American Elephants

Oh Canada, Brave Canada, You’re a Pretty Impressive Country Now! by The Elephant's Child

While the United States struggles under low growth and high regulation, our northern neighbor is economically strong.  The Obama administration and its economic advisers have flailed around, completely baffled as to how to get the economy growing again. They might profit by paying attention.

On Thursday, Canadian Prime Minister Stephen Harper announced that he would slash corporate taxes again on January first, cutting the federal business tax burden to just 15%.  Along with tax cuts in the provinces, total taxes for businesses in Canada will drop to 25%, one of the lowest in the G7 and below the OECD average. Beside making it easier for Canadian business to do business, Canada is trying to get the government out of citizens’ lives.

Minister Jim Flaherty said that “Creating jobs and growth is our top priority.  Through our government low-tax plan…we are continuing to send the message that Canada is open for business and the best place to invest.”

“We believe in free trade in Canada, we’re a free-trading nation.  That’s the source of our strength, our quality of life, our economic strength,” Flaherty said last month.

Canada has pursued its competitive advantage — oil. And it did so not through top-down “industrial policy” but by getting government out of the way. Harper has enacted market-friendly regulations to accomplish big things like the Keystone pipeline — and urged President Obama to move forward with it, or Canada would sell its oil to China who is ready and anxious to buy.

These policies have been well-known since the Reagan administration, and practiced successfully in the Coolidge and Kennedy administrations as well. Republicans have urged America to adopt free market, small government policies — because they work.  Canada is proving it once again. But Canada had essentially been a socialist country since the 1950s. Stephen Harper’s moves are a dramatic affirmation of free market economics. A policy that works every time they are tried.

Incomes are rising in Canada, unemployment is two percentage points below the U.S. rate, it’s currency is stronger and it boasts Triple-A sovereign ratings across the board, lowering its cost of credit.

Obama, on the other hand, has expressed his support for the Occupy movement, their demands for an end to capitalism, and an end to free-market economics.  He has approved the Occupy attacks on corporations and banks because it fits with his class warfare campaign strategy. Pity that he is unable to learn from others.  Perhaps Obama will awaken before Canada inks contracts with China for the oil and the jobs they have offered to us, only to be put off — till after the election. That may well be too late.

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