The Iowa car crop

By Andrew Coyne - Thursday, September 16, 2010 at 1:48 PM - 0 Comments

I’m borrowing this from Mike Moffatt, who got it from Stephen Gordon, who cut-and-pasted it from Stephen Landsburg, who was quoting David Friedman, but it’s precisely relevant to the current discussion about jobs and jets and whether we should build things here or overseas:

There are two technologies for producing automobiles in America. One is to manufacture them in Detroit, and the other is to grow them in Iowa. Everybody knows about the first technology; let me tell you about the second. First, you plant seeds, which are the raw material from which automobiles are constructed. You wait a few months until wheat appears. Then you harvest the wheat, load it onto ships, and sail the ships eastward into the Pacific Ocean. After a few months, the ships reappear with Toyotas on them.

International trade is nothing but a form of technology. The fact that there is a place called Japan, with people and factories, is quite irrelevant to Americans’ well-being. To analyze trade policies, we might as well assume that Japan is a giant machine with mysterious inner workings that convert wheat into cars.

Any policy designed to favor the first American technology over the second is a policy designed to favor American auto producers in Detroit over American auto producers in Iowa. A tax or a ban on “imported” automobiles is a tax or a ban on Iowa-grown automobiles. If you protect Detroit carmakers from competition, then you must damage Iowa farmers, because Iowa farmers are the competition.

…It is sheer superstition to think that an Iowa-grown Camry is any less “American” than a Detroit-built Taurus. Policies rooted in superstition do not frequently bear efficient fruit.

Sometimes economics makes me weep it’s so beautiful.

BONUS MORAL: Moffatt sums up,

“either way, the F-35s will be obtained with Canadian labour. The question is, will it be done directly or indirectly through trade?

And obviously we’d like to do as little work as possible to obtain them, right? Because with the time we save, we can be doing other things. So the notion that we should structure the contract in such a way as to “create” as many jobs as possible has it exactly backward.

Hard right? Hardly

By Andrew Coyne - Monday, March 22, 2010 at 7:28 PM - 115 Comments

Just so we’re clear: I don’t really care whether the Harper government conforms to one definition of conservatism or another. Neither do I carry any brief for conservatism, as such, though I might hold conservative views on specific issues. When I say that conservatism is dead in Canada, I am not mourning or despairing. I am merely stating a fact.

The reason that’s worth stating is that there is a party that continues to carry on as if it were conservative, though it conforms to no known definition of the word. And all right, yes, I’d prefer that people should be who they say they are and do what they say they will do, and that things should be called what they are and not what they are not.

So I suppose in that sense I should be delighted to find, via my friend Paul Wells, that I’ve got it all wrong: that the Conservatives are in fact robustly, unabashedly conservative, that indeed conservatism is “on the march across Canada.” Why, it’s the biggest swing to the right in “half a century.” It’s Harper’s hard right turn.

This is contrarian analysis at its finest. Under the Conservatives, spending, which conservatives once promised to cut, has been growing at a rate of 8 per cent a year. The budget, which conservatives once aimed to balance, is now in deficit to the tune of $54-billion, with literally no end in sight. Corporate subsidies, which conservatives once vowed to eliminate, continue to be doled out by the billions every year; much of the auto industry has been nationalized; the number of regional development agencies has increased by one. Conservative MPs now run around the country boasting of the pork they are bringing home to their ridings, complete with novelty-cheque signing ceremonies.

The top marginal rate of income tax remains where it was a generation ago, while the tax system has been further complicated with the addition of a slew of special credits for children’s sports, transit passes and other good causes. Employment Insurance has been larded up with supplementary payments that make a return to insurance principles more remote than ever. The Canada Pension Plan has been allowed to swell to Caisse de Depot-like dimensions. The great statist vehicles of the 20th century — Canada Post, Via Rail, the CBC — likewise continue to stalk the land, subsidies and privileges intact, while private oligopolies in air travel, finance and telecommunications remain largely protected from foreign competition. All were once the objects of conservative reform efforts. No longer.

The political reforms that were the bedrock of democratic conservatism in the age of the Reform party, aimed at giving more power to ordinary MPs and, via referendums, to the citizens at large, are now but a memory, replaced by a PMO whose all-controlling zeal exceeds even previous records. The philosophy that distinguished the conservative approach to constitutional matters — decentralizing power to the provinces, commitment to the equality of provinces and citizens — has been replaced by massive increases in transfers to the provinces generally and a raft of special concessions — powers, money, an ill-defined “national” status — to Quebec.

But that is to look at the matter through the narrow lens of fiscal, economic, democratic and constitutional conservatism. Rather than obsessing on such arcane matters — you know, the whole size and role of government thing — friend Wells encourages us to see the glass as socially full. Because even as it was giving ground on every one of all those other fronts, the government has been delivering for social conservatism. Why, “look at the victories” social conservatives have won, Wells suggests, “in just the past few months.” Yes, let’s.

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Canada’s biggest problem? America

By Luiza Ch. Savage - Wednesday, October 7, 2009 at 8:00 AM - 130 Comments

It has been almost two years since Stephen Harper disclosed that his cabinet was having serious discussions about what to do to “restore the special Canadian and American relationship” that he said had become “lost” in the Bush years. “What has happened is that Canada lost that special relationship with the United States. We increasingly became viewed as just another foreign country, albeit an ally, a good friend, but nevertheless a foreign country. You know, the northern equivalent of Mexico in terms of the border,” the Prime Minister told Maclean’s in an interview back in December 2007. “That isn’t just a shift in the view of the administration, that’s somewhat a shift in American public opinion as well, which concerns me.”

At the time, Harper was preoccupied with a new passport requirement that threatened tourism and trade, adding a new scale to the ongoing red-tape “thickening” of the world’s longest undefended border. “I’m certain this trend will not be reversed in the lifetime of the current American administration,” Harper said at the time. “I’m more optimistic it will be deferred later by a new administration.” But, he added, “I’m far from sure.” Continue…

Nortel and the Avro Arrow myth

By Andrew Coyne - Thursday, August 13, 2009 at 6:03 PM - 106 Comments

I’ll have lots to say about this Nortel nonsense in a bit, but for now let me just deal with the inevitable Avro Arrow analogy. Appearing before the Commons industry committee the other day, Research in Motion co-CEO Mike Lazaridis trotted out the well-worn Arrow story to pressure lawmakers into blocking Nortel’s deal to sell its wireless operations to the Swedish telecom giant Ericsson.

He told MPs that allowing Nortel’s next-generation wireless patents to go to a foreign-based company would be similar to Canada’s notorious decision to cancel development of the Avro Arrow aircraft in 1959….

Lazaridis noted that he has a model of the Canadian-designed Avro Arrow on his desk and that 2009 marks the 50th anniversary of its cancellation. “Fifty years later we consider the disposition of another beachhead built by Canadian ingenuity,” he remarked. “Let us learn from our history and not make the same mistake again.”

There are any number of things wrong with RIM’s case, but the first and worst is the notion that killing the Arrow was some sort of terrible mistake. Indeed, if the best RIM can do is cite the Arrow, darling of every nationalist drama queen and high-tech trainspotter who never bothered to actually inform themselves of the reasons for its demise, that tells you just how weak their case is — though it was enough to send the Toronto Star into one of its patented teenage swoons.

For those in need of a refresher course, let me point you to Michael Bliss’s classic history of Canadian business, Northern Enterprise, pgs. 474-477. I’m going to quote it at some length, because, well, it’s just so damning…

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An interview with Finance Minister Jim Flaherty

By John Geddes - Thursday, June 4, 2009 at 10:30 AM - 11 Comments

Finance Minister Jim Flaherty has the toughest job in Ottawa, and maybe the most crucial: running Canadian economic policy during the worst global recession since the Depression.

In a wide-ranging interview with Maclean’s earlier this week, Flaherty talked about everything from the expectations he raised with his Jan. 27 budget to whether the Conservative government can survive after governing through a punishing economic downturn.

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Flaherty reluctant to counter U.S. pulp mill subsidy with Canadian payments

By John Geddes - Thursday, June 4, 2009 at 10:06 AM - 2 Comments

Finance Minister Jim Flaherty is firmly reluctant to spend billions countering a massive new U.S. subsidy for pulp and paper producers by offering a comparable Canadian pay-out to forest products companies.

“We really don’t want to do that,” Flaherty told Maclean’s in an interview earlier this week. “That’s the sort of thing that’s been talked about time and time again around the G20 finance ministers’ table, around the leaders’ summits in Washington and London—to avoid protectionist measures.”

“This is the lesson of the 1930s,” he added. “This is a recipe for a downward spiral into depression.”

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Megapundit: Unscrambling the egg, vexedly

By selley - Monday, November 3, 2008 at 4:09 PM - 9 Comments

WEEKEND ROUNDUP

Must-reads: Rex Murphy on the Martin memoirs; Haroon Siddiqui on Barack Obama; Gary Mason on Robert Dziekanski; Jeffrey Simpson on the Tories in Quebec; Chantal Hébert on Iggy’s chances; Robert Fulford on gambling; Randall Denley on frugality.

The fat lady, or the choir of angels?
Canadian pundits have apparently never heard of the jinx.

The Globe and Mail’s John Ibbitson attempts to explain the historical significance of Barack Obama, who isn’t just black, but potentially the first “northern liberal” president since John F. Kennedy. “His victory would acknowledge an ongoing reformation of the republic: the halting, inconstant but unmistakable breaking down of barriers; the political debut of a new generation; the transformation of whole regions of the nation,” Ibbitson argues. It would embarrass “those skeptics who believe [the United States] is a failing giant.” Heck, he’s already “re-enfranchised African Americans” and “convinced Latinos to submerge racial suspicions toward African Americans and join them in common cause,” and he hasn’t even won!

The Toronto Star’s Haroon Siddiqui recaps all the indignities Obama has faced from various Republicans determined to make his race and his purported Islamic faith defining issues among the rednecks. And he suggests it was Colin Powell’s powerful endorsement, during which he asked why a young Muslim shouldn’t (hypothetically) aspire to be President, that really highlighted the meaning of the campaign. “By just being who he is,” Siddiqui concludes, he “has put fellow Americans on an irreversible journey to national reconciliation.”

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Carbon protectionism

By Andrew Coyne - Thursday, June 19, 2008 at 12:54 PM - 0 Comments

Here’s another unforced error in the Liberal plan:

We will build carbon pricing into our strategy for international trade, endeavouring where possible to ensure that goods from countries that are not pricing carbon will face a tariff reflective of carbon content. Since the next president of the United States, be he a Republican or Democrat, has already committed to pricing carbon, this will likely not impact our largest trading partner.

A “carbon tariff”? Soot-Hawley? This is unnecessary, first of all – it makes no more sense to “level the playing field” with a carbon tariff, on the grounds that other countries do not charge a carbon tax, than it does to impose an “income tariff” because other countries have lower income tax rates. It is also a dangerous precedent, an invitation to retaliation, and a possible violation of WTO rules.

Granted, it would be better if every country did its part to reduce greenhouse gas emissions. And granted, Canada alone can have little impact if they do not: the argument for a carbon tax is simply that we should do our part. But there is no point punishing our consumers for other countries’ sins, nor would it help the planet if we all descended into carbon trade wars.