New Zealand, Denmark, Hong Kong, Singapore and Canada are the top 5 Countries for Business

Posted by PITHOCRATES - November 17th, 2012

Week in Review

Once upon a time the United States was the place to be if you wanted to go into business.  It was once so business-friendly in the United States that they overtook one of the world’s greatest empires.  The British Empire.  And caused great concern and consternation in Europe with their growing economic prowess.  As American became the world’s greatest economic power.

But those days are gone now.  When George W. Bush was president the US was still the best place in the world to run a business.  But in President Obama’s first year in office we slipped to the number two spot.  In 2010 we fell to number 10.  And in 2012 we slid even further to number 12.  And with President Obama winning a second term things aren’t likely to improve.  For President Obama is clearly not as good as George W. Bush.  Who kept America the number one place to do business in the world (see New Zealand Tops Our List Of The Best Countries For Business by Kurt Badenhausen posted 11/14/2012 on Forbes).

The U.S. continues to lose ground against other nations in Forbes’ annual look at the Best Countries for Business. The U.S. placed second in 2009, but it has been in a steady decline since. This year it ranks 12th, down from No. 10 last year. The U.S. trails fellow G-8 countries Canada (No. 5), United Kingdom (No. 10) and Australia (No. 11).

Corporate taxes continue to put a damper on American businesses…

It is not just the rate that hinders the U.S., but also the complexity of the tax code. The typical small or medium-size business requires 175 hours a year to comply with U.S. tax laws, according to the World Bank. Overall the U.S. ranks 55th out of the 141 countries we examined in terms of its tax regime. The world’s biggest economy at $15.1 trillion, it also scores poorly when it comes to trade freedom and monetary freedom.

New Zealand ranks first on our list of the Best Countries for Business, up from No. 2 last year, thanks to a transparent and stable business climate that encourages entrepreneurship. New Zealand is the smallest economy in our top 10 at $162 billion, but it ranks first in four of the 11 metrics we examined, including personal freedom and investor protection, as well as a lack of red tape and corruption…

We determined the Best Countries for Business by grading 141 nations on 11 different factors: property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance…

Ranking second on our list is Denmark, on the strength of its technology, trade freedom and property rights…

Hong Kong ranks third. Its economy, highly dependent on international trade and finance, remains one of the most vibrant in the world. Credit one of the world’s lowest tax burdens and a high level of monetary freedom…

Singapore comes in at No. 4, ranking in the top 20 in all but one of the 11 metrics we measured…

Canada slid from the top of the rankings in 2011 to No. 5 this year, losing ground on innovation and technology… However Canada remains among the best countries in the world when it comes to trade freedom, investor protection and the ease of starting a new business.

Congratulations New Zealand, Denmark, Hong Kong, Singapore and Canada.  You are the 5 best in the world.  Perhaps one day the US can emulate the great things you are doing.  For we have lost our way.  Let’s hope that you don’t, too.

If there was any further proof that we need to reform our tax code this is it.  Tax compliance costs are sucking capital out of our businesses.  And hindering economic growth.  As evidenced by one of the worst economic recoveries of all time.  There’s a reason for this.  It’s the tax code.  And costly regulatory compliance costs.  Which does not encourage entrepreneurship.  But kills it.  For with today’s red tape you need an army of tax accountants and tax lawyers to start up a business.  Which doesn’t exactly encourage someone with a great idea to spend their life’s savings to go into business.

With another 4 years of pushing America down the list expect one of the worst economic recoveries of all time become even worse.  For this is not a climate to create jobs.  Expect continued high levels of unemployment.  And a worsening of the economy.  For we ain’t seen anything yet.  As President Obama told Russian president Medvedev, “This is my last election. After my election, I have more flexibility.”  Which means he’ll be able to do what he really wants to do in the next four yours.  Which means the first four years were as good as it’s going to get.  And it probably won’t get that good again.

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FUNDAMENTAL TRUTH #13: “If you were to live under the socialist maxim ‘from each according to his ability to each according to his need’ you would find yourself surrounded by needy people with no ability.” -Old Pithy

Posted by PITHOCRATES - May 11th, 2010

“WHO IS JOHN GALT?”  If you can’t answer that I’m guessing you don’t like reading 1,000-page novels.  Or that you went to public school and had no conservative friends or family.

The book is Atlas Shrugged by Ayn Rand.  John Galt worked at the Twentieth Century Motor Company.  An engineer.  A pretty brilliant one at that.  He’s the hero of the novel.  The plot is the eternal struggle of individualism versus statism.  Private entrepreneurship versus state economic planning and control.  ‘Leave me the hell alone’ versus the all encompassing nanny state.  Good versus evil.  You know, the usual stuff.

Dagny Taggart is the heroine.  She’s the vice president of operations of Taggart Transcontinental Railroad.   If you like your women intelligent, strong, independent, feminine and sexual, then Dagny’s for you because she’s all that and a bag of Skittles.  She doesn’t take sh*t from anyone.

Anyway, Galt and Taggart do some brilliant things separately.  They have some mutual acquaintances.  They later meet.  Yadda yadda yadda, big climax and that’s the story.  I could tell you more but I wouldn’t want to spoil it for you when you do read it.  And you should read it.  When people put together lists of books that have influenced lives, the Bible often lands in the #1 spot.  Atlas Shrugged often lands in the #2 spot.  A must read.  And when you make it through the 50+ page speech near the end, why, you’ll have some bragging rights.  Those of you who have read it are probably nodding your heads as you recall your own perseverance in reading that speech and your will to finish it.  But fret not, casual readers.  The other 950 or so pages are a breeze.

FROM EACH ACCORDING to his ability to each according to his need.  Great philosophy.  If you’re one of the needy.  Kinda sucks if you’re one of the able, though.  Big time.  Here’s how.

Let’s say there’s a husband and wife who are both brilliant doctors.  He’s a neural surgeon.  She works in the field of infectious diseases.  They are among the best of the best in their respective fields.  They are literally saving lives where people once had no hope.  They worked long and hard to reach this point in their careers.  And they continue to work and study.  They contribute greatly in research.  Workaholics both.  Being so dedicated in their careers they chose not to have children.  They felt the work they were doing was that important.  As did others.  Between the two, they earn in excess of $500,000 annually.  Talent like theirs is just so rare and oh so valuable.

Now let’s consider a 19 year old high school dropout.  He works as a bouncer at a strip club and sells a little weed on the side.  Lives in his mother’s basement.  Parties all night and sleeps in till 4 PM.  And he has 10 children by 9 different women.

Now, in the normal world, the doctors would have a nice home and drive Mercedes Benzes.  The bouncer would not.  But in the world where we take from those according to ability and give to those according to need, things would be different.  You see, the doctors don’t have very many needs.  They have no children and work most of the time.  The bouncer, though, has a lot of need.  Ten kids to support.  So can you guess how things would work in this Socialist Utopia?  That’s right.  We take from the doctors and give to the bouncer.  Fair, right?

It depends on your definition of fair.  If you’re just a leech that wants to suck on the teat of society, you have no complaints.  You find the whole thing pretty sweet.  Why, anyone running on that platform, they got your vote.

But what about the ones who spend 8 years in med school, struggle through sleep-deprived internships, residency, continuing education, who work long and stress-filled days and give up a lot of personal pursuits in the process?  What about them?  Shouldn’t we reward that incredible effort and self-sacrifice?  I mean, if we don’t, why do it?  For the good of the people?  Yeah, right.  If it’s all the same, why can’t the bouncer sacrifice for the good of the people?  Why is it always the ones who work hard that have to do all of the sacrificing?  And do.

So there it is, the Socialist Utopia.  Work hard and succeed and get…less.  Don’t work hard and be irresponsible and get…more.  This is the essence of Marxism/Socialism.  In economics, we call this a disincentive to succeed.  Anyone with half a brain will strive to show as much need as possible while showing as little ability at the same time.  Because if you don’t you can see where this ends, can’t you?  You get stuck doing all the hard work.  And if you don’t have a lot of need, you get bupkis for all your sweat and ulcers. 

But it gets worse.  If no one chooses to do those incredibly difficult and stressful jobs, what happens then?  Simple.  If you choose to say ‘no’ someone will simply says ‘yes’ for you.  And what do we call forced labor against one’s will?  We call it slavery.  Or servitude, if you prefer.  As in F.A. Hayek’s The Road to Serfdom which shows the progression from socialism to servitude when someone ultimately has to be the final decision maker in determining what’s best for the common good.

INTERESTING THING ABOUT socialism.  It has a track record.  Not a good one.  Everywhere it’s been tried it has failed.  Why?  It goes against human nature.  Ponder this, if you will.  Let’s say you’re going to dine at a fine restaurant.  There are two ways in.  One through the main entrance where the maître d’ greets you.  The other is through the kitchen.  If you come in through the kitchen, though, you’ll have to do some basic food prep for table 3 and wash the dishes from table 5 before you eat.  Now, which path do you choose?

Yes, it’s a silly example.  But it makes a point.  Only an idiot would enter through the kitchen in this example.  Why?  Because we choose the path of least resistance.  Always.  Even though helping with some food prep and washing some dishes is best for the common good we’re just not going to do it.  At least, not voluntarily.  And that’s why socialism has failed and always will fail.  The natural state for people is NOT slavery.  We don’t volunteer to do more for the same outcome.  People do that only when forced, for the state of slavery can only exist by force.  As Hayek so aptly shows in The Road to Serfdom with the rise of the Nazi and the Italian fascist dictatorships.

THIS IS WHY Atlas Shrugged is so enduring.  It is THIS story.  The eternal tug of war between individualism and statism.  The escalation of force.  Submission.  And breaking points.  Both Hayek and Rand warned of the same dangers and the ultimate consequences of our ‘altruist’ actions.  He by philosophical treatise.  She by narrative.  And one of her characters, Francisco d’Anconia, summed it up well in an exchange with Henry Rearden when he said:

“…if you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down upon his shoulders-what would you tell him?”

Rearden didn’t have an answer.  D’Anconia did.  He’d tell him, “to shrug.”  To let go his burden.

And, of course, Atlas is a metaphor for those people with rugged individualism, the entrepreneurial spirit.  And the day they do shrug, we’re screwed.

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