Ahhh, if we could only do this!
A free-trade union between new Europe and Anglo-America would probably make more sense than "harmonizing" solid growth with recession and high unemployment.
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The dissonance of harmony
By Lawrence Kudlow
THE WASHINGTON TIMES
Published November 12, 2003
Is there an English-speaking interest-rate increase sweeping the world? More important, will English-speaking economic growth principles rule the waves?
Most likely, both are correct.
The Reserve Bank of Australia and the venerable Bank of England raised their policy interest rates last week. These precautionary moves to maintain price stability actually caused stock markets to rally in both countries.
Using history as a guide (U.S. rates frequently follow British rates), the U.S. Federal Reserve may be next in line to raise its policy target — especially after the American economy, now firing on all cylinders, created nearly 300,000 new jobs over the past three months.
Of course, the English-speaking countries have more in common than interest rates. Freedom-loving Great Britain and Australia have been integral in the global fight against terrorism. Seeing them in stride with the U.S. economically is also a good thing, particularly when they sound the pro-growth siren.
The immediate implementation of President George W. Bush's supply-side tax cuts last May provided a huge jolt to domestic economic growth. You can rightly call it the Bush boom. Similarly, Prime Minister John Howard has jolted the Aussie economy with his tax-cut and deregulation moves: Australian unemployment is now an enviable 5.6 percent while Aussie economic growth has averaged nearly 7 percent annually over the past four years.
Meanwhile in Britain, Finance Minister Gordon Brown has been teeing off on European Union (EU) bureaucrats for their missing-in-action growth policies. Mr. Brown noted that the European Central Bank has only lowered interest rates seven times (compared with 10 for Britain; 11 for the U.S.). He's right — EU monetary policy is too tight. Year-to-date gold prices in U.S. dollar terms have increased 10 percent — indicating a looser monetary policy — while Euro gold is essentially unchanged.
Mr. Brown, along with Prime Minister Tony Blair, has also flatly told the European Union that Britain will never enter the Eurozone if English tax-and-welfare and labor-market regulations have to be harmonized with the EU. Such "harmonization" would clearly be an economic step backward.
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