Quotulatiousness

May 28, 2025

The Throne Speech

Filed under: Cancon, Media, Politics, USA — Tags: , , , , , — Nicholas @ 03:00

On his Substack, Paul Wells reports on the first Throne Speech delivered by the reigning monarch since the 1970s:

Mark Carney joins our visiting King in the traditional Making of the Small Talk.
Photo by Paul Wells from his Substack

We’re like Charlie Brown with Lucy’s football, or I guess, since the new PM is said to prefer British spellings, Charlye Brownne with Lewsey’s Foote Ball. Each generation of Canadian leadership tries to find a new way to make throne speeches exciting. These attempts are forever doomed, because no generation of Canadian leadership is exciting and because the format — a statement of intent from a dignitary who is forbidden to harbour autonomous intent — tends to short-circuit the delivery.

This time the delivery mechanism was the King of Canada, Charles Philip Arthur George, popping over from his secondary residence at Buckingham. His French tops Mary Simon’s, though his Inuktitut is shaky. He did his best to sound excited, or resolute, about the CBSA’s “new powers to examine goods”.

A quarter-century ago the reliably impish John Fraser told me he was preparing a book called Eminent Canadians that would survey recent developments in four Canadian institutions. The institutions he’d selected were the office of the Prime Minister; the Globe and Mail; the Anglican Church; — and here Fraser urged me to guess the fourth. Canadian institution? I dunno, the armed forces? The NHL? “The Crown”, Fraser said with a twinkle. Thus was I prepped for this week’s extended round of you-know-he’s-really-the-king-of-Canada browbeating.

This throne speech was like many before it, though out of deference for the deliverer it was on the short side, 21 pages tucked inside wide margins. In substance it was a paraphrase of Mark Carney’s already-semi-legendary Single Mandate Letter for cabinet ministers. There were sections on redefining Canada’s relationship with the United States; on internal trade; on crimefighting and national defence; and on “spending less and investing more”, which, I mean, we’ll see.

The mandate letter seems to have supplanted the Liberal election platform as the main blueprint for Carney’s action. The two aren’t wildly incompatible, but the mandate letter/throne speech is streamlined and puts stuff in different order.

I saw two surprises big enough to make me write today, but first I want to point to a few elements that are worth noting in the less-surprising stuff. That’s right, I’m trying to be useful, not just smart-assed, so here’s a way to thank me. […]

First, Carney (through His Majesty) makes claims for the “new economic and security relationship with the United States” that seem unrealistic. He expects “transformational benefits for both sovereign nations”. But surely any cross-border negotiation can only be, at best, an exercise in damage control? Any security costs that would be newly borne by Canada would represent a net cost. Trade arrangements short of the substantially free trade we’ve enjoyed for 40 years will also represent a net cost. The point of seeking “one Canadian economy” and taking relations with third countries more seriously is to offset the cost of a degraded Canada-US relationship, no?

Under “more affordable”, the throne speech repeats campaign promises for income-tax cuts and cuts to GST on new homes. The list of tangible financial benefits to individuals doesn’t go much past that. “The Government will protect the programs that are already saving families thousands of dollars every year. These include child care and pharmacare.” “Protect” is an old Ottawa word meaning “not extend”.

The goals for the “one Canadian economy” now include “free trade across the nation”, at both federal and provincial levels of government, “by Canada Day”. Which is 34 days away. The staffing and mandate of another new entity, a single-wicket “Major Federal Project Office”, may end up mattering more to this government’s success and Canada’s prosperity than the name of the PM’s next chief of staff, so put an asterisk next to that.

The government repeats a mysterious claim I’ve found shaky since Carney became a Liberal leadership candidate. It “will take a series of measures to catalyse new investment to create better jobs and higher incomes for Canadians. The scale of the Government’s initiative will match the challenges of our times and the ambitions of Canadians.” The challenges of our times, at least, are large.

So again: if the Canada Infrastructure Bank, the Canada Growth Fund and the Freeland-Sabia investment tax credits are sufficient to catalyse (British spelling) new investment, why duplicate them?

And if they haven’t worked, why keep them?

May 25, 2025

Comparing Japan’s supply management system to the Canadian version

Filed under: Bureaucracy, Cancon, Food, Government, Japan, Media, Politics — Tags: , , , , , , , — Nicholas @ 03:00

Colby Cosh considers the fate of a Japanese government minister who accidentally told the truth about a subject near and dear to Japanese consumers’ hearts (well, stomachs, actually):

“Japanese Girls at Work in the Rice Fields – Grand Old Fuji-Yama in the Distance, Japan” by Boston Public Library is licensed under CC BY 2.0 .

I’m sure some of you saw Wednesday’s NP headline for an Associated Press wire story: “Japan’s agriculture minister resigns after saying he ‘never had to buy rice’” AP’s Mari Yamaguchi explained this international-news nugget. A cabinet minister in a shaky minority government made a flippant comment indicating that he was light-years out of touch with ordinary people facing high grocery costs in a developed country.

Taku Eto’s political survival thus became impossible within a matter of hours, and his prime minister hastily swapped a congenial young star into the agriculture portfolio. Japan is a constitutional monarchy with a system of parliamentary government more or less like ours, so there’s nothing incomprehensible about any of this to a Canadian …

… but, of course, one almost couldn’t help flashing back to our recent election campaign, wherein the prime minister had half-boasted to a Radio-Canada reporter that he doesn’t buy his own groceries and has no earthly idea how the stuff in his fridge gets there. It struck me at the time that this was a classic mistake for an electoral neophyte like Mark Carney. Fans of the legendary American columnist Michael Kinsley will surely think of it as a “Kinsley gaffe”, i.e., an obviously true statement that is nevertheless bound to get a politician in trouble.

[…]

Eto was talking about rice because the prices for it in Japan have gone through the roof, the clouds and the stratosphere. And rice plays a role in the Japanese culture and diet for which there is no analogue in omnivorous Canada. For precisely that reason, rice is supply-managed there in much the same way our dairy, eggs and poultry are — i.e., through confiscatory tariffs on foreign products, along with a mafia of politically powerful producer cooperatives who operate under supply quotas.

If you read Canadian news, you can recite the effects of this, whether or not you’re capable of finding Japan on a map of Japan. Their supply-management system is, like ours, a major headache for counterparties in trade negotiations. Their farmers, like Canada’s, are dwindling in number and aging out of the business. They are sometimes paid to destroy crops. Farm costs for machinery and supplies are subject to inflation. And sometimes the system for domestic demand forecasting blows a tire.

It’s a constant high-wire act for Japanese governments, who still have official responsibility for the national rice supply under wartime statute. If store-shelf prices get too high, and consumers start to make trouble, the cabinet must consider loosening tariff barriers and releasing rice from the national strategic reserve. The LDP ministry has done both these things in the face of hallucinatory prices, and so the farmers are now just as ticked off as the buying public.

May 6, 2025

If “a trade imbalance constitutes an American ‘subsidy’ justifying annexation of that country, then the US is going to have to annex most of the planet”

Filed under: Britain, Cancon, Government, Media, Politics, USA — Tags: , , , , , — Nicholas @ 05:00

Despite getting his preferred choice elected as Canadian Prime Minister, US President Donald Trump still seems determined to troll Canadians about becoming the “51st state”. Among his shifting set of justifications for this is the trade imbalance between the US and Canada, which Trump chooses to interpet as a “huge” subsidy the US is providing to Canada. On that basis, there are going to have to be a lot more US states in the future:

So now we have serious commentators gaming out the pros and cons of war with Canada. What started out as a mildly amusing bit of presidential “trolling” is now being discussed as next year’s Donbass.

If, for the purposes of argument, one accepts the President’s line that a trade imbalance constitutes an American “subsidy” justifying annexation of that country, then the US is going to have to annex most of the planet: last year Washington had a one-and-a-quarter trillion-dollar imbalance with the world. It’s not hard to figure out why: over recent decades the uniparty turned a country that used to make things into a crappy low-wage service economy. […] The US now has trade imbalances with — or “subsidies” of — not only the countries that you’d expect (China, Mexico, Germany, Japan, India) but a lot of ones you wouldn’t (Finland, Algeria).

True, Canada is closer than Algeria, so there are national-security implications for Washington: the country and its politicians (Trudeau, Carney) have been entirely hollowed out by Peking, but then so it goes south of the border (Biden, McConnell). And Trump’s plan for a “fifty-first state” will not solve that problem.

The “fifty-first state” shtick can’t ever have been serious, can it? Geographically, the fifty-first state would be bigger than the other fifty combined, and with a bigger population than California’s. Last time they added stars to the flag, both parties got something out of it: the GOP Alaska and the Dems Hawaii. So wouldn’t it make more sense to make Canada’s ten provinces and three territories a baker’s dozen of new American states with a couple of senators apiece? Yeah, sure – if you want Republicans never to win a national election again.

So, aside from last week’s vote, how is the other side reacting? Last Thursday’s print edition of The Spectator contained a curiously phrased squib from my old editor, Charles Moore:

    The President may be only hazily aware that the King, of whom, he says, he has the “honour to be a friend”, is also King of Canada. If, as seems likely, the King follows his mother’s twice-used precedent and opens the new Canadian parliament in person, Trump may come to see that his next-door neighbour is part of a long-standing, legitimate order which Canadian voters are happy to endorse.

Let’s just run that again:

    If, as seems likely, the King follows his mother’s twice-used precedent and opens the new Canadian parliament in person …

The last time his mother opened Parliament in Ottawa was in 1977 — her Silver Jubilee year. Trudeau-wise, Justin’s father Pierre was not keen on it, but didn’t feel he could pick and win a fight with the Palace over it. A quarter-century later, Trudeau’s successor Jean Chrétien, a towering colossus of micro-pettiness, was annoyed at being given a crappy seat at the Queen Mum’s funeral and so scuttled Her Majesty’s Golden Jubilee throne speech.

So why would Charles Moore think it “likely” that the King would be opening Parliament in Ottawa later this month? If, as it was in my day, Speccie columns for Thursday’s magazine have to be filed on Tuesday, that would make Moore the first guy in either the Canadian or UK media to know what was not revealed to the world until Friday […]

The King has travelled far less in the first three years of his reign than his mother did: shortly after her Coronation, the Queen set off on a tour of parts of the Commonwealth that kept her away from London for six months. Her son can’t do that because he’s very sick with cancer. So it’s quite something that he’ll land in Ottawa on Monday May 26th, deliver the throne speech the following day, and then fly out again. Carney wouldn’t be doing this if he weren’t going to take the opportunity to put his view of Canadian sovereignty into the Sovereign’s mouth.

So, if Trump really has the “honour to be a friend” of the King, the only point of this 24-hour flying visit is so His Majesty can send the message that friends don’t let friends threaten to steal each other’s countries. In fact, he has made a point of referring to himself as “King of Canada” quite a bit of late. […] The “King of Canada” bit was done at the instigation of Carney. Which is odd. Especially from a party that has spent half-a-century diminishing and degrading the Crown, and for a monarch who is, unlike his mother, largely unloved and unloveable. Yet Carney seems belatedly to have come around to the old-school monarchist view that, without the Sovereign, there is insufficient to distinguish Canada from its domineering southern neighbour — especially when that neighbour keeps talking about taking it. On the other hand, both the King and his Canadian prime minister are bigtime players at the World Economic Forum, so they’re not the most obvious choice for defenders of national sovereignty. On the other other hand, it’s one thing to surrender it to fellow globalists, quite another to surrender it to Donald Trump.

I have no idea where this is headed, and if anyone can enlighten me I’d be happy to hear it. But Trump has doubled down on it, and Carney is playing the King card to oppose it. As longtime readers know, I have a general preference for smaller nations as happier homes for their people. If Alberta or Quebec voted to secede, why would you take the trouble to do that just to become a minor and inconsequential part of another big country?

But, that aside, why would it be in America’s interest to absorb a hostile population of mostly lefties over a vast and unpoliceable landmass? The history of the last thirty years is that China has shown there are subtler ways of taking over the world without firing a shot, while America has persisted in doing it the old-fashioned way and, in Iraq, Afghanistan, Ukraine and elsewhere, has gotten nowhere. Why add Canada to the list?

April 10, 2025

Canadian political aspirations to being “very mid” on the world stage

Filed under: Cancon, Government, Media, Politics — Tags: , , , , , , — Nicholas @ 03:00

In The Line, Matt Gurney reflects on a recent statement by caretaker prime minister Mark Carney about Canada taking a “leadership role” on the international stage and supplanting the United States under President Trump:

Oh, we will, eh?

Don’t get me wrong, I like the sound of it. He’s certainly manifesting that elbows-up spirit that seems to be so impressing Canadians.

But, like — Carney knows which country he’s in, right? Canada? The one full of Canadians? Because as I heard him say what Canada would do in response to the accelerating American withdrawal from global affairs, I couldn’t help but note that there is a problem here.

Canada isn’t a leader. Canada doesn’t lead.

Even as I write this, I know it’s going to be a fraught statement. Canadian patriotism is a bit supercharged right now. It’s nice to see. But a lot of stupidity gets overlooked — or even caused — by patriotic outbursts. Internal dissent becomes a lot less popular when everybody is sewing the Maple Leaf onto their backpack. So I want to make my point respectfully and politely, largely to spare myself the agony of wading through idiotic replies for a few days. So here goes: many Canadians do indeed lead in their fields, and there is nothing inherent about Canada that makes us incapable of exercising leadership. If Mark Carney remains prime minister — or if someone with similar ambitions should replace him and make a point of pursuing a policy of broad-based Canadian global leadership — I don’t write that off as a doomed proposition.

There is more that we could choose to do. There are practical constraints that would bind us, and we’ll talk about those in a minute, but just to get into the spirit of the moment: sure. We could choose to exercise global leadership.

But we would first have to start with the recognition that it has been generations since we have actually tried to do that. This is not a moral judgment on Canada or Canadians. It is simply a recognition of the historical record. This country has not pursued a national policy — or even a series of smaller policies that take on a greater form in the aggregate — that sought to establish this country as a leader in the world.

If we’re being honest, we’ve typically pursued almost the opposite policy, and deliberately. I’m not saying we’re slavish followers. But this is a country that for generations has been quite comfortable thinking of itself as an overachieving middle power, nestled comfortably in a supporting role for allied countries that do seek to lead. Usually the Americans. Maybe sometimes the British or French. Or something like the UN or NATO. We’ve never claimed to land the hardest punches, or tried to. We’d settle for punching above our weight. We haven’t tried to conquer or command or even compel. In the words of a member of the incumbent government, our aspiration largely maxed out at wishing to convene.

But, of course, as we’re learning these days, Canadian politicians of almost all parties (Maxime Bernier is the only exception I’m aware of) consider the beneficiaries of our trade-distorting supply management system to be the only ones whose interests they always champion:

The most interesting field of international relations, though, and the most germane to what Carney said on Liberation Day, is in the field of trade. Canada definitely likes trade. I’ll even give some credit here to both Liberals and Conservatives. It has been broadly understood that Canada thrives when we have access to markets all over the world. The pursuit of expanded trading relationships has been a bipartisan priority for Liberals and Conservatives alike … so long as it doesn’t cost us anything on the domestic political front.


And yes, I’m talking about dairy. Some other things, too. But mostly the milk and eggs.

Seriously. Scroll up a bit. Look at that big quote I dropped in at the top from Carney. Watch the CTV feed again. Canada is going to pursue a role of leadership in defending liberalized free trade?

Really? Forgive me for squinting. I’m struggling with my middle-aged eyes to find the tiny text appended to Carney’s pledge that notes that “conditions apply”. Because that very same Mark Carney has already gone out of his way to say that protecting Canada’s supply-managed dairy and egg producers is an absolute, unbendable priority for him and his party.

So yes. Let’s all pledge ourselves to a new era of Canadian leadership in defence of free trade and unfettered market access, right up until the moment some weirdo foreigner gets it into their pathetic little brain that they should be allowed to sell me a stick of butter. Because that ain’t on, friends. Let’s get our elbows up, and bury them deep into this wheel of filthy xenocheddar.

April 8, 2025

Free trade, the once-and-future left wing cause

Filed under: Britain, Economics, History, Politics — Tags: , , , , , — Nicholas @ 05:00

Let’s join Tim Worstall on a brief trip into economic history, when free trade was a pet issue for the left (because it helped the poor and the working class) and protectionism was the position of the right (because it helped the wealthy and the aristocracy):

The people who suffer here are the consumers in the US. The people who benefit are the capitalists in the US. Which is why free trade always has been a left wing position. True, many lefties in recent decades have somewhat strayed from the one true path but given that it’s Trump imposing them some seem to be coming back. Although how much of that is about TDS and how much about reality is still unknown.

We’ve also got that little point about what happened last time around:

That all started with eggs. There’s fuss about eggs in the US at present. My, how history echoes, eh?

There’s only the one logical, moral or ethical position to have upon trade. As I’ve pointed out before with my model trade treaty:

Note that this applies to all ideas about tariffs — with the one exception of national security where we are indeed willing to give up direct economic benefit in order to keep the French at bay. To tariffs for industrial policy, tariffs for Green, tariffs for trade wars, tariffs as revenue raisers, tariffs, see?

We should remind ourselves that the opposition to Adam Smith and his ideas came from the conservatives. Cobden and the Manchester Liberals were the left wing betes noires of their day. The Guardian was actually set up as a newspaper to push their ideas including that dread free trade.

We did actually get free trade too, in 1846. Which, not by coincidence, is when the Engels Pause stopped happening. Which was, itself, the observation by Karl’s buddy that while the British economy had grown lots — industrialisation, capitalism, etc. — the living standards of the base people hadn’t, not very much. Of course, he was missing a bit — that ability to have a change of cotton underwear even for skivvies (aha, skivvies for skivvies even …) would only feel like an advance to those who had, previously, had to wear woollen knickers. This changed, living standards for the oiks began to rise, strongly, once we had free trade.

Now, there are a few of us still keepers of that sacred flame. But just to lay out the basic argument.

Average wages in an economy are determined by average productivity in that economy. Trade doesn’t, therefore, change wages — not nominal wages that is. Trade does change which jobs are done. That working out of comparative advantage means that we’ll do the things we’re — relative to our own abilities — less bad at and therefore are more productive at. Trade increases domestic productivity and thereby, in the second iteration, raises wages.

Trade also — obviously — gives us access to those things that J Foreigner is more productive at than we are — those things that are cheaper if Foreign, J, does them. This raises real wages again because we get more for our money. We’re better off. This is true whatever the tariffs our own exports face.

Finally, trade doesn’t affect the number of jobs in an economy — that’s determined by the balance of fiscal and monetary policy.

So, who benefits from trade restrictions? Well, the people who lose out from free trade are the domestic capitalists. Pre-1846 it was the still near feudal landlords in fact. What killed those grand aristocratic fortunes was not war nor tax — pace Piketty et al — it was free trade which destroyed agricultural rents.

The same is true today. The people who benefit from tariffs are the domestic capitalists who get to charge higher prices, make larger profits, as a result. The people who lose are all consumers plus, over time, all domestic workers as well. Tariffs increase the capitalist expropriation of the wages of the workers that is.

Tariffs are a right wing, neo-feudal, impoverishment of the people. Free trade is the ultimate leftypolicy to beat back the capitalists.

March 27, 2025

Alaska legally required to use LNG ships that don’t exist thanks to the Jones Act of 1920

Filed under: Government, Law, USA — Tags: , , , — Nicholas @ 03:00

As J.D. Tuccille reports, Alaska is having to ask the US government for a waiver from the requirements of the 1920 Merchant Marine Act to allow them to legally transport their own liquid natural gas within the state:

“LNG Carrier Alto Acrux” by kenhodge13 is licensed under CC BY 2.0 .

Alaska is a cold state where residents need energy to keep the chill at bay. Fortunately, the state is blessed with natural resources, including abundant oil and natural gas that can help satisfy that need. Unfortunately, as I’ve written before, a nationalistic, century-old law requires that shipping between American ports be conducted only by U.S.–built and –flagged ships. And there aren’t any liquid natural gas tankers that satisfy the requirement. Now Alaska officials are seeking a waiver so they can use their own resources to resolve a growing energy crunch.

[…]

Over a century ago, Congress passed the Merchant Marine Act of 1920, better known as the Jones Act, mandating that “No merchandise … shall be transported by water…between points in the United States…in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States”. There’s more to it, but the nationalistic law, intended to protect American shipping, effectively barred transporting goods between American ports in foreign-built and foreign-flagged vessels. That means North Slope natural gas can be transported to Alaska’s populated south only in American tankers. If you can find any. You can’t.

“LNG carriers have not been built in the United States since before 1980, and no LNG carriers are currently registered under the U.S. flag,” the U.S. Government Accountability Office (GAO) reported in 2015. And, while you’d think that demand — not just in isolated states like Alaska and Hawaii, but also territories like Puerto Rico — would drive supply, there’s a huge hurdle. “U.S. carriers would cost about two to three times as much as similar carriers built in Korean shipyards and would be more expensive to operate,” the GAO added.

The GAO created its report at a time when Congress was considering extending the Jones Act to require that exports of natural gas be carried only in U.S.-flagged shipping. The GAO concluded that such a law would “increase the cost of transporting LNG from the United States, decrease the competitiveness of U.S. LNG in the world market, and may, in turn, reduce demand for U.S. LNG”.

Congress wisely dropped the idea of extending the Jones Act, but Alaskans are still stuck with the original law, waiting for nonexistent domestically-built LNG tankers to show up with loads of North Slope natural gas. If they don’t wait but instead try to ignore a law with which it’s impossible to comply, they risk millions of dollars in fines, since the federal Department of Justice vigorously enforces the Jones Act.

In 2017, the feds fined an energy company $10 million for transporting a drill rig from the Gulf of Mexico to Alaska’s Cook Inlet in a foreign-flagged vessel. The company planned to bring more natural gas to the resource-rich but energy-starved state.

March 23, 2025

Tariffs versus income taxes – pick your poison

Filed under: Economics, Government, USA — Tags: , , , , , — Nicholas @ 11:29

Walter Block on the pros and cons (from the government’s point of view) of income taxes and tariffs:

Every fiber of my economic being cries out against tariffs. If they are so good, why doesn’t each state in the US have one against the products of all of the other 49? That is, Ohio could “protect” its industries against the incursions from Arizona. This is obviously silly. One of the important reasons America is so prosperous is that we have a gigantic, internal, free trade area.

Donald Trump supports them on the ground that the McKinley administration was prosperous, and relied upon tariffs. But this is to commit the post hoc ergo propter hoc logical fallacy: that since A precedes B, A must be the cause of B. No, America did indeed become rich during this epoch, but that was in spite of tariffs, not due to their benign influence. If you are looking for a historical episode to shed light on this matter, the Smoot-Hawley Tariff of 1930 will do far better: it greatly worsened an already bad recession, plunging our economy into a deep depression.

Our President also claims that the US is victimized by a negative balance of trade: we buy more from Canada and other countries than they purchase from us. However, I have a horrid balance of trade with McDonald’s and Wal-Mart. I acquire several hundreds of dollars’ worth of their products every year, and neither has yet seen fit to reciprocate with any of my economic services (hint, hint!). On the other hand, I have a very strong positive balance of trade with my employer, Loyola University New Orleans. They pay me a decent salary; apart from a few lunches in their cafeteria, my expenditures to them fill their coffers to a zero degree. Should anyone worry about this sort of thing? Of course not. Ditto for international trade. If Country A buys more from B than it sells to it, money will flow from the former to the latter, reducing prices in the former and raising them in the latter, until matters balance out.

Everyone realizes the foolishness of tariffs when it comes to absolute advantage. No Canadian objects to the importation of bananas from Costa Rica. Producing this tropical product in the frozen North would be financially prohibitive (gigantic hothouses). Ditto for maple syrup in the country to the south. The only way they could produce this item would be to place maple trees in gigantic refrigerators. Ludicrous and prohibitively expensive.

But when it comes to comparative advantage, all too many people are out to lunch insofar as the teachings of Economics 101 are concerned. They fear that other countries might be more efficient than we are; with free trade, they would produce everything, we, nothing, and we would all starve to death from massive unemployment.

March 18, 2025

QotD: Lester Thurow and the other cheerleaders for “Industrial Policy” in the 1980s

Filed under: Economics, Japan, Politics, Quotations, USA — Tags: , , , — Nicholas @ 01:00

The late Lester Thurow was quite popular in the 1980s and 1990s for his incessant warnings that America was losing at the game of trade with other countries. Most ominous, Thurow (and others) warned, was our failure to compete effectively against the clever Japanese who, unlike us naive and complacent Americans, had the foresight to practice industrial policy, including the use of tariffs targeted skillfully and with precision. Trade, you see, said Thurow (and others) is indeed a contest in which the gains of the “winners” are the losses of the “losers”. Denials of this alleged reality come only from those who are bewitched by free-market ideology or blinded by economic orthodoxy.

And so – advised Thurow (and others) – we Americans really should step up our game by taking many production and consumption decisions out of the hands of short-sighted and selfish entrepreneurs, businesses, investors, and consumers and putting these decisions into the hands of the Potomac-residing wise and genius-filled faithful stewards of Americans’ interest.

Sound familiar? It should. While some of the details from decades ago of the news-making proponents of protectionism and industrial policy differ from the details harped on by today’s proponents of protectionism and industrial policy, the essence of the hostility to free trade and free markets of decades ago is, in most – maybe all – essential respects identical to the hostility that reigns today.

Markets in which prices, profits, and losses guide the decisions of producers and consumers were then – as they are today – asserted to be stupid, akin to a drunk donkey, while government officials (from the correct party, of course) alone have the knowledge, capacity, willpower, and power to allocate resources efficiently and in the national interest.

Nothing much changes but the names. Three or four decades ago protectionism and industrial policy in the name of the national interest was peddled by people with names such as Lester Thurow, Barry Bluestone, and Felix Rohatyn. Today protectionism and industrial policy in the name of the national interest is peddled by people with different names.

Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2020-03-12.

March 1, 2025

Canada’s “supply management” system – our literal “sacred cow”

Filed under: Cancon, Economics, Food, Government, Media, Politics, USA — Tags: , , , , — Nicholas @ 04:00

In negotiations with the Trump administration to avert the threat of massive tariffs, our political leaders say that “everything” is on the table … except for one teeny-tiny little massive crony capitalist protection racket that we are apparently willing to destroy the entire national economy to preserve:

Unfortunately, Canada’s stubborn intransigence on a significant trade-related issue once again threatens to undermine our position and, with it, the possibility of a deal. I probably don’t have to tell you, but in case you couldn’t guess … yup. It’s the dairy sector.

At this point it should be noted that there are basically two agricultural industries in Canada. One of those industries relies heavily on exports, has thrived under the various free-trade deals Canada has been party to, and is filled with dread at the prospect of U.S. tariffs. Given the obvious significance of the U.S. as an export market for Canadian goods, one doesn’t have to look too far to find all kinds of nervous folks in these industries. For example, nearly $9 billion in agricultural products were exported to the U.S. in 2023 from just Alberta alone. Beef exports represent about a third of that total, and in fact the U.S. and Canada comprise the world’s largest two-way trade in beef and live cattle. There is much at stake here (pardon the terrible pun).

The other agricultural industry in this country, is, of course, the supply managed sector. That’s dairy, as noted above, but also eggs and poultry. The supply managed sectors of the agricultural industry are governed by a system of quotas, price controls, and sky-high tariffs. It’s essentially a legalized cartel system. This sector not only wants nothing to do with free trade, but actually sees free trade as a threat. To them, “tariff” is not a dirty word because they hide behind a shield of tariffs that are far higher than anything Trump has ever threatened or conceived.

Now, it should also be noted that these two sides of the agricultural sector are vastly different in size and importance. Yet, the vocal and irrational demands of the small, sheltered component seem to be the demands that our politicians remain most beholden to. Consider comments made recently by the contenders for the Liberal leadership: during this week’s debate, nearly all of them bent over backwards to declare fealty to supply management, even while expounding upon the existential threat posed by Trump’s tariffs. Even now, it’s clear that our politicians are afraid to pick this fight.

[…]

While that could have been a wake-up call for Canada, we instead went in the other direction. In the aftermath of the U.K. situation, Parliament went ahead and passed Bill C-282, which would enshrine into law the principle that supply management should never be on the table in any trade talks (the bill ended up being bogged down in the Senate and its future is unclear).

It’s naïve in the extreme to think that any trading partner, including and especially the Americans, would simply shrug and say “Well, shoot, that’s too bad. Let’s move onto other issues.” We’re needlessly harming our position even before talks begin.

February 25, 2025

Argentina’s experience of life with high tariffs

Filed under: Americas, Business, Economics, Government, Politics, USA — Tags: , , , , , , — Nicholas @ 05:00

Marcos Falcone explains how Argentina’s unusually high tariff barriers distort ordinary economic activity for Argentines every day:

When Argentines go abroad, they usually go shopping. Many of the products they want cannot be bought at home, ranging from clothes to smartphones and all kinds of home appliances. Because of this, it has become a tradition to return from a trip with one or two extra suitcases filled with smuggled goods. Did you know that it is more expensive to buy an outdated iPhone in Argentina than it is to fly from Buenos Aires to Miami, stay for three days, and get the newest one?

[…]

Tariffs do not just make it difficult to get phones at home — they can make life dangerous as well. Argentina’s most sold car, which is artificially expensive because of protectionist measures, got 0 (zero) stars on one of Latin America’s most renowned safety tests. Cars in Argentina are not only more expensive than elsewhere in the region, but also markedly less safe.

To achieve these terrible results, the only thing Argentina had to do was enact tariffs, and now the US seems to be heading in the same direction. But in the past, protectionism has caused the same damage in the north as it caused in the south. Back in the first Trump administration, protecting the steel-production industry saved some jobs, but eliminated many more. Tariffs have also hurt businesses that rely on imports within the US and can continue to do so in a world of globally integrated supply chains. More generally, the 1933 Buy American Act, which forces the government to pay more for US-made goods, has been proven to be both ineffective and costly.

There is no escaping the negative effects of blocking outside competition. The more barriers a country enacts, the more damage it causes to itself. If we, as individuals, acted in a protectionist way, we should aim to grow our own food, build our own house, or make our own cars. But how does that make any sense? Economist Robert Solow once said, “I have a chronic deficit with my barber, who doesn’t buy a darned thing from me”. He meant it as a joke, but he had a point: What matters is to create wealth, which can be done both by selling and buying from others.

The revival of protectionism in the US is worrisome. To avoid it, Americans should take a look at the enormous destruction of wealth that tariffs have caused in other countries. Despite President Milei’s recent efforts to lift tariffs and take Argentina out of the “prison” in which it exists, the fact that the country shot itself in the foot decades ago has put it in a very delicate economic position. The US should not follow its path.

February 16, 2025

Free-market economist grapples with a new kind of tariff

Filed under: Business, Economics, Government, Politics, USA — Tags: , , , , — Nicholas @ 03:00

With US President Donald Trump seemingly utterly entranced by the possibilities of killing off as much world trade as he can using tariffs, I did not expect to read that renowned libertarian economist David Friedman is not sure about the latest kind of tariffs being proposed:

I have finally encountered a kind of tariff that I am not sure I am against. The idea is to impose the same tariff on another country’s exports that they impose on your exports. A tariff makes the country that imposes it worse off, a fact that neither Trump or most of the media appear to understand — Vance may — but it makes the country it is imposed against worse off as well. Imposing a tariff can be in the interest of the politicians who impose it for public choice reasons, as a way of buying support from a concentrated and well organized interest group such as the auto industry at the expense of a dispersed interest group such as their customers. That is one of the two reasons tariffs exist, the other being that the false theory of trade economics is simpler and easier to understand than the true theory.1

But another country’s tariff barriers against your exports make both your country and its politicians worse off. So if imposing tariffs on their imports results in tariffs being imposed on their exports, it might be in the interest of the politicians as well as the country they rule to lower, even abolish, their tariffs — and free trade, zero tariffs, is my first best tariff policy.

Reciprocal reduction of tariffs is, of course, a routine objective of trade negotiations. What Trump appears to be proposing is to automate the process. That might have some advantages. It would reduce the amount of time and effort spent on trade negotiations. More important, it would make it harder for a government that wanted to keep its tariffs to pretend to its citizens that negotiations for mutual reductions had broken down over details.

It is not obvious what “reciprocal tariffs” means in practice, because tariffs, typically, are on particular goods. China imports oil and exports textiles. If they impose a tariff on American oil there would be no point to the US retaliating by imposing a tariff on Chinese oil — we don’t import Chinese oil.

    Under the Plan, my Administration will work strenuously to counter non-reciprocal trading arrangements with trading partners by determining the equivalent of a reciprocal tariff with respect to each foreign trading partner. (Reciprocal Trade and Tariffs Memo)

It isn’t clear what “the equivalent” means. One possible approach would be to figure how much revenue a country collects from tariffs on American exports and set a uniform tariff on that country’s exports set to bring in the same amount of revenue. That would be simple and would reduce the political support for tariffs, since they could not be targeted to protect specific industries.

For which reason I don’t expect it to happen. The closest version that seems politically plausible is a nonuniform tariff schedule that brings in the equivalent revenue. Unfortunately that would let the administration protect favored industries with tariffs high enough to reduce imports, and revenue, to near zero.

Of course, the target country could, in a true system of reciprocal tariffs, solve the problem by reducing their tariffs to zero.

February 14, 2025

Trump may start paying attention to Canadian cultural protectionist polices next

Filed under: Cancon, Government, Media, Politics, USA — Tags: , , , , , , , — Nicholas @ 03:00

Michael Geist points out just how many Canadian federal policies and programs will likely come under scrutiny by the Trump administration for their blatant protectionism against US cultural products:

My Globe and Mail op-ed argues the need for change is particularly true for Canadian digital and cultural policy. Parliamentary prorogation ended efforts at privacy, cybersecurity and AI reforms and U.S. pressure has thrown the future of a series of mandated payments – digital service taxes, streaming payments and news media contributions – into doubt. But the Trump tariff escalation, which now extends to steel and aluminum as well as the prospect of reviving the original tariff plan in a matter of weeks, signals something far bigger that may ultimately render current Canadian digital and cultural policy unrecognizable.

Our cultural frameworks are largely based on decades-old policies premised on marketplace protections and mandated support payments. This included foreign ownership restrictions in the cultural sector and requirements that broadcasters contribute a portion of their revenues to support Canadian content production.

As we moved from an analog to digital world, the government simply extended those policies to the digital realm. But with Mr. Trump appearing to call out what he views to be Canadian protectionist policies in sensitive sectors such as banking ownership, the cultural and digital sectors may be next.

If so, there are no shortage of long-standing policies that tilt the playing field in favour of Canadians that could spark some uncomfortable conversations.

Why do U.S. companies face ownership restrictions in the telecom and broadcast sectors? Why are Canadian broadcasters permitted to block U.S. television signals in order to capture increased advertising revenue? Why do Canadian content rules exclude U.S. companies from owning productions featuring predominantly Canadian talent?

The Canadian response that this is how it has always been is unlikely to persuade Mr. Trump.

Canadian policies premised on “making web giants pay” may also be non-starters under Mr. Trump. For the past five years, the Canadian government seemingly welcomed the opportunity to sabre rattle with U.S. internet companies. This led to mandated payments for streaming services to support Canadian film, television and music production; link taxes that targeted Meta and Google to help Canadian news outlets; and the multibillion-dollar retroactive digital services tax that is primarily aimed at U.S. tech giants.

Not only have those policies raised consumer affordability and marketplace competition concerns, they have also emerged as increasingly contentious trade issues. If the trade battles with the U.S. continue, the pressure to scale back the policies will mount.

Beyond rethinking established cultural and digital policies both new and old, the bigger changes may come from re-evaluating the competitive impact of policies that rely heavily on regulation just as the U.S. prioritizes economic growth through deregulation. Proposed Canadian privacy, online harms and AI rules have all relied heavily on increased regulation, looking to Europe as the model.

For example, consider the Canadian approach to AI regulation in the now-defunct Artificial Intelligence and Data Act. It specifically referenced the European Union’s regulatory system, which establishes extensive regulatory requirements for high-risk AI systems and bans some AI systems altogether.

However, the European approach is not the only game in town. Mr. Trump moved swiftly to cancel the former Biden administration’s executive order on AI regulation, signalling that the U.S. will prioritize deregulation in pursuit of global AI leadership. Further, the arrival of DeepSeek, the Chinese answer to ChatGPT, took the world by storm and served notice that U.S. AI dominance is by no means guaranteed.

The competing approaches – U.S.-style lightweight regulation that favours economic growth against a more robust European regulatory model that emphasizes AI guardrails and public protections – will force difficult policy choices that Canada has thus far avoided.

February 11, 2025

The End of Empire? Colonialism in Crisis – W2W 003

Filed under: Britain, Economics, France, History, Russia, USA — Tags: , , , , , , — Nicholas @ 04:00

TimeGhost History
Published 9 Feb 2025

In 1946, the old colonial empires of Britain and France struggle to maintain control as nationalist movements rise and their economies crumble. Meanwhile, two new superpowers — the U.S. and the USSR — seek to reshape the world in their image, using decolonization as both an ideal and a tool for influence. As the colonial order fractures, global power shifts, and the battle for dominance begins.
(more…)

February 8, 2025

Interprovincial trade barriers in Canada

Filed under: Cancon, Economics, Government, History — Tags: , , , — Nicholas @ 03:00

In the National Post, Jamie Sarkonak pours some icy cold water on the fever dream that we can fix what ails us economically with this one neat trick:

Understand what an interprovincial trade barrier is: it isn’t a simple matter of repealing tariffs, because internal tariffs don’t exist — provinces aren’t allowed to impose them. Instead, barriers take the form of red tape that differs in shade by province; if there are 10 provinces that each regulate, say, what shape of toilet seat is required to be used on a construction site, expect 10 different rules on the matter (Ontario requires a gap at the front of the seat; Alberta doesn’t care).

For Canada’s toilet seat manufacturers, that’s another level of complexity that can complicate production and make it costly to expand to new jurisdictions.

Now repeat the mental exercise for every other provincially regulated product: food, alcohol, pesticides, lumber and so on. And again, with all the other provincially regulated things you can buy but not hold: massage therapy, legal services, hair and aesthetic services, provincially regulated securities.

It adds up to a lot, and that’s by design: in 1867, the Constitution explicitly handed authority over most sectors to provincial governments. Provincial regulations, and by extension, interprovincial trade barriers, are central to provincial autonomy.

Theoretically, rule consolidation is a good deal. It would be far easier to do business in Canada if it worked more like one country with one set of rules, rather than a heterogenous group of 10 micro-states packed into one.

On the taxpayer side, there are savings to be had, too: regulatory bodies use public funds and there are (theoretically) savings to be had by centralizing the offices of 10 different sheriffs into one. Estimates vary, but lifting barriers is thought to add a boost of $80 billion (International Monetary Fund) to $200 billion (Canadian Federation of Independent Business) to the economy.

But standing in the way of free-trade utopia are the practical considerations, the big one being protectionism. Making its case in the Journal de Montreal, William Rousseau put it well: “The abolition of these barriers can even be economically harmful, because for each barrier that blocks a company from the rest of the country, there is a Quebec company that benefits from it and whose business model takes this barrier into account.” The exact same can be said for any province.

This is why I thought well of Pierre Poilievre’s recent trial balloon about ways to coax the provinces into reducing interprovincial trade barriers by … let’s be honest … providing a financial bribe from the federal government. By allowing the individual provinces to “capture” some of that “lost” revenue, it may provide enough incentive to start dismantling at least some of the structural barriers to free trade within Confederation.

February 2, 2025

Captain Trumpmerica versus the Post-national Maple Protectionists

Filed under: Bureaucracy, Business, Cancon, Economics, Media, Politics, USA — Tags: , , , , , , , — Nicholas @ 03:00

Donald Trump has made picking fights with the corrupt oligarchs of Mexico and Canada a key part of his appeal to American voters. Canada used to be a proud nation, but after years of deliberate mismanagement and stubborn opposition to innovation and growth, we’ve become — as Justin Trudeau so smugly put it — the first “post-national state” that has “no core identity [and] no mainstream”, because we’re a plaything for the WEF and other transnational organizations. Elizabeth Nickson calls us a “failed state” and that swapping in globalist WEF’er Mark Carney for globalist WEF’er Justin Trudeau will make no positive difference:

25% tariffs will ruin us. The tariffs mean one million small businesses — all which sell to the U.S. — will contract and many will close their doors. And then Trump, as he promised the unions, will pull “our” auto industry. Then we’re done.

Who is to blame for this?

The following is going to be crude because Canada is so boring (that’s deliberate) that no one cares. There are a thousand ultra-complex rationales on why Canada is failing and all they do is obfuscate. I’m not pulling punches, softening rhetoric — it is bad. It is urgent. This is the death of something that 75 years ago was shining, sunlit, exciting. That country? That country was killed by the Laurentian elite, weak, cosplaying Marxism to stay in power, themselves outwitted by investment bankers who plan to steal everything not nailed down. In so doing new elements were forcibly injected into the population: envy, resentment of the successful, sloth, the refusal to grow up, be strong and independent. We effectively sit on top of the U.S., seething with envy, in wet diapers.

We are a broken country. Everyone who understands the world knows this. The only people who don’t are deluded Canadian socialists, which is to say our entire elite and all our “knowledge class”. Dissent is ignored. Or jailed.

Central banker Mark Carney, WEFer paramount, is being parachuted into the Liberal party in order to sell us off to the investment banks who will harvest us for our resources. Our people? Future serfs in Special Enterprise Zones. We already have the regulation in place. No taxes, no worker rights, no enviro controls, no self-determination, no agency, no freedom. Time frame? Ten years, twenty at the outside. The inevitable end of hard-core socialism.

That is what Carney did to Canada in the ‘08 crisis, a crisis entirely created by larcenous government and investment bankers: he loaded us up with so much debt that the moment the economy turned, the working class — and Canada is now 75% working class — paid for it through interest rates so high they crippled and broke every middle class family with a mortgage. Then, he moved to England and did it to the English. His name there? Mark Carnage. During the ’08 crisis, he in Canada and the UK and Obama in the US transferred trillions in public wealth to the investment banks to keep them going after the worst crisis since ’29. A crisis they caused. That was the people’s money, not theirs.

However, as Peter Menzies points out, our Laurentian Elite are still 100% protecting us from the baleful influence of American culture … well, the commercial bits anyway:

Next Sunday, the federal agency responsible for the flourishing of national culture and identity will be swamped with complaints. The grumbling will emanate from Canadians enraged they can’t get more American culture. Yes, America may be in the process of humiliating Canada as its lamest of lame duck leaders, Prime Minister Justin Trudeau, waddles into the sunset. And, for sure, most of us are mortified that U.S. President Donald Trump has chosen to make an example of us as he launches his mission to bring the globe to heel and Make America Great Again.

But the bitching directed in the days to come at the Canadian Radio-television and Telecommunications (CRTC) headquarters in Gatineau will originate from Canadians angry they can’t watch American Super Bowl TV ads along with the game. A perennial contender to be the most watched TV event in Canada, the Super Bowl also has traditionally been the most controversial event on the CRTC’s calendar.

The USA can slap us silly with tariffs. It can send hundreds of thousands of us into unemployment and despair. It can mock our disinterest in maintaining the essentials of nationhood and drive us into unsustainable debt. Trump can brutalize our national esteem and taunt us for our cavalier attitudes towards the defence of our sovereignty. And he can lick his big beautiful lips while pondering our potential as the 51st state.

But what will really light us up Feb. 9 will be being unable to watch Meg Ryan and Billy Crystal reinvent their famous restaurant scene from When Harry Met Sally or Michelob Ultra’s production starring Willem Dafoe and Catherine O’Hara as a couple of pickleball hustlers. Or Matthew McConaughey channeling legendary Chicago Bears coach Mike Ditka for Uber Eats. And the Clydesdales. Everyone loves those Budweiser Clydesdales, particularly the cute little foal making a debut.

It doesn’t matter that the ads cost $7 million U.S. (which will convert into heaven only knows how many bazillion loonies in the months ahead) for a 30-second spot. Or that for more than a decade many of the commercials have been available on YouTube. Canadians don’t want to watch a Super Bowl adorned with Government of Ontario and Maple Leaf Foods ads. They want to watch the game like real Americans and relish the full, unfettered American experience.

At the National Post, a sad recounting of just how badly we’ve been let down by our politicians — and not just recently … this is a decades-long list of conscious self-harm for short-term domestic political advantage:

Bold counter-attacks against the U.S. can’t work, because all the ideas Canada could have put into action to make such a response viable are collecting dust on the cellar shelf. Drop interprovincial trade barriers that amount to a $200-billion penalty on the national economy every year? That only became a serious conversation in the last month. It should have been a serious conversation 10 years ago, if not more.

End supply management? Out of the question — think of the Quebec votes such a move would cost. The Big Milk lobby is a strong one.

How about resource development? Because Canada is ultimately a resource-exporting economy? No; we’ve been cancelling energy projects at the slightest objection and building more legislation to stand in their way. Industries like mining and fishing, already mired in growth-choking regulations, are increasingly refashioned by governments into welfare and “reconciliation” initiatives, repelling private investment that would have brought prosperity to the country as a whole.

Diversify away from the Americans? We’ve only done the opposite: since 2017, Canadian trade has become more focused on the U.S.

Canada should be a prosperous, growth-oriented economy, but instead, its government — and the people who continuously vote for economy-stagnating policy — settle for subsistence and redistribution of a shrinking pie of wealth. Their choices for the past decade have left us without enough fat to get through a cold trade winter.

Prompt retaliatory counter-tariffs are hence unwise. Such a move would put Canadians in the path of two separate blows, one from the front, the other from the back. And while immediate counter-tariffs could affect Americans whose support the president depends on — as was the case in the 1930s, when Canadian counter-tariffs prolonged the American Great Depression (while inflicting domestic pain) — those Americans have much bigger economic fat stores. In a trade war of attrition, expect Canada to lose.

That leaves us, unfortunately, with the less-glamourous immediate option: play this by the book. The United States-Canada-Mexico free trade agreement, which will be violated by any across-the-board tariff Trump applies, needs to be challenged with the mechanisms agreed upon by party states. During the process, Canada must remind Trump that it’s just following the agreement that he made.

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