Fortress Canada?

The most important thing to remember is that things could be worse.

I say that because whenever something would go horribly wrong that's what my mother would say.

Breath in and breath out. There we go.

Four more years of Obama will not be a pretty sight. But remember that FDR was in power for twelve years and would have sat in the Oval Office for another four if fate had not intervened. The Republicans were a marginal force in American politics for much of the 1930s and 1940s. The White House stayed Democratic for twenty straight years. When the Republicans did again win the Presidency it was under Dwight Eisenhower, an unideological pragmatist with more than a few similarities to Mitt Romney.

That was only the beginning. Then came the Sixties. Then the Sixties became the Seventies. Four years of Jimmy Carter's sour mug on the television screens of the nation before, at last, there was a turn to the Right. Then after that it took another fourteen years before the Republicans retook the House of Representatives for the first time in forty years.

Now doesn't the above make you feel better? 

OK. Maybe not.

The question we are faced with now is how to survive Obamageddon.

The American Right has the hard task of saving their country from itself. American voters' addiction to free stuff is approaching Greek levels of unsustainability. The problem is that if Greece goes it might take out Europe. If America goes it might take out Western civilization. There is an inherent problem, which has been mostly overlooked since the beginning of the Reagan era, of having so much of the capital of the free world invested in a single polity.

Scroll back the chronometer to say 1900. The West consisted of about a dozen major and minor powers. A short-sighted or unstable government in one power would not, necessarily, mean destruction for the rest. There was a great deal of political diversity in Europe, much of it admittedly bad. The modern continent has a great deal of political homogeneity. Sure the Portuguese still speak Portuguese and the French still speak French, but the political leadership in Paris, Lisbon, Rome and Berlin is pretty much on the same ideological page. Euro politics stretches from hard-left socialism to mushy middle social democracy.

This intellectual synchronization of Europe means that when a very bad idea takes hold, like the Euro, it impacts the whole continent all at once. The downside of integration is that you've bound yourself hand and foot to the mercies of your neighbours. Europe looks more like a single highly dysfunctional federation than a series of competing nation states. The danger of competition among ethnic nationalist polities is the occasional bloodbath. A lack of competition leads to stagnation and the politics of the lowest common denominator. Overall Europe looks more like Greece than Germany.

The West is comprised of the Americas, Europe and Australasia. Latin America is still too much of basket case to be taken seriously, perhaps in twenty years time there is a possibility for positive change. Though, of course, people have been saying that about Latin America for two hundred years. The two great pillars of the West, America and Europe, are now broke. So what happens to small open trading economies like Canada?

If you're Australia you see the wind blowing and adjust accordingly. After the Fall of Singapore Australia's political leadership pivoted quickly toward the United States. Now that America is weakening we are seeing that continental state place its bets firmly on Asia, especially China. More than a decade ago John Howard could take China to task on a range of issues. Today with so much of the country's economy dependent on trade with the PRC, it would take an especially brave politician to make more than the usual formulaic criticisms of the ChiComs' human rights record.

Australia, being out there in the middle nowhere in terms of Western geography, has been far more conscious of its strategic vulnerability. Canada, nuzzled between it's usually benevolent older brother and sometimes absent minded mother, has little understanding of this fear and the need to react quickly to change. Bad stuff is stuff that happens elsewhere. This, after all, is Canada.

Sure the American economy tanks from time to time. The result is a recession and then we recover. What happens when the American economy craters? Not just for a decade or two, but for the foreseeable future? Then you need to start preparing the fortifications. Canadian governments since Trudeau have tried to diversify our economy away from the United States. Even the Mulroney Free Trade deal can be understood as a defensive measure against periodic US protectionism. So far no government has succeeded as well as the Harper Tories. Not that the Tories have actually done all that well.

Selling natural resources to the developing world is certainly a powerful boost to the economy and a step away from our over dependence on the US market. But what about the rest of the economy? Our manufacturing sector produces bulky high value added equipment and parts, not the sort of stuff that can be easily shipped outside of North America. Much of the trade in US-Canada auto parts is transported by rail. Financial services? What can Canadian banks and insurance companies do that Chinese, Japanese and Koreans can't do or can't figure out in a reasonable amount of time?

Where we have a comparative advantage, the extraction and distribution of natural resources, is not a big enough sector to absorb a large swath of the labour pool. An American implosion might decimate manufacturing and finance and leave the primary sector in tact. But what are the political and economic consequences of routine 20% unemployment and underemployment.

If we have a chance, sitting next to the world's biggest ticking time bomb, it is as a larger and colder Switzerland. Talent and capital are always on the look out for a friendly home. If Canada can mostly absorbs waves of immigrants from Third World basket cases, a few million Americans shouldn't be too much of a problem if given some time. A little tweaking of our immigration policy to encourage disgruntled Americans, more than a few of whom will lean Right, makes a lot of sense. Keeping our financial sector sensibly regulated will act as a capital magnet. Not getting too much into debt will also be essential.

We can weather this storm. But to do so Canada needs freer markets, lower taxes and borders open to people who will integrate easily and bring their formidable talents. The question is whether Stephen Harper and Jim Flaherty are conservative enough to make the necessary changes.

Here's hoping.

Comments

[John Chittck]

Beyond the economic realities of living next to a US in serious decline, the Obamageddon will leave traditional allies out in the cold. A US President who whispers sweet nothings into the ear of a Russian President about how he'l sell out US interests after his re-election will likely care less about Canada's claims to arctic sovereignty. Canada might want to consider picking-up a couple of nuclear subs along with a few dozen special MIRVS. In a world where the Norks and Iranians are nuclear, it seems crazy that a Canada, Australia or Japan no longer reliant on the US umbrella, fall behind.

On the economic front, Canada could prosper significantly from the soon to be disaster of US Leviathan-managed Obamacare. Private, for profit, American customer only, medical facilities will be able to sell services no longer available to Americans with savings or other means (eventually Gold and Silver only). The CHC Act would not apply since Canadians would not be allowed as customers and American mandates would not apply either. Just like the off-shore "pirate" radio stations of the sixties beamed into the UK, Canada could construct private pirate hospitals and clinics along the 49th parallel.

[nomdeblog]

John Chittick: “clinics along the 49th parallel”. That’s an interesting concept.

We could start a new industry if we were creative about it. We could have health tourism in Niagara Falls for example. Get a new knee and take a wine tour, gamble, see some shows ….

We already do a bit of Health sales to foreigners but we do it secretly. The Shouldice Hernia Hospital in Toronto has a world class reputation and Americans in fact crowd out Canadians waiting in line because the Americans are allowed to pay more than the Canadians paying with their Health Card. Additionally McMaster University has transformed smoke stacked Hamilton into a medical brain trust. There is obviously a business proposition to be capitalized on if we could get our heads out of the sand.

This would give new meaning to the old saw that “Canadians don’t want US Health Care” because now with ObamaCare Americans don’t want it either; ergo we’ve got something to sell….for a PROFIT.

Obamageddon could be an opportunity if Harper and Flaherty sat down with McGuinty and discussed Health Care as a world class industry and ….whoops I forgot, McGuinty prorogued.

[Cytotoxic]

"The question is whether Stephen Harper and Jim Flaherty are conservative enough to make the necessary changes."

The answer is no. Flaherty? His presence alone negates the notion that Harper is some political genius. As to Harper himself: Harper only does what Harper is sure will make him comfortable. Plus, he has terrible communications.