SMU's Cox: US Has Strayed From Economy That Created Consumer Cornucopia
Tuesday, 16 Jun 2015 06:00 AM
As you may have experienced directly, things aren't looking too hot for Americans' standards of living. And curtailment of economic freedom is a large part of the problem, says Michael Cox, director of the Global Markets and Freedom Center at Southern Methodist University.
"[Americans'] long-established optimism has faded in recent years, and we have only ourselves to blame," he and Richard Alm, the center's writer-in-residence, write in Investor's Business Daily.
"The country has strayed from the economic model that created a consumer cornucopia. We're living above our means, one of a mere handful of countries with diminishing prospects for living standards."
And what's behind the problem?
"More people will strive for [wealth] when property rights are secure, taxes are low and governments hold their regulatory meddling to a minimum," Cox and Alm say. "In short, capital will grow more rapidly when nations commit to markets and economic freedom."
And how do we fare on that score? U.S. economic freedom dropped out of the top 15 in the center's world rankings for 2011.
Elsewhere on the economic front, if we are to believe the conventional wisdom floating through the media, the U.S. manufacturing sector is mounting a major comeback.
Not so fast, says financial writer Bob Woods.
"It's not quite 'Happy Days Are Here Again,' as some have been singing for the past few years. Once you look closely at the data, it's more like 'Those Were the Days,'" he writes on CNBC.com.
And why is that?
The manufacturing sector has shrunk 3.2 percent since June 2009, when the worst recession since the Great Depression ended, according to the non-partisan Information Technology and Innovation Foundation. About 15,000 factories have disappeared since 2007, the year the recession began, taking 2 million jobs with them.
"A look at the numbers suggests that the rallying cry about a manufacturing renaissance has been wishful thinking among many industry trade groups and economists," Woods states.
"Even favorable shifts in a host of factors, including labor costs, the shale gas boom, transportation costs and the weak U.S. dollar, hasn't revitalized the sector to its past glory days."
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© 2015 Newsmax Finance. All rights reserved."[Americans'] long-established optimism has faded in recent years, and we have only ourselves to blame," he and Richard Alm, the center's writer-in-residence, write in Investor's Business Daily.
"The country has strayed from the economic model that created a consumer cornucopia. We're living above our means, one of a mere handful of countries with diminishing prospects for living standards."
And what's behind the problem?
"More people will strive for [wealth] when property rights are secure, taxes are low and governments hold their regulatory meddling to a minimum," Cox and Alm say. "In short, capital will grow more rapidly when nations commit to markets and economic freedom."
And how do we fare on that score? U.S. economic freedom dropped out of the top 15 in the center's world rankings for 2011.
Elsewhere on the economic front, if we are to believe the conventional wisdom floating through the media, the U.S. manufacturing sector is mounting a major comeback.
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Not so fast, says financial writer Bob Woods.
"It's not quite 'Happy Days Are Here Again,' as some have been singing for the past few years. Once you look closely at the data, it's more like 'Those Were the Days,'" he writes on CNBC.com.
And why is that?
The manufacturing sector has shrunk 3.2 percent since June 2009, when the worst recession since the Great Depression ended, according to the non-partisan Information Technology and Innovation Foundation. About 15,000 factories have disappeared since 2007, the year the recession began, taking 2 million jobs with them.
"A look at the numbers suggests that the rallying cry about a manufacturing renaissance has been wishful thinking among many industry trade groups and economists," Woods states.
"Even favorable shifts in a host of factors, including labor costs, the shale gas boom, transportation costs and the weak U.S. dollar, hasn't revitalized the sector to its past glory days."
Related Stories:
- Tale of Two Job Markets Makes Fed's Liftoff Timing a Tough Call
- Consumer Sentiment Climbed More Than Forecast in June
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