January 4, 2003
WHY DO THEY HATE US?:
Time to roar To become the Northern Tiger, Canada needs to emulate winners(Calgary Herald, December 28, 2002)
Two years ago, Industry Canada reported that Canada's standard of living was equal to that of Mississippi, the poorest state in the U.S. In early December, a study on innovation by the Conference Board of Canada ranked Canada last out of 10 countries. Last week, the Centre for the Study of Living Standards reported that Canada had slipped -- again -- in its annual ranking of 23 nations. We're now in sixth place, ousted by the Celtic Tiger of Ireland which leapfrogged to third. [...][M]icro-managing innovation isn't possible. Instead, governments must create the right macroeconomic conditions for entrepreneurship to thrive.
Ireland, for example, was mired in economic torpor in the 1980s. In 1987, it elected new, fiscally responsible leaders who launched aggressive reforms.
The size and cost of government was severely reduced, corporate and income taxes were slashed, and a deal brokered with the unions to keep wage increases low. Labour leaders were smart enough to see the benefits to them of a healthy economy. Besides, when accompanied with deep income-tax cuts, even modest wage increases still resulted in more money in their members' pockets.
These changes made Ireland an attractive place to invest, not just for the Irish themselves, but for more than 1,000 foreign firms, who were warmly welcomed. About 600 U.S. firms landed on the tiny island in the late 1980s and helped fuel its recovery.
As the economy roared forward, government revenues quickly rose again. Tax levels were kept low, but, with growth so high, the net effect was that government regained the means to provide a high level of core services, such as a massive expansion of post-secondary training programs and free university tuition.
Ireland now leads the world in GDP and job growth and provides a standard of living below only that of the U.S. and Norway.
Mississippi? Posted by Orrin Judd at January 4, 2003 10:08 AM
It has to be offensive to Mississippians to be told repeatedly that they're as poor as Canadians and Swedes.
Posted by: pj at January 4, 2003 9:38 AM"Mississippi?"
Clearly Trent Lott isn't as good bringing home the pork as everyone said he was.
Regards,
Compared to when I knew it first, Mississippi's
advance has been little short of Ireland's.
Newfoundland, though, must be just about
the poorest place in the western world.
The Irish economy was given a pretty hefty bonus by very large subsidies from the European Union.
Posted by: M Ali Choudhury at January 4, 2003 5:23 PMThe problem that Canadians have is that so much of their income isn't disposible. Probably fewer Canadians are hungry and none are totally without recourse to the health system, which isn't the case in Mississippi. But there is also less economic upwards mobility, on average. This isn't really obvious when you drive through Toronto or much of southern Ontario, but there are simply areas in Canada that are depopulating due to changes in economics, such as extractive mining operations closing down or changes in lumbering or railroad operations. Added to that is the general deemphasis of agriculture and its labor implications and you can get a situation in much of Canada which is pretty gloomy economically. Again, not in the "banana belt", but just 2 hours drive north, west, or east.
That being said, Canadian growth has been better than US growth in the past two years, so all clouds are not precisely black. But when things were booming in the US, the Canadian economy perceptibly fell behind, along with the Loonie going into the tank.
Ali Ch.: You are correct in using the past tense, "was". How Ireland is still fired up is not explicable by current EU subsidies, nor is how similarly subsidized areas elsewhere in the EU are falling behind Ireland explained by these subsidies. Quite simply, trying to say that the EU bought Irish prosperity is a poor explanation for what has occurred in Eire.
Posted by: Tom Roberts at January 4, 2003 8:55 PMpj: Its better than Georgia (US) being confused with Georgia (by Armenia) or being asked for your passport after you tell customs agents that you are from New Mexico.
Posted by: Tom Roberts at January 4, 2003 8:58 PM