Wednesday, July 09, 2008

Does the U.S. Realize we have Competition?

Being the largest economy in the world we tend to think the world revolves around us. We are recently very aware of the impact of other countries - oil prices, foreign control, I mean investment. But we tend to see these as external forces like the wind - we can't do anything about it. Bob Herbold retired as Exec VP and COO at Microsoft; his wife Patricia is a chemist, attorney and former US ambassador to Singapore. He explains how the choices we make in policies affect our competitive position vs. other countries. Yes, we can do something. We give competitive advantage to the countries that have lower capital gains taxes - almost all of the major countries - and corporate income taxes (which is double taxation). I don't share his hope in higher taxes and government directed research. We need to focus on the government removing the barriers to innovation rather than trying to direct the successful technologies. Many of these issues must be worked at the national level. What can we do at the state, regional and local levels? Puget Sound Business Journal via Discovery Institute
Living half time in Asia for the last two and half years has taught me that many countries around the world are tightly focused on competing with other countries for energy resources and global talent, as well as creating a solid financial foundation for their country and an attractive environment for multi-national companies to run their businesses. Unfortunately, in my opinion, very few people in the U.S., and even fewer in Washington DC, seem to realize this. ... This is in stark contrast to many countries around the globe such as China, several Middle East countries, Norway, Singapore and Russia, which generate a profit each year, based on smart management of their natural resources, very low corporate tax rates which attract multi-national companies and increase total tax revenue for the country, and smart investment of cash reserves. What is needed is for citizens to get very mad, and to put intense pressure on their legislators to stop treating U.S. budget as an infinite source of funds, and to begin managing the country as a business.

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