The numbers behind the numbers

BizPac Review ^ | 9-15-2011 | Bill Martin

[TheBombshellProject]

The World Economic Forum recently published its annual Global Competiveness Report. Our continual slide from first in 2008 to fifth worldwide has received some coverage by the press, but no one has written about the underlying causes for the drop or given any meaningful insight into who the WEF is and how the rankings are compiled. The mainstream press has completely missed the story.

The WEF describes itself as an independent international organization committed to “improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.” The rankings contained in the 544-page Global Competiveness Report are based upon a weighted average of 12 “pillars,” or components of competiveness, with well over 100 sub-components. It defines competitiveness as “the set of institutions, policies, and factors that determine the level of productivity of a country. … [T]he level of productivity, in turn, sets the level of prosperity that can be earned by an economy.”

While all of this sounds very academic, the WEF’s insights are worth discussion. Here is an excerpt from the report’s summary of the United States’ showing, with the numbers in parentheses referring to our rank among 142 countries:

The business community continues to be critical toward public and private institutions (39th). In particular, its trust in politicians is not strong (50th), it remains concerned about the government’s ability to maintain arms-length relationships with the private sector (50th), and it considers that the government spends its resources relatively wastefully (66th). In comparison with last year, policymaking is assessed as less transparent (50th) and regulation as more burdensome (58th). A lack of macroeconomic stability continues to be the United States’ greatest area of weakness (90th). Over the past decade...

[TheBombshellProject]

This is a long article, but worth the read. In a nutshell, Martin proposes that the U.S. backward slide can be halted by balancing the federal budget, tying the size of the federal government to the GDP, reducing regultion and limitations imposed on us by the EPA, the end of price supports and tax reform.

Not happening under the current administration...

[TheBombshellProject]

I apologize for double posting!