It was obvious that as soon as a recession hit, the interventionists and socialists would make the charge. I said as much in 2006, but I also said in 2006 that there was a great flaw in the "Economic Freedom Report".
The flaw has taken away a key weapon that we could be using now against those who charge that the free market failed. As I argued in 2006, no country should be given a passing great if the country exists with a central bank that manipulates the money supply. I wrote:
The Fraser Institute is out with their latest "Economic Freedom" rankings. In the report, Economic Freedom of the World: 2006 Annual Report, countries are ranked by their so-called economic freedom.
The problem with this report is that no country deserves a passing grade,yet many are given impressive scores.
The report completely ignores the destructive nature of money manipulation (Particularly money supply inflation) , especially the long-term destructive consequences of such.
Why are we up in arms about this?
The United States, for example, receives an overall rating of 8.2 (out of 10)and generally gets a rank of 9 plus for money soundness. This categorization occurs despite the fact that the money supply (M2NSA) in the United States has grown over the last 10 years from $3,754 billion [August 1996] to $6,868 billion [August 2006].
This money supply growth suggests tremendous mis-allocations in the economy--that will ultimately lead to a severe economic downturn.
Thus it makes no sense to give a passing grade, i.e. above 6, when a country has a money supply controlled and manipulated by the state. When the ultimate business cycle collapse occurs, won't socialist's of every stripe point to the high freedom ranking as an indication that freedom is a failure?
Wouldn't it be great if we could throw in the face of these interventionists something like, "How can you possibly say the free market has failed when the Fraser Economic Freedom of the World Report has not given a passing grade on freedom to any country in the world? There is no signifcant market freedom if the central bank distorts the money supply."
Let us hope that the Fraser Institute corrects this serious error in future editions, so that we rightfully have a weapon that shows the interventionists that the current problem is not the result of freedom.
Wouldn't it be great if we could throw in the face of these interventionists something like, "How can you possibly say the free market has failed when the Fraser Economic Freedom of the World Report has not given a passing grade on freedom to any country in the world?"
ReplyDeleteYou obviously have never been a college professor.