Does RGF use selective statistics or does economic freedom work?

A week ago in the Albuquerque Business Journal, a letter writer slammed me and the Rio Grande Foundation for using “selective statistics” in a letter to the editor:

Selective statistics don’t tell whole story

(A recent) column by Paul Gessing of the Rio Grande Foundation continues his endless argument for lower taxes and less regulation. He is very good at picking out selective statistics to support his theories. But to realize how wrong he is, one only has to look at the larger world around us.

If we look at the most successful countries, the most stable, the most democratic, the freest, the least corrupt, and the highest standards of living, they are the democratic capitalist countries of North America, Europe and East Asia (Japan, Korea, Australia, etc). One thing these countries have in common are high tax rates, strong and extensive regulatory systems, and governments that are actively involved in promoting the welfare of their populations.

At the other end of the spectrum are countries that have little or no regulation and meager tax systems. Those countries tend to be undemocratic and corrupt. They tend to have a super-rich ruling business and political class and massive poverty.

Over the last 30 years, since the dawn of “Reaganomics,” conservatives like Gessing have been pushing for lower taxes and less regulation. And the rest of us have watched as the middle class continually shrinks. The rich get super-rich and use that money to manipulate the political process for their own benefit and accumulate more wealth.

Under the conservative mantra of “the government is bad,” the U.S. has steadily fallen in the rankings of the quality of life among the wealthy democracies. The countries that appear at the top of lists for highest quality of life, highest life satisfaction, strongest democracies, best health care, best educated – are primarily the highly taxed and regulated countries of northern Europe.

This is not to say there is some utopia out there, or that all taxes and regulations are good. But Paul Gessing and his ilk aren’t pushing polices that are designed to raise the boat for everyone, rather they are pushing polices that support only the 1 percent.

I felt the need to respond to this with my own letter in defense of free markets and limited government both in the US and around the world:

Recent letter writer John Liebendrofer accuses me of being selective in my use of data to support the cause of limited government. He also claims that such policies benefit the so-called “one-percent.” Nothing could be further from the truth.

The simple truth is that economic freedom works all over the world. Economic freedom includes low taxes, the rule of law, and the right to engage in voluntary actions without needing a permission slip from government bureaucrats.

The United States was built on economic freedom, but by most indications, this freedom started a steady decline in about 2000. Historically, America has been a rich country, but few would argue that our economy has struggled under the bi-partisan onslaught of government spending, regulations, and political leadership that plays fast and loose with the rule of law.

To bring this discussion to the local level, New Mexico, despite tremendous mineral wealth, has been among the least economically-free states in the nation. It also happens to be among the poorest. This is not a coincidence.

Speaking of poverty, it is the poor, not the “one percent,” who benefit most from economic freedom. The “poor” in the US have material wealth similar to middle class Europeans and far above those of economically-unfree places like Sub-Saharan Africa and parts of Latin America.