It amazes me that Mr. Pelerin does not see the dark hand of Communism behind all this. They have been at this for over 100 years and the end game is described in George Soros Open Society Institute. He and they intend a Stalinist state with brutal totalitarian control of “the masses”. You and I are the masses.
Capital has no nationality. Whether it is physical capital or intellectual capital, it will go where it is treated well.
Is Communism the New Capitalism? Six Fortune 500 Companies Move HQ to China
The boat is leaving for China. Disney, Kraft Foods, and four more Fortune 500 companies are on board to move their Headquarters to Shanghai.
The mass exodus of American companies which will surely take thousands of jobs with them, is now commencing with mind-twisting irony. Apparently, America is no longer capitalistic enough to invest in, even for U.S-based companies.
Government gone wild By Monty Pelerin
Apparently Russia understands basic economics and self-control better than the Obama administration.
While we continue to spend wildly, increasing our deficits and debt, Russia seems to recognize reality. President Medvedev, according to Russian news sources, will cut 20% of federal officials by 2013:
Russian President Dmitry Medvedev signed on Monday a decree reducing the number of federal officials by 20% until 2013, the Kremlin press service said.
The decree follows the instruction made by Medvedev in June. The measure could save up to 40 billion rubles ($1.3 billion) out of the Russian federal budget.
The US, despite an unequivocal message sent by the electorate, continues to spend. The “Obamacare” entitlement was passed over the wishes of the public, even though other entitlements are insolvent.
Why this behavioral divergence between the two governments? Has Russia suddenly become more capitalist than the US? Are they more responsive to their citizens than the US?
The answers reside in history. The Russian government knows scarcity. For 90 plus years, it dealt directly with (and created) shortages. Communism made the government virtually 100% of the economy. Economic problems by definition were its problems.
US government began small with few responsibilities. The private economy produced unprecedented wealth and income. The US economy grew to become the largest in the world, with a standard of living unmatched.
The different reactions of the two governments can be traced back to these origins. The Russian government started out as both governor and employer. When something went wrong, it was responsible. The US government, on the other hand, started as a “night watchman.” If something went wrong, it was someone else’s fault and provided an opportunity for government growth. Any perceived problem became an excuse for government aggrandizement and the shifting of more resources away from the productive sector.
Once begun, government growth was furious. Total government spending in 1913 amounted to less than 5% of GDP. Today, it approaches 45%. In real terms, the government grew 160 to 170-fold, nine to ten times faster than the private sector.
This rise was directly related to the decline in the importance of the Constitution. Up until the 1960s, the Constitution still was respected, if not strictly obeyed. According to Joseph Sobran:
… the federal principle remained strong long enough that during the 1950s, the federal highway program had to be called a “defense” measure in order to win approval, and federal loans to college students in the 1960s were absurdly called “defense” loans for the same reason.
Things changed rapidly, as Sobran noted:
By 1973, the federal government was so powerful that the U.S. Supreme Court could insult the Constitution by striking down the abortion laws of all 50 states …
Contrast Sobran’s first comment with that of Democrat Speaker Nancy Pelosi. When questioned by a reporter on the constitutionality of Obamacare, stunned by the question, she stammered: “Are you serious?” The implication was that anything Congress did was legal.
Our Founding Fathers tried, unsuccessfully, to protect against what has happened. As they feared, we have a predatory government with the “right” to raid the productive sector at will. As Thomas Sowell so colorfully put it:
If you have ever seen a four-year-old trying to lord it over a two-year-old, then you know what the basic problem of human nature is — and why government keeps growing larger and ever more intrusive.