Blame the free market for government greed?

October 12, 1995

Blame Who?

Remember what I wrote yesterday about crap showing up in the Spectator? Well whadaya know! There's even more today!

Of course, it's only on the OPINION page, but check it out. It's titled "Blame the free market, not social programs, for the debt" by some guy by the name of Ken MacQueen.

Re: Blame the free market, not social programs, for the debt

First question one has to ask is, which free market is this guy talking about? The one on MARS?

The economy of Hong Kong is about the closest approximation of a free market on this planet. Is Mr. MacQueen telling us to blame Hong Kong for our government debt? He doesn't say but it must be so since, instead of a free market economy, Canada rely's upon a heavily taxed, subsidized and regulated private sector.

He does say that the "problem is that the free market place, Canada's beloved engine of economic recovery, has screwed these people in the ear (ie; the so called X generation), to use the technical term" Yeh, this guy's really familiar with technical stuff. But nowhere does he attempt to explain just how it is that Hong Kong has accomplished this feat.

Blaming Hong Kong's free market for Canada's debt problem should be enough to seriously damage Mr. MacQueen's credibility but there's more. Mr. MacQueen refers to the findings of one John Myles who's data covers the period from 1973 to 1991 and which suggests, he claims, that "we have done altogether too much bowing and scraping to the God of the Free Market."

Who has been bowing and scraping? The Canadian government? I hardly think so. The media? That would be news. The Canadian voter? Ha! Is he kidding or what?

The only significant tilts toward free(er) markets in Canada have been the Klein government in Alberta (Klein became premier in 1992) and of course the Mike Harris government elected in Ontario earlier this year. ( and when you think about it.... "significant" seems something of an oversatement.

Both events fall outside of the period covered by Mr. Myles. Bowing and scraping? He must kidding.

Perhaps the most humorous segment of Mr. MacQueen's article is where he talks about a graph showing the change in the makeup of the disposable income of young families from 1972-91. This, obviously, is where Mr. MacQueen's technical expertise comes into play.

He notes that, "the percentage of income from wages falls in a sharp slope while income from social transfers rises over time. The lines cross in a perfect X. It is, Mr. Myles says rather sadly, the portrait of a generation."

Doesn't it strike Mr. MacQueen as the least bit curious that social transfers have been rising during a period in which he alleges that there has been just "too much bowing and scraping to the God of the Free Market"?

And talk about graphs, I've got me one too. This one is on page 47 of Tax Facts Seven, a publication of the Fraser Institute. The title is, "The Canadian Consumer Tax Index, 1961-1990".

Does the consumer tax index rise over time like income from social transfers? No, it skyrockets!

On page 56 there is a table which compares selected expenditures with taxes as a percentage of total income before tax ¹ for different years. Here's an excerpt:

Selected Expenditures as a Percentage of Total Income

Year	Taxes	Shelter	Food	Clothes
1972	29.7	12.6	12.7	5.2
1990	32	10.3	9.3	3.5
Trend	Up	Down	Down	Down

A graph would show the technical Mr. MacQueen that taxes as a percentage of total income have increased notwithstanding all of the alleged genuflection over "free markets".

By the way, in 1961 taxes were a measly 22.1% of total family income. Hmmm... wonder what's really happening to the disposable income of Canadians?

[1] Total income, as used by the Fraser Institute, includes income from government (transfer payments), hidden income and hiddenpurchasing power loss.

last modified:Wednesday,March 19, 2008 at 04:40