Quote:
Originally Posted by It'sAutomatic
How exactly could Obama have stopped a humongous nation from developing economically?
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The beef is not with China developing economically, but rather with the pace of America's development lagging China's by such a great degree. By allowing America's economy to develop faster than it has during his Presidency; making the regulatory and tax structure more amenable to business creation, trade, investment, and mining/drilling would help
a lot, as would decreasing the regulatory burden of direct costs and compliance costs, which have been estimated to subtract more than 2 points of annual growth from the economy. If post-WWII economic growth had averaged 5% instead of 3%, total GDP would be roughly triple what it is now. If growth were two points higher during the Obama Presidency we'd still be ahead of China.
GDP growth has averaged not much more than 1% per annum under Obama, which is pathetic by any measure of "recovery"; even forgetting what could be done to boost growth to much more robust figures, if the Obama Presidency had seen even an
average post-WWII post-recession period after 5 years the economy would be $1.5 trillion larger now than it is today. And this is despite an average post-recession period having experienced another recession* in the meantime, which has not been the case with today's "recovery".
If you look at the countries that have the highest GDPs per capita and the best fiscal situations, they tend to be in three broad groups: trading hubs, tax havens, or big oil/mineral producers. America at this time doesn't excel in any of those categories, but does have the capacity to excel in all three given the right policy vision and leadership to implement it. Those countries also tend to be much smaller than the U.S., though not much smaller than the global average, but they tend to be about the same size as states and big cities; an average state's population is 4.6 million, exactly the same as an average country. NYC's population of 8 million is similar to Hong Kong at 7 million, so the states and big cities of the U.S. aren't
that dissimilar from successful small countries; the primary difference is the political system they're in.
It should also be noted that you can even have long maternity leaves, strong labor unions, universal health care, and the like and
still be friendly and attractive to businesses. Denmark, New Zealand, Estonia, and Finland rank ahead of the U.S. on the Frasier Institute's index of economic freedom despite some of the outlined policies (New Zealand ranks behind only Singapore and Hong Kong). The trick behind that is the fact that those policies are a small part of the total regulatory burden; most of the rest is dead weight by comparison. If you liberalize and streamline the rest (as most of these countries did in the past few decades), you've swept away most of the burden on business, then suddenly your heavily unionized country with universal health care and 2 years of maternity leave looks more attractive to business and investment and you've got a wind at your back.
Once that happens, people in certain other countries that don't have strong unions, maternity leave, or universal health care marvel at how your "socialist" economy can work so well; one political faction ignores your country and wants to increase economic freedom there by deregulating and lowering taxes, and another wants to emulate your country by adding on worker regulations onto the existing structure in their country. What very few realize is that there is enough room in the system for American governments to add on "protections"
and become more business-friendly at the same time. Such a system wouldn't be ideal, but Americans in general should try to be more creative when it comes to their economic programs.
*It is my considered opinion that the recession that began in 2007 persists to the present day, since the post-downturn period has seen a "recovery" that doesn't even appear in many important metrics (including income and employment), and shows up historically weak in most others. That's academic for this post, though, since either 7 years of recession or 2 years of recession followed by the weakest recovery on record are abysmal situations.
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