It’s Beginning to Look a Lot Like the 1970s
Ted Bromund /
In Britain, London’s buried under eight inches of snow, the trains don’t work, the economy’s collapsing, and a Labour government’s put the nation deeper in debt that it has been in thirty years. The Adam Smith Institute, preferring to laugh instead of cry, jokes that it looks like the 1970s all over again.
And the strikes are back too. In late January, workers walked off the job at the Lindsey oil refinery. Sympathy strikes – technically illegal – followed at power stations and refineries around Britain. The cause of the unrest: a decision to sub-contract work at the plant to an Italian firm, which brought in Italian and Portuguese staff.
Prime Minister Gordon Brown wowed the crowds in 2007 with the slogan “British Jobs for British Workers.” Protectionism as patriotism: it sounds like the Stimulus Bill’s Buy American provisions, or then-Senator Obama’s 2007 “Patriot Employers Act.” And like President Obama, Brown has been forced to backtrack, as his government acknowledges that Britain has more to lose than to gain from a trade war.
The refinery did meet the strikers’ demands that it guarantee ‘British jobs.’ That guarantee will last just as long as it takes the increased costs it imposes to work through to the refinery’s bottom line.
The wider and better remedy would be to reduce Britain’s 28 percent corporate tax rate and to bring simplicity and stability to its tax regime. Nothing has done more to hurt job creation in Britain than the expansion of the state and the cost of the regulations imposed on businesses by Gordon Brown.
And if anyone should learn that lesson soon, it’s the U.S.: an $800 billion Stimulus Bill, combined with our 40 percent corporate tax rate, is a recipe for putting the U.S. on the road back to the 1970s. At least we’ll have company when we get there.