Mega Projects Or National Policy Reset?

Editor’s note: This article was originally published on the Canadians for a Sustainable Society website (sustainablesociety.com). It is republished here with permission of the author. This version has been slightly abridged – read the full version here.

Canada now finds itself in a new world of disorder. To assure stability some have suggested embarking on “mega-projects” to boost growth. But will regressing to “Hewers of wood and drawers of water” take Canada back to the pre-industrial era or temporarily put us on solid ground? A long term vision would surely help, as would stopping reacting to Trump and starting to plan.

Growth is not a strategy

The structure of an economy largely determines individual and social outcomes for a country. After 50 years of high growth policies taken to the extreme by Justin Trudeau, Canada finds itself with a failing house of cards economy and the butt of 51st state jokes.

Why? It is painfully clear how narrow and weak the structure of the Canadian economy has become. Once built on the foundation of high paid, productive jobs, the hollowed-out economy has declined into a morass of low wage service jobs and extremely profitable finance and speculation based activity.

Jim Basillie outlines just how badly governments have performed for Canadians in this brief interview clip:

Structure matters

Structure matters. This “Profit by Industry” graph makes this strikingly obvious. In Canada, finance and rental profits exceed the combined profits of the next eight (actually productive) industries by a factor of two. This profit structure is not possible in a functioning democracy, and is a classic example of an unsustainable Ponzi growth economy.

Despite constant media exhortations that all things housing form a core industry and that housing inflation is good, housing is a consumer good and not a wealth generator. It can be a stock of wealth for individuals but houses don’t generate wealth any more than automobiles or toothbrushes do. The profitization of housing has pumped trillions of dollars out of the pockets of the vast majority of people into the pockets of the wealthy.

This model was created by the finance cult for that exact purpose. Instead of a broad-based economy investing in its people, increasing productivity and real incomes which support both fiscal balance and a robust social safety net, corrupted governments implemented inflationary growth policies. A broad-based and healthy economy would be characterized by profits well distributed across productive industries.

GDP growth favours the very wealthy through an expanding population (mass immigration in most Western countries). This transfers hundreds of billions of dollars annually from mid and lower income productive groups to the parasitic overhead of financial elites and dilutes investment per worker.

Inflated housing costs and low productivity are the perfect generator of inequality, and in all three of these measures, Canada finds itself at the bottom of barrel in the developed world.

Low to no growth rates can enable very high levels of progress. Contrarily, by focusing solely on GDP growth, Canada has failed to invest in its people – with the inevitable social and fiscal outcomes, and the loss of faith in the political system.

In the growth model, everything is sacrificed for a higher cash flow (GDP). The messaging is that whatever problems exist will eventually be cured by growth. If growth hasn’t cured them, then we weren’t growing fast enough. The reality is that growth has hurt every metric of social or environmental well-being, as the past five decades bear witness.

The great majority of Canadians will benefit from a stable economy, but the beneficiaries of the Ponzi economy will wither. Good riddance. Canada needs productive business models, not usurious wealth transfer and cheap labour models.

Fear of progress: Classic media fearmongering and misdirection

“The Trump administration is cracking down on immigration – legal and otherwise – setting the stage for potential labor shortages, weaker economic growth and higher inflation.” – CNN

Headlines like this are code for “We don’t care about higher productivity, higher wages, lower housing costs, or better working conditions. We want ever more serfs paying ever increasing rents and higher mortgages.” In their hands, the nation has become nothing more than a market, and the people have become mere consumers, rent-payers, and cheap labour.

The mainstream media growth cheerleaders represent the groups who were sufficiently corrupt and disconnected to make Donald Trump, by comparison, look good enough to elect.

What we know from past experience:

• Growth doesn’t equal progress
• Cashflow doesn’t mean strength
• Bigger doesn’t mean better

Mega-trends we see ahead which growth exacerbates:

• Resource depletion
• Climate instability
• Ageing
• Supply chain disruption
• Financial disruption

For another take on the biophysical issues Canadians for a Sustainable Society has been addressing over the years, read the article by energy expert Art Berman here.

Mega trends unfold gradually but inexorably, while Trump has landed like a hyperactive bull dropped through the roof of a china shop. Energy cost increases, trade pattern re-organization, and finance and monetary restructuring may take place in a very short timeframe. It now seems clear that Trump has no strategy, and is shaking things up in order to make short term deals to his advantage.

A coalition of the egalitarian must be organized to avoid a melee of arbitrary tariff actions and reactions sending the West into a downward spiral.

The status quo has been cancelled. Canada must establish clear basic goals and re-wire its political neural pathways to transform from its money oriented growth fixation into a biophysically aware culture. Pro-active policy is now required.