Flights Of Fantasy - The Left's Approach To The Economy

If you're planning to read this post, you probably should get a coffee because it's a long one.

Canada’s socialist New Democratic Party is worried about Canada’s trade imbalance. I know this because their leader, Thomas Mulcair, has waxed poetically in another of his apoplectic fits as he blamed the government for this newfound crisis. He is positively livid about the fact that Canada is currently importing more than it is exporting.

Sometimes, he gets so livid his face turns red and I worry about his blood pressure rising to the point that he becomes dizzy and might trip over his sanctimonious rhetoric and hurt himself.

Earlier this year, he was positively livid about the fact that western provinces like Alberta were doing very well while Ontario and Quebec and were struggling economically. Mr. Mulcair, in what has become the mantra of the left these days, blamed the successful economies in the west for the failure of those who mismanaged their affairs in the east. Sounds like so many today who blame their personal plight on those who have succeeded doesn’t it? 

Blame and envy are something at which the left has become very accomplished.

The Ontario and Quebec Liberal governments who had bought their way into power on borrowed money weren’t responsible for their economic woes according to Mr. Mulcair; it was the success of the resource driven economies in the west. It wasn’t absurd entitlement and meddling policies of the left-leaning governments that were responsible, it was the successful governance of the Conservative government in Alberta.

That argument sounded good but didn’t fly very well unfortunately because a rather significant wave of inconvenient facts in both Parliament and the media undermined Mr. Mulcair's carefully crafted criticism..  Undeterred, Mr. Mulcair has switched course and is now blaming the state of things on Canada’s trade imbalance. 

Mr. Mulcair is nothing if not flexible and willing to embrace change on a moment’s notice.

While I’m sure that most of us welcome the NDP’s newfound interest in the benefits of trade to our economy, I think it would be prudent if they took the time to learn how it all works before jumping into the debate. 

The NDP seem to want to have it both ways. They criticize the government for negotiating free trade with Europe and parts of Asia while criticizing the government that we don’t have enough markets for our exports and they positively deplore our free trade agreement with the United States. 

The NDP have, in fact, consistently voted against every trade deal negotiated by the government over the years, including one with Liechtenstein. They were quite concerned about the negative impact of trade with a nation that has a population of 35,000 and whose major exports are ceramics, sausage casings and false teeth. 

One shudders to think of what will happen to Canada’s sausage casing industry now that our government has negotiated a trade deal with Liechtenstein. 

The simple reality is that trade is a two-way street. You can’t trade by yourself. Trading with yourself could be called hoarding and doesn’t work very well. You have to have someone to trade with and if they aren’t prepared or able to trade with you because their economies are in the toilet, then there is going to be some kind of slowdown in trade activity. 

Apparently Mr. Mulcair was so focused on blaming other Canadians for the mess in Ontario and Quebec while trying to save the sausage casing industry, he didn't notice that most of the world is in economic recession.

Canada’s economy is quite stable, in fact it is outperforming all countries in the G7. This means that we have stuff to trade and the ability to buy but some of our trading partners are in less stable economic shape than we are. Hence, we’re importing more right now than we’re exporting. Mr. Mulchair and his NDP would shout that we wouldn’t have to import so much if we manufactured more and he’s correct. You can’t manufacture more, however, when government tax and energy policies along with unions salary demands have priced manufacturing jobs right out of the market.

The simple truth is that manufacturers are leaving the country, taking their jobs with them to countries where labour and operating costs are less expensive.

The fact is that if it costs more to manufacture something, that cost will be reflected in the selling price which affects whether or not people will buy it. It is difficult to trade Canadian manufactured goods when so many of them are more expensive to produce thanks to high labour costs, than those same goods can be produced elsewhere.

It is one of the great weaknesses of the left, that it has never understood that government does not control the economy. In fact, most politicians on the left don’t fully understand how economies work at all . That is evident by the interfering policies they implement.

In Quebec, for example, the new PQ government is moving to protect Quebec-owned corporations from foreign takeover. This is in response to a recent offer by Lowe’s to purchase Rona, a large Quebec-owned hardware/lumber chain. The government refers to Rona as a “champion of Quebec business”. Some champion. Over the past five years, Rona’s shares have plummeted 48% which is more than four times the drop in the Standard & Poor’s/TSX Composite Index over the same period. It makes you wonder how well the non-champions in Quebec are performing and how much that's going to cost taxpayers.

Fortunately, the new socialist PQ premier has reassured us that both she and her new finance minister, a former academic, both have MBA's so I guess we can all sleep better tonight.

The Quebec Government authorized the purchase of shares in Rona to artificially prop up the share price. Who pays for that? Why taxpayers of course.

And that’s the problem with the left’s approach to the economy. 

They introduce policies that negatively impact the market which hurts shareholders which include every day folks like you and I, as well as, many public sector and private pension funds. That drives capital to other, more attractive investment opportunities, which undermines economic growth. This has a negative impact on the companies that the government was trying to protect for political optics which results in more tax money being spent to prop up those companies as we saw in the bail out of the auto sector in 2008/09. It undermines investor confidence which reduces business development and job growth.

It also discourages new business start-up and foreign investment which further impedes job growth and economic prosperity.

The government of the United States is shutting down coal plants at the cost of thousands of jobs at precisely the time when unemployment is a huge problem in America and without a plan in place to replace those jobs. It bans off shore drilling in the United States but provides billions in support of the same thing in Brazil. Only the left would spend billions to prop up in another country what it bans in its own, providing jobs to that foreign country rather than its own unemployed citizens.

It was the same government that declined to approve the Keystone pipeline which would have provided thousands of high-paying American jobs and a stable supply of oil from a friendlier ally than many from whom America now depends on for oil imports.

This is done to win favour with the environmental movement that love sustainable energy and who are as clueless about the economy as fruit flies.

Sustainable energy is the darling of the left with claims of new jobs and cleaner environments. For the foreseeable future it is nothing but wishful thinking, a flight of fantasy that was tried in Europe and which is failing. Even the NDP's much vaunted cap and trade policy has been tried only to result in increased cost, slower economic growth and outright corruption.

The problem with sustainable energy is that it remains too expensive and unable to meet industrial demands. Millions were spent by the Obama administration on Solyndra to advance solar energy only to see the company go bankrupt, taking its promise of cleaner energy and a half billion of tax payer money with it.

In Ontario, the government squanders billions on wind and solar which is seeing companies paying absurd increases in energy costs. In some cases, increases under Ontario’s Clean Energy act have been upwards of 1000% and that, my gentle gum drops, causes companies to shut down and/or relocate which costs jobs which cause economic hardship and undermines prosperity.

Ontario's economy, which just a decade ago was the powerhouse of Canada, isn't even the envy of Greece these days and most of it is the fault of bad economic management by a Liberal government and it's fuzzy economic policies.

Quite frankly, if the objective is simply cleaner air, the left’s program will work well because in the end, nobody will be able to afford to live here and everyone will have moved away leaving a big empty place with lots of clean air.

The really stupid thing about the Clean Air Act in Ontario is that of the top 10 cities with the cleanest air in the world, Canada already had eight of them. Considering how the left has screwed up our economies, I would suggest that stupidity was a bigger problem than clean air.

It almost makes you long for the good old days when the Liberal Party of Canada simply stole money from taxpayers as they did during AdScam. At least we didn’t have to deal with all this pretentious, self-serving and uniformed rhetoric every day and it really didn't hurt the economy or cost jobs.

Clean energy, like fair trade and equitable labour practices, are all laudable goals and should be part of a nation’s long-term economic planning but the left doesn’t plan. It reacts. It grasps at trends and politicizes issues to the point where more damage is done by their policies than by simply leaving things alone. 

Studies have shown that prosperity has consistently been higher during periods of reduced government interference than during those periods where government increased its presence through regulation and control; but that doesn’t deter the left. Despite repeated historical failure, it persists in its absurd attempts to do what cannot be done, control economies and socially engineer societies.

Government doesn’t belong in business any more than business belongs in government. It is government’s job to provide a level and fair playing field with sufficient regulation and safe-guards to protect investors, employees and the public and then get the hell out of the way. It is the responsibility of business to make a profit and in so doing, provide jobs and prosperity for the country.

The sooner the left realizes that, the better off more of us will be. Don’t hold your breath, however, as people like Thomas Mulcair have shown time and time again, when it comes to the economy the left are slow learners.

I told you this was going to be a long post.

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