In “He Stopped Loving Her Today,” country music’s George Jones sings of a man who “can’t” — until the day he dies — “stop loving” an ex from long ago.
The song (and its story of a long-broken relationship) came back to me in thinking of “Brexit” — the historic decision that British voters made on June 23 to exit the European Union.
More than a change in the relationship between Britain and the rest of the Europe, Brexit signified a breakdown in the relationship between the British people and Britain’s political and managerial class, encompassing: the leaders of both main parties… most sitting members of Parliament… captains of industry and trade union bosses… the financial wizards in the Bank of England and the UK Treasury, plus the mandarins in the Foreign Office. Most of those in leadership positions were strongly opposed to Brexit.
In a year of anti-establishment surprises, here again the people stopped listening to their leaders. Now a new leadership team under Theresa May, who has replaced David Cameron as prime minister and leader of the Tory Party, is scrambling to catch up with the people.
The good news, post-Brexit, is that Britain will be more — not less — open to business with the rest of the world. Britain won’t have to comply with innumerable EU regulations. Among other things, the EU tells member states how much fat can be put in a sausage and it requires that labels on tins of smoked salmon tell customers they contain fish.
Having appointed free traders to several key cabinet positions, it appears that the new PM will use freedom from EU rules to reduce or abolish high tariffs on agricultural goods and many consumer goods. Call that a win-win for British consumers and non-EU producers, including the U.S.
With her brisk, no-nonsense style of leadership, Ms. May draws comparisons to Margaret Thatcher. “She’s not as ideological as Thatcher, but she is equally hands-on,” says Eamonn Butler, director of the influential Adam Smith Institute, a short walk from the British Parliament. Butler sees the post-Brexit environment as a once-in-a-generation chance for fresh thinking and bold action across every area of public policy.
Thatcher cut taxes, attacked abuses of trade union power, and undid many of the shackles placed upon private industry and commerce during three and half of decades of socialism. Butler dares to think that it is possible today’s Britain could go far beyond that and recapture the true commanding heights of socialism that remain to this day — namely, state controlled monopolies that suppress competition and free choice in the provision of education and health care.
In a 30-page report released in July, the Adam Smith Institute set forth its recommendations for radical change in those areas. The report also calls for the staged elimination of Britain’s tax on corporate income — from 20 percent to 12.5 percent (as in Ireland), then to 6.25 percent, and then to zero.
As I told Butler, we at the Show-Me Institute advocate market-oriented reforms for Missouri similar to many of those contained in Adam Smith’s “Rebooting Britain” playbook (which may be downloaded at no charge at adamsmith.org).
No serious observer can doubt the failure of Missouri’s business-as-usual policy-making. Over the past decade and a half, Missouri ranks near the bottom of all states in economic growth. With just middling growth, household income in Missouri today would be 10 percent higher.
There is, however, one area in which Missouri has (quite shamefully) outperformed other states. The Mercatus Center at George Mason University has identified Missouri as one of the “corporate welfare kings of America” — ranking among the top ten states in state and local subsidies to private businesses.
Missouri Gov. Jay Nixon has publicly stated that tax cuts should be provided on a “specific project-by-project basis.” “We need to come at this in an overall thoughtful way, not just throw darts,” he has said. According to this logic, it is “throwing darts” to lower taxes for all businesses, but it is a “thoughtful” use of government power to single out a small number of politically connected businesses for major subsidies and tax breaks. Needless to say, the biggest breaks go to the companies with the biggest and best lobbying organization.
What will it take to reignite growth in Missouri? To name three things, we need to lower income taxes for all businesses, end corporate welfare (which just now seems to be spiraling out of control), and fight back against public sector monopolies in education and healthcare.
But can we summon up the will to “reboot” the Show-Me State?
It’s time for us to stop listening to leaders who peddle tried-and-failed solutions.