Canada: RCMP report warns Canadians may revolt once they realize how broke they are

 What's the result of nine years of the left wing government of Justin Trudeau?  National collapse according to a report by the Royal Canadian Mounted Police.  The RCMP's report was obtained by Canada's National Post via an open records request.  The report is highly redacted so one can only assume that the parts that are taken out are even more dire than that which remained.  

The report states: "The coming period of recession will … accelerate the decline in living standards that the younger generations have already witnessed compared to earlier generations" and that "[e]conomic forecasts for the next five years and beyond are bleak."

The Post adds more detail on Canada's dire economic situation and how high housing costs--higher relative to incomes than the United States--mean that young Canadians are unlikely to ever afford to buy a house.

In terms of declining living standards and inaccessible home ownership, the RCMP’s warnings are indeed in line with available statistics.

Canadian productivity — measured in terms of GDP per capita — has been trending downwards since at least the 1980s. But this has accelerated dramatically in recent years — even as per-worker productivity rises in many of our peer countries.

An analysis last year by University of Calgary economist Trevor Tombe found that if Canada had merely kept pace with U.S. productivity growth for the last five years, Canadian per-capita earnings would be $5,500 higher than they are now.

Meanwhile, housing affordability has reached “worst-ever” levels in most of Canada’s major markets, according to a December analysis by RBC. On average, even condos are now so unaffordable that only 44.5 per cent of Canadian households had sufficient income to buy one at current prices. As for single-family homes, only the richest 25 per cent of Canadian households had any hope of obtaining one.

According to the Heritage Foundation, economic freedom in Canada declined sharply since Trudeau took office.  

The Canadian experience again shows how socialism harms the interests of the young.  Nine years into the Trudeau Administration, young people in Canada can only look forward to declining living standards and renting in perpetuity.  Not a happy situation.    

The Economic Plight of Chinese Youth Demonstrates Yet Again That Socialism Doesn’t Work

 

Surveys show that roughly half of the young people in America have a positive view of socialism.  Yet socialism has failed everywhere it’s been tried. 

Typically, it is young people that are harmed the most by socialist economic policies.  The economic plight of young people in China is just one recent example.

If there’s anyplace that socialism should work for young people, it’s China.  China economy has been centrally planned and managed since1949, longer than any other nation on earth. 

Yet young people in China are having a difficult go of it.  Jobs are scarce, youth unemployment high. 

It’s so bad in China cities that young people have begun sharing beds with strangers just to make ends meet.  Young Chinese call this “hot bedding”. 

Hot bedding with a stranger is not a good thing.  It’s the kind of thing you might have seen in a Three Stooges short, not a romantic rendezvous. 

Hot bedding has come common because job opportunities for young people in China are so poor and rents so high.   

Below is China’s youth unemployment series for the last five years as reported by the New York Times. 

By comparison, the youth unemployment rate in the United States is 8.7 percent.

Notice that the unemployment rate for older Chinese has actually ticked down a bit over the last five years.  Why is rising unemployment in China a more widespread phenomena?

Simple.  Patronage and work rules in China protect more senior workers with greater political connections.  The Chinese have a name for that: The Iron Rice Bowl. 

That works out great for older workers.  They have lifetime sinecures. 

But when the economy slows, as it has in China, someone has to bear the downside. 

Instead of sharing the risk of job loss throughout the workforce, patronage places all of the downside risk on younger people. 

Because of their relatively short tenure in the workforce, younger workers and new entrants have had fewer opportunities to acquire political connections within their own organization.  Note that I’m not using “political” in the ideological sense.  Rather “political” refers to relationships which may involve the local Communist Party apparatus, or it could just be relationships with influential managers and other employees.

Union seniority rules in the United States work the same way.  They protect the jobs of some but they also place the entire risk of job loss on younger workers with fewer years of experience.

To make matters worse, the Chinese government has decided to cover up the youth unemployment problem by discontinuing publication of youth unemployment statistics. 

In socialist economies, governments have more control over everything including the media. 

Control of the media allows the ruling party to squelch any news that makes the ruling powers look bad. 

That’s exactly what’s happening in China.  As the Chinese economy slows, inconvenient economic data series disappear.

This week China announced that it was no longer going to publish the youth unemployment rate.

That doesn’t solve the problem.  That just covers it up.  

Despite so much evidence on the failures of socialism, large numbers of young Americans are sympathetic to socialist ideas.  Many even endorse communism.

A recent survey found that 49 percent of Gen Z had a favorable view of socialism and a third supported the gradual elimination of capitalism in the United States.   

18 percent of Gen Z and 13 percent of Millennials think communism is a fairer system than capitalism and deserves consideration in America.

As Marion Smith, the Executive Director of the Victims of Communism Memorial Foundation put it, the findings of the survey demonstrates “a total failure of our education system, not just in schools but also a basic dishonesty in our media and popular culture. When one-in-four Americans want to eliminate capitalism and embrace socialism, we know that we have failed to educate about the historical and moral failings of these ideologies.”

 Indeed.

China’s Youth Unemployment Problem Provides More Evidence That Socialism Doesn’t Work

 

Karl Marx wrote that communism would solve the unemployment problem created by capitalism.  Evidence from China shows he had it backwards.

In 1847 Marx wrote: 

“Big industry constantly requires a reserve army of unemployed workers for times of overproduction. The main purpose of the bourgeois in relation to the worker is, of course, to have the commodity labour as cheaply as possible, which is only possible when the supply of this commodity is as large as possible in relation to the demand for it, i.e., when the overpopulation is the greatest.”

But does his critique of capitalism hold? 

China provides a natural experiment.  Were Marx correct that socialism solves the unemployment problem then we’d expect to see little or no unemployment in China. 

China is the world largest communist regime.  The Chinese Communist Party has been in power for 74 years.  Surely they must have gotten it right by now. 

Well, not so much.

The figure below contains the unemployment rate for young Chinese (between 16 and 24).  Their reported unemployment rate is almost 20 percent.  And since the Chinese government often fudges its figures, the actual youth unemployment rate may well be far higher. 

 

Compare that to the United States.  Youth unemployment in the United States never got above 20 percent.

 

This comparison show that socialism, even when practiced in its most extreme form (communism), doesn’t solve the unemployment problem.  In fact, it makes it worse.

The figure below contains average unemployment rates among young people between the ages of 20 and 34 for the advanced countries of the world (OECD member countries) over the past ten years.

The chart clearly shows that unemployment rates are lower in countries with economies that are closer to the capitalist economic model (more economic freedom) than those with larger public sectors and more regulation (less economic freedom).

 

Bottom line: socialism fails young people wherever its been tried.  And that’s a fact.