Vander Zalm speaks out against outsourcing

[idealisttotheend]

It looks like the Cambell government is being opposed by the right now as well as the left.

"I just can't believe what I see happening," Vander Zalm told interviewers at the rally. "These are jobs that must be kept in the province.... It's $500 million going abroad. It's losing the tax benefits that come from industry, from the workers when they're employed."

I suppose the lesson that you reap what you sow is catching on. If you compete for the lowest cost you'd better be willing to work for the lowest wage.

In any case, I wonder if the BC liberals aren't giong the way of the Mulroney conservatives, they seem to have very little to redeem them.

oneworld link

[Hugo]

It's my opinion that economics should be complusory subjects in school, so that the electorate doesn't keep picking politicians who are economically ignorant or who propose economically disastrous policies, like trade protectionism.

I'm sure nobody here is old enough to remember the Great Depression, but that's what happens when you start fiddling with the economy, fixing prices and slapping tarriffs on imports to "protect" domestic jobs and industry.

[idealisttotheend]

It's my opinion that economics should be complusory subjects in school, so that the electorate doesn't keep picking politicians who are economically ignorant or who propose economically disastrous policies, like trade protectionism

IMO, no one should learn economics because if they do learn economics they claim things are true simply because they appear in an economics textbook, whether or not that makes any sense in practice

Trade protectionism is the reason we have any industry at all in this country and was the policy since confederation until the 50s and 60s. Free trade with the US was often an election issue and there is a reason the majority kept electing anti-free trade parties. Sometimes the majority knows a thing or two.

I'm sure nobody here is old enough to remember the Great Depression, but that's what happens when you start fiddling with the economy, fixing prices and slapping tarriffs on imports to "protect" domestic jobs and industry.

The great depression was caused by rampant financial speculation, unduly influenced stock prices and an overabundance on borrowing on the "margin." It was continued due to an inflexable money supply and companies who made record profits while laying off workers left right and centre.

Outsourcing domestic jobs would not have helped alivate the problem as the problem at the time was trying to create domestic jobs (remember the camps, the lines for dole etc.)

[Hugo]

IMO, no one should learn economics because if they do learn economics they claim things are true simply because they appear in an economics textbook, whether or not that makes any sense in practice

Well, then this is the difference between our ideas of what "learning" means. To me, "learning" is about exploring many different ideas scientifically, discussing and debating, with the idea that you will become well-versed in general theory and in specifics and then be able to make a well-informed judgement of your own. To you, "learning" means memorising textbooks by rote and certainly, if we "learnt" by that model, we'd get nowhere.

The great depression was caused by rampant financial speculation, unduly influenced stock prices and an overabundance on borrowing on the "margin."

Incorrect. The Great Depression was caused by import tarriffs that caused repercussions in other countries. A year after the Depression began, world trade was at less than 25% of what it had been. Price fixing and minimum wage laws also contributed.

Furthermore, if what you say was true, we would be in the midst of a far greater recession right now because the "problems" you allege were the cause of the Depression are far more prevalent today. Private debt, speculation and downsizing are all at far greater levels, and yet the economy is ticking over quite well. The empirical evidence denies your viewpoint.

And it would certainly be a very, very odd coincidence that the Great Depression was the depression in which government became the most involved in the economy, and also the longest and most severe depression in human history. Depressions before and since, when governments were more laissez-faire, were never so severe or so long.

Outsourcing domestic jobs would not have helped alivate the problem as the problem at the time was trying to create domestic jobs (remember the camps, the lines for dole etc.)

This is also not true. Protectionism sealed off foreign markets as well as foreign industry and international trade died. This caused far more damage than anything else.

[idealisttotheend]

Well, then this is the difference between our ideas of what "learning" means. To me, "learning" is about exploring many different ideas scientifically, discussing and debating, with the idea that you will become well-versed in general theory and in specifics and then be able to make a well-informed judgement of your own. To you, "learning" means memorising textbooks by rote and certainly, if we "learnt" by that model, we'd get nowhere.

Point taken. I'm just extremely skeptical about economics and how it seems to be used by people to "prove" things they really only assume. But you are right.

Furthermore, if what you say was true, we would be in the midst of a far greater recession right now because the "problems" you allege were the cause of the Depression are far more prevalent today. Private debt, speculation and downsizing are all at far greater levels, and yet the economy is ticking over quite well. The empirical evidence denies your viewpoint.

These things are better controlled now. The banking system is more stable and able to handle the increased debt though there is now talk about the debt wall. Unemployment is generally lower whatever "downsizing is occuring" and speculation is less easily manipulated.

In fact government's instituted all sorts of measures after the great depression to stop it from happening again. Stock markets were regulated (they close if the market drops beyond a certain percentage), central banks were created and there are all sorts of laws to stop price manipulation. Banking laws were created to stop bank from failing so easily.

The argument that minimum wages and other government interventions caused the great depression or did more damage is easily disproven. Post WWII we saw the welfare state in it's prime as all sorts of programs and standards were introduced. Yet there was a period of great prosperity that lasted until the oil price shock of 73.

Protectionism sealed off foreign markets as well as foreign industry and international trade died. This caused far more damage than anything else.

The drop in international trade does not prove causation between tariffs and economic depression. It simply means that tarrifs may not have been very effective in eliminating it, not that it caused it or worsened it.

[Cartman]

Economists are not a homogenous group. There are more interesting studies in econ. dealing with life happiness for example.

[Cartman]

BTW...never forget when Zalm literally ran away from the press up some stairs when presented with uncomfortable questions (corruption charges). He profoundly altered my perception of politicians and authority.

[Hugo]

Unemployment is generally lower whatever "downsizing is occuring"

This is because downsizing and outsourcing don't cause unemployment.

Regarding the causes of the Great Depression, without the protectionist measures it would certainly not have been nearly as bad, had it occurred at all. All evidence shows a global economic slowing, however, without the protectionist measures instituted it would not have become a depression. Once again, I refer to FDR's Folly as a good source on how both Hoover and FDR worsened the Depression with their meddling.

You say that speculation was a cause of the Depression. It was not. The reaction to speculation was a cause, specifically, the Federal Reserve's effort to "cool off" the market by raising interest rates. They did this knowing that it ran the risk of causing a recession, but they clearly did not know how deeply their knife would cut.

The drop in international trade does not prove causation between tariffs and economic depression.

Yes, it does. Directly following the Smoot-Hawley tarriffs, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Economic recovery followed the liberalisation of trade, starting with the 1934 Reciprocal Trade Agreements Act.

The US State Department says, "the Smoot-Hawley Tariff was more a consequence of the onset of the Great Depression than an initial cause. But while the tariff might not have caused the Depression, it certainly did not make it any better... such policies contributed to a drastic decline in international trade."

Trade creates wealth. Lack of trade does not. Or would you like to dispute that?

In fact government's instituted all sorts of measures after the great depression to stop it from happening again. Stock markets were regulated (they close if the market drops beyond a certain percentage), central banks were created and there are all sorts of laws to stop price manipulation. Banking laws were created to stop bank from failing so easily.

All these were in place before or during the Depression. None helped.

Post WWII we saw the welfare state in it's prime as all sorts of programs and standards were introduced.

The post-WWII period has one crucial economic caveat - it was post-WWII! The need for foreign aid was a great stimulus to economic trade, and the changes to the labour market and so forth all skew the picture far too much for your example to have any validity.

[idealisttotheend]

Trade creates wealth. Lack of trade does not. Or would you like to dispute that?

If I have too much oil and you have too many apples it makes all the sense in the world for us to trade. That creates wealth as I have apples I didn't have before that are more valuable to me than my surpluss oil.

If I need a car and I have a choice between buying it from my neighbour or from a foriegner I have a moral duty to buy it from my neighbour. After all a car is a car and even if that car costs more from my better paid neighbour if I buy from him he can buy from me.

Trade of manufactured goods is simply trade that takes place between countries instead of within them. It does not create wealth as the trade that occurs simply replaces trade within the domestic economies leaving no real creation of wealth. Unless you find value in paying people less for the same work.

August often uses the example of families. "You don't have your clothing made by your family you farm it out to corporations" says August. But at the end of the day if I had a choice to buy my clothing from my brother or from a stranger I would buy it from my brother even if I had to pay more. The reason, I want my brother to succeed (and eat) on a selfless level and he is more likely to do the same for me (giving me a greater chance of eating) on a selfish level.

[caesar]

While I am against outsourcing when the service or product is available locally; I would like Vander Zalm to crawl back under his rock next to Mulroney and keep his big mouth shut. We don't need or want him speaking out for our side. His opinion is counter productive. He has no credibility nor much respect from our citizens

[August1991]

August often uses the example of families. "You don't have your clothing made by your family you farm it out to corporations" says August. But at the end of the day if I had a choice to buy my clothing from my brother or from a stranger I would buy it from my brother even if I had to pay more. The reason, I want my brother to succeed (and eat) on a selfless level and he is more likely to do the same for me (giving me a greater chance of eating) on a selfish level.

Why would you have to pay more to your brother? Why wouldn't your brother simply lower his price to match the foreigner's price? Then you could in good conscience (and as a smart shopper) buy from your brother. In this case, the effect of the foreigner is merely to make you richer and your brother poorer.

Unless of course, your brother does not want to match the foreigner's price because, at such a price, the work isn't worth it to him. IOW, your brother has an alternative job possibility that earns him more than making cheap clothing.

This alternative job possibility is what will make your family (you and your brother together) richer.

More dramatically, imagine the foreigner decides to give you clothing for free. Your brother will certainly never match that price. So he'll do something else instead. Whatever he does, will make your family richer.

This last example is exactly what happens with the invention of a new device that makes some jobs obsolete. (eg. automated elevators)

----

Vander Zalm's comment made me laugh. He says such nonsense but I'm sure he never ran his business that way.

I would like to believe that politicians matter much less than their egos imply. But then the history of the past century shows that politicians are capable of complete folly. In 1913, the world had a functioning global economy where people travelled without visas and shipped goods to buyers across oceans without hindrance. By 1945, the folly of politicians had swept that freedom all away.

[takeanumber]

Alright.

I'm going to get attacked by both the Left and Right for this.

It's a complicated thing; outsourcing.

The Right wing thing to say is to be blind, and say that it's purely a great thing.

The Left wing thing to say is to be blind, and say that it's purely a horrible thing.

The reality is in the middle.

I can cite a number of historical precendents where those who abided by the benefits of 'comparative' advantage blindly, and their countries got really, really bit by it.

For instance, basic comparative advantage says that Saudi Arabia, by doing what it's doing (selling oil, concentrating capital in oil, and not developing any sort of domestic production themselves because it's cheapter to import) is the best thing to do.

Yet, recall that Spain also had a comparative advantage when it came to gold and silver just 400 years earlier. It was easier for them to hire a Flem to do their weaving than it was for Spain to learn.

The long run result? Britain and Benelux built infrastructure with Spanish money, and well....Spain entered hundreds years of economic stagnation, that, in spite of myth, was not caused entirely by the Inquisition.

Similar lessons can be learned from Britain.

And now we can see a similar pattern with the United States.

Sure, the United States is showing a surplus in the administrative (head office) type jobs.

Sure, the US can control a lot of the capital in China, but what of the extra capital that China earns from spinnoffs. How long can the US have supremacy?

And how soon until domestic capital (as was the case in Spain) takes a permanent flight?

Outsourcing has benefits, to be sure. It makes our imports cheaper and allows us to relieve ourselves of excess capital (because according to the Solow Growth Model, you can only use so much capital in your own economy...the goal isn't maximizing production, it's to maximize consumption..and Jesus Christ people, make sure you read up the Solow Growth Model before you come at me on this theory.)

There ARE policy alternatives to preserve our place in the world without 'coddling' specific industries while relieving ourselves of excess capital.

[August1991]

On one hand this, on the other hand that. Solow growth model? WTF? [Or are you are trying to somehow impress?]

Look, the issue here is whether the Canadian government should force (or induce) me to deal with another Canadian rather than with someone in China.

Do you really mean to say that allowing Canadians this choice, we'll stagnate like Spain in the 1600s? And do you really believe that trade with the Flemish caused Spain to decline as a political power? And can't you find a more recent example?

On the contrary, all the evidence suggests that trade restrictions lead to stagnation.

Countries don't trade; people do. Economic arguments go wrong when they ignore individual choice.

[takeanumber]

sigh.

Solow Growth Model is taught to second year students of economics. The advanced form is often taught in the third year. Graduate programs often feature a large component on the model.

I'm not trying to impress anybody.

Just because you've never heard of it doesn't mean that it's 'impressive'.

And just because you don't agree with the results of the model doesn't mean that it's false.

-----------------------------

People do trade. Countries cause shifts in trading patterns and policies.

There are several acts that were passed by the British Parliament during the late 1700's and early 1800's which sheltered the native mill industry and allowed it to thrive.

It's in part the principle of Import Substitution.

It is true that such import tarrifs do lead to stagnation IF THEY ARE LEFT IN PLACE TOO LONG.

Example: Latin America, 1921-1988.

How can you discount the effects of policy by saying "countries don't trade, people do", while simultaneously attacking tariffs, saying that they cause disaster to economies.

This is why you never have any chance of winning an economic debate, you don't think through your arguement before you make it.

Moreover, I merely stated that there ARE POLICY ALTERNATIVES to deal with the ill effects. I did NOT imply tariffs.

Nor do I support import tariffs at this point and time for Canada.

YOU implied import tariffs.

If you thought about what I said about Spain and Britain, and Saudi Arabia today, you'd get the similarities, and understand my thesis with respect to comparative advantage.

But to expect that a Con would respect and learn from history and economics is obviously too much to expect.

[August1991]

Do you write the same way elsewhere as your posts here? That is, do you write in such an incoherent fashion?

First, for some bizarre reason, you start with a disjointed description of when the Solow Growth Model is taught. Who cares!

Then, you state that people do trade but "countries" cause shifts in trading patterns. When you say "country", do you mean "government"?

Then you give an example (from the UK in the 1700s) which seems to support trade restrictions - specifically import substitution. But then you state this shouldn't been done for long.

Then you state:

How can you discount the effects of policy by saying "countries don't trade, people do", while simultaneously attacking tariffs, saying that they cause disaster to economies.

Sorry, you got me here completely. Canada does not trade with the UK. Individual Canadians trade with each other and with individuals in the UK. How does a restriction on your ability to trade make you better off?

Then you state:

Nor do I support import tariffs at this point and time for Canada.

Huh? So where is our disagreement?

If you thought about what I said about Spain and Britain, and Saudi Arabia today, you'd get the similarities, and understand my thesis with respect to comparative advantage.

Let me get this right. Trade is not the issue at all. What you think is that the government should get into the business of picking winners. That is, you think the government should take from successful people and give to other people if they follow what the government wants.

I guess what you really mean is that the Albertan government should tax the oil industry and subsidize the non-oil industry.

If this is such a good idea, why can't people do this on their own?

[takeanumber]

No, people can't do this entirely on their own.

Setting up a plastics industry requires billions upon billions of dollars, and requires a coordination, and risk dispersal (both in literal form and in expropriation) that only government can provide.

That's where policy comes in.

Should government pick winners and losers?

Does it not already do so when it picks which industries are going to be opened up (for instance, box wine) and which will be protected (milk)?

Is it right?

That depends on the policy mix.

You said that countries don't trade, people do. Governments set policy which sets the patterns for trade. I think that's a big deal.

We shouldn't be handing out tax breaks for outsourcing.

It's not healthy in the long run, in spite of what comparative advantage proponents say (and they've been around for centuries, in case you didn't know.).

-------------------

You attacked the Solow Growth Model. I told you when it's typically taught, anticipating your next bevy of attacks against economics in general.

The fact that you don't know a stich about economic theory, and yet, you behave like an authority.

Then, you attack arguements out of hand because you're not educated enough to understand them.

What you've demonstrated here tonight is that in one post, you can't even be consistent, little though provide an intelligent rebuttle.

Try reading up.

Regards,

Takeanumber.

[Hugo]

If I need a car and I have a choice between buying it from my neighbour or from a foriegner I have a moral duty to buy it from my neighbour. After all a car is a car and even if that car costs more from my better paid neighbour if I buy from him he can buy from me.

Except that he cannot buy from you after you do that. You spent your surplus capital paying more for a car from him.

Oversimplification, but do you get the point? Buying cheaper goods leaves you with more money. Outsourcing and downsizing has made consumer products so cheap that we can all afford plenty, whereas before a TV or a refrigerator was a luxury item.

Spain entered hundreds years of economic stagnation, that, in spite of myth, was not caused entirely by the Inquisition.

No, it was caused by mercantilism. The fact is that Spain had gold flowing in from the Americas and the prevalent mercantilist theories taught that capital should stay in your own country, so Spain was closed to free trade. Spain was able to coast along on plundered gold for a while, but when it had all been spent, they had no trade to fall back upon. Refer to your Paul Kennedy.

And how soon until domestic capital (as was the case in Spain) takes a permanent flight?

"trade deficit" is a misnomer. It would be more appropriate to call it an "investment surplus" because that is actually what is happening when you are running a deficit: foreigners are investing in your country more than you are investing in theirs. This is why the deficit runners - USA, Britain - are doing much better than the surplus runners - Japan, Russia.

Thus to speak of capital "taking flight" as part of outsourcing and trade deficits is complete and utter rubbish. The only capital doing any flying is foreign capital, into your economy.

Should government pick winners and losers?

Does it not already do so when it picks which industries are going to be opened up (for instance, box wine) and which will be protected (milk)?

Government can pick winners and losers if it likes economic collapse. Look at MITI. Government should be separated from the economy for the same reason as it is separated from the church. Too much concentration of power which leads to the detriment of all. Government interference in the economy is costing jobs and incomes and making people poorer than they would be under a properly free market.

Setting up a plastics industry requires billions upon billions of dollars, and requires a coordination, and risk dispersal (both in literal form and in expropriation) that only government can provide.

Absolute and total rubbish. All you need is an IPO and you can raise your billions and disperse your risk massively, far better than government could ever do for you.

[takeanumber]

Absolute and total rubbish. All you need is an IPO and you can raise your billions and disperse your risk massively, far better than government could ever do for you.

The Google IPO is worth only 2.5-3.0 billion dollars.

It takes a lot more capital than that to set up a plastics industry.

It takes land expropriation (for the additional pipeline capacity) and coordination of multiple firms.

Thus, government is needed.

No, it was caused by mercantilism. The fact is that Spain had gold flowing in from the Americas and the prevalent mercantilist theories taught that capital should stay in your own country, so Spain was closed to free trade. Spain was able to coast along on plundered gold for a while, but when it had all been spent, they had no trade to fall back upon. Refer to your Paul Kennedy.

Clearly not. All of Spain's gold went to other countries to buy what it wanted. They coasted on easy money.

They had no domestic manufacturing to protect.

So how could it possibly have been Mercantilism?

Thus to speak of capital "taking flight" as part of outsourcing and trade deficits is complete and utter rubbish. The only capital doing any flying is foreign capital, into your economy.

Hardly.

All the foreign capital flooding into the US economy is mainly Asian, and it's financing the deficit.

What's the deficity money being spent on?

Mainly waste. Yeah, I consider most military spending to be wasteful. It doesn't benefit anybody materially.

So how can this be a good thing?

------------------

A superior response Hugo.

[Stoker]

Thus, government is needed.

Or a bank loan.........

Mainly waste. Yeah, I consider most military spending to be wasteful. It doesn't benefit anybody materially.

How's that? If you choose to believe that the Iraq war was fought over Oil (which I don't), wouldn't it stand to reason that by funding the military, the American people are revieicing the material beneifits of (cheaper) Oil?

[caesar]

The best laid plans of mice and men go oft awry. poor translation of Robbie Burns but let's face it Iraq invasion was NOT one of the best laid plans.

[August1991]

All the foreign capital flooding into the US economy is mainly Asian, and it's financing the deficit.

Huh? The US has a current account deficit which means it has a capital account surplus. In effect, foreigners are delivering good and services to the United States because it offers a good place to invest them. In return, foreigners get a future claim on US resources. Incidentally, this situation is not new and occurred when the US government budget was in surplus. In fact, the capital account surplus is much larger than the current budget deficit.

I think that's what Hugo said.

I'm not sure your example of 17th century Spain is appropriate. Saudi Arabia typically runs a trade surplus, I believe.

BTW, I agree with you about much military expenditures. Making cruise missiles and then exploding them is fun at first but is ultimately a waste of time and money. I learned that as a kid with fireworks and my allowance.

Thus, government is needed.

Typical Canadian thinking.

You attacked the Solow Growth Model.

Attack a mathematical model? Are you joking?

I merely wondered why you went into detail about what years it is taught in a university curricula. I thought the discussion was about government international trade policies.

----

Cases can be made for governments to intervene in trade between people. It is almost impossible to justify interventions which treat trade between people in one country differently from trade between people in two different countries.

[takeanumber]

Cases can be made for governments to intervene in trade between people. It is almost impossible to justify interventions which treat trade between people in one country differently from trade between people in two different countries.

Opium trade, China, 19th century.

Cocaine trade, United States, 20-21st centuries.

Still believe that it's wrong for government to get in the way of trade?

Careful of blanket statements. They'll bite you.

-----------------------------

Current account deficits are not necessarily a good thing. Spain is a great example of how an economy can retard because of them.

I challenge anybody to state that Saudi Arabia has a model economy.

The point stands. Everything in moderation.

You can modify trade flows and control outsourcing with careful and measured policy, and it IS a desirable thing to do.

------------------------------

"Take out a bank loan".

This is another one of those statements that is quite funny.

True, banks have billions of dollars worth of capital (our capital in reality), but they're not going to invest a massive chunk of it to develop a key strategic industry.

There's another side to it too. The market clearly dictates that it's best to have all steel be made in Korea, or all of our oil produced in Saudi Arabia. But is this desirable?

I'd argue that it isn't. I'd argue that every country needs to take steps to develop and foster strategic industries.

Aerospace is another key example.

Pharma is another wonderful example.

---------------------------------------

I strongly believe that some outsourcing is alright. I believe that you can't ever sqeeze off the entire flow, just as you can't sqeeze off the flow of Columbia blow into the nostrils of bored NYC'ers and Eurotrash types.

But, you can take measures to take the edge off the negative aspects. Just as we use macroeconomic policy to take the harshness out of the business cycle, policy has a role to play in taking out the harshness of global trade.

It's a perfectly moderate position to take.

[Hugo]

It takes a lot more capital than that [2.5-3.0 billion dollars] to set up a plastics industry. It takes land expropriation (for the additional pipeline capacity) and coordination of multiple firms. Thus, government is needed.

I disagree with every word. First off, a plastics company is likely to bring greater returns than Google, so the IPO would be correspondingly higher. In the capitalist system, if you are proposing an enterprise that offers a return on investment you will find financial backing no matter how much you need.

Secondly, why does the government have to be involved in land expropriation? If land is privately held, then the prospective buyer can simply buy the land in the free market.

Thirdly, government does not need to coordinate multiple firms. Plenty of projects have been developed by the coordination of multiple firms without any government intervention. Where there is mutual benefit, firms will cooperate. This is what happens when you have outsourcing. Do you think Ford makes all of the parts in a car from scratch? Of course not. There are literally dozens of companies involved in the production of a car and they have all come together for a mutual profit without any government intervention.

Clearly not. All of Spain's gold went to other countries to buy what it wanted. They coasted on easy money. They had no domestic manufacturing to protect. So how could it possibly have been Mercantilism?

Spain's main problem was that it was bankrupted by a succession of wars, wars that, thanks to new military methods, had become more costly than ever before. It paid for these wars in profoundly anti-capitalist ways, for instance, raising new taxes, borrowing and hoping for windfalls from the Americas rather than trashing mercantilist economics and developing an economic underpinning to supply the military machine.

The Counter-Reformation weakened the economy and was very anti-capitalist. Economic incentives all revolved around a benefactor in either the church or the nobility. Labour was monopolised by guilds, for example, the Mesta (sheep-owners guild) retarded the development of agriculture. This is all mercantilist. You can tell because it deliberately concentrates wealth in families, which is a tell-tale sign of mercantilist policy.

Mainly waste. Yeah, I consider most military spending to be wasteful. It doesn't benefit anybody materially.

Yes, it is wasteful. Guns and butter.

All the foreign capital flooding into the US economy is mainly Asian, and it's financing the deficit.

What you are saying is that since the influx of capital into the US finances the debt, an influx of foreign capital is wrong. This is fallacious. It is not the influx that is wrong but the debt.

Opium trade, China, 19th century.

Cocaine trade, United States, 20-21st centuries.

Still believe that it's wrong for government to get in the way of trade?

Yes. Both the examples you listed are profoundly anti-capitalist because there is an element of coercion in both and capitalism can only involve voluntary transactions.

Current account deficits are not necessarily a good thing... You can modify trade flows and control outsourcing with careful and measured policy, and it IS a desirable thing to do.

You are begging the question. You have not shown that modifying trade flows and controlling outsourcing will reign in current account deficits.

"Take out a bank loan". This is another one of those statements that is quite funny.

It's not the best method of raising capital. Shares gives a much greater dispersion of risk.

I'd argue that every country needs to take steps to develop and foster strategic industries... Aerospace is another key example.

Like Bombardier, which now needs endless corporate welfare to even stay afloat?

The government has no business fostering any kind of industry. Industries will develop under the right market conditions, and if those conditions do not exist and the government attempts to develop the industry anyway such industry will inevitably fail.

[Michael Hardner]

Great thread going here. I'm learning a lot.

takeanumber seems to be mostly arguing against economic absolutes such as "government has no place in trade"

There are literally dozens of companies involved in the production of a car and they have all come together for a mutual profit without any government intervention.

Are you saying the government has no hand at all in the building of new plants ? Ernie Eves delivered his last budget at an auto plant, I believe...

[Hugo]

Are you saying the government has no hand at all in the building of new plants ?

No, I'm saying that government should have no hand at all. If the government took no stance at all the plants would get built if they were needed. There is absolutely no need for government intervention in any industry except those which government itself creates.

A truly free economy has never existed but if you look at periods of history where we have come close, for instance, America for about 20 years post-Revolution and between 1840 and 1860, industrial development, innovation and trade all boomed without any government input at all.