Learning from Canada Is Not Un-American

Did you know that more North American cars are manufactured in Ontario than in Michigan?

Unfortunately, our country’s political tensions are so elevated that anyone who even suggests the possibility that another country may do something better than the U.S. is labeled unpatriotic. Of course, those suggestions are made because the person making them cares deeply about our country’s future, but that point often gets ignored.

Fareed Zakaria of Time Magazine penned an interested piece in the 2/16 issue entitled “The Canadian Solution.” In it he points out several areas in which Canada’s government policies appear to be working better than ours. Maybe if we finally can admit that not everything we do in the U.S. turns out to be perfectly right, we can begin to at least consider other kinds of policies without being labeled un-American.

It became clear from President Obama's address that healthcare reform will be on his agenda in 2009. A likely focus for such reform will be making sure that every American has health insurance. Such a task will undoubtedly be bad-mouthed by many, labeled as socialism.

“Let the free market work, we can’t be socialists like Canada and France!”, they’ll say. The free market is usually great, but if you have been diagnosed with a disease and lose your job and employer-based insurance plan, you often can’t turn to private health insurance provided by the free market. Either the insurance company will refuse to cover you at all (because they won’t make a profit on someone who is sick), or they’ll charge you a few thousand dollars a month, which obviously you can’t afford. The free market works most of the time, but not all of the time, as the sub-prime bubble has taught us so well.

Zakaria’s article uses evidence from Canada to try and show us that sometimes other countries get things right more often that we do. Simply pointing out facts does not make Zakaria unpatriotic, it simply suggests that he believes we should keep an open mind about certain important issues. After all, if our system isn’t working very well, but we refuse to adopt the ideas of other countries, then how can we ever expect to make improvements?

Below are some excerpts from Zakaria’s article:

Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it’s Canada. In 2008, the World Economic Forum ranked Canada’s banking system the healthiest in the world. America’s ranked 40th, Britain’s 44th.

Canada has also been shielded from the worst aspects of this crisis because its housing prices have not fluctuated as wildly as those in the United States. Home prices are down 25 percent in the United States, but only half as much in Canada. Why? Well, the Canadian tax code does not provide the massive incentive for overconsumption that the U.S. code does: interest on your mortgage isn’t deductible up north. In addition, home loans in the United States are “non-recourse,” which basically means that if you go belly up on a bad mortgage, it’s mostly the bank’s problem. In Canada, it’s yours.

Ah, but you’ve heard American politicians wax eloquent on the need for these expensive programs—interest deductibility alone costs the federal government $100 billion a year—because they allow the average Joe to fulfill the American Dream of owning a home. Sixty-eight percent of Americans own their own homes. And the rate of Canadian homeownership? It’s 68.4 percent.

Its health-care system is cheaper than America’s by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; “healthy life expectancy” is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America’s largest car-producing region.

Comments

[digitaldorobo:]

Thank you so much for this article.

We in Canada have been watching the economic bloodshed with amazement.

We are not a socialist country; we are simply a little to the left. It shocks us when American's polarize any country that is different e.g. 'Canada is too socialist/ is communist.'

What has this enabled us to do?
-increase regulation of predatory capitalism--the very type that creates a parasitic elite that destroys an economy, and its country, in the end
-increase the quality and coverage of healthcare (my family of four pays less than $100 per month for excellent care)
-keep businesses competitive through lower healthcare plan costs
-teach personal responsibility through realistic mortgage requirements
-kept our crime and murder rate to a much, much lower level
-increase the quality and breadth of our educational system

How have we done this? By looking around the world at what works and what doesn't and then adapting.

I know I will probably get a lot of thumbs down for this post. But, before you hit the button, ask yourself if knee-jerk jingoistic U.S. hubris in 'sticking to its guns' or 'don't mess with Texas' is part of the reason it is where it is right now.

Anyone who thinks they can't learn from others is doomed to fall behind.

Cheers

Feb 26 08:31 AM

[sunnsea:]

Thanks, Digital. Right-wing Americans especially hate it when some Canadian says they spend $100 per month and get excellent health care for a family of four. The conventional wisdom that every American is born with is that Canadians have to wait for everything and come here for operations. The top 400 ruling families in the U.S. control everything so how would we really know what is going on in the rest of world on any subject. Over the last 30 years we have become Argentina.

Feb 26 08:45 AM

[DOK FROTH:]

Mr. Brand has made some good points in his essay. As a Canuck myself, it should be mentioned Canadians enjoy a favorable balance of trade with the USA across the longest undefended border on earth.
Canada sells the US more goods than the US sells to Canada.Our banking system is different in that the BIG 5 banks are national in scope,allow only maximum 10% ownership by any group or Corp.creating a widely held shareholder base. Canadian banks are more conservative in their lending practices.
Because the USA is our largest trading partner Canada is feeling the effects of this recession.Our forest products, petroleum and auto sectors are hurting big time. Sharing the wealth in good times and sharing the pain in bad times. Glad the good ole USA is our neighbour and friend. I have no doubt the USA as world leader will come through this current bad patch stronger, because the American people still have the most dynamic country and economy on earth.
I bought GE yesterday,battered, yet still one of the great US companies
IMHO.

Feb 26 09:30 AM

[derryl:]

I am also from Canada (Alberta) and though it's true Cdn companies enjoy the benefit of public health care it's also true that our corporations and governments suffer the same unfunded pension liabilities that America faces. These public entitlement schemes were invented when the demographic trend was exactly opposite to what it is now; i.e. many new baby-boomer workers paying taxes to support health care and pensions for each retiree.

Health care was low tech and inexpensive. It couldn't prolong your life for an additional 10-20-30 years so people died younger and it looked like the tax rates needed to fund the programs would be relatively painless. That is no longer the case.

Nobody, not corporations or governments, can guarantee to provide 'free' unlimited health care and pensions to everyone without greatly increasing tax rates to the levels of Europe's socialist democracies. So far the funding problems have been dealt with by borrowing (rather than taxing) or by ignoring them.

The unanswered question is whether it will ever be politically possible to increase taxes to the levels required to fund these massive entitlements. We would collectively have to spend more of our income on health and pensions (for ourselves and for other people) and less of it on our houses and investments and lifestyles. In other words we have to choose between paying for health and retirement or maintaining our current standards of living.

At some point I think it will become necessary to return at least some personal responsibility to individuals for their health and retirement, because I don't think taxpayers can be forced to subsidize unhealthy and profligate lifestyles by paying the health care and pension costs of people who spent their lives enjoying like the grasshopper rather than working and saving like the ant.

Feb 26 11:14 AM

[Fairness:]

I'm a naturalized American from Europe, and simply cannot wonder enough how stuck in the past, sold on the "free-market by all means" mentality my compatriots are...
I do believe it is a fair amount of herd behavior involved, and that this herd is relatively easy to control through the multitude of mass communication tools owned by the wealthiest families. In the US, the press is massively biased, to the point where I no longer watch American broadcast channels and news. Nowadays the average American is educated by the mass media mostly through the heavily biased TV and advertising. How can we expect such people to think independently and promote their own best interests, when they allow themselves to be constantly brainwashed by unscrupulous and greedy money-chasers? Human and social values have not much meaning for the manipulators. These people disregard everything but profit.
Honestly, I am now pleasantly surprised that we were finally capable of electing not another moron as our president, but a smart and seemingly true leader for the middle-class. Obama appears to be smart enough to shake us up, and steer US away from our past imperialist and world dominating ways; but he is just one man working against the flood of what money can buy and an abundance of deeply rooted ignorance. That’s not an easy task to do. It needs commitment, courage and a lot of character. I give him credit for what he says he’ll do, let’s hope he is able to surround himself with allies, with people capable to support his ideas and help him find ways to deliver on his promises.

.

Feb 26 02:04 PM

[ain't no fo...:]

great comments fairness, you struck a chord with me.

you are so correct about the media and the control the wealthiest few hundred have tried to exert over this country.. but that is changing, more and more every day

Feb 26 02:17 PM

[info19:]

On Feb 26 08:45 AM Sunnsea wrote:

> . "Over the last 30 years we have become Argentina."

You should be so lucky!

Feb 26 10:47 PM

[speculari:]

Mr. Zakaria's banner says "News Week" not Time magazine. Perhaps if there are sufficient numbers of people among us that will now migrate to Canada - a balance might be struck. Perhaps, as well, we could trade our executive & legislative branches for theirs - and really demonstrate some progress! Any volunteers?

Feb 26 11:05 PM

[John McLeod:]

Hi Digital,

I've been watching this from my perch in North End Halifax, and yes, it's been an amazing ride.

Did you know that the world-wide credit crunch started right on Bay Street?

Coverage of our ABCP crisis (Canada's version of Auction-Rate Securities -- ARS -- for those South of The Border) has been sporadic, but that aspect of the downturn has been truly astounding. When C$32 billion of our short-term commercial paper suddenly froze in August 2007, the banks found a quirk in local financial law and simply walked away from their commitments. The Economist wholeheartedly approved, and investors ended up providing those funds as a free subsidy to the banks for over 17 months before they even started to have access to what was left of their investments.

That little business the other day about Caisse mislaying 1/4 of the pension money for the Quebec Civil Service last year is wealth that essentially got laundered into helping make Canada #1 in financial stability.

And that's just the tip of the iceberg. Under our carefully maintained veneer of dullness, there's a lot going down in The Great White North that I would ask Seeking Alpha's readers to please continue to ignore.

On Feb 26 08:31 AM digitaldorobo wrote:

> Thank you so much for this article.
>
> We in Canada have been watching the economic bloodshed with amazement.
>
....

Feb 27 01:07 PM