Thursday, July 19, 2012

History of being richer than them

Canada ahead of the US, but how'd the Aussies get so rich?
Canadian journalist Stephen Marche caught the US by the ears recently with an article noting that Canadians are now richer than Americans -- and crediting the difference to Canada's "hard-headed socialism."

A long time ago John Kenneth Galbraith wrote, "I was brought up in southwestern Ontario where we were taught that Canadian patriotism should not withstand anything more than a five-dollar-a-month wage differential.  Anything more than that and you went to Detroit."

Well, nobody goes to Detroit any more, but it's an old attitude -- the Yanks are richer, but if it's not too much, we can live with it. A century of tariff walls and National Policy was based on that kind of thinking.Visiting Canada in the 1860s, Anthony Trollope found Canadians saying they were "poorer but happier" than Americans -- and he didn't much believe the second part. "Happiness is for individuals; a nation secures the potential for it when it is prosperous." 

So the idea that Canadians are richer takes some getting used to.  

And needs some examination.  Dylan Matthews in the Washington Post says Canadians are farther ahead than Marche's data shows, and have been for quite a while. Huh?  But in the comments to his article, someone pithily points out that Americans have recently had a huge real estate bubble burst, whereas Canadians have a huge real estate bubble that is still inflating. 
The Conservative government here allowed zero down mortgages, 40 year mortgages, no income verification mortgages and slammed interest rates to the floor after the 2008 crash. It's being hailed as an economic miracle. Sound familiar? 
 Maybe we are still merely lagging behind them on the curve.

(Illustration source: Matthews article in Washington Post noted above)

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