Tag Archives: Prosperity

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Twenty years of fiscal conservatism in Sweden: has it worked?

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Map of Europe
Map of Europe

From Investors Business Daily, a story about about a nation that changed course – and won big.

Excerpt:

The turnaround has been driven in no small part by the election of Fredrik Reinfeldt as prime minister in 2006. He took office in October of that year and by January of 2007, tax-cutting had begun. The Reinfeldt government also cut welfare spending — a form of austerity — and began to deregulate the economy.

[…][A]s Finance Minister Anders Borg told the Spectator, the Reinfeldt government was simply continuing the last 20 years of reform.

[…]Sweden fell into recession in 2008 and 2009, as did many developed nations. But it’s pulled strongly out of the decline, posting GDP gains of 6.1% in 2010 and 3.9% last year, when it ranked at the top in Europe’s list of fastest-growing economies.

[…]Under Borg, Sweden handled the downturn in the most un-European way. “While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden’s finance minister, his mission has been to pare back government. His ‘stimulus’ was a permanent tax cut,” Fraser Nelson wrote last month in the Spectator.

Borg strongly opposed the Keynesian solution, which the left continues to advance while it inveighs against an austerity that has yet to be implemented.

He also refused to resort to the trickery of a stimulus, instead cutting the taxes that he knew were hindering entrepreneurs from giving the economy the kick it needed.

The country needed innovators and capitalists — “the source of job creation,” says Borg — and he did what he had to, to attract new ones and to keep those already there from leaving.

During Sweden’s decline into a welfare state, it became, as Borg told the Spectator, “a textbook case of European economic sclerosis” punished by “very high taxes and huge regulatory burden.”

That lasted until the 1990s, when the nation realized it had to return to the market policies that had made it rich prior to the onset of its cradle-to-grave coddling.

How much further can Borg and Reinfeldt take their reforms? Will voters ask them to come back and complete the job?

After all, it’s not over. Though it continues to fall, Sweden’s government debt as a share of GDP is still too high at 38.4%. And while it’s dipped below 45% for the first time in decades, the country’s tax-to-GDP ratio is still far too steep.

Despite this unfinished business, Sweden is still moving in the right direction. We might be able to say that about America after the 2013 Inauguration Day. But we can’t say that now.

If liberals are so smart, why can’t they take time off from taxing, spending and buying votes, in order to look at countries that are having economic success? Isn’t it “smart policy” to do what works? Why listen to Hollywood celebrities and people with journalism degrees when we can just do what has been proven to work? It’s not like what we are doing now is working.

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EPA administrator boasts about crucifying oil and gas firms

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Tom sent me this article from CNS News.

Excerpt:

Sen. James Inhofe (R-OK) took to the Senate floor today to draw attention to a video of a top EPA official saying the EPA’s “philosophy” is to “crucify” and “make examples” of oil and gas companies – just as the Romans crucified random citizens in areas they conquered to ensure obedience.

Inhofe quoted a little-watched video from 2010 of Environmental Protection Agency (EPA) official, Region VI Administrator Al Armendariz, admitting that EPA’s “general philosophy” is to “crucify” and “make examples” of oil and gas companies.

In the video, Administrator Armendariz says:

“I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting, but I’ll go ahead and tell you what I said:

“It was kind of like how the Romans used to, you know, conquer villages in the Mediterranean.  They’d go in to a little Turkish town somewhere, they’d find the first five guys they saw and they’d crucify them.

“Then, you know, that town was really easy to manage for the next few years.”

“It’s a deterrent factor,” Armendariz said, explaining that the EPA is following the Romans’ philosophy for subjugating conquered villages.

Soon after Armendariz touted the EPA’s “philosophy,” the EPA began smear campaigns against natural gas producers, Inhofe’s office noted in advance of today’s Senate speech:

“Not long after Administrator Armendariz made these comments in 2010, EPA targeted US natural gas producers in Pennsylvania, Texas and Wyoming.

“In all three of these cases, EPA initially made headline-grabbing statements either insinuating or proclaiming outright that the use of hydraulic fracturing by American energy producers was the cause of water contamination, but in each case their comments were premature at best – and despite their most valiant efforts, they have been unable to find any sound scientific evidence to make this link.”

We want to be careful with environmental regulations so that we don’t hurt job creators. We need to work to have money, and we shouldn’t have to give up our prosperity in order to make a few bureaucrats feel as if they are “saving the world”.

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New study finds that Obama’s regulations cost $46 billion per year

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From the Washington Examiner.

Excerpt:

Some 10,215 new federal regulations from the Obama administration are costing consumers, businesses and the economy overall $46 billion annually, more than five times the regulatory price tag of former President Bush in his first three years in office. Worse: just implementing those regulations had a one-time additional cost of $11 billion, according to a Heritage Foundation analysis provided to Washington Secrets.

Ironically, Bush instituted more regulations, 10,674, but they cost just $8.1 billion annually, said the Heritage report, titled “Red Tape Rising: Obama and Regulation at the Three Year Mark.” It will be released Tuesday.

The analysis backs up complaints from the U.S. Chamber of Commerce and other business groups that the president’s regulations are stalling the economy and employment growth. It also calls into question Obama’s promise to put the brakes on new regulations and his State of the Union bragging about issuing less red tape than Bush.

The fact is, said Heritage’s review, hundreds more costly regulations are coming, especially those targeting energy companies and Wall Street. They threaten “to further weaken an anemic economy and job creation,” said Heritage’s James Gattuso and Diane Katz.

[…]The $46 billion price tag calculated by Heritage is staggering, as are those hitting the economy the hardest. Just consider the regulations tagged as “major” for costing $100 million or more. Obama’s team issued 106 on private industry since taking office, compared to 28 by Bush. Last year alone, Obama’s administration issued 32 major regulations impacting everything from clothes dryers, to toy labels.

Heritage said that most expensive regulation of 2011 was from the Environmental Protection Agency, which added five major rules costing $4 billion. Among them, stricter limits on industrial and commercial boilers and incinerators, for a cost of $2.6 billion annually for compliance.

The regulations are also hitting workers through higher fees on items such as checking accounts.

The link to the Heritage Foundation study is here. The title of the report makes me think of “Red Storm Rising“, an excellent novel written by conservative author Tom Clancy.