Conrad Black: US Stock Market Fluctuations a Warning to Canada Amid a Decade of Competitive Decline

Commentary

The U.S. stock market has been fluctuating, with the Dow Jones Industrial Average dropping by over 1,000 points in one day on Aug. 5. This has sparked curiosity among Canadians, who are used to a strong stock market.

In the United States, the recent stock market decline has been attributed to concerns about the upcoming presidential election and rising debt levels. If the U.S. economy falters, it could have negative consequences for Canada, as a significant portion of our GDP is tied to the U.S. economy. However, Canada also faces challenges due to mismanagement of its own affairs.

The OECD predicts that Canada will be the poorest-performing advanced economy in the world for the next 35 years if current trends continue. In recent years, Canada’s income growth has lagged behind that of the United States, and there has been a significant outflow of capital from Canada to other countries. Additionally, there has been a disproportionate increase in public-sector jobs and salaries compared to the private sector.

Capitalism is seen as the best economic system due to its alignment with human ambitions for security and prosperity. However, the reliance on expanding the money supply during economic downturns has led to currency devaluation. Canada’s economic challenges are exacerbated by a focus on climate concerns and a backlash against the oil and gas industry.

Canada’s economic prospects are closely tied to the flow of capital, and the country’s competitive decline in recent years has raised concerns about its future prosperity. The volatility in U.S. markets serves as a reminder of Canada’s economic vulnerability and the need for strategic reforms to address these challenges.