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May 23, 2006 9:34 pm


US NO. 1 IN COMPETITIVENESS, BUT . . .



The 2006 IMD (International Competitiveness Yearbook) has just been published. The results? The US remains number one followed by the much smaller economies of Hong Kong, Singapore and Iceland. Japan, China and India are moving up in competitiveness. Japan moved from 21 to 17; 74.321; China has moved from number 31 to 19 and India from 39 to 29. That means that if the US score is 100; China's score is 71.554 and India's 64.416. Scandinavia and other smaller countries lead Europe while the big three continue to falter.

In other words, the US is holding its own WHILE fighting a war. It is the acknowledgement of that factor which is absent from the IMD's press release:

The 2006 is a more compact race than ever before. Although the US is still no. 1 in IMD's World Competitiveness Yearbook, others economies, especially Hong Kong and Singapore are closing the gap. Why?

There is a striking difference between the achievement of US economy in 2005 (3.5%growth) and the US318b budget deficit accumulated by the federal government and US 8,000B debt. Are some governments becoming a burden for competitiveness? Italy, France and some Latin American countries are confronted with the same situation.

No, it is not the same situation. The US is competing with one hand tied behind its back. For various reasons, including nobless oblige, it has taken on the job of creating and maintaining the conditions which enable the world economy to thrive. That is the real reason the US government is a burden on the US economy. For it spends a fortune fighting masters of terror seeking to undermine the liberal democratic system while opening it vast market to its competitors under unequal terms and acting as insurer of last resort to populations with incompetent or vicious governments.

Sudan turns millions of its citizens to refugees, the US takes on the job of insuring they will be fed. The Palestians elect a terrorist government; the US insures their officials will be paid.

You wish to make the US more competitive? Start insisting that the rest of the world share the burden. Why can't the oil rich Gulf countries pay for the running of the PA? Why can't China (which has signed lucrative oil contract with Sudan) make sure that people of Darfur are fed?

Just as importantly, stop rebuking and start acting. Inconsequential rebukes do not only create hostility but also expose weakness of resolve.

The best way to secure American competitiveness AND continued global economic development is by protecting the proven engine of development, the Capitalist system. How? By distinguishing between private and state owned companies. As state owned companies are not motivated exclusively by the profit motive, they subvert the global economic system as well as undermine its security.

In other words, the US may not listen enough for Putin's satisfaction or, too much, to mine but it is far from being " comrade wolf who knows whom to eat." It is much more like a mother hen who does not know when to stop fussing, protecting and feeding.



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