American Consequences - August 2020

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P.J. O’Rourke comment: Robert, if your meaning of “we” is political, the answer is no. “We” the partisan enthusiasts, “we” the campaign activists, and – alas – “we” the voters are always looking for someone to solve our economic problems for us. But if your meaning of “we” is “we who work our butts off” (whether at a job or in a family or by making some other material contribution to society), we’ve already answered you with a resounding “yes” just by doing what we do all day. If you ever feel like doing another term paper let me suggest, as a subject, another free market hero very much like Professor Ludwig Erhard. Sir John Cowperthwaite was a British economist and civil servant who was posted to Hong Kong in 1945 and assigned to help revive Hong Kong’s economy, which had been devastated by Japanese occupation. Cowperthwaite realized that the people of Hong Kong – though ill-fed, ill-housed, and broke – were already engaged in a vigorous economic revival. Sir John put all his effort into making sure that the post-war Labour government back in the U.K. didn’t destroy Hong Kong’s free market the way they were destroying Britain’s... And it worked. Sir John rose through the colonial administration’s ranks to become Hong Kong’s financial secretary (i.e. minister of economics) in 1961 and held that office for a decade. When Cowperthwaite arrived in the colony, it was starving. But when he retired, it was one of the richest places in the world.

Re: After the COVIDWar, the Debt Bomb Your article with answers to what can be done about the “Debt Bomb”? The lesson # 1 [Breaking down a cage of regulations can free up resources and encourage the economy to grow faster] caused me to dig out a term paper I wrote back in the 1960’s as a student attending Miami Dade County College. My answer to the question “What should be done” about German recovery after WW2. First was currency reform and then a bunch of left-wing regulations. Except one man, Professor Ludwig Erhard as minister of economics was a declared enemy of economic controls who believed in the free market, shouldered the responsibility to dispose of the compulsory economy with all its restrictions and regulations. He implemented the rules of a free economy – the rules of “LAISSEZ- FAIRE”. By 1953, the index of industrial production had risen from 40 in 1948 to 170. Sixteen million persons were gainfully employed. Three million new jobs were created, etc., etc. The German currency became one of the hardest in the world. Will we ever learn the lesson of a truly “Free Market”? – Robert G.

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August 2020

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