INTEREST RATE SHOCK
Open Letter to The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance
January 4, 2021
FOR IMMEDIATE RELEASE
Red Deer – Mountain View, AB
The economic collapse as a result of COVID-19 lockdown measures has pushed the real interest rate to record lows. This rate however, is very misleading given our current economic environment.
- Baby boomers are retiring and are reducing the pool of available investable funds.
- Reduced number of people in the workforce will result in higher wage demands.
- Inevitable higher taxes required to repay significant debt brought on by lockdowns.
- High likelihood of reduced outsourcing in order to protect domestic supply chains.
- An economic plan that focuses on “green” incentives and destroys Canada’s oil and gas industry.
- Inflated housing prices across Canada despite a poor economic outlook.
- High consumer debt levels pre-COVID-19.
- Long running Bank of Canada policy which encourages consumption over investment.
Your government has indicated that it is considering adding an additional $100 billion in stimulus spending once the “virus is under control”. As the Canadian economy is already flooded with record government spending, the potential for inflation is very real.
Considering the above, the return of high interest rates, as seen in the 1980’s, is entirely possible. While we may not see record high mortgage rates of 21.46% as posted in August 1981, even small increases in rates could result in significant interest rate shock for many Canadians.
Increases in inflation and interest rates would impact low-income families most adversely. Most notably, these individuals may struggle to pay for food, shelter and healthcare, all of which are basic necessities.
COVID-19 has already resulted in the biggest transfer of wealth in human history. I am strongly urging you to end the pursuit of a “green economy” and commit to a drastic reduction in red tape to allow the private sector to begin generating wealth, something the government is only able to redistribute.
Candidate for Red Deer – Mountain View, AB
The Best Life Lesson for a Teen Is a Job
From the Brownstone Institute
During the Covid debacle, kids were locked out of school or otherwise condemned to an inferior Zoom education for up to two years. What were the alternatives? Unfortunately, since the New Deal, the federal government has severely restricted teenagers’ opportunities for gainful employment. But new evidence proves that keeping kids out of work doesn’t keep them out of mental health trouble.
Yet suggesting that kids take a job has become controversial in recent years. It is easy to find expert lists on the dangers of teenage employment. Evolve Treatment Center, a California therapy chain for teenagers, recently listed the possible “cons” of work:
- Jobs can add stress to a child’s life.
- Jobs can expose kids to people and situations they might not be ready for.
- A teen working a job might feel like childhood is ending too soon.
But stress is a natural part of life. Dealing with strange characters or ornery bosses can speedily teach kids far more than they learn from a droning public school teacher. And the sooner childhood ends, the sooner young adults can experience independence – one of the great propellants of personal growth.
When I came of age in the 1970s, nothing was more natural than seeking to earn a few bucks after school or during the summer. I was terminally bored in high school and jobs provided one of the few legal stimulants I found in those years.
Thanks to federal labor law, I was effectively banned from non-agricultural work before I turned 16. For two summers, I worked at a peach orchard five days a week, almost ten hours a day, pocketing $1.40 an hour and all the peach fuzz I took home on my neck and arms. Plus, there was no entertainment surcharge for the snakes I encountered in trees while a heavy metal bucket of peaches swung from my neck.
Actually, that gig was good preparation for my journalism career since I was always being cussed by the foreman. He was a retired 20-year Army drill sergeant who was always snarling, always smoking, and always coughing. The foreman never explained how to do a task since he preferred vehemently cussing you afterwards for doing it wrong. “What-da-hell’s-wrong-with-you-Red?” quickly became his standard refrain.
No one who worked in that orchard was ever voted “Most Likely to Succeed.” But one co-worker provided me with a lifetime of philosophical inspiration, more or less. Albert, a lean 35-year-old who always greased his black hair straight back, had survived plenty of whiskey-induced crashes on life’s roller coaster.
Back in those days, young folks were browbeaten to think positively about institutions that domineered their lives (such as military conscription). Albert was a novelty in my experience: a good-natured person who perpetually scoffed. Albert’s reaction to almost everything in life consisted of two phrases: “That really burns my ass!” or “No Shit!”
After I turned 16, I worked one summer with the Virginia Highway Department. As a flag man, I held up traffic while highway employees idled away the hours. On hot days in the back part of the county, drivers sometimes tossed me a cold beer as they passed by. Nowadays, such acts of mercy might spark an indictment. The best part of the job was wielding a chainsaw—another experience that came in handy for my future career.
I did “roadkill ride-alongs” with Bud, an amiable, jelly-bellied truck driver who was always chewing the cheapest, nastiest ceegar ever made—Swisher Sweets. The cigars I smoked cost a nickel more than Bud’s, but I tried not to put on airs around him.
We were supposed to dig a hole to bury any dead animal along the road. This could take half an hour or longer. Bud’s approach was more efficient. We would get our shovels firmly under the animal—wait until no cars were passing by—and then heave the carcass into the bushes. It was important not to let the job crowd the time available for smoking.
I was assigned to a crew that might have been the biggest slackers south of the Potomac and east of the Alleghenies. Working slowly to slipshod standards was their code of honor. Anyone who worked harder was viewed as a nuisance, if not a menace.
The most important thing I learned from that crew was how not to shovel. Any Yuk-a-Puk can grunt and heave material from Spot A to Spot B. It takes practice and savvy to turn a mule-like activity into an art.
To not shovel right, the shovel handle should rest above the belt buckle while one leans slightly forward. It’s important not to have both hands in your pockets while leaning, since that could prevent onlookers from recognizing “Work-in-Progress.” The key is to appear to be studiously calculating where your next burst of effort will provide maximum returns for the task.
One of this crew’s tasks that summer was to build a new road. The assistant crew foreman was indignant: “Why does the state government have us do this? Private businesses could build the road much more efficiently, and cheaper, too.” I was puzzled by his comment, but by the end of the summer I heartily agreed. The Highway Department could not competently organize anything more complex than painting stripes in the middle of a road. Even the placement of highway direction signs was routinely botched.
While I easily acclimated to government work lethargy, I was pure hustle on Friday nights unloading trucks full of boxes of old books at a local bindery. That gig paid a flat rate, in cash, that usually worked out to double or triple the Highway Department wage.
The goal with the Highway Department was to conserve energy, while the goal at the book bindery was to conserve time—to finish as quickly as possible and move on to weekend mischief. With government work, time routinely acquired a negative value—something to be killed.
The key thing kids must learn from their first jobs is to produce enough value that someone will voluntarily pay them a wage. I worked plenty of jobs in my teen years – baling hay, cutting lawns, and hustling on construction sites. I knew I’d need to pay my own way in life and those jobs got me in the habit of saving early and often.
But according to today’s conventional wisdom, teenagers should not be put at risk in any situation where they might harm themselves. The enemies of teenage employment rarely admit how the government’s “fixes” routinely do more harm than good. My experience with the highway department helped me quickly recognize the perils of government employment and training programs.
Those programs have been spectacularly failing for more than half a century. In 1969, the General Accounting Office (GAO) condemned federal summer jobs programs because youth “regressed in their conception of what should reasonably be required in return for wages paid.”
In 1979, GAO reported that the vast majority of urban teens in the program “were exposed to a worksite where good work habits were not learned or reinforced, or realistic ideas on expectations in the real world of work were not fostered.” In 1980, Vice President Mondale’s Task Force on Youth Unemployment reported, “Private employment experience is deemed far more attractive to prospective employers than public work” because of the bad habits and attitudes spurred by government programs.
“Make work” and “fake work” are a grave disservice to young people. But the same problems permeated programs in the Obama era. In Boston, federally-subsidized summer job workers donned puppets to greet visitors to an aquarium. In Laurel, Maryland, “Mayor’s Summer Jobs” participants put in time serving as a “building escort.” In Washington, D.C., kids were paid to diddle with “schoolyard butterfly habitats” and littered the streets with leaflets about the Green Summer Job Corps. In Florida, subsidized summer job participants “practiced firm handshakes to ensure that employers quickly understand their serious intent to work,” the Orlando Sentinel reported. And folks wonder why so many young people cannot comprehend the meaning of “work.”
Cosseting kids has been a jobs program for social workers but a disaster for the supposed beneficiaries. Teen labor force participation (for ages 16 to 19) declined from 58 percent in 1979 to 42 percent in 2004 and roughly 35 percent in 2018. It’s not like, instead of finding a job, kids stay home and read Shakespeare, master Algebra, or learn to code.
As teens became less engaged in society via work, mental health problems became far more prevalent. The Centers for Disease Control and Prevention found that in “the 10 years leading up to the pandemic, feelings of persistent sadness and hopelessness—as well as suicidal thoughts and behaviors—increased by about 40 percent among young people.”
The troubled teen years are producing dark harvests on campus. Between 2008 and 2019, the number of undergraduate students diagnosed with anxiety increased by 134 percent, 106 percent for depression, 57 percent for bipolar disorder, 72 percent for ADHD, 67 percent for schizophrenia, and 100 percent for anorexia, according to the National College Health Assessment.
Those rates are much worse post-pandemic. As psychiatrist Thomas Szasz observed, “The greatest analgesic, soporific, stimulant, tranquilizer, narcotic, and to some extent even antibiotic – in short, the closest thing to a genuine panacea – known to medical science is work.”
Those who fret about the dangers that teens face on the job need to recognize the “opportunity cost” of young adults perpetuating their childhood and their dependence. Sure, there are perils in the workplace. But as Thoreau wisely observed, “A man sits as many risks as he runs.”
How to save 4 million lives every year
Dr. Bjorn Lomborg researches the smartest ways to do good. With his think tank, the Copenhagen Consensus, he has worked with hundreds of the world’s top economists and seven Nobel Laureates to find and promote the most effective solutions to the world’s greatest challenges, from disease and hunger to climate and education.
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