How Liberals or Statists or Socialists Lower the Standard of Living

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    Do not think about, write about or deal with  human behavior without determining the effects of incentives. It’s not their money, of course they’ll waste it.

    Wherein we see the eternal dance of stupidity where politicians continue to make things worse while constantly telling us things are getting better. Life is really the same things over and over. These liberals are actually called Liberals.

National Post – (Latest Edition)
Philip Cros s Financial Post

Ontario’s growth-killing policies are sinking what was once the engine of Canada’s economy

Ontario now qualifies for equalization payments, confirming its shift from “have” to “have-not” status

Ontarians are clearly having buyer’s remorse after re-electing its Liberal government last year, with twothirds now believing that Ontario is headed in the wrong direction. An exasperated Kathleen Wynne recently asked “What is it that especially disqualifies me for the job I’m doing?” as Premier of Ontario. Well, since she asked, let’s list the problems the Liberal government has created.

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    No one is qualified for the job governments take on; the regulation of everything, the subsidies of some things and preaching about everything.

Start with persistent slow economic growth. Since 2002, real GDP growth in Ontario has been consistently below the national average, with a total shortfall of over 10 percentage points. Two-thirds of this gap occurred outside of recession years. Meanwhile, Ontario’s unemployment rate rose above the national average in 2007 for the first time on record and has stayed there.

Ontario has lost its traditional above-average income status in Canada. In the decades after the Second World War, real disposable income per capita in Ontario was 20 per cent above the national average; in the 1990s under the Harris government, it was still 10 per cent above average. In 2012 and 2013, incomes in Ontario fell below the national average for the first time ever. Ontario now qualifies for equalization payments, confirming its shift from “have” to “have-not” status within Confederation.

The government’s response was more government spending financed by deficits that doubled its total debt over the past decade. This failed to stimulate growth, but has triggered two downgrades to Ontario’s debt rating. Almost all of Ontario’s total debt was accumulated in two periods — during Bob Rae’s failed administration of the early 1990s and the Liberal government over the past decade.

Population trends show that people in Canada and around the world understand Ontario’s economy is floundering, even if its own government does not. Ontario was once the beacon for both immigrants arriving in Canada and people moving within Canada. However, for 11 straight years there has been a net exodus from Ontario to other provinces as people “vote with their feet” and leave for greener pastures. Meanwhile, Ontario’s share of immigrants arriving from outside Canada has fallen from 60 per cent to a record low of 38 per cent. The result is an aging population saddled with a high debt burden and slow economic growth.

In response to this long litany of underperformance, the Wynne government continues to work through its checklist of growth-killing policies designed to raise the cost of doing business in Ontario. It raised corporate taxes, depressing business investment. It boosted the minimum wage faster than median wages, contributing to massive youth unemployment averaging 16 per cent last year despite their above average levels of education.

More broadly, the Wynne government does not understand that it is prosperity that lifts wages and not higher wages that leads to prosperity. In fact, high wages will hamper growth if not justified by high productivity. Ontario has above average unemployment partly because it has the highest unit labour costs in Canada. High labour costs reflect the hikes to the minimum wage, chronically weak business investment and growing government regulations — introducing a new paid holiday during the worst of the recession in 2009 demonstrates a mind-boggling lack of understanding of how business operates. These costs are before the new provincial pension plan adds to both the direct cost of labour and the indirect cost to firms of complying with an entirely new set of government levies.

The Wynne government has compounded the highest electricity costs in North America with uncertainty about the precise design of its announced plan to adapt a new cap-andtrade carbon pricing system. Quebec Premier Philippe Couillard said it was “remarkably easy” to persuade Wynne to join the plan, suggesting little thought was given to how it would affect Ontario’s competitiveness. No wonder a Chamber of Commerce survey found that one in 20 firms in Ontario expect to shut its doors in the next five years due to the high cost of electricity.

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     Electricity generation has all the earmarks of government–high labour costs, ridiculous “green energy” costs, costs overruns on everything, and etc.

Chrysler head Sergio Marrachione said that in a meeting with Wynne he complained specifically about the cost of the Ontario pension plan and electricity prices as “things that add to the cost of running operations. They don’t come for free.” That business leaders have to explain how government policies are raising their costs may be the best answer to Wynne’s own question of what disqualifies her from being premier.

In economic policymaking, Ontario has become the Eighth Blunder of the World. Instead of focusing on policies that would encourage economic growth, the Wynne government is following the maritime province’s tactic of begging the federal government for more transfer payments. Ontario’s goal should be returning to its traditional status as a “have” province within Confederation.

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     From success to failure–liberal path to Nirvana, at least there are lots of regulations so that’s good.

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.
Cui Bono–Cherchez les Contingencies

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