Harvard’s Ferguson: U.S. Losing Edge, Thanks to Regulation

by Greg Brown

The United States is slipping behind in its global competitiveness, a trend many business and political leaders fail to realize, says Harvard professor Niall Ferguson.Referring to a recent survey of more than 1,000 Harvard Business School alumni, he points out that just 16 percent favored the United States as a place to locate a business.“The answers were fascinating: regulation, uncertainty about taxation and macroeconomic policy, as well as the issue of poor skills based on the educational outcomes,” Ferguson told Bloomberg TV in an interview.
Particularly, in terms of regulatory issues, “the United States is declining in terms of competitiveness,” Ferguson said.America is losing ground, of course, to China, Ferguson said. The World Economic Forum’s competitiveness rankings show that.Since the organization standardized its methods seven years ago, “the U.S. has lost 7 percent and China is up 20 percent,” Ferguson notes.But it’s not just China. In the 15 competitiveness measures tracked by the group, rating such features as regulation and rule of law, “Canada beats the United States on all 15,” he said. The U.S. economy generated just 120,000 net jobs in March, far below the 200,000-job pace of the past few months.Former Reagan adviser Art Laffer argues that President Obama is missing the point if he believes Washington has the answers."What Obama is missing is that government spending doesn't create jobs, it destroys jobs," Laffer told CNBC. "The tooth fairy doesn't work on the Treasury staff.”