I share your skepticism. The fact that Greenspon (regardless of how nice a person he is in real life) lobbied for a slush fund which lines the pockets of newspaper executives and throws the objectivity of our entire media ecosystem into question, undermines his credibility as any kind of purveyor of genuinely important 'big ideas' (this isn't to say however that he can be blamed for Slush Fund: The Sequel Bill C18 in which Big Tech is forced to take over payment from the government - a really good 'idea,' if deceiving the public is one of your objectives).
(BTW Paul, investing in this newsletter was a good idea. Getting great value for money, thank you).
The primary obstacle to supply of things like oil & gas, pipelines, energy export terminals, minerals, housing, air travel, telecommunications, doctors, children's medication, and basically anything else in short supply in this country is government interference and regulation. Get rid of that, and the problem will be solved. Try to solve the problem without culling regulation, and you are just wasting everybody's time.
I think up I'm going to throw up. Everything wrong with policy from the 70's is coming back. I lived it as a young man and don't miss it - too bad my kids will have to deal with the aftermath.
At this point, it seems like a bunch of slogans. How does it work? Dismantle GATT, the agreement that effectively built moden China, and the World Trade Organization? Bring industry back to the West where we can see that much of our climate mitigation has been smoke and mirrors? The devil is always in the details. Quickly dismantle the present trade regime while China's demograohics fall through the floor and rusty old Russia squanders its oil wealth on warfare and you will meet the devil. The Freeland Doctrine is good talk, but it will require nimble fingers to defuse the various bombs and, frankly, the political class in North America has not been attracting that kind of talent.
I can't comment on the political merits of that idea or the person who came up with it, so I really appreciate your insight into it.
Regardless of its political standing though, I don't think Canada is currently in a good position to put it into action. The engines of a manufacturing economy runs on energy, not money. Our current energy generation and supply infrastructure is barely stable enough for current demands, and experts are increasingly worried that we're not doing enough to future proof our infrastructure.
Ontario especially is speeding towards a wall it won't overcome on its own. Planned shut down of baseline nuclear plants with no plans for replacement. Reliance on natural gas which has a shaky future. No potential for high capacity hydroelectric projects. Renewable energy not proving to be as effective as hoped. Electrification of transportation which it is unreasonably reliant on. It's all coming at once and Ontario has no off-ramp for this one. In this environment, a new fangled production and supply economy is going to struggle to find legs to stand on.
Alternatively, what Canada could do is become an energy supply leader, in all shapes of form. Oil, gas, hydrogen, nuclear, transmission, bio-mass, renewables. If focused on freeing up public-private research and development initiatives we'd not only shore up our own energy needs but we'd be lowering the costs of generation and production with mass production and exports. I'm talking about making Canada leverage it's massive territory the same way Quebec did with hydro power, except for all energy solutions and become a net exporter. Isn't that a new idea worth peddling?
We used to call it BOHICA (bend over here it comes again).
I thought that the 1980s had convincingly shown that government intervention in most markets hinders, rather than helps. When it comes to supply of anything other than police services, military, justice system and a foreign affairs service, government operations are less efficient. Just look at the companies that were privatized and those that were not. Moreover, government production decisions often have a political tinge -- regional distribution of money and jobs, affirmative action, and other non-production-related restrictions. Why would we want the return of these?
This is a gretheads up for the public to understand how policy papers eventually work into government policy. These idea men and women seem to shift thought dramatically every 20 years or so as we all witness and live with these global and national policy shifts. Paul speaks to this recent paper as being the next paradigm shift. It is obviously overdue and late to the Re-Set Party. Nonetheless it has arrived and thanks to Paul Wells for alerting us to the new theme. Personally I see Canada as a resource rich country that barely makes enough effort in the gas and oil sectors. Government red tape and foot dragging have kept us poor when we should be swimming in prosperity. Back to the drawing board as this paper suggests is not so much a new concept as it is a necessary one. Let's listen and watch where the speaking heads go with this one.
“For that, attention now must move from the demand-based and redistributive policies of the past decade and a half to a supply rebuild.”
Seriously? Canada's down there with Australia when it comes to lowest social spending in the Western world. I think these kind of policy statements are often attempting to cloak unambitious centrism in radical language. The policies the paper proposes don't meaningfully alter the current status quo, but they do provide ammunition against the growing interest for social democracy in North America. It manufactures a narrative against idealism.
Interesting. This is also being promoted in the US by folks like Noah Smith and Ezra Klein under the moniker of The Abundance Agenda. The recently passed Inflation Reduction Act which includes A LOT of incentives for the energy transition is a concrete manifestation of it. I think we’ll see a Canadian response to that Bill here before long.
I'm looking forward to seeing the full paper by Greenspon and Speer. I'm focused on housing - we have a lot of people who want to live and work in BC and Ontario, and we have other people who want to build housing for them, but we make it really difficult to get permission. https://morehousing.ca/what-happened-in-the-1970s
Some likely obstacles:
Small-c conservatism. There's a lot of Canadians who are satisfied with the status quo, and who fear and oppose change, especially large-scale change. This is especially evident when it comes to housing, but it's also true for major energy projects like the Site C hydroelectric dam.
Low levels of trust, reinforcing opposition to change. Without trust, it'll be difficult to make changes happen, no matter how beneficial they would be. (Why would people believe that the supposed benefits are real?)
Environmentalism. There's a lot of people who think we should be reducing our extraction and consumption of resources.
Lack of prioritization. What do we need to focus on? (Housing? Energy? Workers?)
Conversely, what's likely to drive this agenda forward?
One is the sheer level of frustration with scarcity and costs. This is especially true for housing - younger people in Ontario are boiling mad.
Another is climate change, which makes it increasingly obvious that the status quo isn't sustainable - switching from fossil fuels to non-fossil sources of energy is going to require a lot of megaprojects.
You are correct and being skeptical is right on. In all my 40 years doing economics I have become tired of central planning folks in Ottawa and the heads of think tanks telling the people they "must do something". Well, it has not worked in USSR, is not working in China and will not here in CDA. The current "big idea" of being off carbon will prove to be another failure in this genre of big ideas. The only thing that will transform an economy like ours is to free up private sector decision makers to go to work and "supply" what is in demand. Easy. But no or few big photo ops for politicians. So here is my "big idea" for the day - fix the health care system by repealing several sections of the Canada Health Act and allow private providers and private insurers. Within 5 years there will be no more wait lists. And my wife will be able to get her knee fixed!
I think we’ll someday look back on “The World Is Flat” and its vision of a frictionless just-in-time anything-from-anywhere global economy as a sort of pipe nightmare. There are always costs. There is always friction. But at the turn of the millennium, maybe we allowed ourselves the wild naïveté to believe those were solved problems.
“Logistics” turned out to be another way of saying, “Take all the (human-intensive) padding out of every production and delivery system, and channel the savings to ownership.” The pandemic exposed and amplified that massive vulnerability and left us unable to get what we need when we need it because of amorphous “supply chain issues.”
My sense is that the Greenspon-Speer report, like many other recent policy prescriptions, is a rational reaction against the sudden bracing fear that the thing you need you can’t get, which is an unfamiliar feeling for those of us with Prime memberships.
This desire for supply security complements the year’s other big policy discovery, Josef Borrell’s epigram that “We have decoupled the sources of our prosperity from the sources of our security,” a line that feels destined to define the coming era. Canada’s prosperity and security are both lodged below the 49th parallel, like it or not, and I don’t see that changing no matter how good we can get at providing for ourselves. We can (and should) limit our risk and protect our flanks where and as we can. But national self-sufficiency even on matters of existential importance seems like it’s still a long way off.
Oh my, another rationale for the government to spend money. Oops, not spend, invest. And what exactly will they be buying? I haven't seen anything they*invest* in that has actually produced anything, never mind made a profit. I guess I am just one of those nasty capitalist types....
I share your skepticism. The fact that Greenspon (regardless of how nice a person he is in real life) lobbied for a slush fund which lines the pockets of newspaper executives and throws the objectivity of our entire media ecosystem into question, undermines his credibility as any kind of purveyor of genuinely important 'big ideas' (this isn't to say however that he can be blamed for Slush Fund: The Sequel Bill C18 in which Big Tech is forced to take over payment from the government - a really good 'idea,' if deceiving the public is one of your objectives).
(BTW Paul, investing in this newsletter was a good idea. Getting great value for money, thank you).
Dumbest thing ever!
The primary obstacle to supply of things like oil & gas, pipelines, energy export terminals, minerals, housing, air travel, telecommunications, doctors, children's medication, and basically anything else in short supply in this country is government interference and regulation. Get rid of that, and the problem will be solved. Try to solve the problem without culling regulation, and you are just wasting everybody's time.
Of course the underlying problem is that there is strong lobby to reduce supply of most of these things. What does Greenspon propose doing about that?
I think up I'm going to throw up. Everything wrong with policy from the 70's is coming back. I lived it as a young man and don't miss it - too bad my kids will have to deal with the aftermath.
At this point, it seems like a bunch of slogans. How does it work? Dismantle GATT, the agreement that effectively built moden China, and the World Trade Organization? Bring industry back to the West where we can see that much of our climate mitigation has been smoke and mirrors? The devil is always in the details. Quickly dismantle the present trade regime while China's demograohics fall through the floor and rusty old Russia squanders its oil wealth on warfare and you will meet the devil. The Freeland Doctrine is good talk, but it will require nimble fingers to defuse the various bombs and, frankly, the political class in North America has not been attracting that kind of talent.
I can't comment on the political merits of that idea or the person who came up with it, so I really appreciate your insight into it.
Regardless of its political standing though, I don't think Canada is currently in a good position to put it into action. The engines of a manufacturing economy runs on energy, not money. Our current energy generation and supply infrastructure is barely stable enough for current demands, and experts are increasingly worried that we're not doing enough to future proof our infrastructure.
Ontario especially is speeding towards a wall it won't overcome on its own. Planned shut down of baseline nuclear plants with no plans for replacement. Reliance on natural gas which has a shaky future. No potential for high capacity hydroelectric projects. Renewable energy not proving to be as effective as hoped. Electrification of transportation which it is unreasonably reliant on. It's all coming at once and Ontario has no off-ramp for this one. In this environment, a new fangled production and supply economy is going to struggle to find legs to stand on.
Alternatively, what Canada could do is become an energy supply leader, in all shapes of form. Oil, gas, hydrogen, nuclear, transmission, bio-mass, renewables. If focused on freeing up public-private research and development initiatives we'd not only shore up our own energy needs but we'd be lowering the costs of generation and production with mass production and exports. I'm talking about making Canada leverage it's massive territory the same way Quebec did with hydro power, except for all energy solutions and become a net exporter. Isn't that a new idea worth peddling?
We used to call it BOHICA (bend over here it comes again).
I thought that the 1980s had convincingly shown that government intervention in most markets hinders, rather than helps. When it comes to supply of anything other than police services, military, justice system and a foreign affairs service, government operations are less efficient. Just look at the companies that were privatized and those that were not. Moreover, government production decisions often have a political tinge -- regional distribution of money and jobs, affirmative action, and other non-production-related restrictions. Why would we want the return of these?
This is a gretheads up for the public to understand how policy papers eventually work into government policy. These idea men and women seem to shift thought dramatically every 20 years or so as we all witness and live with these global and national policy shifts. Paul speaks to this recent paper as being the next paradigm shift. It is obviously overdue and late to the Re-Set Party. Nonetheless it has arrived and thanks to Paul Wells for alerting us to the new theme. Personally I see Canada as a resource rich country that barely makes enough effort in the gas and oil sectors. Government red tape and foot dragging have kept us poor when we should be swimming in prosperity. Back to the drawing board as this paper suggests is not so much a new concept as it is a necessary one. Let's listen and watch where the speaking heads go with this one.
Pendulum swing, like a pendulum do...
“For that, attention now must move from the demand-based and redistributive policies of the past decade and a half to a supply rebuild.”
Seriously? Canada's down there with Australia when it comes to lowest social spending in the Western world. I think these kind of policy statements are often attempting to cloak unambitious centrism in radical language. The policies the paper proposes don't meaningfully alter the current status quo, but they do provide ammunition against the growing interest for social democracy in North America. It manufactures a narrative against idealism.
Interesting. This is also being promoted in the US by folks like Noah Smith and Ezra Klein under the moniker of The Abundance Agenda. The recently passed Inflation Reduction Act which includes A LOT of incentives for the energy transition is a concrete manifestation of it. I think we’ll see a Canadian response to that Bill here before long.
I'm looking forward to seeing the full paper by Greenspon and Speer. I'm focused on housing - we have a lot of people who want to live and work in BC and Ontario, and we have other people who want to build housing for them, but we make it really difficult to get permission. https://morehousing.ca/what-happened-in-the-1970s
Some likely obstacles:
Small-c conservatism. There's a lot of Canadians who are satisfied with the status quo, and who fear and oppose change, especially large-scale change. This is especially evident when it comes to housing, but it's also true for major energy projects like the Site C hydroelectric dam.
Low levels of trust, reinforcing opposition to change. Without trust, it'll be difficult to make changes happen, no matter how beneficial they would be. (Why would people believe that the supposed benefits are real?)
Environmentalism. There's a lot of people who think we should be reducing our extraction and consumption of resources.
Lack of prioritization. What do we need to focus on? (Housing? Energy? Workers?)
Conversely, what's likely to drive this agenda forward?
One is the sheer level of frustration with scarcity and costs. This is especially true for housing - younger people in Ontario are boiling mad.
Another is climate change, which makes it increasingly obvious that the status quo isn't sustainable - switching from fossil fuels to non-fossil sources of energy is going to require a lot of megaprojects.
You are correct and being skeptical is right on. In all my 40 years doing economics I have become tired of central planning folks in Ottawa and the heads of think tanks telling the people they "must do something". Well, it has not worked in USSR, is not working in China and will not here in CDA. The current "big idea" of being off carbon will prove to be another failure in this genre of big ideas. The only thing that will transform an economy like ours is to free up private sector decision makers to go to work and "supply" what is in demand. Easy. But no or few big photo ops for politicians. So here is my "big idea" for the day - fix the health care system by repealing several sections of the Canada Health Act and allow private providers and private insurers. Within 5 years there will be no more wait lists. And my wife will be able to get her knee fixed!
I get shivers whenever I hear of another government initiative.
I think we’ll someday look back on “The World Is Flat” and its vision of a frictionless just-in-time anything-from-anywhere global economy as a sort of pipe nightmare. There are always costs. There is always friction. But at the turn of the millennium, maybe we allowed ourselves the wild naïveté to believe those were solved problems.
“Logistics” turned out to be another way of saying, “Take all the (human-intensive) padding out of every production and delivery system, and channel the savings to ownership.” The pandemic exposed and amplified that massive vulnerability and left us unable to get what we need when we need it because of amorphous “supply chain issues.”
My sense is that the Greenspon-Speer report, like many other recent policy prescriptions, is a rational reaction against the sudden bracing fear that the thing you need you can’t get, which is an unfamiliar feeling for those of us with Prime memberships.
This desire for supply security complements the year’s other big policy discovery, Josef Borrell’s epigram that “We have decoupled the sources of our prosperity from the sources of our security,” a line that feels destined to define the coming era. Canada’s prosperity and security are both lodged below the 49th parallel, like it or not, and I don’t see that changing no matter how good we can get at providing for ourselves. We can (and should) limit our risk and protect our flanks where and as we can. But national self-sufficiency even on matters of existential importance seems like it’s still a long way off.
Oh my, another rationale for the government to spend money. Oops, not spend, invest. And what exactly will they be buying? I haven't seen anything they*invest* in that has actually produced anything, never mind made a profit. I guess I am just one of those nasty capitalist types....
https://twitter.com/PierrePoilievre/status/1587479801925074945?s=20&t=cNDxtZOs_6LEVAL1FvXjdg
"Create more of what cash buys" is arguably a Productivist slogan. Wouldn't bet the farm on it, but maybe.
"I'm from the government. I am here to help" comes to mind. I too share your skepticism Mr. Wells. To be honest I am close to a cynic on this one.