Monday, May 30, 2005

The secret to productivity: be as unEuropean as possible :: The Economist En Su Laberinto

The Economist En Su Laberinto draws our attention to these words from the concluding paragraph of a recent op-ed in The Economist:

The way to support enterprise—American enterprise, the best in the world—is to be as unEuropean as possible. Mr President, look at France. Notice their economic policies. See how they subsidise this and protect that. Do we have to spell it out?

Bush, instead, has been going the Euroway:

A fine way to deal with this would be to cut corporate taxes (against which debt service can be deducted, hence the pro-debt bias); and an excellent way to pay for that would be to launch an assault on corporate welfare—the $100 billion a year or so, conservatively estimated, of special-interest subsidies and handouts that the government pays to American businesses. Preferably, don't just cut that lot, eliminate it.

This last recommendation is one that George Bush will be especially reluctant to accept. Mr Bush is the classic instance of a conservative politician who confuses support for particular businesses with support for enterprise in general. These seemingly similar ideas are in fact directly contradictory.

Some French factions, their normal obstreperousness leavened by paranoia, think the constitution is a conspiracy to use "ultraliberalism" -- free markets -- to destroy their "social model." That is the suffocating web of labor laws and other statism that gives France double-digit unemployment -- a staggering 22 percent of those under age 25.
Implicitly, they pay George Bush more of complement than he deserves for adherence to his free market principles.

UPDATE (via Newmark's Door): Robert Samuelson, brilliant as usual, writes:

On being overtaken, history teaches another lesson. America's economic strengths lie in qualities that are hard to distill into simple statistics or trends. We've maintained beliefs and practices that compensate for our weaknesses, including ambitiousness; openness to change (even unpleasant change); competition; hard work; and a willingness to take and reward risks. If we lose this magic combination, it won't be China's fault.


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