Is it just my imagination or is there a striking similarity between the economic problems of Egypt today and where Obama was clearly taking America?
To open a small bakery, our investigators found, would take more than 500 days. To get legal title to a vacant piece of land would take more than 10 years of dealing with red tape. To do business in Egypt, an aspiring poor entrepreneur would have to deal with 56 government agencies and repetitive government inspections.
Update: Excellent video showing how bureaucratic red tape destroys economies. h/t Oz
Welcome to the world of socialist or autocratic economics.
I’m guessing if you bribe the right people you can cut right through the red tape. This is where I lose all pity for these countries. They don’t care enough to stop this sort of nonesense. And this is the reason I think corruption has to be stomped on without reservation when we encounter it here.
To put it into perspective, Egypt has a comparable population to Germany. Can you name even one Egyptian product for every 10 German?
sooooo form 1099 is related to the illegal wiretapping done by the FBI during the george dubya tenure?
Norman: cotton…but that’s all I’ve got.
You might be interested in this Robert.
Related:
http://tinyurl.com/2cbu5ub
I don’t remember where I picked up the above link, but bureaucratic red tape has been strangling the growth of new business and jobs for awhile.
Not just in America, but all over.
“…there a striking similarity…”
You don’t have to go to the U.S. to encounter bureaucratic b.s. Try getting a permit to do some simple building renovations in Calgary.
Robert, the article at the Wall Street Journal is only open to subscribers, some that may want to read the entire expose of how governmental interference has set up roadblocks to accessing capital can read Hernando de Soto’s book from which the text above is from. (er… from memory). The book and de Soto’s work have been widely praised from both sides of the political spectrum.
The Mystery of Capital: Why Capitalism Triumphs in the West, and Fails Everywhere Else… Hernando de Soto
This is from the Amazon.com website review of this book,
“As de Soto points out by way of example, in Egypt, the wealth the poor have accumulated is worth 55 times as much as the sum of all direct foreign investment ever recorded there, including that spent on building the Suez Canal and the Aswan Dam. … No, the real problem is that such countries have yet to establish and normalize the invisible network of laws that turns assets from “dead” into “liquid” capital. In the West, standardized laws allow us to mortgage a house to raise money for a new venture, permit the worth of a company to be broken up into so many publicly tradable stocks, and make it possible to govern and appraise property with agreed-upon rules that hold across neighborhoods, towns, or regions. This invisible infrastructure of “asset management”–so taken for granted in the West, even though it has only fully existed in the United States for the past 100 years–is the missing ingredient to success with capitalism”
I recall it being sold at the local Chapters / Indigo and at local public libraries without coffee facilities. It’s worth buying.
He was awarded the Milton Friedman Prize / $500,000. from the Cato Institute in 1994.
http://www.cato.org/special/friedman/desoto/index.html
The U.S. Senate has passed an amendment to repeal the onerous reporting requirement for small transactions on 1099 forms, and I believe a similar bill is before the House, or may have already been passed.
http://www.accountingtoday.com/news/Senate-Passes-1099-Repeal-Amendment-57177-1.html
If Obama vetoes the repeal, that veto will be an albatross about his neck.
halvah….camel urine by-products…mummy manufacturing tech…
well, i could go on but the list is endless really.
Death of an economy by bureaucrat.
Slow, painful, shameful . . . but death nonetheless.
Sounds like Ontario. Dundas Valley School of Art took a year to get their gas fired kiln certified. Brand new installation, nothing wrong with it, all to code, present and correct in all specifications… took a -year-.
Don’t get me started on building a coffee shop.
More government my friends,more oversight, more checks and balances, higher taxes on the filthy rich, that’s the answer.
Here is a very interesting article from 2009 on Egypt. Keep in mind that this article was written long before the riots, back when Mubarack’s National Democratic Party was still a member in good standing of Socialist International.
http://www.nytimes.com/2009/09/20/world/africa/20cairo.html?pagewanted=1&_r=1
Killing pigs to prevent the swine flu may seem idiotic to some of you, but to those of us who have lived under a socialist government, it’s all too typical.
Exactly what I’ve been saying – and have been castigated at SDA for focusing on: population, economic mode, political mode.
Egypt, like the other ME nations, has operated in a statist, socialist or two-class economic mode. That means that a small set of Rulers control the economy (and the political authority)..and the mass of the population..have no means of creating wealth, supporting themselves..and no political means of changing this setup.
Then, the population exponentially increased, far beyond the carrying capacity of a statist economy. A statist economy runs by socializing industry; by removing private control of business and having only public industries and public services. The income from these industries supports public services and welfare.
BUT – this income can’t support a population that has morphed into the 80 millions as it has in Egypt. For that, you need a small business private economy to generate the wealth to support the people. Egypt hasn’t allowed a middle class (that’s the class of private businesses) to emerge.
Result? Masses of impoverished people with no future, no ability to change the status quo. Dissent emerges.
Next result? Mubarak and dictators move to repress the people. Forbid opposition parties. Forbid a free press and have the press function only as a state propaganda. Go after and jail activists, torture and brutalize the people for daring to dissent and criticize.
Next result? Some will turn to magic, the magical utopian world of fascism. Islamic fascism. Remember, utopian ideologies can’t run an economy; they operate only within rhetoric and ‘hope and change’ mantras.
Next result? Massive demonstrations. What does Mubarak do? He’s announced that the state will increase PUBLIC EMPLOYEE salaries by 15%! And the West is supporting this? [Read the Globe and Mail]. But public employees are the people around Mabarak! Mubarak is bribing the already-employeed to stay loyal to him!
The key economic problem is the lack of a private economic dynamic. Small to medium size businesses that are privately owned. And Mubarak isn’t doing a thing to set up such an economy. Instead, he’s strengthening His Side.
What’s needed? A constitutional amendment to permit opposition parties, to set up term limits and a free press. And, legislation to enable the development of a middle class or private capitalist economy.
Employment in Egypt (2004) :
public sector: 5.9 mil
private sector: 6.8 mil
underground economy: 9.6 mil
http://online.wsj.com/article/SB10001424052748704358704576118683913032882.html
xiat – yes, and that underground economy is at the lowest economic level; they can’t access bank loans, they can’t develop their business; they just scrape by in poverty. And notice the size..and that was 7 years ago. The disparity has expanded.
And the ‘private sector’ employment isn’t in industrial or job-creating or wealth-creating systems. It’s the local corner store and tobacco shop.
This absolute refusal of the Egyptian (and the same is true of ALL ME Islamic nations) to prevent a middle class economy, is the root cause of ‘magical’ or fascist thinking.
By the way – it is a serious error for the Egyptian govt to have ‘talks’ with the Muslim Brotherhood, or indeed, with any opposition. It is not the function of a government to pick its own members of a legislature – and if they are going to do something as insane as bring in a ‘few’ MB into their current legislature – that’s an attempt to retain statist control. Just as is their 15% salary increase to their own employees.
It is up to THE PEOPLE to choose, by themselves, which political ideology they want in their govt. It is NOT up to Mubarak’s cabal to make that choice.
What Mubarak should be doing, is allowing opposition parties, changing the constitution to do that, enabling a free press and setting up term limits. THEN..allow a six month period for these opposition parties (and yes, that includes the MB) to organize and speak to the people. Then, the people choose.
And I strongly doubt that any population would choose Islamic fascism in a free election. Mubarak and his cabal are not helping the emergence of democracy in the ME; they are preventing it.
ET said: “It is up to THE PEOPLE to choose, by themselves, which political ideology they want in their govt.”
I don’t know about the choosing part, ET. After all, I didn’t chose for it to take a fraking year to certify a gas kiln in this province, but it does.
I get the feeling (because I have no proof, just a lot of anecdote) that this stuff is simultaneously a lot more chaotic and force-driven than I’d like to think. One gets the impression of a sand pile: the grains stack randomly, avalanches occur unpredictably, but the pile is always always -always- the same shape.
The “gravity” is public opinion, which is shaped by propaganda. The guy who choses the propaganda pretty well wins, unless a stronger idea intrudes or somebody shows up with a whole lot of guns.
Just sayin’.