Thomas Muclair and the Fine Art of Economic Idiocy
NDP leader Thomas Muclair hit the oil patch last week, finding himself amazed at the size of the thing and spouting nonsense economics.
As Jen Gersen points out in the National Post, his arguments are full of holes. One part of his argument in particular was stunning in how little economic knowledge was required to make it:
The second argument Mr. Mulcair made was that the profits of oil companies were being falsely inflated by the federal government’s refusal to enforce existing environmental legislation. Mr. Mulcair believes that if we started to crack down on oil sands environmental offenders, those costs would be internalized, profits would come down, and that would balance out the currency and thus, the economy
Is this what these guys think, currency fluctuates up and down based on profit margins? No wonder the envy-class yearn for the days of a weak dollar. Sadly, a weak dollar just means a fundamentally weak economy.
The currency’s value is a product of how much comes into the country and how much of it leaves the country – supply and demand. The reason the currency is high now, Mr. Muclair’s Dutch disease, is, in part, because the oil patch is selling so much of it’s oil internationally.
Increasing the fines paid for ignoring environmental law – and if Mr. Muclair has evidence that the laws of the land are being ignored without consequence he should bring it forward – cuts into the profits of those being fined, yes. But it doesn’t decrease one penny the amount of money coming into the country (unless, of course, companies decide to not invest in Canada lest they get on the radar of an envious governing class).
The NDP leader proves with his talk about devaluing the currency to make us stronger (NDP slogan, “strength through weakness”) that he has little grasp of macroeconomics. His solutions to the “problem” show he has even less of a grasp on microeconomics. Good thing there’s all those other branches of economics for him to get a handle on.
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