Chrystia Freeland

Does government have a role in the 21st century?

Chrystia Freeland
May 31, 2012 19:50 UTC

The big economic question in much of the world today is usually framed as the fight between advocates of austerity and advocates of growth. But another way to view the debate is as a contest between those who think that 21st-century government can be effective and those who don’t.

Indeed, some of America’s most outspoken capitalists have begun to fight the “Buffett Rule,” which would set a minimum tax level for millionaires, and other calls to raise taxes for those at the very top, with the argument that money is best left in the bank accounts of the superrich because they are more effective at using it than the state is.

“I’m a job creator. I’m one of the guys who can help us out. I’m a Silicon Valley guy who can invent and create,” T.J. Rodgers, chief executive of Cypress Semiconductor, told me. “If you tax me more, I will either give less to charity or I will fund venture companies less, or I will sell the stock in my own company or other companies I own, like Intel and Google. I will do one of those three things to return the money to the government.”

If that were to happen, Rodgers told me, the economy would be hurt, because he is better at investing money than government bureaucrats are.

“The money will go into cash for clunkers or another program. And somehow we’re supposed to believe that taking money from the investments, my investments, out of Silicon Valley, where they have been very, very good for the economy, and putting them into cash for clunkers, or the new scheme, whatever it is, is somehow going to make America’s economy better,” he said. “It’s just wrong. It’s going to hurt the people that they’re pandering to. It’s going to hurt the very people that think if we vote for this, then we’ll get more money. What will happen is the economy that they depend on will be less robust and they’ll be in worse shape.” “Cash for clunkers” is a term for a U.S. government program in 2009 that provided rebates to those who traded in older, fuel-guzzling cars for more efficient models.

Taxes: How low can you go?

Chrystia Freeland
May 24, 2012 20:11 UTC

Are your taxes too high? When Gallup asked that question in April, tax month in the United States, 46 percent said they were. An additional 47 percent said their taxes were “about right.” Just 3 percent said their taxes were too low.

This campaign season reflects that result. Mitt Romney, the Republican candidate, is offering a 20 percent tax cut for everyone. Given the mood of the conservatives in the United States today, that may not surprise you. But even President Barack Obama, who is routinely described as a socialist by his opponents, is peddling a plan under which 99 percent of Americans would pay less than they did under the last Democrat in the White House, Bill Clinton.

This bipartisan agreement that the overwhelming majority of Americans should pay lower taxes than they did in the 1990s is remarkable for many reasons. For one thing, we are constantly hearing – and it is true – that U.S. politics is more polarized than ever. But unless you are a member of the 1 percent, on this core issue there is a lot more consensus than you might think. Political strategists on both sides, it turns out, know how to read poll data.

Equal rights and the U.S. economy

Chrystia Freeland
May 18, 2012 01:17 UTC

Are equal rights good for the economy? Campaigns against discrimination, like the battles for women’s rights and civil rights in the 1960s and the fight for gay marriage equality today, are usually framed as struggles for justice.

We think of these issues as entirely separate from economic concerns and sometimes as even running counter to them. Equal pay legislation and rules against discrimination have often been opposed by business on the grounds they would raise costs.

But there is actually a powerful economic argument for equal rights. If you believe that talent isn’t determined by gender, race or sexual orientation, but is instead a roll of the genetic dice, then the most productive society will be the perfectly fair one. A society that is blind to gender, race and sexual orientation will choose the best person for the job – not just the best white, straight man.

Obama and the politics of party unity

Chrystia Freeland
May 10, 2012 22:23 UTC

The world, particularly the world economy, is pretty vulnerable at the moment. The recent French and Greek elections, and Germany’s unpredictable response to their results, have again raised the specter of a crisis in the euro zone that Robert Rubin, a former secretary of the U.S. Treasury, told me this week could be far worse than the bankruptcy of Lehman Brothers in 2008. Nor is everything fine in the United States, where disappointing job numbers for April have set off fears that the economic recovery may be weakening.

Yet, at a time when the global economy is so fragile, and in a year when it had been billed as the only election issue that matters, the United States has spent the week focused on same-sex marriage, which President Barack Obama explicitly endorsed on Wednesday after a dance of the seven veils by other members of his administration.

This focus on social issues when so much else is awry can be perplexing to outsiders: Dmitry Peskov, President Vladimir V. Putin’s press secretary, memorably sneered about the mixed-up U.S. priorities in a recent conversation with David Remnick, editor of the New Yorker.

Colonial America: How Swede it was

Chrystia Freeland
May 3, 2012 21:52 UTC

America used to be Sweden: According to new research, the America of the Founding Fathers was ‘‘more egalitarian than anywhere else in the measurable world.’’

That’s an important finding, and one that will surprise most Americans today. Both inequality and American exceptionalism are high on the national political agenda. One idea that brings those issues together is the belief that Americans have an exceptional cultural tolerance for income inequality. Unlike Europeans, the thinking goes, most Americans are confident that they are ‘‘soon to be rich.’’ As a result, the conventional wisdom has it, Americans in the middle look up to their 1 percent and are loath to tax them.

But historical research by the economists Peter H. Lindert and Jeffrey G. Williamson shows that when it comes to inequality, this American exceptionalism is an inversion of the conditions that prevailed at the time of American Revolution. In that era, which is so often invoked in today’s political and social battles, America was the world’s most egalitarian society – and proud to be so.