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Saturday, November 17, 2012

GHEI: An end to European bailouts - Washington Times

GHEI: An end to European bailouts - Washington Times: "That leaves only one path to recovery: Adopt the tough reforms that politicians have been putting off until now. Italy and Spain finally are waking up. Even though those nations have increased taxes, they also are exploring labor-market reforms so critical to returning their economies to a growth path. In France, labor costs average $44 per hour — 13 percent higher than in Germany — reducing its potential for economic growth. Louis Gallois, former head of the parent company of Airbus, has called for a cut in payroll taxes as a way to decrease the cost of employment and for slashing regulation to restore French economic competitiveness. It remains unclear whether the socialist French President Francois Hollande, who wants a 75 percent marginal tax on high-income persons, will pay heed. Ignoring Mr. Gallois’ sensible suggestions will let France slip further into recession.

Reducing the size of government and increasing labor-market flexibility are essential for a country to get out of a low-growth trap. That’s something President Obama needs to realize as well."

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