What would these guys do if not for the Atl. Canada example?

You don’t get to to be the “Chevening scholar” studying at the London School of Economics, or a senior fellow with the Fraser Institute or a fellow with the Manning Centre for Building Democracy if you aren’t particularly intelligent.

But when it comes to analysis of the ‘Atlantic Canada’ problem, thes guys, like this John Williamson seem to take off their thinking caps.

Or more accurately, they start acting less like academics and more like talk show hosts and politicians.

Take his commentary on EI in Atlantic Canada in the National Post. Here are some select nuggets and my comments below:

Federal government changes in the 1970s to EI made leisure more attractive by paying richer benefits in areas of high unemployment. The result was predictable: Some people decided collecting pogey was preferable to extra work. It was a rational response to lousy public policy.

The Atlantic provinces can afford such a rich system because workers in the rest of Canada pay for it. EI payroll taxes paid by central and Western Canadians make it possible. These workers transfer more than $500-million in benefits annually to the East Coast. But that’s not the worst part. The Atlantic EI scheme retards job creation by making it more costly for business to hire workers.

Companies that have, in the past, been ready to hire could not find enough workers willing to trade leisure for regular work. This choice is influenced by generous EI payments and explains the paradox of both high unemployment and a labour shortage in the region. As a result, companies invest less in Atlantic Canada or leave in search of more willing workers in New England or central and Western Canada. The result is more unemployment and an exodus of young people to the United States or other parts of the country. It is a vicious circle with less economic growth, more dependency and declining opportunity.

People assume that higher unemployment rates necessitate more EI. But it is worth considering to what degree generous EI has caused chronic unemployment. Indeed, if EI rules were similar across provinces, it would be an incentive for workers in areas with high unemployment to move to locations with more jobs.

Now let me start out with a couple general comments:

1. I am not a big fan of seasonal EI and have been clear about that on this blog.  I think the Feds have substituted credible economic development policy and effort with beefed up EI to keep people happy and politians in rural Atlantic Canada have willingly settled for this.

2. What frustrates me the most about these brilliant academics is that they love to blame Atlantic Canada on everything but the real problem.  Consider:

They blame Equalization.

They (this guy) blame EI.

They blame oppresive government.

They blame a culture of defeat.

Again, you might be able to see this from the feeble minded or the simpleton that wags their heads while listening to talk show rants but from credible academics?  Visiting Professors?  Yadda yadda yadda?

It just shows that these guys are human and bring all the biases to the table of any of us mere mortals.

My position on this stuff is simple and well explained on these pages:

Williamson blames EI for a lack of investment, out-migration and what he calls  a culture of ‘leisure’.  But anyone with even the most basic understanding of the situation realizes that EI is a symptom – not a cause of the region’s economic problems.  It may have exacerbated it a bit but these guys make it sound like Atlantic Canada had this booming economy, then imposed this evil EI program and killed the economy.  And, watch out! The Liberals and NDP want to do it to the rest of Canada.

Equalization is a symptom not a cause – it might have exacerbated things a bit as well.

A culture of leisure?  I don’t even buy that at all.  There may be a fraction of the population that would take $10 seasonal job for half year/$5 on EI for half year compared to $8 to work year round but if the economy was strong this would dissapate.  You can’t tell me that an auto manufacturing plant in Caraquet wouldn’t get thousands of applicants.

The need for a real economic development think tank in Atl. Canada

It is increasingly clear that the best and brightest academic minds in Canada are not turning their minds to solving the economic development riddle in Atlantic Canada they are using this region as their “what not to do” example for the rest of Canada.  This is callous and cynical but true.

We need to have Atlantic Canadian researchers studying these issues from a minimally-influenced ideological viewpoint.  AIMS is a credible think tank (in the sense it has Phds) but it is way to ideological to really address the issues.

The real problems in Atlantic Canada are based on a chronic lack of business investment in this region and the fall out from that over generations.    The federal government did step in and that ended up with a really bad unintended consequence (giving pogey down here and spending most of the real economic development effort in the Windsor to Montreal corridor).

I don’t entirely disagree with this Williamson except that he is using his analysis to warn the rest of Canada not to become Atlantic Canada.  If he had any concern for Atlantic Canada, he would be studying ways to serious redress the business investment paradox here.

At the end of the day, I don’t like Atlantic Canada being used as the worst case scenario by these central and western Canadian academics and ultimately the simple minded media which loves to run superficial analysis and call it insight.

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5 Responses to What would these guys do if not for the Atl. Canada example?

  1. richard says:

    “AIMS is a credible think tank (in the sense it has Phds) but it is way to ideological to really address the issues”

    A simple examination of regional employment rates and regional EI benefit levels over the past four decades would put the lie to the ‘beliefs’ of Williamson. But Williamson prefers his opinions to the facts, as is usually the case for those of his worldview.

    As to AIMS, I’d like to see a list of peer-reviewed journal publications from their full-time staffers (not their ‘advisors’). Are there any journal publications at all from them? If not, how can they possibly be considered ‘credible’? Few if any of their staffers have PhDs in economics or fiscal analysis. Not only are they consistently wrong about things, they do not even have enough expertise on their staff to make a data-based argument.

    Wonder why Williamson is going to LSE – it can’t be because LSE is an excellent school, because it isn’t. Perhaps he wants to be another William Watson – I afraid he’s missed the boat there, he may have to settle for permanent ‘think’ tank employment.

  2. mikel says:

    Hey David, your page is all messed up with Firefox, it can’t access the comments page (is that on purpose?:)

    We often rail on the Irvings here, but those who argue for Irving to sell the chain forget that corporate media outside the Irving chain is just as bad, and the National Post is the worst offender. These are the guys that axed most of their staff who had dissenting views. And any paper that employs David Frum, well, need I say more. I’ve read much of AIMS stuff, and like Richard says, NONE of it is peer reviewed, they are papers submitted only to AIMS for publication. And I know something about peer review-there are a lot of bonehead peers, and a lot of butthead publications, so if they don’t even limbo under that high pole, then you KNOW its got to be bad.

    Since they don’t allow comments without membership I did send a letter to the editor, they probably won’t print it, but what the hell. Here it is:

    I have to respond to John Williamson’s latest column. For the author to state that welfare rates are high because ‘the system is so generous’ simply is incredulous, obviously he doesn’t know anybody on welfare.
    Some canadians forget how much federal money goes to BC to battle the pine beetle, how canadians rallied around Alberta beef producers and bailed out the industry during the ‘mad cow’ crisis. They forget CD Howe moved factories from the east to central canada in an industrial development move that had british politicians accusing Canada of war profiteering during the second world war.
    The study he references is discredited by the simple fact that the US and Canada both have different ways of counting who is actually unemployed. However, there ARE lessons to be learned-namely, that in Maine the largest employer is in shipbuilding, a protected US market where navy destroyers are built. In Canada, the St. John shipyard was scuttled by the Prime Minister and the Irvings because at the time there were no contracts. Irving still does shipbuilding-just not in New Brunswick. Canada instead but sub par ships second hand from Britain. And instead, they were given 50 million to open a wallboard factory, which provides few jobs, and fewer ‘good’ jobs.
    Federal investment (both funding and policy) has helped build and keep industries in EVERY part of the country-except the maritimes, where they basically fund either the Irvings, or build bridges and fix water systems in favoured ridings. EI has NOTHING to do with systemic under investment in the maritimes-that has occurred since confederation, long before the current EI system was in place. That doesn’t mean there are no provincial reasons for under achievement, but call a spade a spade.

  3. mikel says:

    Hey David, your page is all messed up with Firefox, it can’t access the comments page (is that on purpose?:)

    We often rail on the Irvings here, but those who argue for Irving to sell the chain forget that corporate media outside the Irving chain is just as bad, and the National Post is the worst offender. These are the guys that axed most of their staff who had dissenting views. And any paper that employs David Frum, well, need I say more. I’ve read much of AIMS stuff, and like Richard says, NONE of it is peer reviewed, they are papers submitted only to AIMS for publication. And I know something about peer review-there are a lot of bonehead peers, and a lot of butthead publications, so if they don’t even limbo under that high pole, then you KNOW its got to be bad.

    Since they don’t allow comments without membership I did send a letter to the editor, they probably won’t print it, but what the hell. Here it is:

    I have to respond to John Williamson’s latest column. For the author to state that welfare rates are high because ‘the system is so generous’ simply is incredulous, obviously he doesn’t know anybody on welfare.
    Some canadians forget how much federal money goes to BC to battle the pine beetle, how canadians rallied around Alberta beef producers and bailed out the industry during the ‘mad cow’ crisis. They forget CD Howe moved factories from the east to central canada in an industrial development move that had british politicians accusing Canada of war profiteering during the second world war.
    The study he references is discredited by the simple fact that the US and Canada both have different ways of counting who is actually unemployed. However, there ARE lessons to be learned-namely, that in Maine the largest employer is in shipbuilding, a protected US market where navy destroyers are built. In Canada, the St. John shipyard was scuttled by the Prime Minister and the Irvings because at the time there were no contracts. Irving still does shipbuilding-just not in New Brunswick. Canada instead but sub par ships second hand from Britain. And instead, they were given 50 million to open a wallboard factory, which provides few jobs, and fewer ‘good’ jobs.
    Federal investment (both funding and policy) has helped build and keep industries in EVERY part of the country-except the maritimes, where they basically fund either the Irvings, or build bridges and fix water systems in favoured ridings. EI has NOTHING to do with systemic under investment in the maritimes-that has occurred since confederation, long before the current EI system was in place. That doesn’t mean there are no provincial reasons for under achievement, but call a spade a spade.

  4. mikel says:

    Hey David, your page is all messed up with Firefox, it can’t access the comments page (is that on purpose?:)

    We often rail on the Irvings here, but those who argue for Irving to sell the chain forget that corporate media outside the Irving chain is just as bad, and the National Post is the worst offender. These are the guys that axed most of their staff who had dissenting views. And any paper that employs David Frum, well, need I say more. I’ve read much of AIMS stuff, and like Richard says, NONE of it is peer reviewed, they are papers submitted only to AIMS for publication. And I know something about peer review-there are a lot of bonehead peers, and a lot of butthead publications, so if they don’t even limbo under that high pole, then you KNOW its got to be bad.

    Since they don’t allow comments without membership I did send a letter to the editor, they probably won’t print it, but what the hell. Here it is:

    I have to respond to John Williamson’s latest column. For the author to state that welfare rates are high because ‘the system is so generous’ simply is incredulous, obviously he doesn’t know anybody on welfare.
    Some canadians forget how much federal money goes to BC to battle the pine beetle, how canadians rallied around Alberta beef producers and bailed out the industry during the ‘mad cow’ crisis. They forget CD Howe moved factories from the east to central canada in an industrial development move that had british politicians accusing Canada of war profiteering during the second world war.
    The study he references is discredited by the simple fact that the US and Canada both have different ways of counting who is actually unemployed. However, there ARE lessons to be learned-namely, that in Maine the largest employer is in shipbuilding, a protected US market where navy destroyers are built. In Canada, the St. John shipyard was scuttled by the Prime Minister and the Irvings because at the time there were no contracts. Irving still does shipbuilding-just not in New Brunswick. Canada instead but sub par ships second hand from Britain. And instead, they were given 50 million to open a wallboard factory, which provides few jobs, and fewer ‘good’ jobs.
    Federal investment (both funding and policy) has helped build and keep industries in EVERY part of the country-except the maritimes, where they basically fund either the Irvings, or build bridges and fix water systems in favoured ridings. EI has NOTHING to do with systemic under investment in the maritimes-that has occurred since confederation, long before the current EI system was in place. That doesn’t mean there are no provincial reasons for under achievement, but call a spade a spade.

  5. 156icq says:

    This blog lucky mikel makes some sense.

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