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”Shoots (News, Views and Quotes)”

– 2003 Index of Economic Freedom

By Gerald P. O’Driscoll, Edwin J. Feulner, & Mary Anastasia O’Grady

“The trend towards liberalization … continued undisturbed … it represents a deep worldwide consensus that the path to prosperity lies in the verities of open trade, sound money, international flows of goods and capital (and labor), market-determined prices, sensible regulation, and the protection of property rights.” — From the Foreword by Robert L. Bartley, Editor, The Wall Street Journal

Now in its ninth edition, the Index of Economic Freedom, co-published by the Heritage Foundation and The Wall Street Journal, measures the level of freedom and prospects for growth in our global economy. The 2003 Index of Economic Freedom is a practical reference guide to the economics of 156 countries, with detailed information about foreign investment codes, fiscal burden of government, tariffs, banking regulations, monetary policy, black markets, and more. The 2003 Index of Economic Freedom is the handbook for anyone who invests or does business abroad. It also is an essential guide to economic growth for those who want to understand the reasons that some economies flourish and others lag behind.

Check out the 2003 Index Of Economic Freedom at www.heritage.org Only $19.95 after mentioning this “AD”! That’s more than 20 percent off the cover price! Also … substantial discounts for bulk orders and classroom use! Call The Heritage Foundation 1-800-544-4843 for more information.

– Success or Failure of Boston’s ‘Big Dig’ Being Watched Closely

A 3 mile section of Boston’s 7.8 mile system of underground highways, ramps and bridges — known as the Big Dig — has opened. Officials around the country are watching closely to see if the most expensive public works project in the nation’s history can justify its $14.6 billion price tag.

Success or failure in Boston will determine the fate of nearly 20 multibillion-dollar highway plans in other cities coast-to-coast.

Cost estimates for these proposed projects range from $1 billion to $9 billion each — but then, as with all such government projects, there is the near certainty of cost overruns.

The Big Dig was originally estimated to cost $2.6 billion, but it has already soaked up more than $8.5 billion in federal money.
Projects contemplated for other states face similar hurdles:

Congress has become wary of lending support to such huge projects like the Big Dig, which received 60 percent federal funding.
Legal challenges by environmentalists and the demand for countless environmental studies greatly increase the costs of these mammoth projects, which often cut directly through urban areas.
Voters are in no mood to endure local tax increases to foot the bill for expensive projects — especially in view of the Big Dig’s example of horrendous cost overruns.
Yet federal highway officials contend that some of the proposed projects are needed to replace structures which are sometimes 50 years old and in bad need of rescue or replacement.

Source: Fred Bayles, “Boston Has a Lot More than Cars Riding on the Big Dig,” USA Today, January 20, 2003.

For text http://www.usatoday.com/news/nation/2003-01-19-bigdig-usar_x.htm

Above article is quoted from National Center for Policy Analysis www.ncpa.org Daily Policy Digest January 20, 2003

”Roots (Food for Thoughts)”

– The President’s FY2004 Budget in Perspective

It is important to put the current budget proposal into historical context. To do so, it is necessary to translate current spending and revenue proposals into real terms either by adjusting for inflation or by expressing the proposal in terms of the broader economy. Looking merely at the budget in nominal terms that do not account for inflation or economic growth is misleading and inaccurate. The table below contains information about the current budget in the context of the post-World War II era and the past three administrations. Highlights include:

The President’s budget proposes spending $390.4 billion on defense related activities in FY 2004. This amounts to 17.5 percent of all spending and 3.5 percent of GDP.

– This level is roughly the same as defense spending was in 1996, which amounted to 17.0 percent of all federal spending and 3.5 percent of GDP.

– Defense spending in 1987, the height of the Reagan build up, was 28.1 percent of all federal spending and 6.1 percent of GDP.

The President’s budget proposes a fiscal year 2004 budget deficit of $307.4 billion, which is 13.8 percent of all spending and 2.8 percent of GDP.

– This level is roughly the same as the deficit was in 1994, which amounted to 13.9 percent of all spending and 2.9 percent of GDP.

– Deficit spending in 1983, the highest point during the Reagan administration, was 25.7 percent of all spending and 6.0 percent of GDP.

Comparison of Bush Budget (FY’04) with Past Budget Averages

FY’04

*Proposal

Post-WWII

*Average (FY’46 – FY’02)

Clinton

*Budgets (FY’94 – FY’01)

G.H.W. Bush

*Budgets (FY’90 – FY’93)

Reagan

*Budgets (FY’82 – FY’89)

Total Receipts as percent of GDP

*17.0%

*17.9%

*19.4%

*17.7%

*18.0%

Total outlays as percent of GDP

*19.7%

*19.5%

*19.6%

*22.0%

*22.3%

Deficit (-)/Surplus as percent of GDP

*-2.7%

*-1.6%

*-0.1%

*-4.3%

*-4.3%

Annual growth in total receipts (average % change from previous fiscal year, FY96 $) 2.7% 2.9% 4.9% 0.5% 2.5%

Annual growth in total outlays (average % change from previous fiscal year, FY96 $) 2.2% 2.3% 1.5% 1.9% 2.7%

Defense spending as a percent of total outlays

*17.5%

*35.5%

*17.1%

*21.7%

*26.7%

Non-defense discretionary spending as a percent of total outlays
*19.2%

*19.4% (See Note below)

*17.6%

*16.6%

*17.1%

Net interest costs as percent of total outlays

*7.9%

*10.5%*

*13.9%

*14.5%

*13.2%

Other mandatory spending as a percent of total outlays

*55.4%

*41.6% (See Note below)

*51.4%

*46.2%

*42.9%

Debt held by public at end of fiscal year as percent of GDP 36.9% 44.0% 43.0% 46.3% 36.7%

Gross Debt at end of fiscal year as percent of GDP

*64.8%

*56.2%

*63.4%

*61.8%

*45.4%

(Note) includes only data back to 1962 since the distinction between discretionary and mandatory began only in that year.

Above article is quoted from The Tax Foundation www.taxfoundation.org/2004budgetperspective.html

– The Moral Health of Capitalism

By Michael Novak

The business corporation is the strategically central institution of social justice. If the business corporation fails to meet its moral responsibilities, the odds against the rest of society doing so shrink to next to zero. Take one obvious example: the business corporation is strategically central to the creation of new wealth-and new industries -and new jobs; no other institution even comes close. The workers of a corporation depend on its success for their jobs, their career opportunities, their job training, their pensions, and their health care-even their friendships. When women and men enjoy their work, grow as human beings in it, prosper from it, they are happier in the rest of their lives.

On the other side, when corporations go badly, human misery increases. If human conditions at work are poor, the rest of life tends to sour with it.

That’s why building a good corporation is a noble human calling. It is a calling heavily weighted with moral obligations. In a set of public opinion polls collected by my colleague Karlyn Bowman at the American Enterprise Institute, the public holds the corporation morally responsible for at least eleven different moral tasks. In one book, I list fourteen moral responsibilities of business, but I didn’t finish counting.

More impressive: In the matter of corporate responsibility, the stakes are high: the liberation of the poor through jobs and the creation of new wealth; the success of democracy and human rights [as we learned in Eastern Europe, people are not satisfied with democracy if all it means is voting every two years, while their daily economic condition does not improve]; and the project of building civil society-that network of artistic creativity, good works, and medical research that self-governing citizens choose to initiate by and for themselves. The corporation is the main creator of the wealth that makes the works of civil society achievable.

The poor, democracy and human rights, civil society-these are big issues, and all these important projects have now been injured by corporate scandals. And so my second point: moral scandals in corporate life-especially by corporate leaders-are huge evils. They are trebly evil. One disgusting example was recently reported: A CEO installed a $6,000 shower curtain in his private home, allegedly at company expense. If that story is true, that was not only an evil harming one man, his reputation, and his company. It was twice evil because in the same act he humiliated all the good and decent CEOs in the nation, and dragged them all into ridicule. It was three times evil because his stupidity gave ammunition to the classical enemies of the free economy, at a time when the poor of the world depend on the spreading and the growth of the free economy. In his moral carelessness, he did enormous damage to causes far larger than himself.

The third point to make is far briefer: Corporate responsibility can be backed up by good law, but it cannot be completed by law alone. The law necessarily rides along behind breakthroughs in technology and invention. The law often arrives-as in this past year- after the damage has been done, in time to put up some monuments. Between the cutting edge of change and the slow course of the law must come something else: character and conscience.

“There are many things which the law permits them to do which the religion of the Americans forbids them to do,” the great scholar Alexis de Tocqueville wrote in 1835. Things must be so in a free society, which wishes also to be a decent society. Humans must decide how to use their freedom. Conscience has to fill the gap between breakthroughs in technological possibility and the later-arriving decisions of the law. Persons of character know limits; there are things they will not do, no matter what, and no matter what other people are doing.

In recent years, too many folk have tried “thinking outside the box,” “breaking out of old paradigms,” “making new rules.” Well, that might be a good thing to do in technological inquiries. But it’s a fatal mistake in ethics. For technology may change, but the human need for honesty, trust, and the firm rule never to use other people as means, only as ends, doesn’t change. When the American people can’t trust a company’s financial report, they won’t invest in that company. It’s as simple as that. You may not be able to see “trust,” but it’s as real as a huge loss on the stock market. In the daily life of a capitalist system, things of the spirit-like trust-are more real than money. When they are missing, money itself loses its value.

All through America, in every organization, in every institution, we need more attention paid to the human spirit, to the priceless realities, to people whose words, once spoken, can be absolutely relied upon. I have the impression that there were more such persons in our nation’s past. But maybe every generation views the past through rosy lenses. Whatever the numbers, every republic needs many such people.

To endure, a republic needs people whose words are rock-solid, reliable, true-until hell freezes over they will not lie, they will not do the dishonest deed. There are such people in America. People with internal North Stars. People who are not saints, but they almost always do the right thing. They are our Mount Rushmores. Fourth, for too many years, economics textbooks and business schools and the public media have been far better at talking about material things-about the bottom line-than about character, and trust, and honesty.

Besides the ecology of the natural world there is also a moral ecology, a moral environment. For 100 years, we have neglected this whole nation’s moral ecology. We have used up invaluable resources stored up at great cost in the past.

We need to rebuild this ecology-this moral ecology-all through society. This task is done by emphasizing high morals in every realm, through stories of good and evil, and tales of moral heroes and villains. We need to talk about high morals day-in and day-out, encourage one another, rebuke one another.

As part of this task, many companies these days have drafted moral codes. “In our company,” they say, “anybody who does x, y, or z will be fired. Employees who follow paths a, b, or c will be supported all the way up to the Board of Directors. If you act ethically in this company, you will not act alone. The whole organization is with you.

Max Weber was partly right, you know, about “the Protestant ethic.” You don’t have to be Protestant to practice it. But there is an ethic that lies behind capitalism, and in the real world it has to be practiced. The system simply will not work without it.

John Stuart Mill and all the classical economists held that economics is a branch of ethics. And they were right. The whole system is based upon trust, honesty, and clarity about the facts-no lies, no illusions, no duplicity. Those are destructive agents in the system.

Finally, we must not lose sight of the corporation’s three major
responsibilities: to create new wealth; to generate new industries and new jobs; and to inspire new generations who will invest for the future and sacrifice in the present, as well as to nourish workers who have confidence that their business is a noble calling, and that through it they are leading the world into a freer, more prosperous, and more virtuous future.

Mr. Novak is the George F. Jewett scholar at the American Enterprise Institute. Mr. Novak is the author, most recently, of On Two Wings: Humble Faith and Common Sense at the American Founding. These are his remarks opening the panel on corporate responsibility at President Bush’s Economic Forum in Waco, Texas in August and were previously published on National Review Online on August 16, 2002

Above is quoted from The Heritage Foundation www.heritage.org The Insider November/December 2002

”Evergreen (Today’s Quotes)”

“It is error alone which needs the support of government. Truth can stand by itself.” — Thomas Jefferson

“Liberty is meaningless if it is only the liberty to agree with those in power.” — Ludwig von Mises

”’See Web site”’ http://www.grassrootinstitute.org ”’for further information. Join its efforts at “Nurturing the rights and responsibilities of the individual in a civil society. …” or email or call Grassroot of Hawaii Institute President Richard O. Rowland at mailto:grassroot@hawaii.rr.com or (808) 487-4959.”’

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