First Rate Country with a Fourth Rate Business Class

A few times in this space I have made the statement in the title of this post when describing Canada.  I go into detail of what I mean here.

This was brought back to my mind again in the past couple of weeks because of the ongoing "crisis" in Alberta and the announced closure of GM plant in Oshawa.  Both are situations that demonstrate the lack of vision, courage and business acumen of the Canadian business class.

The situation in both places has been well documented in other spaces so I will not go into great detail about them here.

The business community and many conservative commentators in this country look longingly at the dynamic US economy and would like to be able to create such an economy here.  They point to the low personal and business taxes and less regulation in the US and state that if Canada were to follow that path Canada could have an economy like theirs.

The situation in Alberta and Oshawa puts paid to that assertion.

First, the Tar Sands were only developed because the Federal government of Pierre Trudeau spent a tremendous amount of federal money to move the development along.  No private business in Canada would take the risk in attempting to develop it themselves.  Contrast that with the US.  The rise of shale oil in the US market, which has contributed to the depression of the price of Alberta oil, was exploited by private businesses with private money.  Little or no public funds were used.  I dare say that if the Tar Sands had been located just a couple of hundred kilometres below the 49th parallel they would have been exploited by private industry, without any public funds, and the companies that exploited it would be pulling the stuff from the ground and shipping it for processing at processing plants and refineries that they owned, not to establishments in another country that they did not own.

Second, it is more than even money that nothing developed in Canada will replace the GM plant after it closes.  Maybe another car company, from another foreign country will decide it is a good space to build their cars, but if that does not happen that site will be largely abandoned.  No Canadian company will have the vision or the courage to take advantage of that space. 

The US economy is the way it is because entrepeneurs who are not adverse to taking risks are pervasive in the economy.  Many more fail than succeed but enough succeed to sustain that economy and help it grow.  Contrast that with the Canada, where the business class is the exact opposite of their American counterparts.  Canada could eliminate all taxes and regulations and the Canadian economy would still not be as dynamic as the US economy because the Canadian business class would not have the courage and motivation to take advantage of it to leverage the windfall into increased economic activity and greater wealth.

As I have stated in this state before if the Canadian business class had any kind of business acumen Canada would be punching well above its weight in the international economy.  We are blessed with a tremendous bounty of natural resources and an educated and capable work force.  A business class that could actually live up to that name would have taken full advantage of these two facts long ago to make themselves and Canada much wealthier than they already are.  They would have allowed the Canadian economy to realize its full potential and we would all be much better off as a result.

Alberta and Oshawa further proves that this is a pipe dream.  

We have not seen as much progress as we thought

I few nights ago I watched the movie "Selma" on TV.  I originally saw it when it came out in theatres a few years ago but this second watching made realize something.

In the movie the open depiction of racism and bigotry is prevalent, as it was in many parts of the United States in the 1960s.  So it seemed to accurately depict that period in time.

Since then it has been accepted wisdom that the level of racism and bigotry that we saw during that period has been greatly reduced.  We have come along way from then and only a few pockets of the US still hold those views and most of them are in the most backward parts of the South.  The rest of the people in the US have become much more tolerant of people of colour.

Watching the US, and Canada for that matter, it would seem that the accepted wisdom is wrong.  Racism and bigotry has raised its ugly head again with a vengeance.  For almost 50 years social convention has forced those who are racist and bigoted to keep their opinions to themselves.  However, with an openly racist and bigoted President these people have been released to spout their hate and vitriol again.  As well, if you look where this is coming from it is much more widespread than just a few pockets in the most backward parts of the South.

Although the situation in Canada is not a extreme is in the US the same forces are at work.  If anybody thinks that the general acceptance of Faith Goldy running for mayor of Toronto, using an opening racist election platform, is not similar to what we are seeing in the US they are not paying attention.

Fifty years ago governments made great efforts to suppress the black vote and blacks were in great danger of being killed because of the colour of their skin.  Fast forward to 2018 and several state governments in the US enacted harsh election laws which were designed to suppress the black vote and it is almost a weekly occurrence that a black man is killed by a white police officer.

The so called progress that we have seen since the 1960s, with regard to race relations in North America, is a mirage, a fantasy.  It does not exist.  The same attitudes that plagued that sad decade never went away.  They were just hidden and they are now coming out of hiding.

It is not really about the Carbon Tax

In a previous post I wrote about the breakdown of the current economic orthodoxy that has informed economic and political debate in the Western world for over three decades.  I call it the Conservative Consensus.

In Canada that Consensus was set in stone in 1993 when the Progressive Conservative government of Kim Campbell/Brian Mulroney was destroyed at the polls.  One of the contributing factors to that destruction was the introduction of the GST.  Ironically, the Liberals would be the greatest benefactor to this but it had a lasting chilling effect on effective fiscal policy until 2015.

In Canada, I would say that election was the one that cemented the Conservative Consensus in place.  From that point conservatives framed the debate on what were the acceptable fiscal tools and their position that lowering taxes and decreasing government spending become the default and only suitable position of all governments, regardless of their political stripe.

As I stated in that previous post conservative elements of our societies took full advantage of this situation to eventually land at the position that tax cuts for the wealthy and big business, at the expense of ordinary people, was the best fiscal policy.  Their position was essentially that ordinary people needed to make these sacrifices for the greater good.  And these ordinary people ate it up.

Then along came Mr. Trudeau who campaigned in the last election on a platform that included increasing taxes for the wealthy and the introduction of a Carbon Tax.  He won that election and he kept both of those promises.

So for the first time in three decades a political party has strayed from the Conservative economic orthodoxy and they have been rewarded for it.  That will not do for conservatives who desperately want to maintain the Conservative Consensus.

People ask what the Conservatives would do about climate change.  They point out that they do not have a plan.  They point out that a Carbon Tax is a conservative idea and a market based solution to the need to reduce greenhouse gas emissions.  

These same people miss the point.  It is not about Climate Change.  It is about maintaining the current economic orthodoxy.  It is about maintaining the Conservative Consensus.  I stated in a previous post that there are signs of the Conservative Consensus beginning to break down.  Conservatives see it and they know that in order to maintain it they need to stop any progress away from the Consensus, now, before it develops a momentum that will make it unstoppable.

That is the overarching goal of Conservatives in this country right now.  Everything else is secondary.

Why the Sudden Rush Mr. Singh?

It made the news last week that the leader of the Federal NDP is now ready to run for a seat in Parliament, after more than a year of being the leader and after passing on four by-elections since he won the NDP leadership.  The seat he has chosen is in Burnaby BC, which is available and for which a by-election has to be called by March 2019.

The Prime Minister has decided to wait to call that by-election and the NDP in general and Mr. Singh in particular are up in arms about it.

I have been watching Mr. Singh for the past few months and it strikes me that he is not enjoying his job.  It strikes me that maybe he would like to leave it.  Unfortunately, a whole host of reasons would prevent him from resigning at the moment so he is stuck.

However, if he were to lose the by-election, which would be very possible since the Burnaby seat is by no means a safe NDP riding, he would have his excuse.  Unfortunately, in order for that excuse to work he would have to lose that by-election sooner rather than later.  His resignation as a result of that loss would have to be early enough to allow the NDP some time to pick up the pieces.  

Losing in March would be bad for both him and the NDP.  If he sticks around the NDP would be saddled with a wounded leader, perhaps a mortally wounded leader and the 2019 election would be an NDP bloodbath.  If he left then the NDP would only have about six months to find a new leader and develop an election platform.  Again, that would be a recipe for an electoral bloodbath for the NDP.

This is all speculation of course and I could be completely wrong in my assessment of what I am seeing.  However, my political gut is telling me that there is more to Mr. Singh's sudden urgency to win a seat in the House of Commons than what we are hearing from him and the NDP.