9/14/08

The Canadianization of America

Related story: "Workers disinterested in irrelevant unions"
Related card-check stories: here

Here comes 'no-vote' unionism

In Canada, worrying about being Americanized is a national pastime, particularly in political and media circles. It seldom occurred to me the United States could become Canadianized until I moved here, in an election year, no less, and found Americans obsessed with many Canadian ideas at a time when those Canadian ideas are losing favor north of the border because they just don't work.

Presidential hopeful Barack Obama and heavy hitters in the Democratic Party have unambiguously supported a series of labor-law changes that would replicate some of the worst parts of Canadian labor laws. For example, the Democrats support card-check certification for unions, in place of secret-ballot elections. Such a system already exists in parts of Canada.

Interestingly for America, though, Canadian governments have largely been moving away from this system because of its negative consequences, namely creating a pronounced imbalance between union power and that of the workers and employers.

Consider also American replication of the Canadian health-care system. Large constituencies in America, including much of the Democratic Party, favor single-payer health care based on the Canadian model. Indeed, my experience in California is average citizens are more than ready to implement Canadian health care, not because they necessarily understand it but because elites have convinced them it's a better system.

It's not. The reality of Canadian health care with its chronic shortage of physicians is substantially different from the romanticized version I've heard about since landing in America. Canada's system is one of the most expensive in the industrialized world and provides relatively poor access to doctors and technology, which results in long and often painful waiting times. And these are only two of many problems plaguing the system.

Yes, U.S. health care suffers from serious problems, and it took me less than four months to experience them firsthand. What I've quickly learned, however, is the United States does not have a market-based health system, which would eliminate or dramatically reduce many of the problems observed. Rather, the problem is the American system is heavily and prescriptively regulated by government. Swapping a heavily regulated, privately provided health system for a heavily regulated, government-provided health system is not the panacea advocates make it out to be.

Taxes are another area where much of the United States seems intent on mimicking Canada, at least Canada pre-1996. That is, Canadians before 1996 generally argued about which taxes to increase. The environment here seems to be the same. Most of the debates, particularly in the presidential race, are about whether to increase taxes, and if so, which ones. Obama, for example, would allow the Bush tax cuts to expire (increase current rates) and raise income taxes on people making more than $250,000. The result would be a top marginal tax rate north of 60 percent for American workers.

Canadian governments, national and provincial, are reducing personal and corporate taxes because they recognize through experience the damaging and counterproductive effects of high taxes. Canada is supposed to be more egalitarian, while the United States supposedly focuses more on entrepreneurship and merit-based compensation. However, the ability to retain the fruits of one's efforts is deteriorating in the United States and now improving in Canada.

American politicians seem intent on copying Canada pre-1996, without regard to consequences. They have picked Canadian ideas that don't work very well, to the point that Canada is actually discarding them. That can leave a new arrival like me feeling like Al Pacino in Godfather III: "Just when I think I'm out, they drag me back in."

It wouldn't be so bad if America copied Canada post-1996. That would mean tightening the spending belts of government, balancing the books and reducing taxes — aggressively in some cases. Americans should welcome that kind of Canadianization not because it's Canadian but because it works.

- Jason Clemens is the director of research for the Pacific Research Institute in San Francisco and the former director of fiscal studies at the Fraser Institute in Vancouver.

(rep-am.com)

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