OK, I recently spent some time in Ontario.
Which, is part of Canada, but it’s only a part. I cannot speak about Canada as a whole, but I can speak about Ontario.
Ontario has a much higher tax burden than any state (including RI and NJ) in the USofA. Gas costs more than $5 per gallon. It has universal health care. The minimum wage is $10.25 per hour. Union density remains very high. Factory jobs pay well. The regulatory environment makes California look like a Libertarian paradise.
IOW, it’s a socialist heck-hole.
If one listens to RW ‘economists’, these conditions mean that the economy of Ontario has to–HAS TO!!–be in the tank, right? According to every RW pundit and crank and know-nothing, all of those conditions mean that the economy has to–HAS TO!!–be creeping along at a negative growth rate. It’s a law of nature. Taxes, regulation, unions, high minimum wage, any one of these are job killers. The whole group of them must be–MUST BE!!–Economy Killers.
Right? Right! Ayn Rand said so!
Guess what? The economy of Ontario is booming. There was no financial crisis. Why not? The regulatory environment didn’t allow the banking system (or shadow banking system, which pretty much doesn’t exist north of the border) to play Russian Roulette the way banks here did.
The high minimum wage means that even people working low-end service jobs have money to spend. And they spend it. Which stimulates the economy. Just like Henry Ford said would happen.
The universal health care means less time is lost to sickness, and that sick people get care before they end up in the emergency room, and cost 5-6 times what it should cost to treat them. Costs which uninsured people pass on to the rest of us. So their health care system produces comparable results at about half the cost.
(Ah, I can hear it: but but but you have to wait six months for a hip replacement!! Yeah. What’s the point? Hip replacements are elective. Yes, they make people’s lives better, but they aren’t generally a matter of life and death. And, who gets most hip replacements in the US? Folks with single-payer health insurance. Except here we call it “Medicare”.)
My point is that, according to Ayn Rand, and Paul Ryan, Charles Krauthammer and the WSJ (and too many others to name), the economy of Ontari0 has to–HAS TO!!– be dismal. In fact, it’s great.
How is that possible? Could it be (gasp!) that RW ‘economics’ is actually an ideological position, completely divorced from the way the real world actually works?
That’s exactly what it means. The stuff that RW ‘economists’ claim is actually an ideological belief that has nothing to do with how the economy in the real world actually works.
Don’t believe me? Go to Ontario. Look at the cranes in Toronto, the spanking-new factories along the highway, the huge numbers of houses being built in London, the industry in Sarnia.
The Heritage Foundation (one of those “right wing” websites you must despise) notes that Canada as a country is actually more economically free than the US. heritage.org/index/country/canada
“There was no financial crisis. Why not? The regulatory environment didn’t allow the banking system [...] to play Russian Roulette the way banks here did.”
Canada’s gov didn’t incentivize giving loans to people the banks knew wouldn’t be able to pay back either. Either way though, you’re criticizing big gov’t cronyism, not capitalism (something Canada is apparently doing a much better job of fighting than the USA). I guess I shouldn’t expect you to recognize the difference though, since you already have shown your bias and an inability to get your history and economics right in other posts..
“Canada’s gov didn’t incentivize giving loans to people the banks knew wouldn’t be able to pay back either.”
Really? There are still people out there trying to blame the housing crisis on the CRA? On Fannie and Freddie?
How far are you willing to take this Lew Rockwell thing? I mean: do you want to go whole hog and say that the U.S. government caused the collapse by trying to help poor black people?
“The Heritage Foundation (one of those “right wing” websites”
It’s not a website.
It’s also, ultimately, the source of Obamacare.
“Either way though, you’re criticizing big gov’t cronyism, not capitalism (something Canada is apparently doing a much better job of fighting than the USA).”
This sentence could be a bit better constructed, unless you’re trying to say that Canada does a better job of fighting capitalism, which, arguably, it is.
Anyway, I don’t see your point here. Are you trying to say that what the post says about Ontario is untrue or that Ontario’s policies are not progressive? What are you even getting at?
“I mean: do you want to go whole hog and say that the U.S. government caused the collapse by trying to help poor black people?”
Intent is irrelevant — the US Gov created the environment for the collapse to happen. Even you couldn’t make a logical argument to the contrary.
“What are you even getting at?”
That it’s unlikely that the province of Ontario is vastly different than the rest of Canada. That comparing the USA to Canada and claiming CAN has, what Oswald considers, a more business-unfriendly system than the USA when a conservative foundation has found the opposite, pokes holes in both his attack on conservatism and the position that the US is more friendly to businesses.
“the US Gov created the environment for the collapse to happen”
By what mechanisms? Name’em. I dare ya.
“That comparing the USA to Canada and claiming CAN has, what Oswald considers, a more business-unfriendly system”
Oswald is claiming precisely that Canada has a more business-friendly system.
He is claiming that high taxes, high minimum wage, high union membership, and lots of regulation are all business-friendly.
He is claiming that were the U.S. to raise taxes, raise the minimum wage, increase union membership, and increase regulation, it would do better by American businesses.
Apparently, this is now a consevative position?
I’m actually quite sympathetic to the neo-liberal argument that it doesn’t particularly matter how much wealth redistribution is going on in an economy (as long as fraud is kept under control). What really cripples economies in the long run is: 1) physically large government, as in lots of public employees and huge budgets, and 2) interventionist government.
Large government hurts the economy because of the resource opportunity cost and brain drain relative to the private sector, and interventionist government disrupts natural market efficiencies and creates perverse incentives, such as regulatory capture. As long as the government mostly stays out of the market and keeps its total headcount and expenditures under control, I don’t think it’s fundamentally unreasonable to have a generous welfare system. Again, this is only assuming fraud is kept under control, which we do a pitiful job of controlling in this country – see SSDI, etc.
Some of the European countries and Canada have demonstrated that such neoliberal societies can work, as far as I’m concerned. I’d personally rather live in a freer society with a smaller welfare state, but that’s more of a philosophical preference on my part. The important component is to let buyers and sellers do their thing.
Scott Sumner gave a good interview on this subject on EconTalk in 2010:
www.econtalk.org/archives/2010/06/sumner_on_growt.html
Interesting that many on the right define freedom solely in economic terms. By some measures Canada is quite a bit more free than the U.S. This ranking comes to mind… Press Freedom Index.
Just for the record, Ontario’s economy is not “booming.” It is expected to grow at about the same rate (1.8%) as the general Canadian rate (1.6%) and general U.S. rate (1.8%) as measured by GDP. They also have employment issues of their own, Ontario unemployment is at 7.8% and not expected to fall measurably in the coming months.
That is better than RI, yes. But I’m not sure your observations match the data.
“It is expected to grow at about the same rate (1.8%) as the general Canadian rate (1.6%) and general U.S. rate (1.8%) as measured by GDP.”
Which, Oswald is saying, should not be possible, according to your average, right-wing economic crank.
The whole point of lowering taxes, keeping the minimum wage low, busting unions, and deregulating is, according to your average, right-wing economic crank, to produce growth.
So Canadians enjoy all the benefits of the welfare state, union jobs, universal health care, and so on, and they get the same economic growth as Americans.
Well, great. Then what’s all the right-wing crankery about? I mean ‘aboot’?
We disagree with some of the assumptions, obviously. Canadian taxes are roughly comparable to the United States and don’t rank high among developed countries internationally. Their business regulations are certainly not more burdensome than the United States. As a couple of commenters have already pointed out, a number of different organizations have ranked Canada higher than the United States on free market indexes.
Ontario does better than some states but not others. It looks good compared to a dysfunctional, failing state like Rhode Island, but not so good when compared to well-run states like libertarian New Hampshire or Virginia.
I don’t think minimum wage has much of an economic effect one way or the other besides some weird price distortions, and universal health care could easily work better than the backwards, heavily regulated corporatist system we have now.
What is it with you and the ‘we’?
“Their business regulations”
are quite different when it comes to financial services, precisely the industry Oswald specified. Canada regulates financial services much more tightly than does the U.S.
“libertarian New Hampshire or Virginia”
Neither is libertarian. Both depend on Federal handouts, Virginia especially (a Federal tax moocher state dependent on Federal government jobs), though NH did not get through the recession without the stimulus.
“I don’t think minimum wage has much of an economic effecect”
“universal health care could easily work better”
Could someone bring in a real libertarian?
Honestly, this was not quite ready for prime time. The intent was to save in draft, re-work, perhaps tone down some of the rhetoric, tighten it up, but, oh well.
I stand by the basic concept of what I said. Minimum wage is higher; union density in Canada (not Ontario) is 29%; labour (as they would spell it) costs are higher. As far as I can tell, top marginal tax rate is 39%.
The Heritage Foundation, the various Koch Brother mouthpieces, and John Boehner will tell you that implementing any one of these in the US would cause the economy to tank. Just as they all predicted it would tank after Clinton raised taxes. And yet, Ontario is doing very well. That is the basic point.
You really seriously need to respond to that.
Regulatory environment can be debated on specific issues, but, come on, you’re really going to tell me it’s less stringent than the US? We. who are stumbling over ourselves to gut Dodd-Frank, to gut environmental protections, to race to the bottom in the tax breaks we offer companies so that we can cannibalize jobs from another part of the country.
BTW, NH is not well-run. Or, it is in the sense that they’re smart enough to leech off Mass. Go to the northern part of the state and you will find some for-real employment issues. Virginia looks so good because of the presence of the fed gov’t. All those bureaucrats and lobbyists have to live somewhere. Transplant DC into Montana, and suddenly Virginia start looking really ill.
And I love how Canada is portrayed as a socialist heck hole when it suits rhetorical purposes, but it’s suddenly a businessperson’s dream when that suits RW rhetorical purposes.
If it’s such a business-friendly place, I say we emulate them: let’s bring in a $10.25/hour minimum wage. let’s get union density back up to 29%, and let’s raise the top marginal tax rate to 39%.
Come on, guys, what do you say to that? That is the real issue here.
“Minimum wage is higher; union density in Canada (not Ontario) is 29%”
As I said, minimum wage most likely just causes minor price distortions and hurts some businesses while helping others. It’s not very well-understood what the consequences are, and it probably doesn’t have a huge impact on the economy one way or the other.
I don’t know enough about labor laws in Canada or what the union culture is like there to comment on it. In Finland, for example, the union culture and labor laws are very different – they cooperate with management to remove poor teachers from the classrooms instead of insulating bad employees from firing.
“BTW, NH is not well-run. Or, it is in the sense that they’re smart enough to leech off Mass. Go to the northern part of the state and you will find some for-real employment issues.”
I don’t understand what this means. In what sense does New Hampshire “leech off Mass”? If the unemployment rate in northern NH has “issues,” then the lower part of the state must just be that much better, because their unemployment rate leads New England (they also have the highest average and median salary). The other commenter in this thread likes to say that NH “took stimulus” as some kind of blanket dismissal of its success – but so did every state, so I don’t see how that would affect its comparative position.
“Virginia looks so good because of the presence of the fed gov’t. All those bureaucrats and lobbyists have to live somewhere.”
This narrative has some merit, but it has some major holes in it as well. The two obvious counterexamples are Maryland and DC, both of which are drowning in perpetual tax increases that Virginia has managed to avoid. DC has a massive unemployment problem, and Maryland’s is fair but also higher than Virginia’s. In any case, Virginia is a large state and only the Northeastern part would be affected by DC.
“If it’s such a business-friendly place, I say we emulate them”
Or the people who love it so much could simply move there.
All I can say is, there’s a crapload of shopping going on in Canada. People aren’t afraid of spending money the way they have become in the US. I think the universal health care helps people feel secure in indulging their shopping urges. I’m not entirely sure that’s a good thing for humanity, but it’s a good thing for the economy.
I doubt that’s true. USA has a higher GDP per capita than Canada, which implies that more “spending of money” is going on here.
Then you don’t know how GDP is calculated. GDP includes government spending.
In response.
People who live in southern NH tend to work in Mass. That is the ‘leech’ part. NH has no real economy of its own. This means that the infrastructure costs for maintaining the businesses (roads, airport, etc) are paid by Mass, not by NH. Ergo, ‘leech’. Rhetorical? Perhaps. Accurate. Yes.
Virginia does so well in part because, per the Tax Foundation (more pinkos!) they receive $1.51 in federal spending for every $1 they pay in fed tax. That is a sweet return. Virginia ranks #10 on this metric.
Maryland ranks #18, receiving $1.31 for every $1 of federal tax. Still sweet, but 40% less than Virginia. MD also has to deal with Baltimore, which has some serious problems. Virginia has no comparable money drain.
DC is poor. The people who work in the gov’t, or lobby the gov’t generally live in VA or MD. The lucky residents of DC are the ones who get to serve the lobbyists their coffee.
Per capita GDP is a lousy comparison given the fact that our population is 10 times that of Canada, and our economy is an order of magnitude larger. Plus, it becomes even more skewed by the vast levels of income inequality that exist here.
As for the min wage argument, yes, the evidence is mixed. But that’s because it’s pretty much impossible to get clean data. But use some common sense: if people have more money, they spend more money. Right?
I keep going back to Henry Ford (pinko!). He figured this out almost 90 years ago. Try to keep up, please?
Look, you are doing what a lot of RW commenters do: find a few nits to pick, and then act like you’ve destroyed the argument that you’ve sedulously avoided.
My point, which you are doing your best to obfuscate, is that, per RW economic thought, a high min wage is supposed to drive the economy into Armageddon.
That is my point. Please address it.
We can quibble about exactly how well it’s doing, but explain why it’s doing well at all.
Case in point: you are correct that the union density in Canada–not Ontario–is 29%. However, given that most of the industry in Canada has traditionally been located in Ontario, I would suspect union density is higher in Ontario than it is in the Maritimes, or on the Praries, which means, most likely, that union density is higher in Ontario than the average for Canada.
The bottom line is that Toronto is full of cranes and new construction. 30-story buildings have sprouted from vacant lots. The stretch of highway between Toronto and London is dotted with dozens of new–repeat, new–factories. London has grown enormously. House prices have been rising for a decade, uninterrupted.
Where is this happening in the US? Nowhere. Las Vegas and Florida had housing booms, but they have gone badly bust. The housing boom in Ontario continues. Uninterrupted and unabated.
Where is the comparable situation in the US? There is none. And this is happening despite the high minimum wage, the high union density, and the higher marginal tax rates. And all the RW commentators claim that any one of these will–not might, but will– kill an economy.
So let’s stop quibble around the edges like you’re trying to do. My point is valid. It stands, and you have done nothing to refute it. Drive across NY State to Toronto, drive to London, and tell me what you see. Then we’ll talk.
“People who live in southern NH tend to work in Mass. That is the ‘leech’ part. NH has no real economy of its own.”
This is one of the most ridiculous claims I’ve ever heard. It’s just completely laughable and untrue. NH has no economy? I even know how to respond to that beyond pointing out that there is absolutely no evidence to support this. You’re creating a narrative out of thin air to pave over anything that doesn’t support your ideology-based claims.
“Virginia does so well in part because, per the Tax Foundation (more pinkos!) they receive $1.51 in federal spending for every $1 they pay in fed tax.”
There is absolutely no correlation on that list between Federal dollars received and unemployment, average income, or any other measure of economic success. The top 10 and bottom 10 on the list have both economically depressed and economically successful states on them. More holes in the narrative and excuses built into it.
“DC is poor. The people who work in the gov’t, or lobby the gov’t generally live in VA or MD. The lucky residents of DC are the ones who get to serve the lobbyists their coffee.”
This is another silly caricature. Have you ever lived in the DC area? Northwest DC is one of the richest areas of the country, and plenty of people who work for the Federal government live nearby and either walk to work or take the Metro. Obviously there are fewer employees who live in DC than VA or MD because DC is so much smaller.
“MD also has to deal with Baltimore, which has some serious problems. Virginia has no comparable money drain.”
This supports my point. MD and DC have economic problems that Federal dollars do nothing to resolve. VA is doing something right that these areas are not.
“My point, which you are doing your best to obfuscate, is that, per RW economic thought, a high min wage is supposed to drive the economy into Armageddon. That is my point. Please address it.”
I already did address it by saying that I doubt it has much of an effect on an economy one way or another. I am not advancing the claim you mention, so logically, I’m not going to defend it. I’ve never heard anyone say such things anyway – just another exaggeration to fit the progressive narrative, most likely.
“There is absolutely no correlation on that list between Federal dollars received ”
You’re trying to change your position. You said Virginia is libertarian. You were not making any argument about the benefits to growth of Federal tax parasitism.
Virginia is not libertarian. It survives on Federal handouts. You have been refuted.
“I’ve never heard anyone say such things anyway”
Really? Name a few authorities on libertarian thought–or authorities on economics generally considered to be right wing. The Wall Street Journal, Cato, Heritage, good folk like that. Let’s see what they have to say about the minimum wage. Let’s see if they say anything about the minimum wage increasing unemployment.
How do you think that would turn out for you?
Stop twisting things – it’s intellectually dishonest. I never said that Virginia doesn’t accept Federal money – all the states do. What I pointed out was that, based on the list Oswald provided, there is absolutely no correlation between economic success and a ratio of Federal dollars received over Federal taxes paid. So you can’t simply claim that all of Virginia’s success is due to Federal funds – why isn’t the Mississippi economy booming then? Why isn’t DC for that matter?
I also never said that it hasn’t been argued that raising the minimum wage increases unemployment – you’ll find as much in all the standard economics text books. Obviously some people on the “right” argue against raising the minimum wage for various reasons, but I haven’t seen anyone claiming that it would be an ”Armageddon.” If Oswald doesn’t want exaggerated claims examined, then he shouldn’t make exaggerated claims.
“I never said that Virginia doesn’t accept Federal money”
Then you’re saying that accepting Federal money is consistent with libertarian ideology?
You claimed that Virginia is libertarian; Virginia takes in $1.50 in Federal dollars for each dollar that it pays in Federal taxes. Is this libertarianism? Can a liberterian advocate such a policy? Can a libertarian accept it?
Is there any case in which feeding off of government money is not libertarian?
Or are you now claiming that libertarians are a bunch of moochers who want nothing more than to leech off of the government?
What is a libertarian on welfare, after all?
“you can’t simply claim that all of Virginia’s success is due to Federal funds”
But you claim that Virginia’s success is due to its libertarian policies. Hm. Which libertarian policies are those, and how do they exist apart from Virginia’s Federal tax mooching?
“I haven’t seen anyone claiming that it would be an ”Armageddon.””
Oh. That old trick.
I didn’t say that Virginia was libertarian. I said that New Hampshire was libertarian. I did say that Virginia was a well-run state, and in other threads I have commented that it has a low-tax, right-to-work, business-friendly environment and outperforms Maryland and DC.
I repeat that Federal dollars received is a silly metric because all the states take Federal money for various reasons, many of which could in no way be considered “welfare.” New Hampshire, like all the states, accepts Federal funds because otherwise it will lose that money through taxation to other states. Saying that is a violation of libertarian principles and that it disqualifies them from comparisons between the states is a really stupid point of last-resort.
“well-run states like libertarian New Hampshire or Virginia”
“I didn’t say that Virginia was libertarian. I said that New Hampshire was libertarian.”
Ha ha ha! You’re digging deep on this one!
“Saying that is a violation of libertarian principles and that it disqualifies them from comparisons between the states is a really stupid point of last-resort.”
Actually, it’s a first resort. You can’t claim to be libertarian because you made good choices while you were on the Big Government dole.
You simply cannot claim to have implemented libertarian policies while implementing big government policies. That’s all there is to it.
“New Hampshire, like all the states, accepts Federal funds because otherwise it will lose that money”
Ha ha ha! You’re saying New Hampshire takes the money, because otherwise it wouldn’t have the money!
New Hampshire might as well just buy itself a Cadillac!
And so we have yet another endless argument of attrition, as every thread you enter quickly becomes. Just argument after argument after argument without end, laced with insults and non sequitors, never conceding an inch, never attempting an honest treatment of the issues.
The idea that Federal money rains down from the heavens doesn’t make sense. It comes from taxes. New Hampshire residents are taxed by the Federal government regardless of whether they receive anything back or not. By accepting Federal funds, they are just getting back the money that was taken from them in the first place. And by your own (faulty) logic, New Hampshire is a “donor” state, so it does give more to other states than it receives. It’s the same fallacious argument that you can’t be a libertarian and use the roads, etc.
“And so we have yet another”
What? Another “thread” with “comments” written by “commenters”?
”It’s the same fallacious argument that you can’t be a libertarian and use the roads”
Not at all. You can hold libertarian ideals and work towards achieving them.
You cannot call a particular policy or set of policies libertarian if they clearly violate libertarian principles.
New Hampshire is not libertarian.
fwiw, Virginia ranks in the top ten states with the highest percentage of government workers (more than 1 in 5 are employed by local, state, or federal government). If we added in DOD consulting companies or other firms doing government contracting, the percentage would be much, much higher. Is that all of their economy? Of course not, but it’s certainly the biggest sector.
I’m not surprised, but as I pointed out earlier, DC and Maryland are both higher on that list and don’t perform as well in terms of unemployment and other factors, and both of those state (counting DC as a state) have had perpetually skyrocketing tax increases and annual deficits which Virginia has managed to avoid through fiscal responsibility. As I just explained to the “commenter” above, my point is not that Virginia martyrs itself on a libertarian cross - only that it is more business-friendly and low-tax than DC or Maryland and outperforms them both.
“As I just explained to the “commenter””
Uh oh. I believe we’re moments away from whimpering complaints to Bob.
“Virginia has managed to avoid through fiscal responsibility”
Virginia avoids the problems of MD and DC by not having their problems in the first place. Virginia simply doesn’t face the same issues.
Virginia also has not implemented any kind of fiscal responsibility in thr right-wing sense, because Virginia’s fiscal health depends on big government. The state would collapse without the jobs and funding provided by the gargantuan bureaucracy of the Federal government.
“it is more business-friendly and low-tax ”
Virginia can afford its low taxes only because other states pay its Federal tax bill.
“Virginia avoids the problems of MD and DC by not having their problems in the first place.”
This is circular and makes little sense. Anyone and any business can easily move to any of these three states (DC included) within 50 miles of each other if they want to. Virginia attracts businesses and higher paid, productive people to it and does it with a balanced budget and low taxes. It does all this through public policy choices, not some kind of population randomness or innate geographical feature.
“Virginia also has not implemented any kind of fiscal responsibility in thr right-wing sense, because Virginia’s fiscal health depends on big government.”
I repeat the question – then why do Maryland and DC, which are even more entangled with the Federal government, have more Federal employees, and receive more Federal funds have perpetually increasing taxes and budget deficits year after year? Your narrative has holes in it.
“Virginia can afford its low taxes only because other states pay its Federal tax bill.”
Then why do states that have even higher ratios of Federal funds over Federal taxes paid have significantly higher taxes and higher unemployment rates? More holes in the narrative.
I don’t particularly care if you respond or not, because it will just be narrative over narrative, excuse over excuse, ad infinitum. You literally have an “answer for everything,” and that’s not a compliment. Just another argument of attrition – you know no other way of communication.
“This is circular ”
??? DC and MD have problems VA does not have. Circular?
“It does all this through public policy choices, not some kind of population randomness”
You mean VA, MD, and DC have the same demographics?
Ok.
“or innate geographical feature”
You mean VA, MD, and DC have the same distributions of population?
Ok.
“why do Maryland and DC”
DC and MD have problems VA does not have. In no small part due to demographic differences and distributions of population.
“More holes in the narrative.”
It’s not a narrative. It’s an assessment of VA’s status. You keep thinking there’s a story here, because you’re trying to tell one: the differences between VA and other states are due to policies you like rather than policies you don’t like.
The problem for you is that the policies you like were never actually implemented.
I’m not offering a narrative. I’m saying your story cannot have happened, by definition.
”I don’t particularly care if you respond or not”
What is it with the right wing and playground rhetoric?
Having lived in Northern Virginia (specifically, Arlington) for over 3 years before eventually moving away, I can tell you that it’s one of the few places that wasn’t effected appreciably by the housing crisis, the banking crisis, or any of the other major economic downturns we’ve recently seen. And it just as heck wasn’t because the housing market in northern VA isn’t in demand. It IS in demand. Why? Government Jobs in DC!!!
VA gets taxes from people who work in DC, and people who work in DC and live in VA get a significantly lower crime rate, better schools, and lower housing prices than in DC. I know the Federal Government is the devil and all, but rest assured that if government spending dropped as much as the tea party would like, northern VA would become an economic wasteland.
If you look at the demographics for VA taxes, income, and even politics, you’ll also see that where northern VA goes, so too goes the rest of the state.
FYI Turbo et. al. in regards to your important question: ”What is a libertarian on welfare, after all?” …according to Rasputin’s dictionary it is called a Banker.