Stalled. Michael Hlinka

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СКАЧАТЬ The American is 20 percent more productive than the Canadian.

      To keep the arithmetic simple, let’s start off with the two currencies trading at par: 1CAD = 1USD. If each worker made $200 per week, the cost contribution from labour on the U.S. side is $8.33 per widget ($200/24). On the Canadian side, it’s $10 per widget. However, if the U.S. dollar appreciated by 20 percent, the labour cost per widget would be equal.

      This is the benefit of freely floating exchange rates and why (sensibly) most developed countries embrace this as public policy. It helps correct imbalances.

      Yet here’s the overriding point: In spite of the fact that our currency was fixed against the U.S. dollar for most of the decade, manufacturing still took off. That shouldn’t surprise anyone who’s stuck with the thesis of Stalled so far.

      There are four factors that drive economic growth: labour, capital, total factor productivity, and motivation. It’s difficult to draw too direct a line between exchange rates and any one of them.

      You can make the argument that the 1960s really started with the election of JFK on November 8, 1960. Richard Nixon was Eisenhower’s vice-president and even then seemed much more a product of the 1950s and the Cold War. JKF represented the future … hope. Then he was assassinated on November 22, 1963.

      I have no recollection of that day. But one of my most distinct early memories is of watching JFK’s funeral with my mother. I was in kindergarten at the time, which meant I spent mornings in school and afternoons at home with her. My sister was in Grade 2, so my mother and I were alone in the basement of our house. I was playing with my toys on the hardwood floor and she was ironing my father’s shirts. Tears were streaming down her face. I asked her why she was crying. She said that what was on TV was upsetting her. I asked her why she didn’t change the channel. She just shook her head and cried even harder.

      It was the first time I had seen my mother cry.

      JFK’s assassination traumatized our southern friends and neighbours. There were two major consequences of his assassination: a significant change in the manner in which the Vietnam War was conducted and the launch of the Great Society program. At the same time, the United States wrestled with a terrible historical injustice — slavery.

      We hold these truths self-evident, that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are Life, Liberty, and the Pursuit of Happiness.10

      These stirring words were written by Thomas Jefferson, who throughout his lifetime owned six hundred slaves.11 Not for the first time — or last — would a politician talk the talk, yet fail to walk the walk. Perhaps we shouldn’t judge Jefferson too sharply. It was the world he was born into.

      QUESTION 18

      In a world of slaves and masters, which would you choose to be?

      ☐ A slave.

      ☐ A master.

      A bloody civil war was fought, in part at least, to end the abomination of slavery, although a more sober reading of history might suggest that the real motive was to preserve the Union. After the Civil War ended, the United States struggled with race relations, and it came up with the doctrine of “separate but equal.”

      The politicians passed the laws. Then the Supreme Court put its stamp of approval on the policy with the 1896 decision Plessy v. Ferguson. Not only was it legal to provide separate facilities for blacks and whites, if you defied the law you were considered a criminal. That was the law of the land until the 1954 decision Brown v. the Board of Education. Following that decision, the policy of “separate but equal” was against the law.

      Prior to Lyndon Johnson’s assumption of the presidency following Kennedy’s assassination, both Eisenhower and Kennedy had used the federal government’s power to trump the states when the rights of blacks weren’t being adequately protected. Little Rock, Arkansas, 1957. James Meredith, University of Mississippi, 1962. These actions were necessary to reverse obvious wrongs. Wrongs, by the way, that would never have occurred had America defined itself as a collection of individuals rather than groups. But I digress. The result was that fair-minded people, seeing what good the federal government had done with respect to this issue, started reflexively siding with the federal government. Power was increasingly being concentrated in Washington D.C., at the expense of the states and, ultimately, individuals.

      On May 22, 1964, Lyndon Johnson delivered his famous Great Society speech at the University of Michigan’s commencement ceremony. It’s a wonderful piece of oratory and established the foundation for public policy for decades to come — I would argue — on both sides of the forty-ninth parallel. I’ll summarize it, using LBJ’s words as much as possible.

      For half a century, we called upon unbounded invention and untiring industry to create an order of plenty for all of our people. The challenge of the next half century is whether we have the wisdom to use that wealth to enrich and elevate our national life.

      LBJ was right that in the early half of the twentieth century plenty had been created for most of the American people. Yet even as late as the early 1950s, hunger had been widespread in parts of the United States. That was no longer true by 1964.

      LBJ then proceeded to explain how he planned to “elevate” national life:

      The Great Society rests on abundance and liberty for all. It demands an end to poverty and racial injustice, to which we are totally committed in our time. But that is just the beginning.

      The three pillars of the Great Society, according to LBJ, were taking care of the cities, nurturing the countryside, and improving the classrooms of America. He ended the speech with a series of rhetorical questions:

      So, will you join in the battle to give every citizen the full equality which God enjoins and the law requires, whatever his belief, or race, or the colour of his skin?

      Will you join in the battle to give every citizen an escape from the crushing weight of poverty?

      Will you join in the battle to make it possible for all nations go live in enduring peace — as neighbours and not as mortal enemies?

      Will you join in the battle to build the Great Society, to prove that our material progress is only the foundation on which we will build a richer life of mind and spirit?12

      I don’t know what you were doing as you were reading those words, but I was standing on top of my desk and shouting: “YES! … YES! … YES! … YES!!!”

      Only one problem: the legislation that came out of the Great Society program accomplished exactly the opposite.

      LBJ wanted the Great Society to be his legacy; I would argue that what actually came to define his presidency was the Vietnam War. The United States got sucked into a quagmire, and just as in previous wars, there was a shortage of volunteers, so it had to rely on the draft to fill the military’s ranks. The country was torn apart, divided along class lines. Working class/blue-collar America generally supported it. The intelligentsia and the privileged were against it.

      I’ll be the first to admit that this is a crude characterization. But I’m guessing that Oliver Stone’s Platoon was accurate: those who were sent to die in Southeast Asia, were, for the most part, those who benefitted least from the system.

      The decision to go to war is the most profound one that any country faces, but it’s a particularly significant one for States that consider themselves democracies. The ultimate sacrifice СКАЧАТЬ