This is the first in an ongoing series of articles we are planning, to explore what competitiveness is, from the perspective of particular public figures or intellectuals. For the first in this series we’ve chosen Robert Reich, a former U.S. Labor Secretary. He’s written a short article in plain English that helps illustrate some issues. It begins with an excellent summary:
“Whenever you hear a business executive or politician use the term “American competitiveness,” watch your wallet. Few terms in public discourse have gone so directly from obscurity to meaninglessness without any intervening period of coherence.”
By Jack Copley.
Financial markets are fundamentally concerned with the future. Loans to businesses enable future profits, derivatives supposedly insure against future risk, and speculative practices attempt to profit from future price movements. Yet to truly understand how we arrived at the current financial status quo, we must turn our gaze backwards. This is exactly what Greta Krippner does in her 2012 book Capitalising on Crisis.
- Update: reposted on Naked Capitalism site in the U.S., and the Angry Bear tax and economics blog, and the Middle Class Political Economist.
- Update 2: See also Ireland’s Recent Success Not Built on Low Taxes, by Kenneth Thomas, author of Investment Incentives and the Global Competition for Capital. In which he makes similar arguments.
Did Ireland’s 12.5 percent corporate tax rate create the Celtic Tiger?
Ireland has long been a poster child for corporate tax-cutting. The standard argument goes something like this. “Ireland has very low corporate taxes . . . Celtic Tiger . . . just goes to show that corporate tax cuts grow your economy.” This argument is popular in Ireland too where government officials like to call the flagship 12.5 percent corporate income tax rate a “cornerstone” of industrial policy.
But is any of this even true?
Well, now take a look at this little graph that we created for this blog. We aren’t aware that a graph like this has been made before.