Dear Old Friend,
It felt like I’d stumbled onto a crime scene.
As I stepped off the flight from Zurich on Tuesday, a smoke blanket spread across the skies. It scarred my retinas. Something big was burning.
CNN reported wildfires across Quebec. But… I had this feeling the real danger wasn’t to the north.
The problem was bigger than that…
I soon found myself walking on the outskirts of New York City, a mile from JFK airport. The sky was orange. The streets were covered in potholes. Grime everywhere. Spray-paint layering the doors and facades of buildings. Down-at-the-heel locals scuttled up and down the street, asking for change, picking out of trash cans, fighting over scraps. Most of the local shops were boarded up or closed.
My hotel was right in the center of it.
This couldn’t be America, could it?
Had I stepped off the wrong plane?
Yes. Something worse was burning across the landscape.
A bigger crime against nature… and America.
The state-sanctioned paralyzing of the American economic engine…
I’d now remembered how far this nation’s economy has fallen… in just 15 years.
Read on, but be careful – it’s a long way down…
From First Class to Class Warfare
The Heritage Foundation’s Economic Freedom Index is one of the most important databases in the world. It ranks every country on 12 metrics: property rights, judicial integrity, government efficiency, business freedom, monetary freedom, labor freedom, taxes, government spending, fiscal health, trade freedom, investment freedom, and financial freedom.
If you want to know where business leaders and entrepreneurs can thrive around the world, look at the top of the list: Singapore, Ireland, and Switzerland.
If you want to know where those same business owners might catch a bullet… look toward the bottom of the list: Cuba, Venezuela, North Korea, and Sudan.
During the first week of June, I spent my vacation in Switzerland… No. 2 on the list. There, the air was clean. The streets were safe. The economy was thriving. Inflation was a meager 2.3%. Government spending is high, but taxpayers get a lot of bang for their buck, or franc, in terms of infrastructure and services, and Swiss financial freedom and fiscal health both have extremely high ratings.
For the last 15 years, Switzerland has enjoyed Top 3 rankings on the Heritage Foundation’s Index. This ranking is evident in the culture, the vehicles on the road, the clean streets. It feels like I was visiting the U.S. in the 1980s.
The United States? It has plummeted like a fallen angel from 8th to 25th in that short time. America has fallen across the board in every major category. Its debt has exploded. Its fiscal health stands at the worst rating possible (ZERO), judicial effectiveness (the nature of law) and government integrity ratings are crumbling.
The U.S. now trails the United Arab Emirates… and, in the Americas, flails behind Canada and Chile.
All you need to do is look at basic differences between a healthy fiscal state like Switzerland and what we’ve become…
There, people chatted along the lakes, swilling drinks, smiling, and enjoying the lovely weather. I saw no crime the entire time I was there. Why? That nation is a bastion of economic freedom.
During the entire visit, I saw no politician on television. In fact, I don’t recall seeing any televisions in restaurants or hotels.
People don’t go into politics in Switzerland to be rich; they start businesses, or go to work for any number of leading companies.
People go into U.S. politics to make more money than God… They know – because they can see the business model during campaign season - that corruption and incompetence pays very well here.
But that hard graft takes a toll on the end-product known as America.
This isn’t complicated.
A system that incentivizes prosperity thrives. One that raises taxes, reduces incentives, and creates class warfare… doesn’t.
A place that would pick winners and losers will fail. A place where leaders believe they know better than the businesses and the market will never find success. A place that incentivizes crime through broken policies in the name of “fairness” will wither.
No one talks about crime in Switzerland because crime rates are practically non-existent. A colleague said that a person without their papers or the inhabitants of a drug-riddled encampment wouldn’t last five minutes on the street without being chauffeured away from the public.
Admitting this works is not controversial policy in Switzerland.
But in America, even now, questioning the logic of homeless encampments in front of small businesses in San Francisco can unleash a social media mob. The State Senate of California just passed a law that would ban company employees from stopping any thieves raiding their stores. The law already makes it only a misdemeanor to steal up to $1,000 in goods. Lululemon (LULU)fired two employees for confronting robbers in an attempt to stop a heist last week.
Its CEO guarded the decision, shrugging: “It’s only merchandise.” Okay. But that attitude incentives future crime.
If I were a shareholder in this company, I’d pull my money – as one would think the fiduciary duty is to me… not the thieves…
Incentives matter. They’re the basis for most decisions we make.
New York City – aglow from wildfire haze – just rolled out vending machines in Brooklyn. Do they sell soda or snacks?
Of course not. The new machines provide Narcan, fentanyl test strips, and sterile syringes for drug users – free of charge.
This isn’t compassion.
It’s lunacy, dysfunction, and a system worth opting out from…
I ask the obvious: What is the end game of these policies?
What motivation does a person have to adopt policies proven to destroy economic freedom, upward mobility, public safety, and social cohesion?
What do they want?
To become King of the Ashes?
Because that’s what they are producing in once-great cities.
Bad economic policies and disincentives spread like wildfire.
And you can’t rebuild a society on the back of incendiary rhetoric, manifest corruption, and a lack of private investment.
The people in these cities do realize they don’t have to live under these conditions… right? This wouldn’t have been a controversial question 15 years ago… but it is now.
Don’t Adjust Your TV Screen - It’s Just Broken
Returning to the American media is exhausting. Everything is divisive copy… chirping fodder for a crumbling carnival patch…
They invent controversy because taking a side tickles our tribal instincts. I remember being taught to dislike students at a rival high school… simply because they went to a rival school.
We fight over street sides and street corners.
We act like resources and wealth are infinite, or that we must create an “us versus them” mentality across every social class.
Which is why it’s insane to me that financial freedom is controversial. That is the one thing that this nation could easily unite around… Because it’s not a left or right issue.
It’s an up or down one… swim or sink… build or break to pieces.
You know what isn’t controversial in Switzerland? Allowing people to keep their money.
Tax rates are extremely low – and there isn’t a massive, centralized planning apparatus to skim franc after franc off the top. Tax rates are favorable to residents; their social safety nets are still well-funded.
But what has become of the United States? A nation with hundreds of trillions in unfunded liabilities that will never be paid – without obliterating the U.S. dollar’s value?
We’re suffering the economic malaise and Treasury-raiding that will ultimately fuel even more rising debt, greater instability, and more excuses from the people who created these problems.
The blame will fall – of course - on capitalism… even though we barely practice it. We can look to Scandinavian nations (which are freer, more capitalistic nations than the U.S. by a mile) or Switzerland and see first-hand how responsible leaders and logical policies produce: Stability, freedom, and self-worth.
For a bunch of people who claim to be capitalists, our leaders are pretty lapsed. But watch how some of them claim to practice their religions yet operate on policies antithetical to the classic virtues.
In the end, capitalism and socialism are religions, but the latter is always willing to sacrifice wealth and life for more centralized control. The 20th century clearly proved it.
The truth is we don’t operate in either system right now.
We operate largely under dirigisme – an economic system that is the opposite of capitalism without the state ownership of production. There’s a reason for that. Politicians know they are bad at business, so they just allow businesses to operate and make a profit (but a kickback around election time always helps).
This silly, wealth-starving system creates economic mis-managers. It spawns government agencies by the dozen, accountable to leaders with zero comprehension of how an economy works – these people couldn’t operate my daughter’s lemonade stand. It creates oligopolies, higher prices, less choice, and a wealthy lobbying apparatus that controls ideas.
It's unclear what it will take for Americans to wake up from this economic slumber. Perhaps a Reformation in economic education that shakes participants by the bones and helps them recognize their individual talents and worth. Something that shows them what’s possible on their own individual merit, that something better exists.
Or perhaps more Americans to move to Florida and Texas and other places that haven’t lost their mind economically. The single most important freedom in the world is financial freedom. We cannot and should not be having any other debate while inflation runs rampant, crime accelerates in cities, and more people struggle to put food on the table and gas in the tank.
Here at the Florida Republic, we’ll point out the obvious. There is a better way to live, to invest, and to opt out of a media complex that makes us feel like we are falling downstairs with no hand railing. This is a healthier state of mind for the times.
We will discuss proven strategies that can help you build wealth, explore simple policies that would – almost instantly – improve our world – and highlight the insanity as it happens.
People are always telling me that people complain too often and don’t bring enough solutions to the table. We will speak candidly and offer them here. I’ve studied these systems long enough to know what works.
I’ll also show you what will work in the future – the baseline of smart ideas and investments in a world without the corrupted.
This is your invitation to join us.
See you out there,
Garrett Baldwin
Florida Republic Capital (Available on Substack)