Two months after 9/11, I was visiting Washington with a handful of other editorial writers when then-secretary of state Colin Powell gave me a memorable economics lesson in only four words.
"Money is a coward."
To be honest, I hadn't been expecting that sort of a message. Washington was in a bit of an uproar at the time, not just because of the terrorist attacks but because anthrax powder had been discovered inside various pieces of mail, including some in the State Department building, where our meeting took place.
But as I found out, those four words had everything to do with his approach to foreign policy and with the reasons for fighting terrorism. "Come on, come on, try democracy," Powell said he was telling foreign ministers, particularly from the Middle East. "Free your people. Give them a chance."
That's a message that has application in this country, as well, particularly last week as Congress and the president struggled over what to do to stave off a recession.
Money seeks safety. So far, it doesn't appear to be too impressed with talk of a stimulus package that includes rebates. Perhaps it knows such a thing wouldn't help much. It did, however, react well to a large interest rate cut. I'm guessing it would react well to a tax cut, too.
Sometimes, the best way to understand concepts is to look at how they work in large, glaring examples. This week, I received the latest edition of the annual Index of Economic Freedom, published jointly by The Wall Street Journal and The Heritage Foundation, a conservative Washington think-tank. Each year, this index ranks all the nations of the world on the basis of how free their economies are from government intervention and how safe they are for investment.
There are no real surprises. The top five this year, in order, are Hong Kong, Singapore, Ireland, Australia and the United States. The bottom five, beginning with the worst, are North Korea, Cuba, Zimbabwe, Libya and Burma. That also could be a quick list of the best and worst places to live on Earth. Like money, people prefer safety, too, but they tend to have to live where they're born. Money likes to travel.
Each year, the list also corresponds, in general terms, with political freedom. You can't have true economic freedom without property rights, a judicial system that is free from corruption and laws that allow people to govern themselves.
And there is another message. It's possible for a country to change, and to change rapidly. Estonia ranks 12th, which is a dramatic rise from its recent days as a Soviet state. Singapore has made incredible strides in the last 40 years. Mauritius, despite its location in impoverished sub-Saharan Africa, leaped into the top 20 this year because it has adopted business-friendly and trade-friendly policies.
It's also possible to go in the other direction.
We see this easily when it comes to comparing North Korea with the United States or when we see how Venezuela's heavy-handed policies are slipping it into poverty. It gets a little harder when dissecting campaign rhetoric.
The index this year contains two warnings for the United States. The first is, "U.S. tax rates are burdensome." The second is, "Total government expenditures ...are high." This should be viewed from the perspective of how "other advanced economies reform with lower tax rates."
Those are things to consider when choosing a candidate this year.
Of course, freedom is about a lot more than getting rich. The Founders gave us all a great gift with a Constitution that includes a laundry list of protections allowing people the freedom to achieve amazing things on their own. But that kind of freedom does tend to make people wealthy, as well.
I suppose Powell could have said, "Investors want safety," or "Nations without independent courts and respect for private property scare wealth away," or "Leaders who don't allow basic freedoms can't expect a lot of enterprise."But somehow, he seemed to nail all of that with, "Money is a coward."
Jay Evensen is editor of the Deseret Morning News editorial page. E-mail: [email protected]