Thursday, April 28, 2005

And Another Thing... of the other things that John Ibbitson said yesterday: That an NDP budget would harm Canadian productivity. Because, apparently, once the NDP are elected everyone will just start working a bit slower. Meanwhile, something that will actually matter happened today - the loonie fell below $0.80US today. The low loonie actually does lower Canadian productivity, unlike Ibbitson's fevered delusions. Now, we can argue over whether or not NDP fiscal policies would raise or lower the value of the loonie, but there's no magical socialist penalty for the value of a currency.

Oh, and in case you think there's a connection between the fall of the loonie and the budget deal, think again: Oil was back below $50 today, causing the loonie to fall. It had nothing to do with the budget deal.


Politicagrll said...

While one could argue that a lower loonie decreases productivity i think it needs to be taken in context (or how i would contexualize it).

With a higher loonie less productive workers are often fired, and companies start focussing on lines that aren't affected by the dollar change or are less effected by the dollar change. So things we might have exported before aren't exported. So the folks making those things loose their jobs, thus you productivity goes up (among the remaining workers).

Personally i'd prefer to have more jobs than a high loonie. Increased job productivity doesn't mean that the economy is actually doing better, it depends on what scale you measure things.

john said...

I too would favour more jobs over a high loonie, I was simply using Ibbitson's metric. I think that we often seem to equate the value of the loonie with penis size, or something - bigger = better. And, as with most things in life, the situation is more complicated than that.