Quote:
Since 2003, more than thirty-five major American companies have moved their headquarters and reincorporated overseas. Rather than rail against such “inversions” as President Obama does or call for an economic boycott as Ohio's Democratic Senator Sherrod Brown does, we should figure out what is driving American companies beyond our borders.
–John Fund in The American Spectator
Fund’s article (“Republicans Can Learn a Lot from Burger King’s Move to Canada”) is prompted by the news that Burger King will move its headquarters from the U.S. to Canada after buying Tim Horton’s, Canada’s popular coffee shop.
Canada, ironically, was long a more socialist and therefore poorer nation than the U.S., Fund recalls, but then Canada woke up and pulled back from socialist programs. Canada cut down on public spending, reformed its tax system and reduced its public debt.
In other words, our neighbor to the north has become more like the United States used to be as the U.S. has adopted more of the failed socialist or quasi-socialist policies that hampered Canada.
Canada now has a higher per capita income than the United States, and it ranks eighth on the annual Economic Freedom of the World index compiled by the Fraser Institute, which looks at the economies of 150 nations. The United States is number 17, with the ignominious characterization of “mostly free.”
The Fraser Institute writes of the U.S.:
Unfortunately for the United States, we’ve seen overspending, weakening rule of law, and regulatory overkill on the part of the U.S. government, causing its economic freedom score to plummet in recent years.
This is a stark contrast from 2000, when the U.S. was considered one of the most economically free nations and ranked second globally.
Fund writes that Canada’s strategy of lowering taxes on business was a “conscious one.” Jim Flaherty, who was Canada’s finance minister in the Conservative government of Stephen Harper until March, told Fund that “if you can give people enough upward opportunity for average people the talk will be on creating more of it rather than redistributing a shrinking pie.”
President Obama is not likely to change courses simply because his policies are failing—as has become clear over the last few weeks, when the U.S. has seen two of its citizens beheaded by Islamic jihadists, the president lives in a world of his own. He cannot see that the presumptions with which he assumed the (then) most powerful office in the world were false.
It is not too late for the U.S. to change its course and become again the vibrant country with opportunities for those who are willing to work. For two and a half more years, we are stuck on the current course. If the GOP wins more congressional seats in the midterms, they can impede policies that harm our economy. But the reversal of policies needed to restore the country will depend on what happens in 2016.
Canada should stiffen the spines of those in the U.S. who realize that what we are doing is not working:
Canada proves that a country can climb out of a deep fiscal hole within a remarkably short number of years and build a prosperous society even while it retains a large welfare state.
That is a lesson for Democrats, who rather than rail against Burger King’s lack of economic patriotism, should learn how Canada has avoided America’s economic stagnation.
And also a lesson for Republicans, who often lack the courage of their convictions in calling for genuine economic reform. Canada’s economic example—and the political success of Harper and the Conservatives in winning three elections in a row—should stiffen their spines.
Eight years of stagnation and erosion of the rule of law should be enough.