Monday, May 10, 2004


Globalization saves the day in New Zealand: " It's Saturday morning and you've just noticed that the data projector is missing a fairly important element, known as a power cord. The conference starts in 30 minutes. What does one do? There is no electronics shop open. But there is a Warehouse. Now the Warehouse does not have any power cords for sale, but it does have an electric jug selling for only $10, which uses the same sort of cord. The cost of the jug with cord is much the same as buying just the cord elsewhere, so one purchase is quickly made. Thank God for free trade and cheap China-made electric jugs". [Just by way of explanation, The Warehouse is a New Zealand version of Wal Mart and both Australians and New Zealanders mostly boil water in electric jugs rather than in electric kettles].

The roar of good economic news is getting louder. Our economy expanded 4.2 percent in the first quarter of the year. That follows 4.1 percent growth in the fourth quarter, and 8.2 percent growth in the quarter before that. Over the last three months alone, our economy created more than a half-million jobs. Business investment grew 11.4 percent. Wages and salaries jumped 4.8 percent... Surprised? There's no reason to be. In the second quarter of 2003, President Bush signed legislation that lowered tax rates on the money entrepreneurs invest in the economy -- and those rate cuts took effect immediately.

How much do economists agree among themselves? "The authors survey 1000 economists from the AEA roster; the data cover both 1990 and 2000. Here is one result: ...there was strong agreement with the propositions that restraints on free trade reduce welfare...and that market-determined exchange rates are effective...There was also strong disagreement with the propositions that increasing globalization threatens national sovereignty "

Facts about Sweden No new net jobs have been produced in the Swedish private sector since 1950. None of top 50 companies on the Stockholm stock exchange has been started since 1970. ...well over 1 million people out of a work force of around four million did not work in 2003 but lived on various kinds of public welfare programs, such as, pre-pension schemes, unemployment benefits, sick-leave programs, etc. Sweden has dropped from fourth to 14th place in 2002 among the OECD countries (i.e., affluent industrialized countries) in terms of GDP per capita since 1970.

An all-investor nation? "Imagine if every worker in the United States had the opportunity to become an investor. Well, that dream has a shot at reality. In his 2004 State of the Union address, President Bush suggested workers be allowed to redirect part of their payroll taxes into individual retirement accounts. That was a big statement. It means there's now a legitimate chance to transform Social Security from a financially bankrupt system into a source of real ownership and prosperity for all Americans. ... Since the Reagan presidency, the U.S. has made great strides toward democratizing capitalism by reducing marginal tax rates, deregulating the financial-services industry and creating savings vehicles like IRAs and 401(k)s. Mr. Bush's latest proposal for Lifetime Savings Accounts is another step in the right direction."


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