Friday, 14 September 2012

Mitt Romney tweets: America is not number one

U! S! A! U! S! A! We're number one! We're number one! How many times have I seen Stephen Colbert get his audience worked up by getting them all to chant this? Sounds good. It's inspirational. Rah! Rah! Sis boom bah! But is it true? I ran across the following tweet which seems to be from the legitimate account of presidential candidate Mitt Romney @MittRomney https://twitter.com/MittRomney:

Mitt Romney @MittRomney 6:29 PM - 5 Sep 12
Before @BarackObama took office, the U.S. ranked 1st in global competitiveness – today marks our 4th year of decline.

One tweet, eighteen words, 99 characters but oh so many things to analyse.

The World Economic Forum (WEF), a Swiss non-profit foundation, annually publishes The Global Competiveness Report (GRC) which ranks countries based on the Global Competitiveness Index (GCI). This index, which involves 110 variables, uses data from a variety of sources including a sampling of business leaders in each country organized into 12 categories called "pillars" representing important determinants of competitiveness.

The report "assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources. Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity."

The United States has been ranked recently as follows (Wikipedia):

2012-2013: U.S. = #7

2011-2012: U.S. = #3

2010-2011: U.S. = #4

2009-2010: U.S. = #1

2008-2009: U.S. = #1

While Mr. Romney's tweet seems to be accurate in regards to the ranking of the United States in this Global Competitiveness Report, his tweet also "implicitly" suggests this is the fault of the current president Barack Obama. Is this true too? I quote from the 2012-2013 report page 22:

The United States continues the decline that began a few years ago, falling two more positions to take 7th place this year. Although many structural features continue to make its economy extremely productive, a number of escalating and unaddressed weaknesses have lowered the US ranking in recent years. US companies are highly sophisticated and innovative, supported by an excellent university system that collaborates admirably with the business sector in R&D. Combined with flexible labor markets and the scale opportunities afforded by the sheer size of its domestic economy—the largest in the world by far—these qualities continue to make the United States very competitive.

On the other hand, some weaknesses in particular areas have deepened since past assessments. The business community continues to be critical toward public and private institutions (41st). In particular, its trust in politicians is not strong (54th), perhaps not surprising in light of recent political disputes that threaten to push the country back into recession through automatic spending cuts. Business leaders also remain concerned about the government’s ability to maintain arms-length relationships with the private sector (59th), and consider that the government spends its resources relatively wastefully (76th). A lack of macroeconomic stability continues to be the country’s greatest area of weakness (111th, down from 90th last year). On a more positive note, measures of financial market development continue to indicate a recovery, improving from 31st two years ago to 16th this year in that pillar, thanks to the rapid intervention that forced the deleveraging of the banking system from its toxic assets following the financial crisis.

Election 2012: Choosing the Best Candidate
Trying to determine the best candidate for the presidential election this coming November 6, 2012 is no easy task. There is a lot which is not right with the world and anybody would want to see that change. However which candidate can actually do what's necessary to make those changes? Yes there are the promises but anybody has to admit that there are physical limitations to what any president can do. He may have a great plan but if the opposition decides to vote against it, that great plan may end up being a failure. That's the political side of the problem. He may have a so-called great plan that seems good in theory but in practice does not reflect the reality of how the world works. That's the economic side of the problem.

Running the largest economy in the world is really, really complicated. Doing so with globalization to contend with and the complexities boggle even the experts. Who do you believe? A CBS News article below says the national debt has now increased more during 4 years of Obama than during 8 years of Bush. PolitiFact says that the national debt doubled under Bush. Some say that Obama saddled America with a huge debt during his first year in office due to the financial crisis but others point out that those decisions were made by Bush then supported by Obama. Do we blame just Bush? Do we blame just Obama? Is our focus on the political cycle of four years distracting us from the longer term issues? If the financial crisis demands a 10 year solution, is it premature to get ticked with Obama that he hasn't fixed everything after only four years? And when we look at the problems Obama faces, just what has he inherited from previous administrations?

Inherited? Why is that important? I ask you, if Republican policies got America into this mess, what makes you think Republican policies will get America out of this mess?

According to the CBO (Congressional Budget Office), the U.S. last had a surplus during fiscal year (FY) 2001. From FY2001 to FY2009, at the height of the Global Financial Crisis, spending increased by 6.5% of GDP (from 18.2% of GDP to 24.7%) while taxes declined by 4.7% of GDP (from 19.5% of GDP to 14.8%). ... The 2009 spending level is the highest relative to GDP in 40 years, while the tax receipts are the lowest relative to GDP in 40 years. (Wikipedia: History of the United States public debt: Causes of recent changes in debt: 2001 vs. 2009)

George W. Bush was president from January 20, 2001 until January 20, 2009 when Barack Obama assumed office and "inherited" the worst U.S. economy since the Great Depression.

Final Word
In reality, I don't get the final word, you get the final word on November 6. Well, the final word for the next four years at which time everybody will be happier or sadder. Everybody? No matter what happens I imagine there will be some who will be happy and some who will be sad.

my blog: The 2012 Republican Platform: Are ya scared yet?

my blog: The 2012 Democratic Platform: yes you still can

I would invite you the reader to peruse the platform papers of both parties. They show you exactly what you're going to get for your vote. I have my preference but rather than me trying to sway you, why not look for yourself and make an "informed" decision. These are trying times and I'd like to see all things right with the world as much as the next person but I also realise I have to be careful to not fall in the trap of the politicking. Anybody can talk the talk but who can walk the walk? And don't forget, it took decades to dig this hole. Don't expect anybody and I mean absolutely anybody to get you out of it overnight meaning in just four years.


References

Wikipedia: Global Competitiveness Report
The Global Competitiveness Report (GCR) is a yearly report published by the World Economic Forum.

The World Economic Forum
The Global Competitiveness Report 2012-2013 (PDF)

Wikipedia: World Economic Forum
The World Economic Forum (WEF) is a Swiss non-profit foundation, based in Cologny, Geneva. It describes itself as an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. The Forum is best known for its annual meeting in Davos, a mountain resort in Graub√ľnden, in the eastern Alps region of Switzerland. The meeting brings together some 2,500 top business leaders, international political leaders, selected intellectuals and journalists to discuss the most pressing issues facing the world, including health and the environment.

World Economic Forum - Sep 7/2011
US Competitiveness Ranking Continues to Fall; Emerging Markets Are Closing the Gap
The United States continues its decline for the third year in a row, falling one more place to fifth position. In addition to the macroeconomic vulnerabilities that continue to build, some aspects of the United States’ institutional environment continue to raise concern among business leaders, particularly related to low public trust in politicians and concerns about government inefficiency. On a more positive note, banks and financial institutions are rebounding for the first time since the financial crisis and are assessed as somewhat sounder and more efficient.

World Economic Forum Annual Meeting 2012 » Sessions - Jan 26/2012
US Competitiveness: A Wake-up Call
The United States remains one of the main drivers of the global economy.
...
According to a recent survey of Harvard Business School alumni, US competitiveness has decreased significantly in recent years.
...
The US is still seen as a leader in activities such as innovation, capital markets and higher education. However, more foundational factors such as K-12 education and regulatory regimes undercut the nation’s competitiveness. The complexity of the tax code – more so than the tax burden itself – is seen as one of the biggest areas that could be improved to help the US. Indeed, most significant barriers to increasing business competiveness tend to fall under the government’s jurisdiction – such as regulatory complexity, education deficits and inefficient logistics infrastructure.

Wikipedia: History of the United States public debt
In the United States, national debt is money borrowed by the federal government of the United States. Debt burden is usually measured as a ratio of public debt to gross domestic product.

CBS News - Mar 19/2012
National Debt has increased more under Obama than under Bush by Mark Knoller
The National Debt has now increased more during President Obama's three years and two months in office than it did during 8 years of the George W. Bush presidency.

PolitiFact Texas - Jun 26/2012
Paul Sadler says national debt doubled under George W. Bush
Former Texas state Rep. Paul Sadler [said,] "The U.S. has "never seen national debt like this. It doubled during the Bush administration." ... We decided to see if Sadler’s claim about debt under President George W. Bush holds up. ... We see how Sadler reached his conclusion. In raw terms, both the public debt and gross federal debt more than doubled during the fiscal years corresponding to Bush’s presidency. However, adjusting for inflation, gross debt increased 70 percent over those years, while public debt increased 88 percent. That’s not quite doubling.

my blog: The Right isn't wrong, they're nuts
The United States of America is in a difficult situation and the people are a fickle bunch. They have completely forgotten about the previous president and are strictly concerned with the one currently sitting in the Oval Office. They give him the worst economic situation since The Great Depression and are then upset he hasn't set everything right. Oh he's set a lot of stuff right but admittedly he hasn't set everything right. Unfortunately everyone seems to forget that it is very easy to set a house on fire but not so easy to put it out.

2012-09-14

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