Aid Is Not Answer Part 2

C.K. Prahalad of the University of Michigan writes that "Wealth-creation alone will make poverty history".
Very insightful article in todays Wall Street Journal.

"The G-8, led by Tony Blair and supported by Jeffery Sachs and Bono, believe that debt relief and a doubling of aid from rich countries to poor, especially in Africa, is the way to go. A less popular alternative focuses on the involvement of the private sector in poverty alleviation through the development of market-based ecosystems."

Read the whole article here.

Economy Driving Strong Worker Gains

Despite repeated attacks on this administrations handling of the economy .... "the reality is that the economic well-being of the American family has never been better -- as measured by income, consumption, and wealth ..".
As explained by Stephen Moore in The Wall Street Journal.

"Another reason that workers today have made substantially greater economic gains than the wage data may suggest is that more Americans than ever derive income and wealth not purely from labor, but from ownership. Between 1980 and 2005 the share of Americans who are workers/stock owners has doubled from 25% to 52%. Since 1980, shareholder wealth has increased by about $15 trillion. Those wealth gains used to be hoarded by the wealthy, but thanks to innovations like 401(k) plans and IRAs, the wealth gains from the American bull market have been further democratized and the dividends have been spread more widely to middle-class America."

Read the whole article here.

The Flat Tax Discussion Is Back

Steve Forbes is leading the charge on a flat tax. It would unleash a "stupendous economic boom".

The code corrupts our system of government by encouraging the crassest political conduct and by creating a massive, intrusive federal bureaucracy. One-sixth of the private-sector employees in Washington are employed by the lobbying industry. One-half of their efforts are directed at wrangling changes in the tax code. Few people realize that our health-care system, with its runaway costs, is, in fact, the ultimate product of the tax-code distortion in our economy. And last, but most definitely not least, we simply pay too much in tax. When you take into account all the taxes, fees and tolls paid to the government, the typical American pays somewhere around half or more of his income in taxes. Why do we the people accept this?

Experience demonstrates time and time again -- the Harding-Coolidge tax cuts of the 1920s, the Kennedy cuts of the '60s, the Reagan cuts of the '80s and the Bush reductions of 2003 -- that lower tax rates lead to more economic activity, which leads to more government revenue. Fiscal Associates of Alexandria, Va., an economic consulting firm, did an analysis of the flat tax. Its findings: between 2005 and 2015, the Forbes Flat Tax Plan would generate $56 billion more in new government revenue than the current income tax. More important, an estimated $6 trillion in additional assets would be created, an immense boost to our nation's balance sheet. This study also predicts that that flat tax would lead to nearly 3.5 million new jobs by 2011 -- jobs that otherwise would not exist.

Read the whole article here.

Hitchens on Those Who Support Losing the Iraq War

Christopher Hitchens questioning why the left wants us to lose this war:

"How can so many people watch this as if they were spectators, handicapping and rating the successes and failures from some imagined position of neutrality? Do they suppose that a defeat in Iraq would be a defeat only for the Bush administration? The United States is awash in human rights groups, feminist organizations, ecological foundations, and committees for the rights of minorities. How come there is not a huge voluntary effort to help and to publicize the efforts to find the hundreds of thousands of "missing" Iraqis, to support Iraqi women's battle against fundamentalists, to assist in the recuperation of the marsh Arab wetlands, and to underwrite the struggle of the Kurds, the largest stateless people in the Middle East? Is Abu Ghraib really the only subject that interests our humanitarians?"

Read the whole article here at Slate.com.

The Internet Revolution is Only Beginning

Rich Karlgaard on the birth of the Internet revolution in 1995 with the Netscape IPO:

The Internet has had a positive effect in the U.S., too. The speed with which the U.S. economy recovered after the quadruple blast of Fed tightening, a stock market collapse, a recession and terrorist attacks, could not have happened without an Internet immune system. Key to recovery from financial cock-ups is rapid repricing between sellers and buyers. That is how inventories get soaked up. That is how new markets are made. During the grim year of 2002, Sun Microsystems discovered its chief competitor was its own used Sun servers selling on eBay for a dime on the dollar by cash-starved dot-coms and telecoms. But "clearing" is how an economy heals. After the 2001 recession, the American economy had cleared within a year. It has been growing at a 3.5% clip since.

Ten years after Netscape's IPO, the Internet is where the PC was in 1990. What a short, strange trip it's been! Google, only seven years old, is wildly profitable -- and menacing. Bill Gates, the PC era's winner, pulls his hair in frustration. Large local newspapers, their classified ad sales going to Google, Monster.com, and Craig's List, are in steep decline.

Netscape's Big Meteor of 1995 dooms any nation or business that can't adapt. For the nimble and quick, thrilling days lie ahead.

Read the whole article here.

Please Stop The Aid to Africa

According to Kenyan economist James Shikwati, aid to Africa only prolongs the issue of Africa obtaining independence and self-sufficiency. Only the African countries themselves can truly help their problems of starvation and disease and poor (or no) economic growth.

Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.

Shikwati: Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria's textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide.

Shikwati: .... these days, Africans only perceive themselves as victims. On the other hand, no one can really picture an African as a businessman. In order to change the current situation, it would be helpful if the aid organizations were to pull out.

The brilliant and revolutionary article can be found here.