The effect of the Obama administration’s economic policies have already had an impact on our international standing — and that is bad news. Financial Times reports that the US has dropped out of its customary position as the most competitive economic environment, allowing Switzerland to capture the top spot. Why? Three guesses (via Katie Favazza):
The US government’s sweeping intervention in the private sector has taken its toll on the country’s competitiveness, according to an annual survey by the World Economic Forum.
The country lost its number one spot to Switzerland in the WEF report on global competitiveness, partly because of “particular concerns on the part of the business community about the government’s ability to maintain arm’s-length relationships with the private sector and in the perception that the government spends its resources wastefully”.
Barack Obama, US president, has continued and deepened the government’s involvement in private industry that was started by his predecessor, George W. Bush, as a response to the financial crisis, with bail-outs of the automotive and banking sectors.
The full report has much more detail, but government interventions already committed have dragged our competitiveness down. That doesn’t include the government takeover of health care and the government takeover of energy production, both under consideration now by Congress. If the government imposes itself on both industries, it will control more than 30% of the American economy — and the next rating will not be as kind as First Runner-Up.
How did we come to lose our spot? One reason can be found on page 295 of the report, which ranks nations on the burden of government regulation. Currently, we rank 53rd on that list, behind such free societies as Morocco, Ethiopia, Saudi Arabia, Jordan, and China. The US regulatory scheme is actually 32 nations worse than communist China’s. (The UK ranks 86th on this list, if that makes us Yanks feel any better.)
Well, at least we’re first in protecting property rights, the very basis of American liberty … or are we? Nope. We rank 30th in protecting property rights, two behind the UK. Maybe we should have skipped the revolution. France ranks 22nd, and Jordan 24th. We do somewhat better on protecting intellectual property, but still come in 19th. In diversion of public funds through corruption, we rank 28th — the wages of pork-barrel politics. Another outcome of pork: we’re 68th in government waste.
This is an embarrassment to the US. And yet Congress wants to amplify its pursuit of anti-competitive policies. Where will we rank when the Democratic leadership finally gets the heave-ho?
Update: HA reader TN pulls some historical data on this that shows we have not always been at #1 — and in fact got as low as #6 three years ago, although we were #1 last year. Be sure to read it all. The problem is that we’re moving in the wrong direction to fix the problems that created this drop, as Obama’s domestic agenda seems determined to undermine competitiveness in the long term.