999 has been undermined by global economic developments" (The Independent, Nov 18, 1999; p.3). Said the Zimbabwe Independent (April 27, 1999), Mugabe
rejects the criticism of those who blame the government for the economic crisis. It is, he says, the fault of greedy Western powers, the IMF, the Asian financial crisis and the drought (p. 25).

Naturally, African leaders would deny any responsibility and blame everybody else except themselves for the mess in Africa. The New Economic Partnership for African Development (NEPAD) echoes this orthodoxy when it claims that Africas impoverishment has been accentuated by the legacy of colonialism and other historical legacies, such as the Cold War and the unjust international economic system. Colonialism subverted the "traditional structures, institutions and values," creating an economy "subservient to the economic and political
needs of the imperial powers" (para 21). Colonialism, according to NEPAD, retarded the development of an entrepreneurial and middle class with managerial capability. At independence, Africa inherited a "weak capitalist class," which explains the "weak accumulation process, weak states and dysfunctional economies." (para 22). More recent reasons for Africa's dire condition include "its continued marginalization from globalization process." (para 2). NEPAD seeks $64 billion in investments from the West.

Frankly, this colonialism-imperialism card has been so overplayed that it has lost its relevance and credence. Even Africas children dont buy it. Chernoh Bah, president of the Children's Forum asserted that Africa's socio economic problems are a direct repercussion of incompetent and corrupt political leaders who usurped political office via the gun. "Some blame colonialism for Africa' plight while others blame the continent's harsh climatic conditions. I think the reason is the kind of political systems we have had over the past decades, he said. (Standard Times [Freetown], April 2, 2003; web posted). At the United Nations Children's Summit held in May 2002 in New York, youngsters from Africa ripped into their leaders for failing to improve
their education and health. "You get loans that will be paid in 20 to 30 years and we have nothing to pay them with, because when you get the money, you embezzle it, you eat it, said 12-year-old Joseph Tamale from Uganda (BBC News, May 10, 2002).

The Internalists

Internalists are the new and angry generation of Africans, who are fed up with African leaders who refuse to take responsibility for their own failures and, instead use colonialism and other external factors as convenient alibis to conceal their own incompetence and mismanagement.
Internalists believe that, while external factors have played a role, internal factors have been far more significant in causing Africas crisis. This school of thought maintains that while it is true Western colonialism and imperialism did harm Africa and continues to do so, Africa's condition has been made immeasurably worse by such internal factors as misguided leadership, misgovernance, systemic corruption, capital flight, economic mismanagement, declining investment, collapsed infrastructure, decayed institutions, senseless civil wars, political
tyranny, flagrant violations of human rights, and military vandalism. In fact, one can identify a whole lot of them but these will suffice. U.N. Secretary-General, Kofi Annan, himself an African, lashed out at African leaders at the Organization of African Unity (OAU) Summit in Lome in July 2000. He pointedly told them that they are to blame for most of the continent's problems. Instead of being exploited for the benefit of the people, Africas mineral resources have been so
mismanaged and plundered that they are now the source of our misery (Daily Graphic, July 12, 2000; p.5). Earlier in the year at a press conference in London in April, 2000, Kofi Annan, lambasted African leaders who he says have subverted democracy and lined their pockets
with public funds, although he stopped short of naming names (The African-American Observer, April 25 May 1, 2000; p.10). During a brief stop-over in Accra, he disclosed in a Joy FM radio station interview that "Africa is the region giving him the biggest headache as the
Security Council spends 60 to 70% of its time on Africa. He admitted sadly that the conflicts on the continent embarrasses and pains him as an African" (The Guide, July 18-24, 2000; p.8).

Ordinary people are speaking out too. Said Akobeng Eric, a Ghanaian, in a letter to the Free Press (29 March - 11 April 1996): "A big obstacle to economic growth in Africa is the tendency to put all blame, failures and shortcomings on outside forces. Progress might have been achieved if we had always tried first to remove the mote in our own eyes" (2). Angry
at deteriorating economic conditions in Ghana, thousands of Ghanaians marched through the streets of the capital city, Accra, the economic crisis is due to external forces and therefore, beyond his control, then he should step aside and allow a competent person who can
manage the crisis to take over," Atta Frimpong demanded (The Ghanaian Chronicle, Nov 29, 1999; p.1). Appiah Dankwah, another protestor blamed the NDC government for mismanaging the resources of the nation.

By the 1990s, African governments had completely lost touch with their people; in fact, they were at war with their people. Citing "the credibility gap between the people and the leadership built up through years of mismanagement," Mr. Mohammed Boudiaf, the head of Algeria's
High Executive Council (HEC), lamented: "A large segment of the population has, I am afraid, lost confidence in the capacity of the leadership to provide jobs, housing, health care and its ability to combat corruption" (Financial Times, June 17, 1992; p. 4). Indeed, said Simon Agbo, a farmer in Ogbadibo, south of Makurdi, Benue state capital in Nigeria: "I heard we have a new government. It makes no difference to me. Here we have no light ( electricity), we have no water. There is no road. We have no school. The government does nothing for us (The
Washington Times, Oct 21, 1999; p.A19).

Rafael Marques, a journalist, jailed and convicted of defamation for a 1999 article in which he characterized President Jose Eduardo dos Santos of Angola as a dictator, wrote: "The government has created a stateless state here in Angola. Each citizen is responsible for his own health and welfare while the government is accountable to no one. The MPLA and
UNITA are like two gangs and the people of Angola are innocent bystanders caught in the middle of a drive-by shooting" (The Washington Post, Sept 18, 2000; p.A1).

As a result of the failure to provide the basic necessities of life, the state and those in power have increasingly alienated themselves from those they rule and from whom they claim to derive their legitimacy. The growing gap between the leaders and the people has made the leaders increasingly insecure, sensitive, repressive and less responsive to the wishes of society. The mass of the people in turn regard the state and its organs with fear, suspicion and cynicism because as far as they are concerned, they are no longer legitimate or relevant in their lives. The government does nothing for them. Insecure African despots spend inordinate amounts on the military and security forces, subverting other state institutions squelch dissent, prop them up in power, and serve their parochial interests. The masses on the other hand, sensing their
inability to meaningfully influence the policies of the state and the behaviors of those in positions of power, develop apathy and withdraw from participation in the political process for safety reasons.

Government, as an institution that cares about its people and attends to their needs, has ceased to exist in many African countries. What exists is a vampire state, where the government has been hijacked by a phalanx of unrepentant bandits and crooks, who use the machinery of the
state to enrich themselves, their cronies and tribesmen, while excluding everyone else (the politics of exclusion). The richest persons in Africa are heads of state and ministers. Quite often, the chief bandit is the head of state himself.

At an African civic groups meeting in Addis Ababa, Ethiopia, Nigeria's President, Olusegun Obasanjo, claimed that corrupt African leaders have stolen at least $140 billion (95 billion) from their people in the decades since independence (The London Independent, June 14, 2002. Web
posted at www.independent.co.uk). In August 2004, an African Union report claimed that Africa loses an estimated $148 billion annually to corrupt practices, a figure which represents 25 percent of the continent's Gross Domestic Product (GDP). But these are gross underestimates. According to one UN estimate, $200 billion or 90 percent of the sub-Saharan part of the continent's gross domestic product was shipped to foreign banks in 1991 alone (The New York Times, Feb 4, 1996; p.4). Nigeria's past rulers stole or misused 220 billion ($396 billion) -- that is as much as all the western aid given to Africa in almost four decades. The looting of Africa's most populous country amounted to a sum equivalent to 300 years of British aid for the
continent (The London Telegraph, June 25, 2005; web posted). If this sum had been divided equally among Nigerias 120 million people, its income per capita would be at least $3,000, instead of the miserable $265, which is about the same as it was when it gained its independence in 1960. Between 1970 and 2004, more than $400 billion in oil money
flowed into Nigerian governments coffers. What happened to the oil money?

Eventually the vampire state metastasizes into what Africans call a coconut republic and implodes when politically-excluded groups rise up in rebellion: Somalia (1993), Rwanda (1994), Burundi (1995), Zaire (1996), Sierra Leone (1998), Liberia (1999), Ivory Coast (2000), and
Togo (2005). Only reform intellectual, economic, political and institutional will save Africa but the leadership is not interested. Period.

Ask these leaders to develop their countries and they will develop their pockets. Ask them to seek foreign investment and they will seek a foreign country to invest their booty. Ask them to cut bloated state bureaucracies or government spending and they will set up a Ministry of
Less Government Spending. Ask them to establish better systems of governance and they will set up a Ministry of Good Governance (Tanzania). Ask them to curb corruption and they will set up an Anti-Corruption Commission with no teeth and then sack the Commissioner if he gets too close to the fat cats (Kenya). Ask them to establish democracy and they will empanel a coterie of fawning sycophants to write the electoral rules, hold fraudulent elections with opposition leaders either disqualified or in jail, and return themselves to power (Ivory Coast, Rwanda). Ask them to reduce state hegemony in the economy and place more reliance on the private sector and they will create a Ministry of Private Enterprise (Ghana). Ask them to privatize inefficient state-owned enterprises and they will sell them off at fire-sale prices to their cronies. In 1992, in accordance with World Bank loan conditionalities, the Government of Uganda began a
privatization effort to sell-off 142 of its state-owned enterprises. However, in 1998, the process was halted twice by Ugandas own parliament because, according to the chair of a parliamentary select committee, Tom Omongole, it had been derailed by corruption, implicating three senior ministers who had "political responsibility" (The East African, June 14, 1999). The sale of these 142 enterprises was initially projected to generate 900 billion Ugandan shillings or $500
million. However, by the autumn of 1999 the revenue balance was only 3.7 billion Ushs.

Now, their recalcitrance has transmogrified into extortion. Ask them to move a foot and they will demand foreign aid in order to do so. In 2003, some 30,000 ghost names were discovered on the payroll of the Ministry of Education, costing the government $1.2 million a month in salaries heisted by living workers. When Ghana demanded foreign aid to purge these ghost names, Japan ponied up $5 million.

The reform process has stalled through vexatious chicanery, strong-arm tactics, deception, and vaunted acrobatics. Only 16 out of the 54 African countries are democratic and fewer than 8 African countries can be described as economic success stories. Intellectual freedom remains
in the Stalinist era: only 8 African countries have a free and independent media. But without genuine reform, more African countries will implode -- Chad, Cameroon, Central African Republic, Equatorial Guinea, Guinea, Togo and Zimbabwe are already teetering on the brink

The slave trade, Western colonialism, imperialism and external factors have nothing to do with the naked plunder and wrong choices made by bad African leaders. The World Bank has nothing to do with monumental leadership failure in Africa. The IMF, which most African leaders relish
vilifying, has nothing to do with petrol (gasoline) shortages in Nigeria. Nor do Western agricultural subsidies have anything to do with why African governments cant supply reliable electricity and safe drinking water to their people. The slave trade has nothing to do with
Nigeria turning itself into the scam capital of the world.

The Flaws in the Externalist Position

The issue of Western culpability or complicity in causing Africas woes evokes such intense emotionalism that it often clouds rational analysis of our problems in Africa. Let us strip the issue of its emotionalism and examine it rationally.

Historical Wrongs Committed by the West

The Slave Trade/Colonialism

Everyone agrees that the slave trade was at once a brutally inhumane treatment that can ever be meted out to a people. The horrors of capture, the trans-shipment, the loss of millions of able-bodied men, the atrocities that were committed by European slave traders, etc. are all documented. We all agree to the humiliating experience of colonial subjugation. The discrimination against African natives, the exploitation of Africa's mineral wealth and artifacts, etc. -- we also agree on that.

Remedies

We may seek compensation (reparations) for the harm that slavery did to us. We may seek the return of the stolen booty. Ethiopia has just received its ancient obelisk, stolen by the Italian colonialists. But even here, African leaders have debauched the issue.

Back in August 1999, representatives of African governments met in Accra and issued a declaration: "Africa is demanding $777 trillion from Western Europe and the Americas in reparation for enslaving Africans while colonizing the continent" (Pan African News Agency, August 18, 1999). It added that the money would be demanded from ''all those nations of Western Europe and the Americas and institutions, who participated and benefited from the slave trade and colonialism''. Dr. Hamet Maulana and Debra Kofie, co-chairpersons of the commission, urged that worldwide monitoring and networking systems be instituted to ensure
that reparation and repatriation will be achieved by 2004. Problem is, U.S. GNP is only $12 trillion and amount asked- $777 trillion- exceeds the combined sum of the GNPs of the entire Western world! According to the British governments Office of National Statistics, The United
Kingdom -- that is England, Wales, Scotland and Northern Ireland -- is officially valued at $8.8 trillion, a sum that includes all of its property and buildings, machinery, roads, bridges, planes, trains and automobiles. It also includes all the money deposited in its banks and other financial institutions. Plus everything on the shelves at Harrods (The New York Times, Jan 1, 2004; p.A4). So how do African leaders hope to collect $777 trillion?

We may argue all we want about the size of reparations but these historical wrongs cannot repeat, cannot -- be used to justify the cruel atrocities and grotesque misdeeds African leaders commit against their own people. Winning independence for their respective countries gives no African leader -- none of them -- the license to do what they want with their people and countries.

European slave traders or colonialists did not tell President Mugabe to raze down shanty-towns, destroying the propertied of hundreds of thousands of Zimbabweans and rendering more than 1.5 million HOMELESS. American imperialists did not tell President Meles Zenawi of Ethiopia
to order his security forces to open fire on student demonstrators, killing more than 40 of them on June 15, 2005. British racists did not tell President Isaiah Afwerki of Eritrea to shut down all the private newspapers in Eritrea and jail all their editors and journalists.

These leaders must be held ACCOUNTABLE for their actions. Historical wrongs by the West do not factor in here because they are a separate issue and CANNOT be used to excuse wrongful actions taken by African leaders TODAY.

Colonial Legacies

It is also agreed that the colonial legacies bequeathed to Africa were pitiful. What the Portuguese left behind in Guinea-Bissau, after 200 years of colonial rule, was a small brewery for their local servicemen. There was no social development; industry was not encouraged. African colonies were to serve as sources of raw material and cheap labor for the industrial machines of Metropolitan Europe. The colonial economies were based on export mono-culture: the export of one or two cash crops.

Colonial education was geared toward training male clerks for the colonial administration. The Belgians and Portuguese never encouraged university education as that would teach African natives of their political rights. When Tanzania gained its independence in 1964, it had only 4 university graduates.

Infrastructure was Spartan. Few roads and railways were built. Even where built in West Africa, they exhibited a dendritic pattern: Straight from the coast to the hinterland to evacuate some mineral or cash crop.

All this is true but heres the problem: After independence, we, African elites, did not maintain, let alone keep the little infrastructure we inherited from the colonialists. In fact, we destroyed them! Infrastructure crumbled in the post colonial period. The few universities we got in Ghana and Nigeria decayed. In Uganda, Makerere University used to be called the Harvard of Africa in the 1950s. By 1980, it was a shambles. In Zaire, the Belgian colonialists put down only 2,000 miles of paved road appalling for that huge country the size of Texas. By 1990, only 200 miles were usable. So who do you blame: the Belgian colonialists for not laying down enough roads OR Mobutu for failing to maintain the little that Zaire got? Later, we learned that Mobutu allowed the roads and infrastructure to crumble in Zaire because it made it difficult for the opposition to organize against him!
(contd)

Via The Daily Caller:

Former Minnesota governor Tim Pawlenty turned out a blockbuster economic growth plan this past week, including deep cuts in taxes, spending, and regulations. It’s really the first Reaganesque supply-side growth plan from any of the GOP presidential contenders. And he caps it all off with a defense of optimism as he charges ahead with a national economic growth goal of 5 percent.

That’s right: 5 percent.

Pawlenty calls this target aspirational. Okay, fine. But deeper down, he’s basically saying no to the declinists and pessimists who seem to populate the economic landscape these days. Big government doesn’t work. Let’s try something different.

Ronald Reagan always believed that America is exceptional. By removing obstacles to growth, the Gipper held that economic policies could unleash a massive outpouring of risk-taking, creativity, and entrepreneurship. He was right, and his policies launched a two-decade-long boom.

Actually, the first couple years of the Reagan recovery came in at over 7 percent. And as Pawlenty noted in his speech at the University of Chicago this week, between 1983 and 1987, the economy grew at 4.9 percent annually. I note that President John F. Kennedy also had a 5 percent growth target, a response to Ike’s three recessions.

...those on the left criticize Pawlenty...

Whether Pawlenty's goal is realistic or not is not the point- rather it is the Democratic liberal establishment's response to it. Rather than hope and change and pushing back the tide and restoring America's prosperity and believing in and pushing for and working for jobs and a great economy, liberals and Democrats, whether they are in Congress or in the White House or in the media, now simply laugh at and scoff and ridicule anyone who believes such things.

IS THIS WHAT YOU VOTED FOR? A party that's first and biggest and lasting impression of someone saying that our economy can grow again is to laugh, scoff, deny, and offer reason after reason why you won't get a job, why you won't get a raise, why your children will owe more in debts, why America will get weaker, etc- the new normal of Obama and the Democrats will be a lesser nation, one that you better get used to and expect won't improve.

The very possibility that America could rise again after the destruction that the Democrats and Obama has driven into the very foundations of America inspired the White House to reply:

With regards to 5 percent growth, we couldn’t agree more; that would be very beneficial to the economy. We think providing expansive tax cuts to the wealthy — which we did in the last term and added tremendously to our debt and resulted in this President inheriting a massive deficit and debt in 2009 — probably not the best approach.

This comment filled with snark and sarcasm and divisiveness and bitterness is what we all can now expect from Obama and an Executive Branch controlled by the Democrats. He didn't say 'That's great, how can we work together and find common ground to achieve not only 5% growth but 6% growth', but rather the reply was mocking, empty rhetoric on class warfare, and transferring blame.

Firedoglake, which Obama reads and quotes from and believes in, called Pawlenty's plan a "Unicorn and Pony Economic Plan", and suggested that it is now a 'fantasy' for America to grow again at 5% and that merely suggesting that America can be a prosperous, free, and strong nation is ridiculous.

Michael Ettlinger of the liberal Center for American Progress said, "It's patently ridiculous... it's not worth serious discussion. ... No one serious thinks that's possible."

This quote illustrates the difference between the right (conservatives, tea partiers, libertarians, moderates) and the left (liberals, communists, socialists, fascists)- the right still thinks that unleashing human liberty and freedom through private property protection, limited government, rule of law, and a love of human life will lead our nation to high GDP growth rates, and the left does not. The left believes that it is no longer even possible for America to grow, and that the ruling classes need to lock in social and economic classes through regulation, government control, and excessive taxes so that the rich can grow richer and the poor can grow poorer.

It is shocking that Obama and the Democrats believe that it isn't even possible for the United States to have a 5% GDP growth rate. According to the CIA, many nations grew faster than 5% last year- Qatar grew at 16.272%, Paraguay at 15.270, Singapore at 14.471, India at 10.365, Turkmenistan at 9.222, Argentina at 9.161, Peru at 8.795, Botswana at 8.562, Nigeria at 8.394, Sweden at 5.536, or Mexico at 5.518.

In fact, out of 184 nations listed, 68 of them grew at a rate of 5% or faster last year- and yet Obama and the Democrats think that this is impossible for the United States to do, and they believe that we've turned it around and that Americans should be happy with a growth rate of 2.834% for 2009, which makes our nation the 117th fastest growing economy in the age of Obama.

Our economy that Obama and his liberal Democrat allies thinks it is impossible and silly and just wrong for our economy to grow faster than 5%, and their policies are doing just this- high taxes, high fees, increased regulation, increased government control over society, more bureaucrats, breaking the rule of law, excessive environmental regulations, rhetorical attacks on business and investment and success and industry, policies that attack our energy industry, policies that break the law white hindering our nuclear industry, and massive stimulus and spending bills that mis-allocate resources.

Republicans offer an alternative- they still believe in America, they still believe in the dream of a growing economy, and they still think that 5% growth rate is possible. Vote for them next election.

Nile Gardiner, a British conservative commentator and former aide to British Prime Minister Margaret Thatcher, unleashed on US President Barack Obama (Democrat) in his latest column, summing up Obama and his Democratic administration's actions perfectly:

The decision by credit agency Standard and Poor’s to downgrade America’s AAA credit rating for the first time in 70 years is a massive blow to the credibility of the Obama administration, and a damning indictment of its handling of the economy. No doubt the White House will pathetically try to blame the Bush Administration, Republicans in Congress, and of course its favourite target, the Tea Party, for the move by S&P. But without a shadow of a doubt, responsibility for the country’s financial mess and staggering levels of debt lie with the current US president and his administration. They have been in charge of running the economy for over 30 months, during which time the United States has witnessed an unprecedented increase in government spending and borrowing.

As the Congressional Budget Office revealed In January, the deficits generated under the Obama administration are the largest since the end of World War Two...

...Since President Obama took office in January 2009, the United States has embarked on the most ambitious failed experiment in Washington meddling in US history. Huge increases in government spending, massive federal bailouts, growing regulations on businesses, thinly veiled protectionism, and the launch of a vastly expensive and deeply unpopular health care reform plan, have all combined to instill fear and uncertainty in the markets. Free enterprise has taken a backseat to continental European-style interventionism, as an intensely ideological left wing administration has sought to dramatically increase the role of the state in shaping the US economy. The end result has been a dramatic fall in economic freedom, sluggish growth, poor consumer confidence, high unemployment, a collapsing housing market, and an overall decline in US prosperity, with more than 45 million Americans now reliant on food stamps – that’s over one seventh of the entire country.

These are increasingly dangerous times, with American leadership being challenged across the globe. Only an historic reduction in government spending combined with pro-growth measures including lower business tax rates to stimulate job creation and attract investment can turn the US economy around. Unfortunately, as Standard and Poor’s decision has shown, this is a presidency in extreme denial over America’s towering debts, leading a nation on a precipice while blindfolded to reality. The United States badly needs another Reagan-style revolution to stave off further economic disaster, preserve American leadership on the world stage, and secure the future of a superpower. Ultimately, greater liberty and freedom, not the deathly hand of Big Government, are needed to turn this great nation around.

He nails it- sometimes it takes a guy from across the pond to really sum up things over here. Click on these links to check out Gardiner's books such as Forever in the shadow of Churchill?: Britain and the memory of World War Two at the end of the 20th century (Historical roots of contemporary international and regional issues occasional paper series).

Although the media is really playing up the fact that Mitt Romney won the Mackinac Republican Leadership Conference straw poll over Rick Perry 51% to 17%, I was there, and the reality is that most of the people there voted prior to hearing either candidate speak and that after hearing both Perry and Romney speak, the race is a lot more even then the margin in the straw poll.

Romney is playing a defensive game, saying all the right things, hitting all the right spots, meeting with all the right people, and clearly is going to attempt to win the Presidency by not making any major mistakes. This might be the way to play it this election, but I doubt it- Obama sounds like he is getting into campaign mode, and although Obama couldn't manage his way out of a paper bag, he can get his hands on a lot of money and win himself office. So the better candidate for the Republican Party might just be Rick Perry.

In a marked contrast to the coached and artificial Romney, Perry is a lively person and is full of personality. He sounds a little bit like Own Wilson with his southern drawl and has a bounce in his step- I see him as a little more of a wild-card in the race, someone who will say some pretty good lines but will also make mistakes- for example, the stuff about not building a fence and providing in-state tuition for people who crossed the border illegally are important mistakes, although in reality these are peripheral to the job of being President.

He began his speech on Mackinac Island at the Grand Hotel by talking about how once America built things- like cars and bridges and beautiful hotels- and if we elect him, "our best days are still ahead of us." I like that idea- that is a marked contrast to Barack Obama, who appears to be trying to play a zero-sum game of class-warfare in America, where he wants to take the existing/shrinking pie and divvy it up to his supporters and allies rather than growing the pie so we all are happy. Perry is patriotic- he said something like 'the greatest nation on Earth is the United States of America'- and I love people who love America.

But what I really liked about Perry was his appeal to Reagan Democrats- although a lot of Republicans who are following the primary are all about picking the best candidate in the primary, in reality the most important consideration they should be thinking about is who stands the best chance of beating Obama. Romney is a good moderate who is business-like and a safe pick, and this gives him a solid edge, but Perry talked about willing over the Reagan Democrats, those people who are still in the Democratic Party even though every year the Democratic Party becomes more militant progressive and socialist. Yeah, the Tea Party might make this GOP not the GOP of your fathers- but the Democratic Party is not the Democratic Party of a generation ago, and having a candidate like Perry in the running who tries to win these Reagan Democrats might be a great asset.

"We will take the boots of over-taxation and over-regulation off the necks of small businessmen and businesswomen" he stated, laying out his theme that it is centralized control and elites in a far away capital who are being a barrier to the progress of America. Restoring freedom and liberty, he feels, will lead us forward better than having government bureaucrats rule over us- the freedom and liberty to make choices and take responsibility from those choices and letting the collective wisdom of the marketplace guide decisions in society will lead to a more prosperous and happy nation. "We don't need the rhetoric of change, but rather a record of change" he declared.

To be honest, his approach is a gutsy approach- it takes courage to let go of power and trust the American people to create jobs and goods and wealth- rather than tell the people what to do with regulations and a controlling tax code, Perry is suggesting that people be free and make decisions freely and that that will result in greater production and wealth. It's a tougher argument to make, but the right one, and I really hope the American people listen more closely to what he is saying.

"There is nothing ailing our nation that freedom can't cure," he said, pointing to crushing debt, increasing regulations, and legislation like Obamacare as the reason why our economy has failed to recover from the 2008 recession. He outright rejected Keynesian economic theory, and it was great to hear a major candidate cite economic theories, because our current President doesn't rely on any sort of economic theories to underpin his policies, unless you consider the mutated and mangled version of Keynesian theory he is ignorantly applying a real policy.

"I will guide this nation with a deep deep rudder," he said- and that to me is perhaps why he moved ahead of Romney as my choice in the straw poll. Sometimes I am concerned that Romney will not steer the ship of state with a deep rudder, but rather a shallow one, and that's okay- with a GOP Congress dominated by the Tea Party, it's okay to go on that current and see where it goes, and after Romney is done America will be a much improved nation. But with Perry, he'll steer our nation in the direction he wants to take it, even if the current flows another direction, and if we do defeat Obama, that might benefit our nation more in the long run.

And as long as Rick Perry keeps rolling off lines like the one he left the lunch crown with, I think he'll be okay- he finished with- "Every day I will try to make Washington DC more inconsequential in your lives".

Mired in grinding poverty and social destitution, Africa cries for help. A cacophonous galaxy of rock stars, anti-poverty activists, and heads of state are calling on the G-8 countries to cancel Africa’s $350 billion crippling foreign debt and double aid to the continent. British Prime Minister Tony Blair will make aid to Africa the centerpiece in Britain's presidency of the G-8 meeting in Gleneagles, Scotland in July. Live 8 is planned for July 2. After meeting with President Bush on June 10, modalities are being worked out to cancel at least $34 billion in debt of 27 of the world’s poorest nations, mostly African. Will this African Marshall Aid Plan work?

Africa’s plight follows a ten-year attention deficit cycle. Every decade or so, mega-plans are drawn up and rock concerts held to whip up international rescue mission for Africa. Acrimonious wrangling over financing modalities ensues. Years slip by, then a decade later, another grand Africa initiative is unveiled. Back in 1985, there was Live Aid and a “Special Session on Africa” held by the United Nations to boost aid to Africa. Then in March 1996, the U.N. launched a $25 billion Special Initiative for Africa. In September 2005, the plight of Africa will again take center-stage at a U.N. conference with clockwork precision. Expect another major initiative for Africa in 2015.

Helping Africa of course is noble but has now become a theater of the absurd – the blind leading the clueless. A recent IMF study estimated that Africans in the diaspora remit $32 billion annually back to Africa, with the main destinations being Ghana, Nigeria, and Kenya. About $7 billion is sent to southern Africa (Ghana News Agency, Accra, May 31, 2005). The amount Africans abroad remit back exceeds the $25 billion Tony Blair seeks to raise.

Nigerian President Olusegun Obasanjo says corrupt African leaders have stolen at least $140 billion (£95 billion) from their people since independence. The World Bank estimates that 40 per cent of wealth created in Africa is invested outside the continent. Even the African Union, in a stunning report last August, claimed that Africa loses an estimated $148 billion annually to corruption – or 25 percent of the continent's Gross Domestic Product (GDP). Rather than plug the huge hemorrhage, African leaders prefer to badger the West for more money. And the West, blinded by its own racial over-sensitivity and guilt over the iniquities of the slave trade and colonialism, obliges. This is the real tragedy of Africa.

Between 1960 and 1997, the West pumped more than $450 billion in foreign aid – the equivalent of four Marshall Aid Plans – into Africa with nothing to show for it. Contrary to popular misconception, foreign aid is not free but a soft loan. Outright debt relief and massive inflow of aid without any conditionalities, safeguards or monitoring mechanisms is absurd. It is akin to writing off the credit card debt of a drunken sailor and allowing him to keep the same credit cards. No African government has been called upon to give a full public accounting of who took what loan and for what purpose since many of Africa’s foreign loans taken in the past were misused and squandered. No government official has been held accountable; instead, irresponsible past borrowing behavior is being rewarded.

More distressing, much of the new aid money will flow directly into an African government budget – a huge black maze of vanishing tax receipts, extra-budgetary expenditure items, perks and off-budget “presidential privy accounts,” redolent with graft, patronage and waste. Over the past few decades, African budgets have careened out of control. State bureaucracies have swollen, packed with political supporters. Back in 1996, 20 percent of Ghana's public sector workforce was declared redundant by the Secretary of Finance and Guinea’s 50,000 civil servants were consuming 51 percent of the nation's wealth. In Kenya, civil service salaries take up half the budget; in Uganda, it is 40 percent. Zimbabwe has 54 ministers; Uganda with a population of 35 million has 70, while Ghana, with a population of 22 million, has 88 ministers and deputy ministers. With bloated bureaucracies, soaring expenditures and narrow tax bases, budget deficits have soared.

They are covered with World Bank loans and foreign aid (Ghana’s budget is 50 percent aid-financed and Uganda’s is 60 percent). If the aid is insufficient, the rest of the budget shortfall is financed by printing money. Even when is aid available for “budgetary support”, there is no guarantee that it will be used productively to generate a return to repay the soft loan. It could well be “consumed” when it pays for the salaries of civil servants. Writing off Uganda’s debt does not eliminate the aid dependency. In fact, when the World Bank canceled $650 million of Uganda’s debt in 1999, the first item President Yoweri Museveni purchased was a new presidential jet!


British Prime Minister thinks he can cajole or browbeat African leaders into curbing corruption and ensuring that resources released by debt relief are put to some good use – such as increased spending on education and health care. But the push for good governance and reform must come from within – from African civil society groups, organizations and the people. However, in country after country, chastened by diabolical restrictions, these groups have no freedom or political space to operate.

Carlos Cardoso, an investigative journalist, was murdered in November 2000 for uncovering a bank scandal in which about $14 million was looted from Mozambique's largest bank, BCM, on the eve of its privatization. The official in charge of banking supervision, Antonio Siba Siba, was also murdered while investigating the banking scandals. Such was also the fate of Norbert Zongo, a popular journalist in Burkina Faso, who was gunned down on Dec 13, 1998, while investigating official corruption. In September 2001, President Isaias Afwerki closed down all the independent media and arrested its staff, quashing calls for democratic reforms. In all, the government shut down eight private newspapers and arrested its journalists, picking them up in their newsrooms and homes and from the streets. They were held in a central jail until April, 2002, when they threatened to begin a hunger strike to protest their detention. They were then transferred to an undisclosed location.

In neighboring Ethiopia, President Meles Zenawi, a member of Tony Blair’s Africa Commission, just held fraudulent elections. Anticipating public outrage, he banned street demonstrations for one month and assumed full control of the country’s security forces. When the opposition rallied to protest the results dribbling in, the police opened fire, killing 26; opposition leaders have been placed under house arrest. Witness the election machinations in Egypt.

The paucity of good leadership has left a garish stain on the continent. Worse, the caliber of leadership has distressingly deteriorated over the decades to execrable depths. The likes of Charles Taylor of Liberia and Sani Abacha of Nigeria even make Mobutu Sese Seko of formerly Zaire look like a saint. In an unusual editorial, The Independent newspaper in Ghana wrote: "Most of the leaders in Africa are power-loving politicians, who in uniform or out of uniform, represent no good for the welfare of our people. These are harsh words to use on men and women who may mean well but lack the necessary vision and direction to uplift the status of their people (The Independent, Ghana, July 20, 2000; p.2).

The crisis in leadership remains a major obstacle to poverty reduction and has many manifestations. It is characterized, among others, by the following dispositions and failings: The "Big Man" syndrome, subordination of national interests to personal aggrandizement, super-inflated egos, misplaced priorities, poor judgment, reluctance to take responsibility for personal failures, and total lack of vision and understanding of even such basic and elementary concepts as "democracy," "fairness," "rule of law," "accountability," and "freedom" -- among other deficiencies. In some instances, the leadership is given to vituperative utterances, outright buffoonery, stubborn refusal to learn from past mistakes, and complete absence of cognitive pragmatism.

Believing that their countries belong to them and only them only, they cling to power at all costs. Their promises are worth less than Al Cappone’s. They stipulate constitutional term limits and then break them: Angola, Chad, Gabon, Guinea, and Uganda. African leaders themselves drew up a New Economic Partnership for Africa’s Development (NEPAD) in 2001, in which they inserted a Peer Review Mechanism (PRM), by which they were to evaluate the performance of fellow African leaders in terms of democratic governance. What happened? To be fair, they acted in reversing the “military coup” in Togo in February but went on vacation when elections were stolen in Zimbabwe and Togo.

Ask them to cut bloated state bureaucracies or government spending and they will set up a “Ministry of Less Government Spending.” Then there is the “Ministry of Good Governance” (Tanzania). They set up “Anti-Corruption Commissions” with no teeth and then sack the Commissioner if he gets too close to the fat cats (Kenya) or issue a Government White Paper to exonerate corrupt ministers (Ghana in 1996). To be sure, multi-party elections have been held in recent years in many African countries but the electoral process was so contumaciously manipulated to return incumbents to power. Four such “coconut elections” have so far been held this year: Zimbabwe, Togo, Congo (Brazzaville), and Ethiopia.

Ask them to place more reliance on the private sector and they will create a Ministry of Private Enterprise (Ghana). Ask them to privatize inefficient state-owned enterprises and they will sell them off at fire-sale prices to their cronies (Uganda). Or ask them to move a foot and they will demand foreign aid in order to do so. In 2003, some 30,000 ghost names were discovered on the payroll of the Ministry of Education, costing the government $1.2 million a month in salaries heisted by living workers. When Ghana demanded foreign aid to purge the payroll of these ghost names, Japan coughed up $5 million.

The reform process has stalled through vexatious chicanery, willful deception, and vaunted acrobatics. Only 16 out of the 54 African countries are democratic, fewer than 8 are “economic success stories,” only 8 have a free and independent media.

No amount of debt relief and increased aid will help Africa until Africa cleans up its own house. But the leadership is not interested in reform. Thus, without new leadership and genuine reform, debt relief and increased aid would compound Africa’s problems and more African countries will implode. The continent is stuck in a veritable conundrum. What can Western donors do?

Smart aid would do one of two things. One, bypass the vampire state and target the people, who produce Africa’s real wealth. An African economy consists of three sectors: the traditional, informal, and the modern sector. The people who produce Africa’s real wealth – cash crops, diamonds, gold and other minerals – live in the traditional and informal sectors. Meaningful development and poverty reduction cannot occur by ignoring these two sectors. But in the 1960s and 1970s, much Western development aid was channeled into the modern sector or the urban area, the abode of the parasitic elite minority. Industrialization was the rage and the two other sectors – especially agriculture – were neglected. Huge foreign loans were contracted to set up a dizzying array of state enterprises, which became towering edifices of gross inefficiency, waste and graft. Economic crises emerged in the 1980s and billions in foreign aid money were spent in an attempt to reform the dysfunctional modern sector. Between 1981 and 1994, for example, the World Bank spent more than $25 billion in Structural Adjustment loans to reform Africa’s dilapidated statist economic system. Only 6 out of the 29 “adjusting” African countries were adjudged to be “economic success stories” in 1994. Even then, the success list was phantasmagoric. Ghana, declared a “success story” in 1994, is now on HIPC life-support system.

At some point, even the most recklessly optimistic donor must come to terms with the law of diminishing returns: That pouring in more money to reform the modern sector is futile. Greater returns can be achieved elsewhere – by focusing on the traditional and informal sectors.

Second, smart aid would empower the African people (African civil society groups) to monitor how the aid money is being spent and to instigate reform from within. Empowerment requires arming the African people with information, the freedom and the institutional means to unchain themselves from the vicious grip of poverty and oppression.

Africa already has its own Charter of Human and Peoples’ Rights (the 1981 Banjul Charter), which recognizes the right to liberty and to the security of his person (Article 6); to receive information, to express and disseminate his opinions (Article 9); to free association (Article 10); to assemble freely with others (Article 11); and to participate freely in the government of his country, either directly or through freely chosen representatives in accordance with the provisions of the law (Article 13). Though the Charter enjoins African states to recognize these rights, few do so. When President Thabo Mbeki called on June 3, President Bush should have handed him a signed copy of this Charter to be delivered to President Robert Mugabe of ‘Zimbabwe.

The institutional tools Africans need are an independent central bank (to assure monetary stability and stanch capital flight), an independent judiciary (for the rule of law), a free and independent media (to ensure free flow of information), an independent Electoral Commission, an efficient and professional civil service, and a neutral and professional armed and security forces.

Recent events in Ukraine (November), Ghana (December), Zimbabwe (March), Lebanon (April), and Togo (April) unerringly underscore the critical importance of these institutions. Without them, President Bush’s plan to spread democracy may stall. Democracies are not built in a vacuum but in a “political space” in which the people can air their opinion, petition their government without being fired on by security forces and can choose who should rule them in elections that are rigged by electoral commissions packed with government goons.

On May 13, thousands of Egyptian judges, frustrated by government control over the judiciary, agitated for full independence from the executive in their oversight of the electoral process. “The institutions are presenting Mr. Mubarak with an unexpected challenge from within, one that will be difficult to dismiss. The fact is, major changes in this country are going to come out of those institutions, not from the streets," said Abdel Monem Said, director of the Ahram Center for Strategic Studies in Cairo.

In the past 24 years, Egypt has received more than $55 billion in U.S. aid in direct government-to-government transfers. Smart aid would assist civil society in instigating institutional reform. Since this approach carries some risks, the same objective can be achieved by funneling aid through diaspora Africans and their organizations, as was the case with Soviet dissidents during the Cold War.

Africa’s long term growth prospects do not lie in rock concerts and increased dependency on Western aid but on the ability of the African people or civil society groups to instigate reform from within. Assistance to such groups – both at home and abroad – constitutes much smarter aid to Africa than all the LIVE AID concerts Bob Geldof can organize.
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The writer, a native of Ghana, is a Distinguished Economist at American University and President of the Free Africa Foundation. His new book is Africa Unchained (Palgrave/MacMillan). This article is culled from his May 10 testimony before the Standing Committee on Foreign Relations of the Senate of Canada.