Our current President has defined his core economic tenets on the assertion of fairness, or to be more accurate, the unfairness of our economic system. Equality of outcome rather than equality of opportunity is the root principle. A forced re-distribution of wealth will act as an equalizer for the past sins of Capitalism.
The administration, the Congressional majority, and an agreeable media are systematically dismantling the free-market mechanisms and installing a centrally regulated, command economy all for the sake of fairness. Evidence over the last fifteen months is overwhelming: Government takeovers of major industries and individual companies, massive ramp-up of government regulations on industry, tax changes to force re-distribution of wealth, and lectures on behavior by our Grand Arbiter of Fairness, the President. The consequences on all 330 million Americans are enormous.
But where is the clear, unemotional evidence of either how bad it was under capitalism or how many more people will benefit under the new system? What is the alternative system? Where is it working today? All we have seen are a string of anecdotes and a parade of victims. Wall street bonuses are bad, out-of-work people are victims, millionaires don’t deserve their wealth, change will make it better.
Facts are rarely useful in debates with ideologues and religious zealots. Yet we cannot allow partisans to make unchallenged, generalized claims about the free-market system with such consequential implications. Using comparative data over the long-term, we can find objective conclusions on the comparison of free-market capitalism to more regulated economies. The last twenty-five years, virtually a generational view on economies, gives us a broad perspective of market performance during a relatively stable period.
Let’s compare countries side-by-side, answer claims of economic unfairness with facts, and decide which economy we would like for our children.
Data source: The Organisation of Economic Co-operation and Development (OECD) is a 30 country member group1 that provides unbiased, consistent economic data comparisons. Please note: For purposes of balance, comparisons are made of the U.S. economy compared to the top five western democratic economies, and the OECD average where data was available. 1987 through 2007 were selected only for completeness of data.
Our economy has been weak for the last decade. Our problems have only been covered up by deficit spending and cheap credit.
The U.S. has out-performed all economies over a 20 year period, out producing goods and services, worker for worker. In terms of annual growth rates, our free-market system has more extreme highs and lows but has climbed out of recessions faster and provided more sustained growth periods.