In a nutshell, why our economy sucks

[Argus]

And always has. It's not about oil or gas or mining or commodities or manufacturing. Our economy sucks and has for decades, because we have low productivity, and it costs too much to make things. And the primary reason is government interference. Government subsidizes so many things, mostly for the wrong reason, that we wind up spending a fortune for stuff which should be cheap, and in doing so we allow companies which should be out of business, to go on forever, sucking in resources which should be going to more efficient and effective companies.

Governments at all levels subsidize a massive variety of companies and industries. Most of the entertainment industry is government subsidized, whether we're talking about theater, opera, ballet, television, movies, writing or art. Industries as diverse as those which make cars to those which make cheese are subsidized. Money goes to companies which are successful, and those which aren't. It goes to those who set up call centres or basket weaving festivals, to those who want to teach native languages or those who want to teach yoga. It goes to lumbermen and fishermen, to roofers and labourers in subsidizing their jobs with pogey, and it goes to the companies which employ them.

It consumes a huge amount of tax dollars at all levels every year, amounting to tens of billions of dollars, and the jobs which are 'created' because of it are probably less cost effective than putting those workers on welfare. Yet no government yet has been able to ween itself off the self-aggrandizing experience of standing up in front of a TV camera and holding aloft a check while bragging about the number of jobs which will be created or saved.

http://news.nationalpost.com/news/canada/canadian-politics/andrew-coyne-the-lucrative-business-of-buying-subsidies

[eyeball]

Our economy sucks because it's geared towards the stinking rich.

Your comment about government interference is spot on.

[PIK]

Even in my small town yrs back, industry came in on government grants and then left 5 yrs later when the money dried up.

[Moonlight Graham]

In certain cases under certain conditions there's a role for subsidies. But as Argus and Coyne point out, it's usually just a bunch of vote-buying or lobbyist-pleasing rubbish that hurts our economy. Sometimes jobs need to die so others can be created, companies and industries rise and fall all the time based on market demands etc., that's how the market works. Artificial resuscitation usually isn't good overall in the long run.

[eyeball]

Canadians only need to look at the ever widening income gap to see why the economy sucks.

Canada's fishing industry is an indication of how the process works.

Ottawa assigns quota to an armchair fisherman at a cost of pennies per lb, the guy in the armchair checks the dockside price of fish sees it's $8 lb and leases that quota to an actual fisherman for $6.50 - $7.00. For his $1 - $1.50 Buddy takes all the risk, pays all the bills, the crew, the boat and maybe himself if he's lucky.

The guy in the armchair risks his time lobbying the government for more quota and entertaining corporate offers to buy his little golden goose. There's a big US company that owns most of it now. Ottawa doesn't seem to care who owns it but it's worth noting Canadians are forbidden by law to own US quota.

A taxi licence is probably the closest thing to this scam that Canadians might be familiar with but there's really nothing quite like the fishery or how it's managed and to who's benefit to bring home why so much of our economy sucks.

Edited January 8, 2016 by eyeball

[eyeball]

I remember when DFO approached the whale-watching industry and offered to create individual transferable licences and limit participation to the existing 'stakeholders'.

"Turn us into instant millionaires'you mean?" "Ummm okay, if you say so".

It didn't come to pass btw... something to do with the scheme clashing with First Nations whaling rights according to insiders. DFO just suddenly dropped the idea and never uttered another word about it.

One of the biggest things that motivates the government to interfere in the economy the way it does is to facilitate it's own ease of management - in our case, it would simply rather deal with a small roomful of millionaires than a bunch of coastal communities.

Edited January 8, 2016 by eyeball

[ReeferMadness]

Our economy sucks because it's geared towards the stinking rich.

Your comment about government interference is spot on.

Are you implying that the economy would be less geared towards the stinking rich with less government interference?

[sirius]

Can you imagine you have a farm and you can't find something to do?

Same with household. And same with a country. For sake of something to create or improove for a better, easyer life. And multi national monster companies hire politicians to play for us a theater.

Economy is not connected to improving the life any more. It is a way some to work for other.

It is politics now. Even geopolitics. You know what part of gdp of usa bring lawyers and medicine? And what part production? And how much debt? And Canada is just a small satellite. Now usa is going after russia. And the bet is all or nothing. If russia start its economy it will be game over for usa (and Canada as satellite). Now china produce for america for peanuts. But if china see russia take back its independance (now russian central bank has little to nothing russian but the name, creditors, etc.) it can put for sale all american obligations and shut down its export for america. Now china is afraid because if russia fails, china will be next dictatorship that needs to be democratised. As Iraq and Libia.

[sharkman]

What the hell Argus! Are you a wishy washy moderate or a conservative again??

[eyeball]

Are you implying that the economy would be less geared towards the stinking rich with less government interference?

Put it this way, it would be a lot harder to tilt the playing field any which way if in-camera lobbying of politicians and senior bureaucrats was outlawed.

[Argus]

What the hell Argus! Are you a wishy washy moderate or a conservative again??

What the hell, sharkman, are you talking about?

I'm the guy who said the big problem with the Harper government was they weren't very conservative.

[CITIZEN_2015]

Those who say our economy is bad can you name a country whose economy is doing well or even better than Canada say in 2015? Western Europe? Eastern Europe? Middle East? US? South America? .... I didn't think so. It appears that when oil prices dropped everybody was hit not just the middle east!!!!!.

[sharkman]

What the hell, sharkman, are you talking about?

I'm the guy who said the big problem with the Harper government was they weren't very conservative.

On second thought, I think I'll take my hell back. I don't visit here often enough to be knowledgeable on your varying opinions.

[overthere]

A major problem , and fairly recent, is how many people of voting age are unaware of the strong, direct connection between all the lovely things we like so much about Canada(the generous social contract) and the need for each worker bee to do something productive to make it continue.

It is a bizarre concept, but sooner or later before you distribute the wealth you must create the wealth.

I know for certain that Trudeau Sr never bought into this idea, and I fear that Jr learned at Papas knee all too well.

[eyeball]

A major problem , and fairly recent, is how many people of voting age are unaware of the strong, direct connection between all the lovely things we like so much about Canada(the generous social contract) and the need for each worker bee to do something productive to make it continue.

Notice in a real bee hive that everyone more or less get by with the same amount every other bee does?

It is a bizarre concept, but sooner or later before you distribute the wealth you must create the wealth.

In human hives of course the share that's distributed to the Queens and the soldiers becomes so disparate that the workers finally start to chafe under the load. What's bizarre is why the worker's betters refuse to understand that from each according to their abilities and too each according to their needs is essentially a sound concept for everyone's benefit.

I know for certain that Trudeau Sr never bought into this idea, and I fear that Jr learned at Papas knee all too well.

The wealthy and powerful always seem to lose sight of the fundamentals of the societies that support them.

Of course in the real world we're also faced with the fact that we're starting to push hard enough on the sustainability of our planet's ecosystems to provide enough that just getting by is more difficult than ever never mind allowing for the stinking rich and powerfully bloated. If maintaining the expectation of privileged classes to enjoy the fruits of everyone else's labour in the manner to which they've become accustomed is born on the backs of people for whom not enough work exists then population growth and labour saving technological change will probably cause a rather explosive collision.

The moral imperative of the wealthy classes on everyone below them to justify their existence will finally be more than anyone can stand which probably explains why cultural revolutions seem so vindictive.

Edited January 9, 2016 by eyeball

[Argus]

It is a bizarre concept, but sooner or later before you distribute the wealth you must create the wealth.

I know for certain that Trudeau Sr never bought into this idea, and I fear that Jr learned at Papas knee all too well.

As I've said before, my impression of both Trudeaus was and is that money issues are a grubby annoyance beneath their concern. Who cares about money and balancing budgets and stuff like that? Not earnest, progressive visionaries! That's for sure! Nor do the majority of their followers, since so many people no longer have to pay taxes. Remember that the lower 50% of income earners are responsible for just 04% of income tax returns.

[eyeball]

Remember that the lower 50% of income earners are responsible for just 04% of income tax returns.

How much of this is their own fault and is shaming then for that an appropriate or prudent course of action?

How would that be reflected or achieved in public policy?

[cannuck]

Argus, you hit this nail right on the head (must have received one of those $300 titanium framing hammers for Christmas).

We are in such deep doo doo because we really have no idea (when I say "we", I mean the royal we that extends well beyond our national borders) how wealth is created vs. how it is merely re-distributed. The left side of the political spectrum believes we just have to tax the rich and re-distribute their money and the right side thinks we really don't need to actually work, just speculate on equities or derivatives and re-distribute that money (mostly into a few lucky pockets). And the whole bloodly lot thinks it is just fine to borrow the money to keep on interfering with everything from a central or regional government, and our grandkids can just pay the bill.

Until we understand that no wealth is created until value is added to a resource, and that we have a mess of resources beyond ANY other country per capita - but to which we really need to add value before cashing in - we are and will continue to be screwed. The idea that government should do what it does (distribute privilege) is also what we do not understand. Most of those subsidies of which you speak are directed to specificly privileged recipients. Government needs to deal with governing - i.e. making rules and enforcing them - and get the hell out of the privilege dispensing business. It has pretty much a 100% perfect track record of failure - and we have not learned from that yet.

My test of good government goes back to Sir Roger Douglas, who defined in four words how he managed to fix the problems of New Zealand's extremely interventionist government when they went broke: "we simply removed privilege". That meant that for government benefits of any kind, either EVERYONE was elegible, or NOBODY was. No special privilege for anyone. Realizing that there ARE things that government must pay (since we do believe in social programmes), THAT is how it is done fairly and effectively.

Otherwise, the business of government should be to legislate, regulate and enforce - by the principles of no privilege.

Edited January 10, 2016 by cannuck

[Argus]

Until we understand that no wealth is created until value is added to a resource, and that we have a mess of resources beyond ANY other country per capita - but to which we really need to add value before cashing in - we are and will continue to be screwed. The idea that government should do what it does (distribute privilege) is also what we do not understand. Most of those subsidies of which you speak are directed to specificly privileged recipients. Government needs to deal with governing - i.e. making rules and enforcing them - and get the hell out of the privilege dispensing business. It has pretty much a 100% perfect track record of failure - and we have not learned from that yet.

No, and you'll note that almost everything in the Liberal platform was about wealth redistribution, virtually nothing on how to generate it. In fact, the arcane rules on exploiting resources and the new additions certain to come in, as well as the new focus on greenhouse gas emissions and placating natives means its extremely unlikely we will be able to exploit our natural resources profitably. Hell, we can't even build a pipeline to export oil.

What we need to do is end almost all subsidies other than those countering those of other countries and those meant to specifically encourage the creation of new technology, end inter-provincial trade barriers, and end seasonal employment insurance coverage. If you can only work three months a year where you are, and can't live on the proceeds the rest of the year, then find another line of work or move elsewhere.

[August1991]

Our economy sucks and has for decades, because we have low productivity, and it costs too much to make things. And the primary reason is government interference. Government subsidizes so many things, mostly for the wrong reason, that we wind up spending a fortune for stuff which should be cheap, and in doing so we allow companies which should be out of business, to go on forever, sucking in resources which should be going to more efficient and effective companies.

I largely agree Argus but at the same time, students in our (state, public, no tuition) schools are rated among the highest in the world.

Our state health system is bad for routine care (we have work-arounds) but it works for catastrophic events.

======

Following his Dad, I'm with Trudeau Jnr on this: Canada doesn't suck and our great success is that we get along. The big question is why, and whether we will in the future. Trudeau Jnr takes this as a given or believes that Laurier's "sunny ways" will make it so.

Clueless.

IMHO, Canada's success didn't just happen.

Edited January 11, 2016 by August1991

[hitops]

Notice in a real bee hive that everyone more or less get by with the same amount every other bee does?

Notice how when the bee hive (communism) model has been applied to humans, it has resulted in the some of the largest human disasters in history?

Our economy is in no way geared towards the rich overall. It has huge social benefits that mostly benefit the poor, and plenty of worker protections, minimum wage etc. This is exactly why it is unproductive.

Edited January 11, 2016 by hitops

[eyeball]

Notice how when the bee hive (communism) model has been applied to humans, it has resulted in the some of the largest human disasters in history?

I'm not the one who applied the model. I'm just trying to imagine why the normal order of a beehive or a modern human civilization can be expected to be sustained without chaos breaking out in the face of unending economic disparity, shrinking resources, fewer opportunities and a growing population. Above all this in our society however is the ridiculous expectations that everyone else get by on less so the rich can keep on getting richer.

This is the actual root causes of the disasters you mentioned through history.

Our economy is in no way geared towards the rich overall. It has huge social benefits that mostly benefit the poor, and plenty of worker protections, minimum wage etc. This is exactly why it is unproductive.

No it's not exactly why at all. You forget that social benefits are just as much for the benefit of the rich who don't do themselves any favours by getting all uppity because the help won't get with the program and work harder for less benefit, shittier environmental standards and a general race to the bottom with people who are even more desperate.

Speaking of analogies in the real world, nothing will get us on the track to to the shrinking water-hole and the meaner animals who'll be circling it faster than the rich not smartening up, getting with the program and allowing more wealth to trickle down faster...and a lot faster.

The rich will just look fatter and tastier the more they resist.

[ReeferMadness]

Put it this way, it would be a lot harder to tilt the playing field any which way if in-camera lobbying of politicians and senior bureaucrats was outlawed.

The economy will be geared to the rich as long as there are rich people. It would be that way even if there were no politicians and no bureaucrats.

[Bonam]

The rich will just look fatter and tastier the more they resist.

Yes, just keep sharpening your guillotine...

[eyeball]

The economy will be geared to the rich as long as there are rich people. It would be that way even if there were no politicians and no bureaucrats.

That's still no excuse for making it easy for them.