Economic News

Funny how Venezuelan President Hugo Chavez likes to "help the poor" of countries he has an ax to grind with (steal from the poor of his own country and give to the poor of others for political points), when he can't seem to manage the economy of his own country.

The Heritage Foundation's 2006 Index of Economic Freedom has Venezuela tied for 152nd place with Libya, on the scale of measuring which nations have the most economic freedom. Countries that rank lower than that, are Zimbabwe, Burma, Iran, and North Korea (with four countries not graded).

In the wake of a failed—and hotly contested—2004 recall attempt, Venezuelan President Hugo Chávez Frías has clamped down on civil liberties, property rights, and Western foreign oil companies that are still operating in this impoverished South American country. He has decreed new laws that define public protest as a crime, has imposed media restrictions that encourage substantial self-censorship under threat of operating license confiscation, and has begun to seize large rural farms and ranches that he claims are not sufficiently productive.

The mayor of Caracas exemplifies how the "compassion" of socialist-thinking makes life worse for everyone. Larry Kudlow reports on how the mayor seized privately owned golf courses in order to make room for building houses for the poor; on the surface, that sounds like an act of compassion. But it is compassion in the absence of wisdom and intellect. Consider:

According to the mayor’s reasoning, it is the state’s responsibility to ensure that none may enjoy luxury while others suffer poverty. But consider the moral disaster that such a principal would create: The security and stability that flow from private ownership would evaporate. No one could safely produce, improve, or acquire any property for himself, since the resulting inequality would only create a new target for “forced acquisition” by the state. Productive incentives would be destroyed. It is for this reason that there is only one way for state-enforced egalitarianism to succeed: by making everyone equally poor.

In other economic news, new tax figures were released by the IRS. Michael Medved puts the numbers into perspective by comparing them to the Clinton years:

In 2000, the last year of the Clinton presidency, the average tax rate for all taxpayers was 15.3%. In 2004 (the latest year for which final numbers are available) that rate had fallen to 12.1%-- an across-the-board cut of more than 20%. The only voters who could claim that a 20% tax cut is insignificant are those who don’t pay taxes.

Meanwhile, the Bush/GOP tax cuts (decried by dishonest Democrats for benefiting “only the rich”) proved especially significant for the bottom 50% of all taxpayers. Under Clinton, these below-average wage earners still coughed up 4.6% of their income to the feds. Under Bush, that rate for the struggling bottom half dropped to 3% --a healthy cut of 35%.

The IRS numbers also give the lie to the Democratic charge that “the filthy rich” gobble up a larger portion of the national income than ever before. The top 1% of taxpayers took an all-time peak percentage of the national income under Clinton—some 17.8%. The most recent figures for Bush show that the privileged one per cent reduced their share of our society’s earnings during his presidency to 16.5%.

Politicians and pundits make it a habit of lying – and they indulge that habit with gusto and recklessness. Statistics, however, don’t lie – at least not when they’re based on the actual money collected by the IRS. Perhaps these new numbers will provide a needed dose of reality therapy for confused conservatives – and cure the crazy idea that there’s no real difference between Democrats and the GOP.

This is talked about toward the end of Michael Medved's 1st hour on Tuesday's show (first half, he talks about the lowering gas prices- really good stuff from America's #1 cultural crusader; highly recommended listening). Is it not obvious yet, that the Bush economy is working? If you want to see the American economy continue to prosper, then help keep a Republican majority in Congress this November.

Hat tip: Free Republic for the photo.