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Preventing a Worldwide Economic Brown-Out

By Sergio Gor

 

In today's tumultuous financial world, everyone is seeking a quick fix where none may be available. Instead, government in its “solutions” is further ruining a free market system that has allowed western nations to prosper and succeed for centuries on end.

Specifically, the U.S. government has been foolishly bailing out favored industries left and right, from auto makers to banks, from irresponsible home owners to insurance giants like AIG. Every time, the size and scope of the bailout seems to only grow. And the odds of succeeding evanesce.

The newest twist in the gradual shift towards modern-day socialism includes calls from European allies for a biggest quick “fix” ever—with a “global New Deal”. In his current visit to the United States, British Prime Minister Gordon Brown is urging President Barack Obama to implement new global regulations that would, he insists, prevent another economic collapse in the future.

Of course, Prime Minister Brown, shakily presiding over his own economic Armageddon, is in no position to lecture, or dictate policy to the United States. And yet here he is, umbrella in hand. Having inherited a strong and robust economy from the Conservatives, Mr. Brown has worked tirelessly against fiscal restraint and responsibility. On numerous occasions Prime Minister Brown has indirectly raised taxes (or, fees as he prefers to call them) in the United Kingdom and thus negatively influenced the entrepreneurship spirit of his constituents. In short he has enriched the prince while impoverishing the paupers.

The regulations that Mr. Brown is now proposing on the world have been imposed in Europe for many years, leading to an excessive welfare rate, unfair competitive advantages towards American, record levels of unemployment and higher-than-ever levels of taxes. The international markets need room to grow and prosper instead of being restricted and choked by regulations. Europe has being failing economically; there is no reason to export that to the international arena.

Mr. Brown's prescription is nothing more than a raw deal for the developing and advanced economies alike around the world, as Europe attempts to export its brand of command-and-control economics. It has not worked there. It will not work here. And it certainly is not a homogenous model to be emulated.

Bureaucracy has never been a means for fostering economic growth or prosperity. It is nothing less than a necessary evil and it is therefore somewhat shocking that the French, British and Germans have agreed amongst themselves to create a new institution that would regulate global markets to prevent another, ‘fiscal meltdown'. One need only look at the United Nations to see how effective such international regulators tend to be.

For years, Europe has had a reputation for being the epitome of a welfare state, with record level taxes, unemployment and government intervention. Its economies have stagnated, and its people have staggered under the onerous burden of oppressive bureaucracies. The European model has no place being exported to an international level. Innovation and ingenuity has been missing for decades in Europe because of government meddling.

Rather, the international community would be wise to remove barriers that restrict free trade and protectionism. The markets will recover faster through less government intervention and less taxes on imports and exports. The best solution that the international community can ascribe to is one of staying out of the financial markets and allowing the invisible hand to control and restore the balance which has been destroyed by the government.

The real role for government—no, make that all governments—now is to forget about a quick fix, and make a quick exit.

Sergio Gor is a contributing editor for ALG News Bureau.


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