Ouch. The United States has dropped another couple notches in global competitiveness, according to this year's World Economic Forum survey, falling from #5 to #7. Not only that, it's the fourth year in a row. Despite the decline, the survey did give the US props for innovation.
“If you look at competitiveness, what we are talking about is productivity. It’s countries that are productive that can support the sorts of rising living standards and high wages that everyone is looking for,” Blanke told CNBC.
For the second year running, Switzerland was the most competitive economy on Planet Earth. Which should be shocking to no one, considering the great lengths the Swiss have had to go to in order to keep the Swiss Franc from going through the roof.
You might say that dropping to #7 is no big deal, and in a lot of ways you'd be right. Of course the US couldn't be #1 forever. Or could it? The survey made a point to say that our university system is "excellent", so a decline in the quality of education can't really be the (main) culprit. So what's the problem?
"A number of weaknesses are chipping away at its competitiveness...the U.S. fiscal imbalances and continued political deadlock over resolving these challenges," said Jennifer Blanke, Economist at the Geneva-based WEF.
So debt and piss poor politics. I guess that makes a lot of sense. If you take an individual with maxed out credit cards who spends like a crack addict, he's probably not going to be the most productive or competitive player in his financial ecosystem. It stands to reason that a whole nation of over-leveraged crack addicts wouldn't fare much better.
Or is this just a temporary thing? Will the ship of the United States come right and rise to the top again? And does it even matter?
prolli not. Our tax system isn't competitive enough. We just got away with it because we were top dog, but as that fade we will have to adapt and give some tax breaks like the Dutch Innovation Box (5% tax rate!)
I misread the title as "UBS Drops in Global Competitiveness...Again" and wondered why that merited a post.
After reading the post, I find it funny that one of the least productive banks (UBS) is from the most productive country in the survey (Switzerland).
Even more worrisome in the current political climate. Fringe topics like Todd Akin seem to continue being the limelight.
I want an election solely based 'how you're going to steer the economy/rework entitlement programs so I don't pay 80% tax on my first million dollars'.
The answers are too grim....any politician who dared to even provide a real solution would get no votes....just look at how poorly Barry Goldwater did in his presidential campaign.
I'm not really surprised by this, but I think when we collectively snap out of this funk we're in as a nation, we'll be back in the top 5.
We have the highest and one of the most complicated personal and corporate tax structure. We've moved past common sense and beneficial regulation to having regulation put entirely in place as a barrier to entry for new entrants.
We rely on foreigners for our STEM educated work force and then kick them out or make it impossible to get their H1 Visa.
Is there any wonder at why we drop in competitiveness.
The only issue that's important after this election is THE DEBT, and I'm supporting anyone and everyone who makes a dent without being a retard (aka, shuffling the money around or targeting the wrong programs).
I'd go further and compare this to the drop in rating of US debt: political hysterics aside, is there any possible way that a sane, thinking person thinks there's default risk on a five year note? In plain English: do you or anyone you know with a high school education HONESTLY and REALISTICALLY think that their govvie with be worthless in a couple of years. Answer this question honestly to yourself, and then translate that decision making process onto this competitiveness rating. I say no, and I question the viability of anyone who's judgement is so clouded by their political leanings to seriously assert otherwise.
The other thing is Euro-bias: just like the Nobel prize, there's a built in bias that makes the rating self serving for the people issuing it.....so by default I question the premises of the decion making before even looking at the verdict.
Cut entitlement programs
Our tax system is a nightmare. We have a president whose re-election efforts hinge on demonizing outsourcing.
We continue to be irrationally hostile to immigration, refusing to import technical expertise even as Silicon Valley is starved for talent.
And our deficit shows no signs of returning to a sustainable level in the near future. As much as I want to believe in the Romney Ryan plan...the lack of specifics and nature of DC politics give me little hope. And Obama's is entirely inadequate.
I think it's also worth noting that 6 of the top 10 countries were in the top 3rd in the Gini coefficient / income equality. The 3 countries with the highest equality were Hong Kong, Singapore, and the US. So it begs the question, does competitiveness lead to more income equality, or does more income equality lead to more competitiveness?
Country (Avg = 40) Switzerland - 33.7 Singapore - 47.8 Finland - 26.8 Sweden - 23.0 Netherlands - 30.9
Germany - 27.0
United States - 45.0
United Kingdom - 34.0 Hong Kong - 53.0
Japan - 37.6
Interesting thought. I would guess the former; you need a high level of wealth to support social welfare systems and public institutions. I don't even mean welfare states like Finland - just having some public institutions can prevent the vast inequality you see in tribal societies.
Low Gini coefficients are also correlated with lower levels of corruption and strong property rights - which also benefit economic competitiveness.
If yes how the fk is sweden less equal than HK/US?
Surprised US is still 6, with a corporate tax rate more like the soviet union than a capitalist nation, Visa policies more like getting access to north korea than an open country and a completly dysfunctional political system in which half the republican nominees are bible freaks, more like Iran than a secular state.
Then again Europe is essentially communist with the exception of Switzerland, which relies on tax haven status.
Good catch, typo on my part. Meant to say highest inequality can be found among HK, Singapore, and US. Higher gini coefficient = more inequality.
Sadly the U.S. is toast. The credit crisis signaled the decline of a once great nation. Like every empire in history, the rich and powerful have become too rich and powerful, and are rotting the country from the inside out.
Bad times boys.
You aint seen nuthin yet
It doesn't matter who is in office, and I never said anything about Romney.
Barack Obama's number 1 campaign contributor was Goldman Sachs, and the top 20 list is littered with bulge bracket banks, white shoe law firms, and multinational corporations. When I say the rich and powerful are too rich and powerful, this is what I'm talking about; they have the ability to rewrite the rules of the game in their favour, to ensure that they are never challenged.
When ANT (or TNA) talks about over regulation, this is the crux of the argument. The new regulations are so onerous that only massive, established players can possibly comply with them, leaving would-be startups in the dust and monolithic monopolies unchallenged. This legislation may be passed with the INTENT of helping the middle class, but the result is entirely different: entrenched powers and growth in government. This inevitably leads to a two class system, rich and poor. As a rich business owner in a capitalist society, you want moderately wealthy consumers who can afford to buy your products, otherwise you're bankrupt.
What kills me are all the "liberals" who talk about how capitalism has failed. This is just the natural order of things, human nature at its finest.
The US has quite a few fundamental strengths going for it: 1. Cheap land (low pop density) 2. Cheap labor (high birth rate + source of low cost immigration from Mexico + high level immigration) 3. Capital (World's reserve currency implies consistent demand for the currency). Temporarily losing this one to the franc but for the foreseeable future USD remains the reserve currency (Only because I don't see any currency within a generation capable of replacing it) 4. An absolute abundance of food + fresh water + great percentage of energy (compared to Europe) from relatively stable sources. 5. The absolute, final , all-else-fails method for a country to get its way - HARD POWER. No one really needs to go into detail about the full strength of the US military.
With all these advantages , I find it tough to bet against the US for the long haul. That's certainly why I've come here. There have always been jitters about countries overtaking the US (Japan , W Germany ,etc).
Finally , I'd add - isn't it to be reasonably expected that an economy of 310 million isnt as nimble as an economy of 10 million?
The larger influence, however, is cultural and economic. People WANT what we're selling: liberty, stability, self expression, self determination, and economic development. Other countries, like France or the Nordic countries, are more refined but are too small and self absorbed to matter in a fully global context. The comparison is more noticeable in a crisis: when disasters strike, such as an earthquake, they send a goodwill van, we dump a dozen freight barges worth of supplies.
So what we don't always get it right, this nation hasn'e even existed that long compared to others who should know better (cough: China, Europe, MENA, basically every wannabe empire). This sounds very prideful and it is...and I think Americans would actually be happy if some other country stepped up and did more.
One last thing: China. Their currency has a lot of implicit credibility largely because they're holding so much of ours in reserve. In reality, they wouldn't be anywhere close to where they are now if not for that. Who's the real paper tiger?
readTooMuchCFRyesterday
Although Switzerland's policy of painful neutrality and hoarding confiscated WW2 era Jewish valuables clearly works for them.
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