Socialism Observed I

Dave 07August 29, 2015

When Albertans in Calgary Foothills go to the polls this Thursday, September 3, Alberta will have had four months of NDP, or, socialist government. As Dr. Phil puts it: “How’s that workin for ya?”

** Americans reading this need  to reflect on eight years of economic and diplomatic chaos, and then start to reflect carefully – not emotionally – about the next election.

Since the socialist NDP took over Alberta’s government, corporate / business income tax has gone up by 20%. And they have set about raising the minimum wage by an economically insane, (but ideologically pure) 47%. $15 an hour has apparently become North American socialism’s ideologically correct number.

Now this may be a mystery to Rachel Notley and the NDP, but that money won’t come from the legal structures called “Companies.” A company, or corporation, is nothing more than a legal entity that allows a group of investors to pool their capital in order to finance larger business ventures than they could as individuals.

Taxes and wages ultimately come from someone’s pocket, and since companies don’t have pockets – either literally or figuratively, the money will come from the pockets of people like you: employees, job-seekers, investors, and shareholders.

Some businesses can operate with a certain percentage of entry-level workers. They start them at a low wage; spend money training them; and those with aptitude, and, a good attitude, move up quickly. Or they move on to different types of businesses that can afford to pay more.

But if you’re unskilled and looking for a job, the socialists are busily building a huge barrier between you and employment. Higher taxes and arbitrary minimum wages are always a barrier to employment, but especially for the unskilled. To you, the NDP/socialists are essentially saying: “Stay where you are and continue living on your parent’s benevolence, or welfare.”

Or to make it more personal, what they’re saying to my unskilled grandchildren and your grandchildren, your children, or any unskilled person who is trying to get into the workforce is; “You might be willing to go to work for nothing to start while someone trains you, but we won’t allow it. If you can’t find someone willing to pay you $15 an hour, you can’t work.” This is government gone crazy, yet it’s become socialist dogma.

And it will eventually lead to more automation.It’s already happening.McDonalds-Machines

Yet lower wage employees and the unemployed are the people that socialists claim to want to help. If governments actually want to help low income and unemployed citizens, they simply need to create a tax and regulation environment that will encourage people to form and expand businesses. It’s not complicated, but few politicians get it Or, efficient government may conflict with their own political ideology, or they may be stymied by unionized bureaucrats who fight them every inch of the way, because efficient government certainly conflicts with their interests!

Higher taxes and wages also mean that less money will reach the pockets of those who invested their time and money in the business. In turn they will spend less at other businesses like restaurants and shops. Yet perversely, higher wage and tax costs eventually lead to higher prices, when companies are forced to increase prices to prevent losses. This fuels inflation, and inflation eventually takes money out of everyone’s pocket.

Pension funds of all kinds invest in publicly traded companies, so they will be negatively impacted. Even most union pension funds are invested in public companies, so higher taxes will inevitably end up in less money for everyone, including union members when they retire. Think about that!

So everybody loses? Well, not everybody. Because in fact, unions will benefit. They will insist on maintaining the differential between the minimum wage and their negotiated wage and they will also insist that their wages keep up with inflation.

So, socialist governments jacking up wages and taxes is no surprise when you realize that a socialist government’s core supporters are unions; and socialist governments largely consist of ex-union, or union connected politicians and staffers.

In fact, it’s likely that none of this is really a mystery to Rachel Notley and the NDP. It’s just them being true to their ideology, and “dancing with the ones who brung them.”

But there’s one more long-term danger to implementing higher taxes and jacked up minimum wages. That is, that they send a powerful signal to potential investors that a jurisdiction is no longer business friendly.

I’ve watched it happen over the past 40 years in British Columbia. When the socialists are in power, mining and forestry decline. When they are turfed out, businesses cautiously begin to return.

Saskatchewan’s socialist government sent that negative signal 70 years ago, and then, sadly, Saskatchewan’s families spent the next 60 years watching their sons and daughters move to Alberta, and British Columbia, and Ontario, each of which – at the time – had more business friendly governments.

More recently, under the socialist/NDP government of Bob Rae, and the subsequent socialist/Liberal governments of Dalton McGuinty and Kathleen Wynne, Ontario’s once powerful economy has been decimated. Almost unbelievably, Ontario has now joined socialist Manitoba, Québec, and the Maritimes, as an officially “have not province.”

If you have children or grandchildren entering the workforce, think about that!

When the voters of Calgary Foothills go to the polls on September 3, whoever wins is not going to change Alberta’s government for the next four years, but voters do have an opportunity to send a signal.

They basically have three choices.

  1. Vote for the candidate of a party with a long history of entitlement, and, if examined dispassionately, incompetence.
  2. Vote for the candidate of a party ideologically committed to higher taxes, ever-expanding government interference in the marketplace, and, in every other aspect of your personal lives.
  3. Vote for the candidate of a party who – ideologically at least – favours smaller government, lower taxes, market driven wages, and more individual and community self-reliance.

If you are a resident of Calgary Foothills, please think about the issues carefully, courageously and completely. Then be sure to get out and vote!

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