Sunday, August 04, 2013

Economic Freedom—lies and distortions from Charles Koch

As usual with Charles Koch, this add running on TV in the Kansas area and elsewhere, is very misleading. It starts off telling you that if you earn $34,000 a year you are in the top 1 % of the world’s earners. What he is not telling us is that about 1/3 of the world has people who earn $2.50 an hour or less. No one living in the US could afford to live on a salary that low. But some countries are poor, their people live in huts or shanties and about all they have to buy with that money is a small amount of food. Many people in such countries have no electricity, running water, flush toilets or few if any health services.

Notice that North America and Europe together make up about 2/3rd’s of the world’s wealth. The US makes up most of North America.
The reality is that most of the countries in this graph have a relatively similar economic system. “Economic freedom” as Koch tells us, is really not that different from country to country.
For example India makes up only 2%. But how much economic freedom does that country have?
According to Wikipedia:
“Until 1991, all Indian governments followed protectionist policies that were influenced by socialist economics. Widespread state intervention and regulation largely walled the economy off from the outside world. An acute balance of payments crisis in 1991forced the nation to liberalise its economy; since then it has slowly moved towards a free-market system by emphasising both foreign trade and direct investment inflows. India's recent economic model is largely capitalist. India has been a member of WTO since 1 January 1995.”
But does all the economic freedom result in well paid happy workers? Again Wikipedia:
 “However, the country ranks 140th in the world in nominal GDP per capita and 129th in GDP per capita at PPP
……. However, it continues to face the challenges of povertycorruption,malnutritioninadequate public healthcare, and terrorism[1].
So people in the US are economically better off than the people in India. According to Wikipedia here are some differences between India and the US including population, India has 1.27 billion people, the US has 315 million people, The US has more land and more resources, so that has a great deal to do with the differences in their place in the world economy.
The United States is a developed country and has the world's largest national economy, with an estimated 2012 GDP of $15.6 trillion – 19% of global GDP at purchasing-power parity, as of 2011.
Then there is Europe that has 32% of the world’s share of wealth. About 30% of Europe’s workers belong to unions, compared to12% of workers in The US. That means that Europeans get better wages and benefits than their US counterparts.
One country that is very poor, vet has many economic freedoms and lacks government regulations is Bangladesh. The Rana Plaza Garment fire disaster in Bangladesh, caused the deaths of at least 1,127 workers, due to ignoring safety regulations. The minimum wage for Bangladesh's garment workers is $37 a month.. That’s one country where economic freedom and lack of government over-reach has not benefited workers.
So don’t be fooled by the phony statistics of any ad put out by Charles Koch. His ad is mostly just lies and that is what he and his brother do best.

No comments: