The End of the Rainbow

Thomas Friedman, author of The World is Flat has an editorial, The End of the Rainbow in which he reports that Ireland is the second richest country in the EU, right after Luxembourg.

Yes, the country that for hundreds of years was best known for emigration, tragic poets, famines, civil wars and leprechauns today has a per capita gross domestic product higher than that of Germany, France and Britain. How Ireland went from the sick man of Europe to the rich man in less than a generation is an amazing story. It tells you a lot about Europe today: All the innovation is happening on the periphery by those countries embracing globalization in their own ways - Ireland, Britain, Scandinavia and Eastern Europe - while those following the French-German social model are suffering high unemployment and low growth.

That's pretty remarkable in itself, but what is more interesting is the pro-business steps it took to achieve that:

And change Ireland did. In a quite unusual development, the government, the main trade unions, farmers and industrialists came together and agreed on a program of fiscal austerity, slashing corporate taxes to 12.5 percent, far below the rest of Europe, moderating wages and prices, and aggressively courting foreign investment. In 1996, Ireland made college education basically free, creating an even more educated work force.

Oh yeah, and national healthcare.

So here's a recap:

• Free college education
• National healthcare
• Low corporate taxes that are simple and transparent
• Actively seek out global companies
• Open your economy to competition
• Keep your fiscal house in order
• Build a consensus around the whole package with labor and management

Imagine that, national healthcare as a pro-business policy.

Unfortunately, with our current two-party system, barring some kind of catastrophe, I don't see free college education, national healthcare and low corporate taxes that are simple and transparent ever happening here in the US.