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Notes -
Canada’s decline
Things are not going well in Canada. The hashtag #Canadaisbroken has been going around for a while, but the scale of the decline remains underdiscussed, especially in our media. Canada’s real GDP per capita is 2.5% lower now than it was in 2019. In the U.S. its 6.0% higher. For decades, Canada has had per capita GDP (adjusted for purchasing power) that was about 80% of the U.S. level, now its 72% and falling. Canada is rapidly becoming a European country in terms of living standards. This understates the problem because in Europe its easier to live on less: cars are not necessary in many places and, crucially, rent is much lower. Canada is in the midst of an unbelievable housing crisis. At current prices and interest rates, the ownership costs of a typical home would consume 60% of the median household's income, the highest ever recorded. I went to the U.S. southwest recently and my overriding impression is how much better off America is than Canada now.
The Liberal government’s response to this has been deficit spending. Their lack of fiscal responsibility was dramatic during Covid, but hidden under the guise of emergency they spent $200+ billion on new entitlements and spending programs which has resulted in Canada running a permanent structural budget deficit. When combined with our provinces (which unlike U.S. states are allowed to borrow) and measured as a % of GDP, the country is running Bush Jr.-tier fiscal deficits without wars. And what are these new programs? Almost all of them are means-tested benefits for behaviours progressives like. A new daycare program aimed at moms working 9-5 jobs (i.e. white collar) that does nothing for SAHMs, a dental care program which is only for families making under 90k (creating a huge marriage penalty and implicit tax rate), a carbon tax rebate which is income redistribution in disguise, replacing the modest but universal child benefit with a generous means tested one, etc. If you put it together, Canada has largely rebuilt our 1970s welfare state but will claw it back from you more than dollar for dollar as you earn more. We variously incentivize poverty and moms to work, stay unmarried and put their kids in daycare. Our taxes are high.
The other big push from our government is immigration. They occasionally frame it as a way to stop inflation, but usually they don’t defend it at all and assume the pro-immigration consensus is unshakable. The levels were shocking last year, but they keep rising. Over just the past 3 months, Canada admitted 430,000 new people. Canada now has an absolute annual level of legal immigration (including temporary migration) of about 1.2 million -- higher than the United States. We get about 500,000 traditional immigrants, but the big change from recent years is about 700,000 net “non-permanent residents” who form a new helot class. Canada now has 2.5 million temporary residents who come to study or work low-paid jobs and it has rapidly transformed the entire country. These people represent 6% of the population, but because they are highly concentrated by age, they are about 20% of adults aged 20-40. I spend time in a small town that is hundreds of kilometers from any major city and nearly every store now employs temporary foreign workers from India. Every worker at McDonalds. Every worker at Tim Hortons. They live 6+ to an apartment and have tightened the rental market pricing locals out. With population growth running at its highest ever pace, homebuilding is unchanged at about 250,000 units creating an incremental housing need of a quarter million units per year. Rent inflation is over 7% compared with approximately 0% month over month in the US.
What the past few years has made plain to me is how deep leftism runs in Canada and how dedicated it is to ignoring the effect of incentives on behaviour: We can just subsidize bad behaviour and punish good behaviour endlessly without actually changing behaviour. In many ways Canada is running on the fumes of vestigial British earnestness, politeness and self discipline which has made this work in the past, but I think we’re rapidly burning up our cultural capital and once its gone, I think we’ll tip into a much worse equilibrium. I have leftist friends whose perspective is: “sure things aren’t great, but would the conservatives do better?” which makes me sad. For most people, even smart people like my friends, seeing the bad consequences of things they support doesn’t move the needle at all in terms of their worldviews. And I didn’t get into spiraling crime and government celebration of the deracination of our traditional culture.
I think part of what is happening is Anglo culture’s seemliness has become our greatest weakness. Its unseemly to ‘punch down’ and blame an avalanche of mostly-poor international students for the rental market, or permissive and ‘anti-racist’ criminal justice policy for a huge increase in crime so we equivocate and people say things like “its so brutal, how sad” while continuing to vote in the same way. There is no transmission from failure in office to electoral results, so we end up with people like Trudeau for three terms. One astute observation I’ve heard about Canadian ‘niceness’ is that its fake: people are very cagey about saying what they think in public about anything controversial. Our entire country is a university campus. Canadians live in a world of feel good pablum as our way of life is destroyed. People rage about it, but there is no honest sensemaking apparatus in Canada – because talking about things plainly is unseemly – so rage is dissipated randomly. Even today, even after its failures, the combined polling share of the LPC-led ruling coalition (i.e. LPC+NDP) is nearly 50%.
Gonna play a bit of devil's advocate on the subject. Not entirely, just a tad. Because I do think there's some reasonable concepts behind the core idea, that Canada's population needs to increase dramatically. Canada has a lot of open space. To be blunt. So I don't think it's unreasonable to think that over time Canada would be better off on the global stage with a significantly higher population. As well, it's a way to get around demographic surges among older people.
I actually think these are good points.
The problem is that the implementation has been awful. There's a number of problems.
The big one, is that I think that immigration programs needs to be controlled for skills (or desire skills). You need to maintain relatively healthy balances of your entire labor market to ensure that things don't go out of whack and you get shortages in one place or another.
The other side of that coin, is credentialism. That is, various licensing regimens doing their best to keep out outsiders in order to artificially boost wages. Then you put on top of that the role of post-secondary education itself, and their role in massively importing labor.
The end result is just tons of essentially low-skill labor and people locked into that role. Relatively few people are coming over to do construction work, and the barriers to entry for that are massive anyway. Truth be told, I have nothing against people coming over, taking high-end or relatively high-end courses and ending up with good jobs. I don't think that's where the problem is. The problem really is down the line.
There's another part of the problem as well, and that's geographic distribution. Yes, Canada has a LOT of room. We can't have an overwhelming % of people living in a few large cities. I'd argue we need the will and the ability to "upshift" smaller cities into larger ones. Or maybe even building a city from scratch. We can't just keep on dumping people into the Toronto area.
If we want to do the whole 100 million thing (that's the goal), there's going to need to be a plan to address all those things I mentioned above. And as it stands right now, there's absolutely not.
Which parts of Canada do you want to see fill up with more people? Which regions do you think are below their potential and should dramatically expand?
To be clear, this is a classic gotcha question, because I don't think most immigration proponents think all that hard about the specifics of what they're trying to change -- but, at the same time, I mean it sincerely. If you have an argument that Saskatchewan could easily sustain another million people, or that the Canadian shield has rich potential with modest and inexpensive terraforming, I'd like to hear it. My impression has always been that Canada has a lot of open space because nobody wants to live there, because there is very little to be produced in these places. I'd love to hear a different story.
Toronto proper (not even the GTA) would have 17 million people if it were as dense as Paris.
Ok, sure, maybe Toronto can grow, but that's not really filling the open spaces of Canada.
Why wouldn't the open spaces he able to be filled?
You can't just build anywhere as if any space will do. Which space? Prairies, forests, marshland? Is there arable land to grow crops to feed these new people? Or clear land that can support roads to ship food in?
There is a lot of open space in Canada, but a lot of it isn't fit for living. Canadian winter gets prohibitively expensive, especially if you build much further North than where Canada has been built. The Canadian shield runs through middle, making much of Canada's open spaces poor for living.
But, there is a lot of open space in Canada, so I could believe there is a lot of untapped potential. I'm not trying to be unfair here: if you want to bring in millions of immogrants, you need to have an idea of where to put them.
Food can be transported, so you don't need arable land. And there's a lot of arable land anyway. If the land isn't cleared, it can be cleared.
Clearly not, since people live in very cold parts of the country. If Winnipeg exists, then people can build in the ample open spaces of southern Ontario, let alone in the rest of Manitoba.
As I said, they could easily fit in the GTA, let alone the many other cities we have and similar environments that haven't been built up.
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Wherever the developers find building to be profitable, once the onerous zoning regulations are lifted.
Food can be imported from elsewhere. We are living in the age of containerized cargo transport.
I'm sure that the developers and/or governments can buy from farmers sufficient land for roadbuilding.
Taken together, Wikipedia's maps of climate and population density strongly suggest that the unfilled habitable area remains quite sizable. See also Google Maps.
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Vancouver's housing could be made cheaper by allowing single-family houses to be built in the empty "Green Zone" (1 2).
AKA 'food producing areas' -- the Fraser River delta is fantastically fertile, it would make way more sense to plop the immigrants up in Prince George or somewhere (Rupert if they just like rainy ports I guess) and plough the condos under to grow veggies.
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Worth noting that this is true for every city and town in the province: the ALR is an absolutely crooked law and it applies almost everywhere. Sure, 50 years ago it might not have been as big a deal to permanently ban all development in cities that hadn't yet grown to need that land, but they do now, and I don't think that unless the province undergoes a dramatic political shakeup it's going anywhere fast, much like California's Prop 13 (for the same reasons).
Fun quote from a Supreme Court opinion refusing to overturn Prop. 13:
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My impression has always been that Vancouver home prices are kept high by investment from China and other countries (which is basically infinite and totally inelastic). Granted, there is also a lot of green space that could be turned into housing, and a lot of room to build up. (I suspect strongly that Portland and Seattle will go the same way.)
Anything else? Granted we could probably fit a million or more people into Vancouver, but that's only one small part of Canada.
The investment may be virtually infinite but it's very elastic--they are investing because it seems like a good investment. They'll invest elsewhere if the quality of that investment declines (perhaps due to increased housing supply)
The last time I looked into it, many years ago, Canadian real estate was a prime investment for Chinese elites looking to sock money away outside China. Perhaps the calculus haa changed, but it would take a lot of new housing stock to sate this demand.
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It appears that similar land-wasting efforts are active in the Toronto area.
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Canada really does seem to be speedrunning national suicide at award-winning pace.
It’s not even clear why all these immigrants were needed, there was no huge labor shortage in 2016 Canada relative to other advanced nations.
When the Brits invited in the Pakistanis and the Germans the Turks there was at least some economic rationale for it. In Canada there seems to have been none. They did it just because.
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"seeing the bad consequences of things they support doesn’t move the needle at all in terms of their worldviews"
It is important to ask others (and yourself) "what would change your mind?" Yudkowsky taught me that.
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I'm not trying to morally compare the current Canadian government to the Nazis, but I was thinking the other day about how they are comparable in terms of "commitment to the bit". The war was well-lost and everyone knew it, but they were still rounding up Jews until the very end. We see that now and think "Guys, take the hint, throw in the towel," but Jew-gassing was just THAT important to the Nazis.
It looks like the current government is finished. Pretty much everyone hates them, Canada is (relatively) crumbling around us, and the government is trying to do things like find a path to citizenship for illegal migrants. I used to console myself with the knowledge that they were a bunch of bad-faith virtue signalers, but their laser focus on moremoremore immigration- to the exclusion of many, if not most, other issues- makes me think they really do believe in this stuff. Talk about commitment to the bit.
I would never screencap this and post it to Twitter for cheap laughs from people who hate us, but
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I guess people who think Cthulhu always swims left could make a similar comment about everyone pursuing conservative policies?
If not, what about this makes it a "bit"?
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The comparison doesn't really work because the Nazis never expected to get back in power and their efforts to continue the war were delusional. But the liberal party is very rationally using their remaining time in office to do unpopular and destructive things that will increase their power next time they get elected, and prevent the current opposition from fixing the disaster they inherit.
In another decade everyone will have forgotten why they voted out the liberals in 2025. But their children will have been raised by the education bureaucrats being appointed today, and their managers at work will have been promoted the same way.
Left wingers have mastered the science of turning the political pendulum into a ratchet by manipulating procedure.
What do you mean by "raised by the education bureaucrats"? Education is under provincial jurisdiction.
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No the liberals are well aware they're possibly never getting back into power.
All of Canada's left depends on Canadian media propped up by government subsidies. There isn't a newspaper, tv channel, or magazine that survives without it.
The conservatives have made it a CORE part of their platform that they'll defund it all... this is the thing their base cares about, this is the thing the party bosses all salivate over... If you told them the journalists would starve to death on the street they'd take the week off to watch it happen and jeer in real time.
They'll Let the CBC and every Canadian broadcaster die, such that it will just be Rebel News and American Media.
Unlike the US where there is sufficient demand and backdoor bribes to keep legacy media going, in Canada it will just die.
And then it will be 4 YEARS until the next election.
The big lesson they learnt from Harper and the convoys is the only thing preventing the total Americanization of Canada (and permanent shift to a US style 60-40 right-left division of time in power (as opposed to the 20-80 Canada had in the 20th century) is State funding of Media...
And they will spend ANY political capital and suffer any scandal to watch those journalist die deaths of despair.
The Big Shift (title of the book that predicted this would occur naturally in the 2010s) was Harper's dream, that if he hit the liberals at just the right angle enough times, their party would die. The New Democrats would become the left wing party, the bloc would become permanently more powerful in Quebec, and Canada forever after would function as America Jr. in terms of how politics played out...
This didn't happen because Trudeau had a magic to him, and every institution fought tooth and nail to prevent the 4th Harper Victory that would have locked it in.
But with Conservative Pierre Poilievre's now 40+% in national polls (this in a 5-6 party system)...and with Poilievre framing himself as Stephen Harper, but more blood-thirsty and Trucker levels of hostile to the media...
This looks like it might be the end of the Liberal-Laurentian era of Canadian politics.
Canada is a country where the parties aren't systemically locked in like in the states... and Great parties have died before. (see the progressive-Conservatives going from a Majority government to 2 seats in the 90s never forming government again, and then harper and his hostile Westerners to absorb them, then slowly purge the remainder of their leaders)
This is not going to happen. Guaranteed.
The media, even when entirely ideologically captured, has enough of a self-preservation instinct to half-heartedly lick the boot after a regime change. And any Conservatives, even and especially those who aren't knowingly playing the role of controlled opposition, are so starved for flattering media coverage that they'll let them flatter them and will forget any plan or promise to deal with the media, until it's too late, it's election season and the knife is buried so far in their back they can't pull it out anymore.
And even if that scenario doesn't happen, CBC is a big enough institution to scrape by on debt for a good long while. Interest rates are high, but so what? If they can get liberals reelected they'll get bailed out.
CBC is a Crown corp, I don't think they can borrow -- and it's hard to overstate how much the CBC has turned into a woke organ over the past ten years or so.
I used to have it on more or less 24/7 in the house -- it wasn't always good but it was rarely offensive enough to go turn it off.
Now I will sometimes listen in the car, but have a policy of turning it off whenever somebody starts bitching about the underprivileged -- I rarely last an hour, and I doubt that most non-woke people are so generous. I don't think the CBC will disappear, but I don't think it would cost the Conservatives that much support among those who would ever consider supporting them to pare it back hard and turn it into a strict news network.
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Remarkably optimistic for you, Kulak. What do you think is the real chance they abolish the CBC?
Not Kulak but 50-50. The CBC has been slipping in public conciousness ever since they lost the NHL rights to Roger's in 2015 and Peter Mansbridge retired. The only people who watch CBC news are old Lauerntian boomers. The only relevant CBC show in the last decade was Schitts Creek which ends this year. I'm not sure the majority of Canadians would notice or care.
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I don’t know much about Canadian politics but as an outsider, I think I came to that realization with that viral video clip of the two MPs going at it a while back.
One, a conservative, asked a very simple question; “How much does the average house in the Ottowa area cost?”.
The other, a liberal I assume, simply replied with a random accomplishment of the liberal government, completely ignoring the line of questioning.
The conservative asked the same question, and the liberal breathlessly did it again, just blurting out some non-sequitor factoid about the supposed accomplishments of the liberal government.
This went on and on for maybe like ten minutes straight, like literally 25 times.
It was so incredibly baldly dishonest I almost admired it.
Edit: Found it.
Question period has long been a joke. That's not new.
I saw this and wondered how common it was.
It’s… good to know that’s normal? I guess?
I don't think it's usually that blatant, but it is common for the government not to answer the question and to make some loosely related rhetorical point instead. They have to respond to the questions, but the Speaker never forces them to actually answer them like a judge would in a courtroom.
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The Westminster system encourages this with question time. It’s kind of like a mandatory humiliation ritual for the government.
Some Anglophile Americans (John McCain was one) have advocated a ‘President’s Question Time’ where the president and other cabinet officials would answer questions from congressmen once a week. But you don’t even need to look north or across the Atlantic to see what a shit show it would become; congressional hearings (eg the recent Harvard/Penn ones) are evidence enough.
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To be fair, it called "Question Period" for a reason -- nobody ever said there would be answers...
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Counterpoint: this same economic malaise is very common among developed Western countries. It is the US that is the outlier here in managing to remain economically buoyant over the past 15 years while peer economies like the UK and Canada have muddled through.
Growth has been anaemic across the entire developed world since 2008 except in Australia due to the resource boom (largely selling to China) and in the US due to the tech boom. Even though only a small minority of the US population is involved in tech, the extreme success of big tech led to a near unique and unprecedented rally in equity prices (making many people much wealthier), driving up PMC pay significantly and supporting other sectors like entertainment, corporate law, finance, luxury and other consumer goods, and real estate because of the sheer volume of new money created out of the general asset pricing boom.
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Just to nitpick a bit, technically, there is no coalition government. Canada has never had a coalition government. The NDP is not part of a coalition with the Liberals, as no one from their caucus is in the cabinet. So they are not part of the government.
They do vote in favour of votes of confidence to keep the Liberals in power in exchange for the Liberals helping to enact legislation that they want, but that's not the same as being part of a coalition government.
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I'll just put this out there- I think Canada should merge with the US. And arguably should have a long time ago.
No clue how this would shake up politically, but I would think it would make both nations more moderate. The US certainly wouldn't vote for Trudeau.
Historically the rent and lifestyle would have been good enough that we'd have been immediately flooded with Americans, destroying the local culture.
As it is, Rest-of-Canadians have been doing this all by themselves.
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I think my biggest question for a scenario like this would be, "What happens to all the crown land?"
I'll take it!
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As a general rule, countries just plain don't want to merge with other countries. The expections are cases like the two Germanies, which didn't even formally see themselves as two countries but as one country with two competing governments, even before the reunification. The European elites have tried to push EU to become a federation for over half a century with this process progressing at a snail's pace at its fastest, with the last 15 years having been spent in an economic muddle as a result things being in a limbo after the last major integration - the Euro - having been exposed by the 2008 crisis to have major problems that have been fixed with fix-tire-with-bubblegum style measures.
Sure, but Rome wasn't built in a day. The EU, despite its flaws, has held together, and my impression is that the smaller central Europe states like Luxembourg, Lichtenstein, etc are really losing their identity as an independant country. It also took a long time for all the kingdoms of the HRE to unify into Germany, but it happened eventually.
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Unrelenting disaster as the Democrats merged with the majority of Canadians and screwed up American politics.
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This is politically impossible. Canadians have a very strong national identity which is based at its core - and on little else - on not being American. Remember, it's the only country in the world that was actually founded in direct opposition to the principles on which the US was founded. The entire point of Canada, for its entire history, has been to not be part of the United States. Furthermore, the Canadian population has been heavily selected over 250 years for people who don't want to be Americans. So despite the cultural similarities, most Canadians very much don't want to be part of the United States.
Most Canadians don't appreciate how much richer the US is, and those who do, mostly think it's only the very richest who are better off. They falsely believe that the average person is richer in Canada.
There are also constitutional issues. Quebec's language laws would violate the first amendment, and nothing is more important to French speaking Quebeckers than protecting their language. They would far sooner become independent than give up control over what language speak in order to join the US.
Our gun control laws would violate the second amendment, and most Canadians have no interest in giving up their safety in order to have that right. There are lots of Canadians who like to hunt and are upset and some of the recent changes to the gun laws, but there is nothing like the broad support that the second amendment has among American conservatives. The gun situation in the US is seen by most Canadians as crazy. and it would be top of mind in any discussion about joining the US.
Most Canadians wouldn't see this as a good thing and would prefer to keep them here where they can support our local industry.
Is there something preventing them from doing this now? The environmentalist movement is very strong in Canada, and outside Alberta, most people don't actually want the oil industry to be further developed.
Quebec isn't persecuted in any way and has much more autonomy than it would as part of the United States, in particular, regarding laws on language usage and immigration. It would also face more pressure to assimilate into anglophone culture. Canada has a lot of federal laws enforcing bilingualism in the rest of the country. These wouldn't exist if it were part of the US, and Quebec's exposure to anglophone culture would increase. Quebec also receives large subsidies from the richer parts of the country as part of Canada's equalization payment system, which the US doesn't have.
It would also lose its ability to separate. US states don't have the right to secede, whereas in Canada, it is not clear, but they likely can if there is enough support among the province's residents. Quebec separatism may be dormant, but francophone Quebeckers do not really see themselves as Canadian and it's quite possible Quebec will try to separate again in the future if it's relationship with the rest of Canada worsens. It would not want to give up that option.
What does this mean?
For most of history, Canadians could just move to the US. There were no immigration restrictions. And even today, it's one of the easier countries to move to the US from. It also used to be easier and more attractive to move to the US than to move to Canada. So most Canadians are descended from people who either chose to move to Canada over the US or chose to stay in Canada and not move to the US, generation after generation, despite the worse weather and the worse economy.
It also might be worth noting that tens of thousands of loyalists from the 13 colonies moved to Canada during the American Revolutionary War, and this was at a time when the population of what is now Canada was only about 150,000 or so. So a non-trivial fraction of Canada's founding stock were people who fled what ended up becoming the United States for political reasons, sometimes because of well-justified fears of violent repression from the revolutionaries.
Yes, that's part of what I was referring to. In fact, most of the population was French when the loyalists came. The loyalists basically were the founding stock of English Canada, while the French had their own reasons for not joining the US in their rebellion.
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By this logic, shouldn't they still be part of the UK? They were founded on staying loyal to the British Crown, the US didn't even exist at that time.
Otherwise you make good points.
It was never part of the UK, but I understand what you mean. The reasons for being anti-American have changed, but there is still a strong anti-American feeling.
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Well, they never were "part" of the UK, they were a collection of separate colonies in the Empire and then a Dominion.
And they're still loyal to the crown, it's just that all the imperial dominions that liked Elizabeth just pinkie-promised each other it wasn't the British monarch ruling them any more, it was the monarch of Canada, or Australia, etc. Except they all so happen to be the same monarch.
Personal union isn't so uncommon historically, but I still find the situation where all the countries have to agree to change the line of succession or affirm a new monarch to be a bit clunky and silly. Honestly, that's probably my take on constitutional monarchy itself, though I go back and forth between thinking it's kind of a neat thing to have a symbolic figurehead people can unite behind, and thinking it's insane and inhuman that Charles has all this power on paper but in practice he's damn near a slave-by-birth to the prime ministers of the countries he supposedly rules. I somewhat respect Edward for having the gumption to just say 'no,' and nope out, but that admiration is tempered by the part where he probably tried to get the Nazis to reinstate him if they conquered the UK. I kind of like the Sweden thing where they rewrote the constitution to remove the king from governance while maintaining him as a cultural figure.
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I'm pretty sure America would elect Trudeau or his American equivalent for the foreseeable future if Canadian provinces were all awarded electoral votes. And America would be saddled with all of the low-skill immigrants that are causing the housing crisis. Large enterprises might benefit, but I don't think the average American would. It might have worked if it had been done 40 years ago.
I think Trudeau is specifically Canadian because of his famous family. I guess RFK might be an American equivalent, but his politics are pretty different.
What if we also merge with Mexico?
Only over John C. Calhoun's dead body first.
John C. Calhoun, speech on Mexico (January 4, 1848).
lol awesome quote. How did you have that on hand so fast?
On the other hand, given politics, John Calhoun being against it is probably a point in favor of the idea... that guy is not a popular historical leader anymore...
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I still cannot wrap my head around the idea of low/middle wage immigration to a country with billionaires and wealth inequality. All of the “economic efficiency” is just going to go to the very wealthy, whereas by restricting immigration you force the wealthy not just to pay higher wages and allow greater employer QoL, but to invest in the future of the citizens. If companies with longterm plans realize that they need to hire high-skilled Canadians to work as employees, suddenly you’ll find yourself with widespread maternity programs and more investment in education. Your companies will actually be lobbying the government to increase health and fertility.
No one has any idea how to do that. Well, actually we do, but it's ultra-cost prohibitive and probably dysgenic.
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I'm not an English expert, but this seems nonstandard. I thought that "immigration" was the word for the phenomenon from the destination country's perspective, in contrast to "emigration" or just "migration". But the use of "to", along with the emphasis on the traits of the country (implying that it's what's in question), implies that you're talking about the migrant's perspective: "I can't wrap my head around the idea of choosing that kind of country to migrate to". It looks as though this led to different people taking different interpretations of your question.
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No? Do you think that labor in general only helps the very wealthy? Does your job only help the very wealthy? At the very least, it helps you and everyone you buy anything from, not even considering whatever benefits whatever youedo accomplishes. Likewise, immigrants help themselves, help everyone they buy things from, and help those who they work those, and help those who buy from those whom they work for, by increasing supply, and so driving down the price. Is this bad for those currently in the niche that those people are in? Quite possibly, as long as it's disproportionately there, to an extent that it exceeds the benefits of the immigration. But everyone else benefits, at least.
Aren't you arguing that having more workers is bad?
In a scenario where there is not surplus labor, employees are paid more and (perhaps) prices increase. The price increase is spread equally to everyone, yet the “surplus resources” (the money that would ordinarily go to the top) are all given to the employees and not the top. The end result is that the people with the most amount of money have to pay more, which is a great result. The lower and middle class also have to pay more, too, but this counterbalanced with their increased pay and quality of life. In the end, they benefit the most.
If my business sells coconuts off the highway, I greatly benefit if I can pay my coconut sellers slave wages. What if there are fewer people willing to sling my coconuts off the highway? I simply need to pay them more to work for me, no questions asked, because if I don’t I lose all my money, but if I do I still make money. That part is obvious, but your take would suggest that I would attempt to make the same amount of profit by simply pricing my coconuts higher. This is absurd because there is clearly a ceiling where people will refuse to buy the coconuts. What actually happens is that I might try to sell my coconuts for more money, will probably fail, and ultimately will have to just give more money to my employees. Oh well, I will have to sell four of my six vacation homes.
In America there is a huge number of businesses that generate enormous absurd profits which have this same ceiling. An obvious one is Amazon, and another obvious one is Starbucks. There is a point at which people will refuse to shop online if the prices are too high. Sorry Bezos, you’ll have to sell your half a billion dollar yacht. Starbucks is milking the consumer dry with their overpriced drinks, but they honestly cannot price them at $14 a drink. So, the people in charge of Starbucks Corporate will have to make less money. This applies to so, so, so much of the American economy. It’s people who have a pseudo(?) monopoly and/or have amassed such industry/marketing knowledge that competition is effectively impossible, and they’re making absurd profits when we can just make take and give it to the middle class simply by decreasing the wage pool.
Sure.
Maybe? Depends on the industries most impacted. I'll grant it.
Wait, you're missing several factors here. If I understand what you're saying, your model is that more employees->wages down->employers pocket the difference. But what's left out is that often that money will go to hire more workers, to scale up the production, or the extra labor lets more firms do things. Competition should drive profits down towards zero, as firms have to drop their prices, so "the top" doesn't actually really benefit much. (And a large amount of low skill labor I would think would go into competitive industries).
No. The goal should not be to have people pay more. That's a loss. We want prosperity. Elon Musk or whoever taking a loss doesn't help you out.
Why do you think increased quality of life, given that you mention increased costs in the same sentence, with no attempt to compare the sizes of the effects?
Well, I'd need to raise wages to get more workers to sell more coconuts up until the point where the cost of raising everyone's wages outweighs the benefit of the extra coconuts sold. It's not exactly all or nothing, but what you're saying is roughly right.
Not exactly. It's actually supply and demand. Fewer workers means I can sell fewer coconuts, which means I can raise the cost because I don't need to try to sell to quite as many people—I don't need to appeal to the ones previously on the edge.
I guess I'm not exactly seeing why the selling of vacation homes is necessary, nor why that's a good thing.
You do realize that Amazon's only able to be so profitable by being enormously useful, right? There are some predatory practices here or there (see some of their pricing policies, in relation to other vendors), but on the whole, they're very good for you, the consumer?
Or, they'll buy from other vendors online or whatever. But yes, Amazon and its sellers do have to set prices at ranges that people will buy them at.
Do you think Amazon and Bezos have merged finances?
Supply and demand. If the price is to high, switch to alternatives, or don't buy (and people do, whether other stores, or prepared at home). Starbucks will only raise prices for as long as they think that the product of the customers at the higher price times the change in price is more than the product of the lower price times the additional customers. (Sorry, that's probably hard to read. It's the difference between two different rectangles on a demand curve. But I don't have a way to represent to you the diagram.)
This makes more sense for the Amazon example than the Starbucks example, because Amazon's a lot harder to compete with than Starbucks.
But remember, why is Amazon hard to compete with? In part, because of anti-competitive practices, but also in part by being really good for the consumer, in ways that you need huge, costly, scale to match. Amazon is skimming value, but it's value that they've created, that their competitors can't keep up with.
Nevertheless, you're right that in this case, you could presumably cut into Amazon's profits without any huge consequences, unless there's some factor I'm missing.
But keep in mind! If we kill/forcibly retire/cause never to have been born/outlaw a bunch of workers, Amazon can afford to maintain it's workers, but all the other companies that can't afford to do so now have to cut back on their workers, and scale back on what they're doing. And so you just increased Amazon's market share, because they, due to having more breathing room due to being more profitable, can handle the increased austerity when other firms cannot.
Forgive me if there are any errors in that analysis. My last detailed interaction with economics was only a basic principles of microeconomics course a few years ago, so I imagine there must be some.
Profit-maxxing businesses with leadership and investors that make a lot of money have already calculated the best way to generate profit, so they’ve hired the exact amount they think allows them to make the most profit, and scaled up the exact amount. The fact that there is still such high income inequality and still so many billionaires in America shows that there’s a lot of money not going to these things, but instead given to those “at the top.” (I don’t like this phrase but it’s easy shorthand).
I do not think this is how real life works for corporations. The competition between two hairstylists at a strip mall is not the large-employee company competition where people sit on years or decades of institutional knowledge, are entrenched in public consciousness and so difficult to compete against, are luxury goods like Nike, etc.
There’s one industry that I think sheds light on this, where a “middle class person” can bring home top 2% earnings: fine dining. It’s fantastic to have the wealthy pay more here, because they’re just giving their money to people who need it more. We can imagine a future scenario where tipping is banned, and what will happen is that the owners of the restaurant and the wealthy patron will simply keep more money, wait staff be damned. An example that economic efficiency can sometimes be bad for the median person. This is why eg bar tenders in America make more money.
I go on to explain this in the coconut, Amazon, Starbucks examples (in my post and also below) —
But remember, I had a profitable coconut business and my employees all sell the same amount of coconuts (give or take; they shill them on the road). Reducing my number of employees is always going to reduce how much I bring in.
Who is going to buy overpriced coconuts? This is something I think is lost on people who think there’s fair/correct pricing today. Wealthy people will literally go to the store and refuse to buy an overpriced steak. They will pass a gas station if it’s too high, they will haggle on contractors. Wealthy people very rarely will buy a coffee more expensive than a Starbucks, which tells us something very important here: a huge number of businesses cannot increase their prices past a certain amount perceived as fair by the consumer independent of the consumer’s income. Starbucks is frequented by people whose income range from 60k to 10 million. Living in a wealthy east coast town, a neighbor might take a private chauffeur into the city but he’s stopping at Starbucks, not Rich People’s Coffee. Yeah yeah there’s an exception among young people in cities with Blue Bottle but even that is not priced relative to the median income of their patron.
What I’m saying is that I cannot sell overpriced coconuts. It’s either that I sell coconuts, or I leave the coconut industry entirely. If I leave it entirely because I demand to be super rich, someone can swoop in and become upper middle class! (Previously I would be able to fight this competition by temporarily lowering the price, to by utilizing my years of industry knowledge). That’s also good. And Starbucks can’t actually increase their prices too much, because there’s little evidence that wealthy people are willing to spend more for something outside the Starbucks price range.
This is not the easy rational choice that the economist thinks it is. I would need to compare my loss in wages because Amazon caused hundreds of thousands of small businesses to die. Even if I never intended to work at one of these businesses, some of my coworkers may have, which means that the loss of these businesses increased competition for me, ie reduced my wages. Amazon is convenient and obviously pleasurable, like online gambling. The negative consequences of using Amazon are hidden whereas the positive consequences are obvious, also like online gambling.
Not necessarily, because humans work on habit, and Amazon is the current exclusive habit of many Americans. What’s more, Amazon is so institutional now that I don’t think you can just “compete” with it.
Okay, what's your model here. How much do you think Bezos' salary is?
After looking it up quickly, it was $81,840 in 2019, plus benefits like travel and security expenses. The benefits aren't nothing, but they are just a few million, a drop in the bucket compared to his net worth. Where does his enormous wealth come from, then? From holding onto his Amazon stock, generally, which he can sell or use as backing for a loan when he needs cash. What does Amazon do with all that money that it gets then, if it's not going to Bezos' pockets? It doesn't pay dividends, so it gets reinvested in the business. This sounds a lot like what I was saying.
But if I'm wrong, how exactly, what is the mechanism, by which all this money is going to the top, when it could be going to the workers? Are those at the top misreporting? Is it really the couple million dollars of Bezos' salary and benefits that you are concerned about? Amazon has like 1.5 million employees, that's maybe 2 bucks per person.
Are you saying Amazon should scale down what it's doing, to accommodate the lower profits, given that it currently reinvests in itself? Are you really confident that the concentrated benefit of higher wages to its workers is better than the diffused benefit of cheaper, faster shipping to everyone?
Yeah, that's fair enough, they do profit because of those. There's bounds on that, because trying to raise prices will cause people to switch, but on the whole, that's right.
This is funny to me, because I despise that tipping is a thing. (Fear not! I do it. Social pressure works.) How the default values have been trending upwards, and how tips are expected everywhere now, is clearly predatory, attempting to socially coerce people into paying higher costs. Anyway, you are aware that restaurants are ordinarily run at pretty narrow margins, right? But okay, you're saying, ban tipping, and everyone is worse off, except the owners and patrons. So, then, you would expect wait staff to want to leave, as it's a worse deal, right? And they need the workers, right? So wages would go up? Maybe not to the level of with tipping, because tipping exploits the fact that people ignore it and then are surprised with an extra, mostly theretofore ignored, expense, but restaurant wages would change, once they realize they need to raise them to keep the workers (as well as the change in quality of service decreases the value to customers of the tips). Prices should also go up, so the patrons wouldn't recoup the full cost of no longer tipping.
Maybe people who need coconuts? Do you think inflation means people stop buying everything? Anyway, what makes them overpriced? It's at the market price. Supply and demand.
Habitually being frugal is probably not unrelated to them remaining wealthy, instead of wasting it all on luxuries. Of course, as you pointed out, this isn't always the case.
Yes, and good. Buying things is good for you because what you're buying is worth more to you than what you're giving up. Where companies always charge you exactly what you're willing to pay is a hellscape, there's negligble benefit to you, it all goes to the company. This is Nate Silver's guess as to why the economy feels bad despite that one good metric. It's why people are so mad about college debt, for example. Their financial aid systems are set up to extort as much out of you as you can afford. Price discrimination does happen as much as companies can manage it, because it leads to bigger profits. I don't get why your entire analysis is concern about what you think greed, but here you wish there were more of it.
The coconuts are not overpriced, as everyone, not just you, has to raise the price of coconuts, due to higher labor costs. Yes, that does contract the industry, but it does force prices up, contra what you're saying. Unless there's some reason that you alone have higher labor costs.
What?? I don't get the logic here at all.
I don't get what you're saying at all. Is it profitable or not? If so, then why would you leave (at least, if more profitable than the alternatives)? If not, then there's no "swooping in" possible, they'll be losing money.
You agree that your view is contrary to ordinary economic analyses? What do you think the root causes of their (and my) mistakes are? I would assume they would be aware of every argument you have made, since it's generally low-hanging fruit, not super complicated cases? So why are they not persuaded, and why are they wrong?
Wait, why are you assuming that your wages went down, as compared to only the small businesses? Are you sure that Amazon buys less labor than the businesses it replaces? Secondly, why doesn't this just apply to every company? You buy from them instead of competitor->competitors have harder time->those competitors hire fewer workers. But surely you don't think that every company is bad, just because they are bad for that company's competitors?
Literally every store that has things that can be sold on Amazon, or has substitutes for things you can buy on Amazon, competes with it. Every item you buy in person is competition with Amazon. It needs to be good enough to beat those other options out, if it wants their sales.
Frankly, I think a zero-sum understanding of the economy, which you seem to hold, is disastrous. There are not a fixed quantity of resources that we just need to spread equitably. People, in every economic trade they make, better both parties, creating wealth that wasn't there before. Yes, people get rich. But that tends to be by creating such an overwhelming amount of value, benefitting huge amounts of people by substantial amounts. Their wealth is a reward for the massive societal gains that they gifted everyone. Trying to remove too much of the benefit the wealthy get by doing things people pay them for dampens the whole system, slowing down economic growth. Further, putting profit where it doesn't belong incentivizes people to do unproductive behaviors, destroying value, making us all worse off.
Think of what the world was like a millennium ago. Why are we so much wealthier now? Because people worked their asses off for the rewards society allocates, via the market system, to those who provide value. And we all have benefitted. When you think that the poor people aren't benefiting, consider that poor people are now stereotypically fat, not starving. Consider that cell phones can be had for cheap, allowing things that would have been unthinkable just 100 years ago. Consider the running water everywhere, the electric lights found cheaply and easily. Food is cheaper than it once was. Skyscrapers. Cars. Planes. Our everyday life is in a great many ways more luxurious than our forefathers could have dreamed.
Okay, you might be thinking, if everything's so great, then why are people so gloomy about the economy? Aside from the fact that we haven't been alive for a thousand years, there are several sectors with serious problems (e.g. healthcare, education), and one of the biggest things is housing. Housing isn't cheap, due in large part to zoning restrictions and regulations everywhere, and especially where it is most valuable, in cities and suburbs, making it hard to build where housing is desperately needed (but keeping the property value a little higher for those who live there), and housing is something that people need.
For one current topic showing the importance of not having zero-sum thinking, consider Argentina. Per wikipedia, Argentina was among the top ten richest countries back in 1913. Why are now 40% below the poverty line? Realistically, some of that loss was due to corruption, and some due to the Panama canal, but surely not all of it? Redistributist policies seem to play a key role in that. I'm glad Milei won, and am fairly optimistic on Argentina at the moment, accordingly.
Now, applying that to the current situation. We have land where wages are astronomical, compared to, say, impoverished Africa. That is a giant sign saying to everyone, far and wide, "WORK HERE, IF YOU CAN! WE NEED WORKERS!" And when they do, they are enormously benefitted, because they have so much more wealth. The companies are enormously benefitted, because they can do so much more (remember, most companies reinvest), or their shareholders, because they have that profit (remember, there are limits to this—competition keeps it from getting out of hand). The people buying the things from the company are enormously benefitted, because there is so much more available to them for the same prices. It makes the whole country better off, because it has more human capital to do good economic things. The only people who might lose out are the workers in the fields where they're competing for the jobs, but that lower pay needs to be weighed against the benefits of being able to buy things for lower cost. And I do think that they often aren't competing in the same fields as the native population prefer to be in.
Compare a city and a small town, in the United States. One has a large labor market, and one a smaller one. Which do you expect to be wealthier and easier to make a good living in, for the average worker? (Hint: the fact that the population is progressively more in cities over time probably says something)
Now, overall, am I open-borders? I'm probably more sympathetic to it than most on here, but there are serious competing concerns. It'd be a drain on our current, already too costly, welfare state. Their politics might not be great, which really matters, or people will implement too many policies like the ones you would like, and we would all be worse off, along with all the social concerns. The loss of US culture would be bad. (I'm in the US, not the original example of Canada.) And so on.
The fact that, at the time of my last checking, your top comment is sitting at 26 votes for, and 4 against, despite some people pushing back, concerns me a little about the quality of this forum. I thought people here were pretty knowledgeable, that this was among the highest quality political discussion readily available online, but I'll have to do more mental filtering of opinions for economic literacy going forward. I'm not quite sure what to make of that, given that posts like this one were insightful and helpful to me.
Once again, I probably made mistakes here or there in this, but really, I think the overall point is important.
Seek to create value, not seize it. Companies are not your enemies; they are your friends.
Investments re: Amazon
People today invest in Amazon with the expectation (or desire) to gain around 10% of their investment annually. Bezos early on thought something like, “I could cash in my ownership for a few million, or I can continue to invest until I make 100,000,000% of my potential to cash out (or original salary)”. This is any investor’s dream; no, it’s more than that, frankly an unthinkable fantasy. So if Bezos had to pay his employees more, what would happen? Amazon would lose some of its profit evaluation, so some of the money that Bezos expected to one day earn (via stock) goes to his employees. Does this necessarily mean that Amazon would have to “size down” or grow at a smaller rate? Not at all, (1) investors would be more than happy to buy the stock at a lower price, which spreads the eventual return to less wealthy parties; (2) Amazon could have paid employees in stock options; (3) Amazon could have taken a loan, like most businesses (this year it obtained an 8bil loan).
We can see then that this is simply making our analysis more complicated but not changing the fundamental wealth exchange going on. Considering my coconut example, I could have lowered my yearly salary in exchange for stock and instead anticipated the return in some years. Any profitable business that grows can do this. But if I chose to receive a salary from my coconut business and still grow, there are a number of ways to do this as listed above.
Now who would make money investing in Amazon? Top of the line financial firms pay their starting employees as much as $600,000 excluding bonuses. Out of charity? No, but because the labor pool of worthy applicants is smaller. Were we to constrict it even more, they would be paid even more. Were we to add in investing immigrants, they would all be paid less. But in any case you can see that investors make too much money, and that if we constricted the labor pool for Amazon as an example, the employees make the money that would have gone to wealthy investors and speculators.
Tipping
You have to consider the specific things I’m saying though, otherwise how could you understand my point? I was discussing fine dining tipping, the places mostly frequented by the very wealthy. “So, then, you would expect wait staff to want to leave, as it's a worse deal” would not apply for fine dining; they would just accept lowered earnings because it’s still a good job for ordinarily middle class people. I’m not making a grand claim about all restaurants, I’m saying that we can see in fine dining restaurants that lowered efficiency can help more people.
Who would buy overpriced coconuts?
As detailed in my Starbucks comments, there’s strong evidence that consumers are unwilling to buy things when they feel ripped off. Wealthy people go to Starbucks, not Rich Coffee Co. Starbucks can charge a premium but this premium exists with a ceiling, because why else would Starbucks be the location of choice for those who make 20x more than the median Starbucks consumers? If coconuts get too expensive, they may switch to different fruit. But let’s say all foods get equally expensive? The labor costs of supplying coconuts on the road will lead consumers to opt of the convenience and instead buy coconuts from the store. Any roadside coconut seller would simply have to make less money or leave the industry.
But I think to steelman the argument, “let’s say you own a grocery store. Grocers already compete against each other, yet the corporate owners still make lots of money. If employees had to be paid more, wouldn’t this just increase the baseline of goods, and they would still charge something on top to make profit?” I’d say yes, but paying grocery employees more increases the wages of all the workers who directly or indirectly compete with those employees. The ones who wind up paying more without a concomitant increase in wages would be the top 5-10% of Americans who are already quite wealthy but are too far away from the competition of grocery store workers.
Small businesses acted as a middle man between producers/sellers and customers. Each small business had his own miniature Jeff Bezos, a hundred thousand CEOs who made maybe 160k a year rather than Bezos billions in earnings. (You can fit one million people making 160k a year within the Bezos net worth). Centralization will always split resources between fewer people. There are then some obscure factors that an economist would never guess, like how these small businesses lived within close proximity to their employees and knew them personally and hired among families/friends, meaning they have to see the humanity in the person they are either benefiting or screwing in pay. Call this the “fine dining tipping effect”: when wealthy people see the reality of another human being, they are morally coerced into pay them more, for fear of losing face face-to-face.
Everyone in the lower/middle class competes in a way with the owners of these small businesses. A worker when deciding their career path would say something like, “I can open up a video rental store or I could become an accountant; I could become an accountant or I could open up a coffee shop…” And then of course, the employer knows this, and to retain employees must pay them more, because they can leave and go elsewhere.
The ones with high wealth inequality, I do.
Investments Re:Amazon
Okay, let's examine each of those possibilities. For (3), this can't keep happening indefinitely, without loss of growth; you're borrowing against the future. Short term? It's fine. Long term? It's harmful. For (2) and (1), this also shouldn't be things happening in perpetuity. If your way of making money is by selling future prospects, forever, you're a ponzi scheme. Further, repeatedly selling stock dilutes the value of everyone who you've sold stock to, including those you paid before. These are fine temporarily, but not as your business model.
Wait, why?
Of course, not all the investors are wealthy; you too can buy stocks. But they majority are. Okay, why is that bad? When they first buy the stock from the owners, they are providing funds with which to operate their business before it is profitable or needs extra money, which is clearly a good thing (Look! Wealthy people helping the common man!), and their return is compensation for that. Are you opposed to venture capital, for example, existing? It's clearly wealthy people investing, and equally clearly is putting that wealth towards the benefit of mankind.
Afterward, when companies are buying or selling stock that they think are more or less profitable between themselves, or between the owner, I see no reason why that should harm the worker. (I imagine there also must be arguments for why that helps economic efficiency, but they are not immediately coming to mind, and I've put enough effort into this already.)
Tipping
Ah, you're right. I hadn't taken into enough account that it was fine dining, and there's a limited supply of dining positions to go around, and the business can't just pay them less, as that's on the patrons.
Who would buy overpriced coconuts?
Yes, people do substitute, or buy elsewhere. I paid inadequate attention to the fact that roadside selling of coconuts did have the alternative of the store. It should be the case, though, that you can raise the prices a little—if you're selling your ultra-cheap coconuts vs your market value coconuts, vs your slightly higher than market value coconuts, you may get fewer people buying them, but you may be able to get some customers, as long as there's a cost to going to the store, or they don't know what the price at the store is.
But back to the example, let's reanalyze. Okay, so the price of labor is higher, so we will need to pay workers more. I was acting under the assumption that our profit is near zero, because there is roughly no barrier to entry to roadside coconut vendors—if it were too lucrative, others would join. Then, as we have near zero profit, we are forced to have fewer workers, or exit the market. If we have fewer workers, we aren't trying to sell quite as many coconuts. As fewer people are buying coconuts, the people who are buying it are the ones who want the roadside coconuts a little more than the marginal buyers before did. So the price is able to be a little higher. (I really ought to look as well at how this works with the competition.)
But what matters most isn't whether there's an increase in wages and costs, but what they are in relation to each other. Increasing pay and costs is just inflation. What we care about are real wages, not nominal wages. And I think this is a poor example for that, because grocery costs are regressive. Someone making a thousand times the money does not spend a thousand times as much on groceries. Suppose that groceries double relative to income, for everyone. It is those who have the largest share spent on groceries, that is, the poorest, with the most mouths to feed, who suffer most.
But this whole time you've acted in contempt of the petit bourgeois as well. You, for some reason, want the roadside coconut seller to lose money.
Nevertheless, what you said is correct. Now, why is it bad? Amazon provides more value than those small businesses did.
What is "screwing in pay"?
Are they paying at or above market value? Then there's no better anywhere else. Are they paying below market value? Then those workers should be able to leave for better opportunities.
Or are you saying that there's some just price for labor, above what the market pays? What is it?
Minimum wages, when binding, lead to unemployment, but that seems not to be what you are suggesting; you would rather there be fewer workers. (Oh, yes. Why do you want higher TFR again, then?) But on the whole, I don't know that that works. The prosperity that we live in now is built by the labor of humanity; removing people concentrates the spoils, but decreases them.
And of course, lower costs of labor allows businesses that otherwise couldn't to prosper.
So if I understand you rightly, what you are saying is that Amazon leads to a drop in wages, because there is now no longer another option of making a small business. So yes, the effect of decreasing the amount of small business does depress wages; of course, the direct employment has the opposite effect.
But again, does this mean it is bad? Let's suppose that there were a free, instant teleportation device. This is far better than Amazon—zero cost, 1 minute shipping. Would you really want this banned? It's not like people don't have other sectors that they can work in. (And if you think they might not be able to switch professions, why is using less efficient means of technology better than the other options, like private charity or government welfare?) (If you've never read Bastiat's Candlemaker's Petition, it's amusing.)
Okay, so the problem is not insofar as they harm competitors, right? You see the problem to be that they increase inequality.
But why is that bad? In particular, why is that so bad that it outweighs all the good they do?
Further, is there a limit? How much inequality is okay? Surely they shouldn't distribute it all?
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You're confusing value added by Amazon by being efficient, and value from being big. Amazon has network effects and economy of scale that no competitior could match.
I think that's true, scale is a lot of what's happening.
Does that have any effects on the broader argument?
You complained about people thinking the market is zero-sum, but advantages from such things are zero-sum. If Amazon didn't have these advantages, someone else would, and only one company can have them at a time.
And it's possible that a competitor can't win against Amazon, yet if Amazon disappeared and the competitor took its place, you'd be better off.
A very fair point. Still, it's better off than no large company existing to make use of the scale. It's at least as good as the option of no company, even if there could be a better possible company.
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The wealthy aren't the only ones who buy things. Everyone benefits when the wages of others fall, causing prices to fall. Immigrants to Canada are actually better educated than average and there is even an investor class of immigrant. It's actually a system that equalizes wages. It's professionals who most notice how little they're paid compared to their American counterparts. Whereas low skilled workers in the US, at least in certain industries, have to compete with a large supply of low paid illegal immigrant labour that doesn't really exist in Canada.
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Because all the efficiency isn't going to the very wealthy?
Again, the only study that has shown any sort of long-term wage depression for workers was in the immediacy of the Mariel boatlift in Miami-Dade, but that's an equivalent amount of immigration nationwide that would never happen, short of Bryan Caplan somehow becoming dictator. Yes, things don't go positively for 100% of people, but most of the actual economic downturn in certain parts of the country is actually due to outside competition from China, not immigration into the US.
Also, fertility is linked to women's education. America could become a fortress with zero immigration, and TFR will keep on going down, as long as birth control and highly educated women with expansive freedom exist.
It’s both true that fertility is linked to women’s education and much more complicated than that; America has a sufficiently large number of much higher tfr subgroups(the core red tribe etc) that the demographic situation would stabilize itself eventually.
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I think when the arcane, longterm, complicated multivariable analyses on economic cause and effect conflict with common logic, we must trust common logic unless there are clear real world cases to disprove it. I have never seen anything approximating a simplified model that explains how increasing the low wage labor pool would not result in worsened quality of life when the wealthy hoard resources and min-max for greed. I have never seen any persuasive argument that supply and demand suddenly stops to work as a principle when you constrict the supply of workers.
If I start a business that requires COBOL engineers, I have one choice and one choice only: hiring COBOL engineers. If there are many to pick from who desire work, I can keep more resources and pay them less. If there are fewer on the market, I need to pay more, end of story. There can be so few COBOL engineers that I can’t hire them to start my business, but before this occurs I would cease to be a billionaire or multi-million! Clearly our country is very far away from having insufficient workers if there is still so much wealth inequality. In every scenario I can think of, in every industry, reducing the labor pool should result in greater wealth equality by forcing C-Suite and investors to let go of resources to use them to recruit and retain talent. God, it’s just so simple… why would any NBA team pay 50 mil for Steph Curry? It doesn’t matter if they don’t want to, they need to, if they want to win, and winning means money. How does this not apply to ever industry, magically, only in complicated studies?
You are looking only at short-term effects. The studies look at more medium and long-term effects. Those immigrants do not just increase the labor supply; they also increase the demand for goodsm which in turn increases the demand for labor. That is why "complicated analysis," not mere "common sense" is necessary to evaluate the effect of immigration on the labor market.
When you add a lower wage employee, that employee’s demand for goods would be less than adding a middle wage employee, because they have less discretionary income. You are decreasing the “median American’s demand for goods”. As an example in America, a new Honduran immigrant who has three sets of outfits and eats primarily rice/beans/carnitas made at home has a very low demand for goods. Very wealthy people have a high demand for goods, yet they buy a lot of wasteful goods when those resources would be better spread downward… what am I missing here? For lower wage workers, I don’t see how their increase of sum total demand for goods could ever come close to approaching the resources that they miss out on because of surplus labor.
I don't know why you are talking about adding employees, rather than about adding residents, which is what the issue is.
Regardless, I that you are relying on a far more complex model than the one you initially posited, one which includes variables for the level of consumption for different types of consumers. So, apparently, common sense is not enough.
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Is this also an argument against TFR > 2.1?
I thought it was the argument against it.
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TFR is directly driven by rural VS Urban and cost of living.
Those who live in rural areas have more kids.
Forcing Urbanization by importing immigrants who settle in cities rapidly increases both urbanization AND the cost of living, cascading TFR downwards.
You're making the problem worse and forcing the children produced by the native rural population to support a bunch of aliens when their old age comes in 20 years (you don't get to be the kind of skilled immigrant slected for in your 20s or even early 30s)
Ethnic Expulsions would be the best thing for birth rates.
Lowered cost of living and rapidly increased perception of risk correlates heavily with higher TFR. There's a reason over 50% of Gaza is under 18
I think you missed my point.
The arguments brought up above against immigrants apply every bit as much to children. All those kids are going to be taking up jobs, housing, etc. People should have just one kid at most to ensure that the good times keep rolling and the CEOs have to keep paying more and more.
Is this supposed to be a gotcha? Are you implying that you can't see any functional difference between the two options? Or are you just trying to bait them into saying something that you can label as racist/eugenicist?
I don't really care about baiting people on a pseudonymous Internet forum for wrongthinkers.
My question is simply, what is the distinction? You mention eugenics, but smart immigrants are actually much worse for the housing market because they earn more money and can pay more for housing.
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This is the theory. Now, let us look at the example of countries that recently tried this recipe for growth.
Croatia Birth Rate
Serbia Birth Rate
Bosnia And Herzegovina Birth Rate
Civil war, ethnic cleansing and atrocities galore, but any rebound and growth is not evident.
Now compare and contrast Zimbabwe, Rwanda, Israel post 48...
That it sucked to be an Eastern or Central european post-communist seems to me the unique factor in those examples
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I think this presumes that Canada has any relevancy to corporations beyond "we can build a branch plant here." Granted, this is my understanding of Canadian industry, as detailed in a certain 2-parter documentary/video essay series on YouTube about the rise and fall of Nortel.
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This is the entire reason - the very wealthy are the ones inviting politicians to their parties, paying for legacy media to broadcast their opinions and convincing people to go into huge debt in order pay money to go to university and become enforcers of their ideology. But if you want to disagree with them that's really uncool and lame and potentially even bigoted - yeah sure you're signing your children and grandchildren up for immense misery and deprivation, but you wouldn't want to look like one of those dirty truckers, would you?
Immigration has always functioned like this in the modern world - a weapon used by the very wealthy against the rest of society in order to entrench their advantages at the cost of society's longer term stability, functioning and prosperity.
Until very recently, immigration was popular. When polled, more Canadians have been saying that the immigration rate should be higher than have been saying it should be lower. Even among those who are against immigration, it's mostly not an important issue. This is why every major party has either supported maintaining a high level of immigration or raising it even higher. The only party that says they'll lower the immigration rate only got 5% of the vote in the last election.
That doesn't actually argue against the point I was making at all. Heroin and Fentanyl, based on whether or not people use them, are extremely popular and people make the choice to use them on a frequent basis despite the incredibly well known downsides of doing so. A heroin addict declaring that he really likes heroin and wants to do more heroin, and who votes solely to make sure the "don't do heroin" party doesn't get into power, is still going to get addicted and deal with the consequences of heroin.
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I'd actually extend this to the pre-modern world as well. It has often been a popular thing among rulers, and recognized as such, to surround themselves with foreigner and foreign classes.
A foreigner is in theory immune to many things that could persuade a local to turn against the ruler. Ambitions to replace one or be a big part of another administration are a non starter. There are no preexisting loyalties to abstract principles such as the nation or the people. Even less so to local rivals.
He is also solely beholden to you as the grantor of his position and has no choice but to actively defend you if he seeks to retain his position and his life, where a local might be tempted to passivity and inaction.
That said, the Goth bodyguard or the Swiss mercenary is rarely a sign of strength. It's usually employed by rulers who have internal enemies so serious they're already a foot in the grave. And the aforementioned principles can end up invalidated by the Goth himself.
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Let me simplify a lot of the change in relative incomes.
Big tech platform rents largely flow to the US in terms of jobs, dividends, capital gains, and taxation.
I don’t know how to quantify this but it’s the big difference going on. And Canada was too small of a market to scale big tech so the US was always going to take this market.
Some of the other stuff you say has an effect. It would be nice if someone smarter than me could do all the analytics to quantify the advantage of America being the big tech ecosystem. It’s obviously a big fucking deal for the last 5-10 years of economics.
That can't explain why the US has had such a good recovery from the pandemic while Canada hasn't. Big tech is the only industry that has had mass layoffs while the rest of the US economy has been booming since the pandemic. The increase in wages has mostly gone to low skilled workers.
We didn’t do nearly as much as other places did which makes it far easier to get back to normal functioning.
Why would that mean the GDP growth rate would be higher? I would expect the opposite: if you shut down more of your economy, you get more growth when you start things up again.
Because it still takes some time to get things back up and running. You don’t store materials on hand to ramp back up immediately, and therefore you need to order them, but that company may have shut down as well and has nothing to sell until their suppliers mine the raw materials to use. The problem of shutting down a just-in-time logistics system is that there’s no slack in the system to hold reserves of unsold goods. If I can’t sell it, I won’t make it, and if the guy supply the inputs can’t sell them he won’t have any on hand, and so on. Starting back up takes longer.
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Isn’t that just baumol costs disease? Highly paid professionals can afford a lot of service sector people therefore bidding up their price?
I would say there are other factors going on too but big tech rents flow into the US and has been a huge change since 2012.
Commodities also have been mostly down since 2018 which would have a disproportionate effect on Canada.
Canadá likely has higher IQ than the US which actually makes them at 72% of US income even more impressive. Though our top .5% are likely far smarter than their top .5% the overall average likely favors Canada.
That's not what Baumol cost disease is, but in any case, no, service sector workers' wages have gone up while professionals' salaries have not.
That could have something to do with it. The last time our economy really did well was during the 2000s commodity boom.
Big tech profits are still up even if employee wages are less. The money is flowing somewhere.
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I greatly doubt this. Tons of middle-American states have much, much higher per capita GDPs than Canada. Nebraska and North Dakota isn't wealthy because of big tech.
It doesn’t matter. There’s an interesting question about why even boring, blue chip, nothing-to-do-with-tech US corporations trade at much higher multiples than similar businesses in other Western countries and in large part it’s because the entire market does, which in turn is because big tech does. The volume of wealth created in San Francisco inevitably trickles down to the rest of the country. Many people in Nebraska still have their pensions / retirement savings in the stock market, and pay even in parts of the US that aren’t booming is affected by the fact that workers can move to the parts that are and make a certain amount, driving up salaries across the board. FAANG software engineer pay really did drive up US engineering pay even for roles unrelated to big tech, which is why American programmers make 3x what their equivalents do in Western Europe even though the US is only ~50% richer. Just as several of the railroad booms in the 19th century lifted all tides, so too did what happened in tech from 2010 onward lead to huge global dollar inflows into the US economy, higher pay, higher consumption and higher growth built on rapidly rising prices for almost every asset class.
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How big of a deal is this really? I'd be hard-pressed to figure out how much of America's economic advantage over other nations was due to big tech, but we can compare San Francisco to neighboring cities with less tech. That city does seem more prosperous than the typical Californian city, but not overly so.
It effects fiscal policy capacity too which helps all of America. I’m not saying all of Canadas decline is related to this but some of it.
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Canada deserves all this. The rod of consequences is a very effective teacher for those on whom the voice of reason has no effect. Canada decided as a country to subsidize shitty behaviour by taking from the productive class and did not listen when they were told this would lead to fewer productive people (relative to the counterfactual) and more shitty behaviour and proceeded with their misguided idea regardless.
Now they are eating the consequences of their beliefs as they have fewer productive people (lower real GDP per capita) as well as more shitty behaviour (no citation needed) and I have nothing to say other than "You deserve it" and a sincere wish they get it given to them good and hard.
Was it the country, the nation or the government that made this decision?
In Britain voters have consistently demanded lower immigration for 20 years and governments (on both sides) have consistently ignored them and raised immigration, or refused to enforce borders. Australia has proven that it is possible to reduce illegal immigration to zero for island countries (if this was ever in doubt). Governments have the power to prevent these things, it's not difficult. They choose not to prevent illegal immigration, they choose not to set quotas on legal migration - the people tend to be pretty happy with such notions.
I don't know if the Canadian people ever got a clear choice, I suspect not if the British didn't.
Voters in Britain apparently considered it to not be a sufficiently important issue to vote for a different party over. There is a clear enough choice: you can continue voting for the parties that made it clear in word and deed that they want more immigration, or you can vote for literally any other parties, or you can start your own.
What are they supposed to do when their major parties both say 'oh we'll lower immigration' and then raise it? They voted for Brexit, many thinking this would finally reduce immigration and it still didn't.
https://twitter.com/t848m0/status/1560662923101347840
When the major parties, NGO blob, big companies and the bulk of the media have a consensus to increase immigration it's difficult to start new parties and move against them, let alone to actually get into govt and implement policies.
You seem to be painting a picture where the problem is basically that voters are too stupid (to see through lies and avoid repeatedly being fooled, or pay attention when the proponents of Brexit make it clear that they aren't actually against immigration) and helpless (to build their own institutions and political parties, or even "just" start a revolution) to get their preferences satisfied. At that point, it's hard to even invoke something like a social contract for why politicians should heed voter interests in this matter, since a contract implies a deal which implies some sort of mutual benefit and evidently there is no detriment to politicians from defecting; and all that you can appeal to is some sort of slave-morality pity or obligation towards their inferiors. Wolves and lambs can never be of one mind, etc.
They're not stupid, they (rightfully) get apathetic about the prospect of achieving change through electoral politics when they face a myriad of manufactured legal/political constraints to achieving their goals. This leads to much less trust in the government and less national cohesion. On the whole, the Brexit campaign was associated with future immigration reduction, this is the broad essence of what was communicated. It's very hard to argue against this:
That the Brexiteers didn't formally promise to reduce immigration afterwards does not remove from the fact that the referendum was about reduction of immigration as far as voters were concerned. And putting communications to one side, Brexit was a necessary prerequisite to preventing immigration, EU had freedom of movement.
They'll have lots of fun with a population that instinctively resists their policies and distrusts their leaders. I'm eager to see how they fill the ranks of the grossly understrength British Army in this climate. Do they think people are going to make any sacrifices for their country, when it is not their country?
Politicians aren't wolves, they're fat cats who rely on the increasingly grudging consent of the governed. Haven't you read the hundred million articles complaining about the decline of democratic ideology, trust in government, populism, political radicalism, misinformation, conspiracy theories? This has severe longterm consequences for the sustainability of the system, it induces fragility.
If you are being lied to repeatedly, but still continue believing what you are told, that seems like a pretty canonical indicator of insufficient brainpower, informally known as stupidity. Your subsequent quote also further confirms that Brexit voters voted for Brexit because they expected it to lead to a reduction in immigration. If being able to predict the consequences of your actions is not a measure of intelligence, then what is?
I mean, the first half of your post, put in the context of everything that happened before Brexit (and I'm sure that any attentive participant of the political system can show me a long list of instances of the electorate being deceived since the dawn of democracy), seems to suggest that the population is actually quite credulous and trusting of their leaders despite everything. At the moment Labour seems to be leading in polls, but I'm sure that if they get elected and screw up in some way power will revert to the Tories. Clearly there is no sufficient distrust to make people do something as drastic as vote third or rather fourth party, or do anything else that would reveal a preference for not continuing in the same way and deferring to the same leaders. I doubt politicians will lose many nights of sleep over people saying in TV interviews that they don't trust them and will resist their policies, as long as those people reliably keep paying their taxes, spinning in the hamster wheel, obeying the laws and voting for them.
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I mean, if there's a secret amount of people who's #1 view is cut immigration, then just like w/ UKIP, an anti-immigration party should be able to run and effect politics the same way UKIP got moderate globalist David Cameron to OK a Brexit referendum.
The UK is a different animal than the US when it comes to minor parties.
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The OP's comment suggests that nobody is really learning anything from where things are heading, thus, it's unlikely anyone's going to update hard once things accelerate out of control.
If you take a look at the top posts on /r/Canada right now, we have:
I didn't cherry-pick these. That's what's at front of mind for a lot of Canadians right now, as best I can tell, and I think people have already updated. If you look at the polls, the Conservative party has shot up to a clear projected majority starting in about September of this year.
/r/canada is not at all representative of the typical Canadian. It has the standard bias of most subreddits in being predominantly young, male, and left-wing, but it's also selected for being strongly anti-immigration. In fact, it's been absolutely obsessed with the issues of housing and immigration for the last few years. This goes back way before the pandemic or the housing crisis.
Years ago, it came out that one of the mods of /r/canada had some sympathy for white nationalism, and there was a big protest resulting in him and some other mods resigning and the creation of /r/onguardforthee, to which everyone who thought /r/canada was irredeemably racist fled, It's pretty popular and is now a more left-wing version of /r/canada that is much less opposed to immigration.
If you look at the top six posts there you have:
Only one about housing and not one about immigration. Some Canadians are definitely thinking about this, but that's not new for most of them, and as often as you see people on /r/canada blame immigrants, they'll blame things like foreign and corporate homebuyers and AirBnb.
The Conservatives have not said they would reduce immigration rate. Their support is due to something else. One cannot overstate how much of a bubble /r/canada is.
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A couple months ago I took this screenshot of the-then top posts for that day in /r/canada. Was an effective summary of the malaise we're in
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That's the amazing thing about consequences: It doesn't even matter if these people are so obstinate they refuse to budge when the rod comes down on their back. All that will happen is that the rod will start to come down harder and harder, until they recant or it breaks their back and a different, hopefully more in touch with reality, group comes into power whence the cycle will begin again.
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I can well believe that Canada decided to subsidize shitty behavior by taxing good behavior. This question is more out of curiosity than a challenge- how exactly did Canada do this in a more egregious manner than other first world countries with their eg single motherhood benefits.
Imagine if 20-30% of Americans were french people explicitly voting with the goal of making things worse for the English?
This isn't a charicature. a top 5 issue for Quebecers is "Climate Change" which is code for shutting down Alberta's oil, and carbon taxing Car Centric Ontario and Western communities for the crime of having to go to work... They will openly say this. Quebec politicians will say as much in French.
Living in this country has made me incredible sympathetic to everygroup that ever concluded ethnic cleansing or ethno-nationalism was the only option, when you live in a truely multi-ethnic/multi-lingual country (where there are actually mutiple groups not just a mass of "Diverse" urbanite) Everything the other ethnic group wants, votes for, advocates very quickly becomes "And the other ethnicity is going to pay for it, and we're going to hurt them extra so they can't resist as much next time"
A Canada comprised of only the 9 english provinces would be no more screwed up than US blue states without large black populations: a collection of Vermonts, Oregons, and Maines and Minosotas.
It's when you add in the weight of 20% of the population being French and there being a deep core of openly hostile Euro-left wing belief that pretty much despises everything the functionally American English Canadians value or aspire to that you get a Canada as fucked up as this is.
I, a frog, would wish to team up with you on a peaceable separation campaign.
Federalists on either side are wretched people.
I'm touched.
There is so much Quebec could have been and could have built instead of being a land of government subsidy its unreal.
Allegedly Quebec has massive amounts of resources that just sit barren because developing them and revitalizing the communities near them would result in equalization clawbacks
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Here in the US we have the same hair-shirt environmentalists, you just can't tell them by their accents.
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Why doesn't Quebec just.. you know, leave? Someone else said that in Canada the provinces still (maybe?) have the right to secede. What's keeping Quebec in Canada if they hate it so much?
Quebec gets massively subsidized by western Canada, just like the maritimes.
As an independentist, what you're saying is true but irrelevant. People are fully economically illiterate, there is nothing close to a popular consciousness that we'd hurt from missing those transfers. We expect short-term economic injury from the turmoil, but that's pretty much it.
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The rest of Canada seems to overwhelmingly want Quebec to stay, and I'd assume that they and their representatives and elites are engaging in plentiful propaganda and lobbying for this (surely the Quebec independence movement is not propagandising unopposed?). In fact I can't think of any instance of a nation being in favour of getting rid of a minority along with the territory they occupy, no matter how vexatious; being big and relevant is evidently one hell of a drug.
Singapore was kicked out of Malaysia due to ethnic tensions.
Also the South African Bantustans, but that was half-assed and no other country recognized them so they ultimately gave up.
I think your question is complicated by the border between ‘troublesome ethnic group’ and ‘terrorist campaign’ being pretty muddy.
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The bantustans weren't the territory they occupied, they were tiny enclaves with no resources.
Like allowing wheeling west Virginia to secede, then forcibly granting all citizenship there, and therefore removing their rights as us citizens even though they actually reside in NYC or California.
Equally, Malaysia probably wouldn't have expelled Singapore if it weren't for England(and big ol uncle Sam) lurking in the background preventing genocide.
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Ah, thanks. Those are interesting examples.
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I think it's the same reason places like Romania want to be part of the EU. Financially, Quebec has a really good deal with Canada, and they have a great deal of autonomy already. Separating wouldn't be easy either. A lot of constitutional issues would have to be sorted out and the last two times they held a vote, they lost.
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Well, it's not an actual majority position, just a sizeable minority. To the extent that there was a 90+% turnout referendum in 1995 that came out to a 50.6/49.4% split for stay/leave. It's lower than that now. You can get a lot more concessions by threatening to leave than actually doing it.
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I am sure that if you asked the French, they would tell you with the same sincerity that the English are keeping them down and do not let them breathe.
This was common discourse during the end times of Soviet Union too. The Russians complained that they are feeding the non-Russians, the non-Russians cried that the Russians are sucking their blood. All were persuaded that if only they became "independent", all their problems would be solved and they would live like in Hollywood movie.
As history shows, things happened otherwise.
Go ahead, play Yugoslavian games and win Yugoslavian prizes. The world can always enjoy some more exciting war footage and cool atrocity videos.
On the other hand, Czechia and Slovokia seem to have done OK with their split.
I've never seen any evidence the Czech's and Slovak's hated each other, though. It was a marriage of post-WWI convenience that they both happily agreed to break, because there was no greater heritage to fight over, and the two groups seemed equal. OTOH, the Wallonians and Flemish seemingly despise one another, because they both feel ownership of what can be described as Belgium or whatever. Funny how there's probably thousands of descendants of Flemish and Walloon immigrants from 200 years ago who in the US are married, friends, and neighbors, and don't give a crap about any of that.
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Are you confident that other countries without those single motherhood benefits, such as the US, have lower rates of single motherhood than Canada? Because I don't think that's true even controlling for race. I'm sure cheaper daycare has an effect on the margin, but I'm skeptical that if Canada elected a clean Conservative slate and abolished the entirety of their welfare system that all the problems OP gestures at would evaporate. Even leaving aside the new problems generated as a consequence.
The USA also has single mother benefits, my point was that subsidizing terrible decisions by taxing good behavior isn’t unique to Canada and I’m asking for clarification on how Canada doing this is uniquely destructive in ways that eg America and the Netherlands aren’t doing.
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What @KMC said. I'm sure this change of heart won't actually go anywhere, it will run up against the innumerable thought terminating cliches with which Canadians have been inoculated (do they say "No person is illegal" up there?) and be successfully contained. And even if it somehow overcomes this conditioning -- then what? The toothpaste is out of the tube, nobody has the guts to deport or worse, so rent will continue to be high and legacy Canadians will continue to find human feces on the beach.
EDIT: Phoneposting typos.
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It's fine to not blame the immigrants themselves so long as you don't confuse that with shielding them from consequences. It's not their fault, it's the government's, but just because it's not their fault doesn't mean that they should not be inconvenienced or sent back. That's the crux that I suspect will be overlooked.
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There has been a distinct and focus driven propaganda effort to marginalize certain peoples concept of an ingroup in the western world. More specifically, any concrete group like a nation or any concrete narrative of a shared suffering and hardship that has eventually been overcome together is, for certain groups, not allowed. The success of this propaganda leads to the conditions you describe.
You can't be angry at immigrants because there is no such thing. There can't be any immigrants since you don't exist. They are people, you are people. They live here now, you live here now. Without any sense of being you can't own anything. In clear terms: There is no you that can demand recompense without asserting, in some form, that you are owed more than the others. The quick and predictable reply to any of your supremacist assertions is the established fact that the Chinese real estate mogul that's lending out apartments for Indian workers is no less a human being than you are. Let alone the poor that are paying rent. You would have to be completely heartless as an individual to stand on your own two feet and maintain that your personal life is worth more than theirs on no greater grounds than because you feel that it is. (This is the base framing of every right winger in mainstream media since that's what they actually are when they buy into the propaganda)
If people had a sense of self and a coherent group identity they could demand, on the grounds of their common ownership of the land, that things change in their favor. Not as individuals but as a people. But if you reject that, you have nothing.
Most people in the west accept and regurgitate propaganda that is premised on the notion that they don't exist as an ingroup but rather an outgroup. At best they can defend themselves by appealing to the nihilistic universalism of money and 'common sense'. (As if it should make any sense to a Chinese person to privilege a bunch of Canadians from Europe. No, you pay rent. No rent, no house. That's common sense.)
I hope this makes enough sense to illustrate why I don't care about Canadians and their plight. I pity them, sure. I share a lot of their problems. But I can at least humble myself and recognize that the liberal humanist ideology I held as a young adult is deeply flawed. I was never a good person just because I felt I was selflessly tossing away notions of being a part of a coherent and exclusive group. I, in fact, wasn't being selfless at all. I simply otherized my ingroup and sense of self.
Canadians will be 'good people' with healthcare that tells them to kill themselves when the constant pressure of the cost of living finally breaks their back. And they will kill themselves, alone, isolated and suffering, because that's what a good Canadian would do in a world where we there is no such thing as a good Canadian. If you want to live, stop being a good Canadian.
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One funny thing about the Daycare situation is that now everybody can afford to put their kids in, but there aren't enough daycares. My wife knows people who have been waitlisted for years in our small city. Of course, the proposed solution is to just import more workers to do this job nobody wants to, and also pay them more money which will increase the cost and competition for houses even further, and around and around we go.
The Quebec daycare system that this is copied from has the exact same problem. It's $7 a day instead of $10 a day, but this is a textbook example of the consequences of a price ceiling. Why they would copy a system where people have to sign up their children for daycare when they're still in the womb, I cannot understand.
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The daycare situation is a perfect example of what is wrong with Canada. The government got involved by subsidizing demand and restricting supply, so it all became worse. When the subsidy program was created, the conditions to receive the subsidy for the daycares entailed capping employee compensation. Demand exploded because prices fell by half and then half again, but supply was constrained by labour availability so much that today there are 15% fewer daycare spots than in 2019. So it is as you say, a windfall if you get a spot, but much worse than before if you can't. Statscan had a report in 2022 which admittedly was still a Pandemic year that 8% of kids aged 0-5 were waiting for a spot to open. Thats 200,000+ kids.
Everyone knows about the crazy long waitlists, which is an obvious and inevitable consequence of capping the price, but what I haven't seen anyone talk about are the dangers of giving your children to an insitution under these conditions. There is a shortage, so the daycare doesn't have to do anything to attract customers, and so they'll have every incentive to cut costs. Is this who you want looking after your children? People who are trying to do the worst job they can legally get away with knowing that there is a long line of children to take your spot if you leave, also knowing that many of the children's parents may not be able to easily afford an alternative?
Someone should do some reading on how such things worked in the Soviet Union or in other Eastern Bloc countries. I'm sure there are horror stories and I'm sure whatever they are will be repeated here.
The fact that this was such an obvious and inevitable consequence which was a widely known side effect of the system it was directly cribbed from should point to maybe "availability of childcare" not being a major motivating factor. I think the clue is in "while doing nothing for stay at home mothers"- this is intended to wag a finger at SAHM's and reward mothers who already have kids in daycare.
There was a very badly done (and not peer reviewed) paper that got a lot of media attention claiming that subsidized daycare in Quebec induced more women to enter the workforce, thus raising income tax revenue and resulting in the subsidies paying for themselves. To come to this conclusion, they made some ridiculous assumptions, such as that women who were induced to enter the labour market earned average wages.
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This is why I'm so suspicious of technocrats. They consistently do this.
This is populism. No competent technocrat would propose something so obviously at odds with basic economic theory. The problem is that programs like these are very popular. The whole point of putting technocrats in control is to avoid disasaters like this one.
Competent tecnocrats create problems that can't be solved so more technocrats need to be hired so that tey can get promoted to managing all the new technocrats creating new problems.
There is no difference between a technocrat and bureaucrat. It is the same jobs.
Technocrat is just the polite euphemism that's already taking on the tarnish that bureaucrat took on after being a euphemism for clerk.
(though clerk has more esteem now, being only used to refer to shopkeepers for so long
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Understood. And famous American would-be-technocrat Elizabeth Warren champions these causes. But perhaps she is a very bad technocrat and a decent populist.
Because technocracy is really hard- Lee Kwan Yew can do it but he was once in a generation. One of that hardest things is that you can only hit one goal at a time. Liz Warren knows that if we went back to female domesticity, we could solve like 50% of the economic problems she’s worried about, and her platform makes the most sense if you assume her real goal is to raise the female labor force participation rate. Subsidizing daycare makes sense for that goal; it isn’t a child benefit it’s a subsidy for mothers to work.
I don't think technocracy is once-in-a-generation hard, I just think our democracies are optimizing for something entirely incompatible
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Technocrats don't want to subsidise demand, they'd rather increase supply but the populists ensure we get demand subsidies instead.
Okay, they don't want to, but they keep doing it. What good are a bunch of technocrats if they just implement populist policies? At this point the (commonly regarded as) most thoughtful and informed would-be American technocrats are proposing wealth taxes. Warren wants to crack down on landlords not renewing leases, etc.
Mostly technocrats just don't get to decide policy. Positions like the Fed Chair are a rare exception. Mostly they advise and execute on behalf of politicians, who frequently ignore them because their advise is probably unpopular or operates over a time horizon that makes it undesirable to elected officials (nobody wants to implement a policy that loses them the election and that their successor gets to take credit for). The usual failing of technocrats is either than they're operating outside their subject matter expertise (see: the Soviet Union, where it turned out that engineers don't make particularly good political/economic leadership) or they're prone to galaxy-brained schemes due to overconfidence in their understanding (half the thesis of Seeing Like a State).
Warren isn't a technocrat. I'd be hard pressed to name a single elected official in the US who could be characterized as such. The technocrats are proposing things like carbon taxes, land value taxes, zoning and permitting reform, etc... And mostly getting ignored because these are unpopular.
I think Warren is a technocrat, just not one whose ideas are straightforwardly aimed at middle/working class standard of living increases; she wants to use government policy as a tool of social engineering for the kinds of things that an upper middle class Massachusetts progressive normie thinks people should be doing anyways and is disguising herself as a Bernie-style left wing populist.
See, I think this is reversed. Warren likes to adopt a professorial persona (maybe calling it a persona is unfair, given she actually has been a professor), but she is really just a lawyer (like most Members of Congress) and dresses up eat-the-rich populism in wonky clothes for the benefit of pseudointellectual liberals. Somewhat famously, she got Saez and Zucman (a pair of noted left-wing economists) to write up policy proposals for her campaign and then proceeded to ignore them when their recommendations weren't spicy enough for the audience she was courting.
Maybe we're using the world technocrat differently; to me "wants to use government policy as a tool of social engineering" isn't a distinguishing element. That could refer to almost any politician. My understanding of the term technocrat implies that they hold their position by dint of at least notional subject matter expertise. Supreme Court Justices are pretty much inherently technocrats, as is the Fed Chair. Conversely, I'm almost tempted to say an elected official can't be a technocrat, but that might be a bit too far. Nevertheless, it's rare (and even more unlikely in the specific context of Congress). It's just not how politicians win elections.
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The Trudeau government has been particularly bad (or deliberately bad?) at anticipating second-order effects.
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What system are you contrasting it with, the United States? I'm curious if you know what the situation there is like.
Sure, the supply is (mostly) there. In my corner of the US, I was on waitlists at somewhere between a half dozen and a dozen places and I started inquiring about 8 months before I'd need it. I was offered a spot at maybe three of them, and two were larger corporate style ones that were significantly more expensive. So definitely not close to Quebec tier where people wait years, but it's still non-trivial to find a spot.
Meanwhile, the prices per month that were quoted to me are 2500$-4000$. On the one hand, it's great that labor women have been doing forever is finally recognized as being valuable - a modern SAH parent of two is essentially providing labor worth ~70k per year. On the flip side, small comfort to the laborer making 50-75k a year and trying to raise a family who would probably appreciate Canadian daycare prices (if they could get them).
Similarly, you could make a parallel argument to the one that you made in your OP that the public Canadian healthcare system incentivizes risky behavior and overconsumption of resources because what the heck, it's free. And yet, somehow Canadians have longer life expectancies. People broadly agree that the American healthcare system is broken, although it seems likely to me that there are just different tradeoffs.
All this to say that most (all?) Western nations struggle with the things you describe. Or if they don't, I'd be fascinated to hear your counterexample of a developed nation with a functioning and cheap childcare system as well as an explanation of how they achieved it. Someone smarter than me will have to explain why this is the case; I'd assume much higher labor costs/CoL in general and higher standards. Modern daycares are strictly regulated in terms of capacity (teacher/child ratio) and safety whereas in the past (I assume) we just had gaggles of near-feral children roaming the streets.
She's not providing labour worth anything close to that. Daycare workers aren't paid that much and could be paid much less if we loosened our labour laws.
He was talking about value that stay-at-home mum provides (or saves if you wish) for the family. Between daycare, schooling, food preparation, house cleaning and other small tasks such as small repairs - the value of labor provided is really high. Labor itself may be less expensive than $70k a year for daycare center or even for restaurant, but the cost of the rest including rent, taxes and cost of additional regulation is just so high that it overrides any benefits of economies of scale in as much that the do-it-yourself approach makes a lot of sense.
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I’d be surprised if at least 75% of the difference in outcomes isn’t explained by obesity and related differences in population.
On the topic of child care, SF has the same problem. The buildings and providers alike are highly regulated, with subsidies galore and predictable results.
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Don't want to dogpile, but using life expectancies as a metric of societal health makes me curious how exactly one calculates how long people are going to live. Not curious enough to research it, unfortunately.
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I think the obvious answer to a better daycare system is to regulate it as lightly as possible consistent with safety and provide whatever subsidy you wanted to provide to parents directly as a transfer. That way you, at minimum, don't punish stay at home parents or parents who work shifts and therefore can't easily use daycares.
I agree its a hard problem because daycare labour is very expensive no matter how you slice it. In Canada we've decided the answer is cheap at point of use, but sharp rationing of availability to turn it into a lottery. Ration by luck rather than price, creating lots of bad downstream outcomes.
On Canadian life expectancy vs. the U.S., its true we live longer but I think thats more about demographic composition and obesity rather than health care.
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I’d heard there was a nullification crisis going on in Canada- is this true, and to what extent is it driven by that stuff?
Yes, its related. In Canada provinces can create carbon pricing schemes, but if they dont, the Federal government imposes a 'backstop' carbon tax. The revenues of that tax get rebated to people per capita, creating a 'climate UBI' of a few hundred bucks. The incidence of that tax falls hardest on rural people who drive the most since in practice the tax is implemented as a tax on gas and various ways of heating homes. The crisis started when the Liberal government removed the carbon tax from home heating oil which is only used in a handful of provinces which vote liberal as a vote buying maneuver. Sounds uncharitable, but a minister came on TV and said that if other provinces wanted carve outs like that they should elect more liberals.
In response, the conservative government of Saskatchewan -- one of our most right-wing provinces -- promised to nullify the carbon tax by refusing to collect it. Its still a live issue, as the nullification starts Jan 1.
This is emblematic of another thing our government loves to do: alienate its conservative citizens. The danger is that many of those people are highly geographically concentrated on the prairies. And the support is overwhelming. In much of the rural west, the Liberals get about 15% of the vote compared to conservatives with 65%. This sort of thing is partly why I think we underestimate the likelihood that western provinces leave in the next few decades.
I'm not that familiar with the culture of western Canada, but don't people there have very shallow roots? Aren't most of them, if they're not foreign, from eastern Canada within a few generations? I find it hard to believe that such people would separate. It's a totally different situation in Quebec.
It would also become harder to sell their oil unless British Columbia left with them.
Well, that depends on where you go in Western Canada- even those provinces are not the same.
For instance, if you go to Manitoba (and to a point, Saskatchewan) there's a significant chunk of that population with native ancestry that goes back to the earliest French contact (which is why the word that describes being a half-breed, 'métis'(1), is French), and this faction was politically powerful enough in the late 1860s to rebel hard enough to force the newly-created government of Canada to create the province as a distinct entity in the first place. So ancestral roots of a non-trivial portion of the people who live there run a bit deeper than those of the average western US state, and that's reflected in its governance even today.
Manitoba doesn't have many resources as the land to its West does, mainly because the province is one giant peat bog whose total theoretical arable land is basically 50% underwater (so... not great for farming)- Minnesota may be the land of 10,000 lakes, but Manitoba's title of the land of 100,000 lakes is actually kind of underselling it given its three largest bodies of water are roughly the size of Lake Ontario and Lake Erie combined. If you want a better look at where economic activity is possible in Manitoba, it is illustrative to look at its 1870 border... which to this day, still encompasses every city and town in the province with a population over 15000; this further speaks to a shockingly bad distribution of resources.
The land gets easier to work as you go west to Saskatchewan; which had fewer people and was populated later by the typical settler population one would expect to see in western US states. Most of its land is above ground this time (it is the flattest province) and the granite slab ends in this province- plus, it has some oil, so while there are less people they're wealthier on average. Most famous for its universal healthcare system (which would be used as a model for every other province) and competently-run government; traditionally a purple state like the Dakotas and Montana, much like Manitoba, for the same reasons (and the same kind of immigrant population).
Alberta is a different animal since it actually has economic opportunity thanks to its oil fields; both of its major cities contain an order of magnitude more people than those in Saskatchewan. Cold Texas is the right way to describe it- the land in Alberta is 1/6th desert, 1/3rd mountains, and the growing season is much shorter around the major population centers due to their latitude, but the province has managed its wealth well enough to diversify (the existence of non-resource-extraction jobs being something that, along with the relative ease of building homes on its land, have kept prices to reasonable levels while still allowing rapid expansion).
BC is... well, a lot like Washington in that the two major cities on the ocean and the rest of the province tend to find themselves at odds politically, for most of the same reasons.
If push came to shove separation-wise, I think BC could quite easily be torn in half more or less along the 52nd parallel- Vancouver is probably powerful enough, and its culture common enough, to retain both the cities below that line and the various islands that depend on Vancouver to survive, but I don't think it's powerful enough to keep Kitimat (which is currently the sea route Alberta is already using to sell its oil).
I do too, but for the exact opposite reason: it's that significant sections of Upper Canada are generally, by and large, OK with rule by Western Canada. It's both Lower Canada (that is to say, Quebec) and the Maritime provinces that generally aren't- the latter are relevant because they're essentially the Rust Belt of the nation and fully dependent on handouts ever since the Grand Banks were destroyed... which naturally puts them at odds with provinces that would like to keep more of their own economic output. They've been in decline for the past 3 decades and the average resident age of the province that took the brunt of it is pushing 50, with the others not fairing much better at an average of 45.
As far as Quebec goes... well, I defer to Kulak on that one, though I think the bureaucracy in Ottawa (and to a point, Toronto) also counts as intentionally hostile. Perhaps the attempts to inculcate hostility in these power bases against the rest of the country actually was an attempt at long-term strategy?
(1) Pronounced the way a pirate refers to his crew, not "meh-tiss".
Wait, what? I've never heard it this way. (4th gen Western Canadian checking in -- I guess that's more than 'a few' but considering that people were still going overland in wagons 5 generations before my birth it's indeed rare to be much higher without native ancestry)
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If they leave, where do they go? Try to join the US? Create the Dominion of Based Canada?
A smarter US would be trying to get them to join the US.
They would contaminate us with their policies. Our politics would be to some degree merged with theirs.
Western Canada only has about 12 million people compared to the US's 330 million.
Correct. And 3 or so new blue states would each get a couple senators, a few congresspeople and a corresponding amount of electoral votes. Which could drive American politics in a new direction.
It's the idea that if Texas turns blue then the Republicans are finished. A few successive Democratic administrations with supporting congress will rewrite our laws and stack our courts full of judges who will support them. And the Republican path too electoral victory is to narrow to survive a blue Texas (or blue British Columbia plus Albert plus maybe some more).
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Assimilation only happens on US terms. It would quickly overwhelm Canada and bring it in line with US politics.
Most of the distasteful shit (from my perspective anyway - anti-migrant Canadians must hate both parties since I came over in Harper's time...) is Liberal stuff they can get away with because there's no GOP and governmental splits. That changes in the US system.
People keep wrongly thinking the Republican party will be vanquished forever as a contender for president and having a majority of congress if only Texas would drift a bit bluer. The thinking goes that any year now they will be a permanent minority in terms of national elected officials.
If we let large portions of Canada into the US, then eventually they will get to vote for Congressional representatives and president. Then the Republican party will be vanquished forever. Or until they realign in such a way as to capture around half the national level power. Which I characterize as being contaminated by Canadian politics.
Western Canada is HEAVILY covservative, and the most immediate impact would be all the Blue canadians move to blue state for bureaucracy jobs and tons of Red Americans move north for Resource extraction jobs
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Alberta is cold Texas. Who doesn't want more Texas in the US?
Obligatory reminder that Texas is not actually a bastion of freedom
For non-potheads, Texas is relatively free, and education savings accounts will happen- Greg Abbott is personally campaigning for primary challengers to republicans that voted against it, you’re looking at a much darker red in the Texas state legislature ‘25.
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I'm sorry I promise I will read the full report and treat it with absolute seriousness, as soon as I get over laughing at #Cannabis And Salvia Freedom
If that section doesn't end with the writer becoming a gelatinous 5-dimensional cube falling through an endless universe of mirrors for ten billion years, I will concede that his Salvia Freedom has been Infringed.
Not mocking anyone here: libertarians are my favorite people because they're the only fun political group left.
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Would help the US in its great power competition with China.
If Canada lost some territory to the US, it would become even more dependent on the US.
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Western Canada is much wealthier than eastern Canada. The GDP per capita there is only slightly less than it is in the US.
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Like how Italy ""helped"" the Nazis in WW2. Bad allies are a liability. Unless the plan is for Americans to "drill, baby, drill" Canada for natural resources.
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Does the US really need an additional few (compared to them) poor states added to it? Maybe linking up to Alaska by land would be nice but beyond that?
Alberta is the standout but Saskatchewan and Manitoba are no slouches either: as global warming progresses the US agricultural zones slowly creep northward. All of our Ukrainians have historically lived there, as well.
Alberta and Saskatchewan are richer than the US as result of their natural resources, but Manitoba is well below the Canadian average.
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Alberta is a rich province thanks largely to oil. It is way above the Canadian average and would be in the top half of states.
Fair enough. That would definitely be a good add to the USA. Probably worth the rest of the baggage too if you can get Alberta.
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At least Alberta is a massive subsidy to the rest of Canada, I think.
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Would they still be poor if they were inside the US?
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