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Thread: Norwailing

  1. #1

    Default Norwailing

    As a new Albertan (7 years olds) and a card carrying NDP-er, I marvel at the amount of Norwailing I hear when it comes to the fortunes of the Heritage Fund. Its size pales in comparison to both Norway's (sovereign) and Alaska's (sub-sovereign).

    With regards to Norway's approach why should Alberta mimic it if:

    1) it is not ethnically homogeneous (meaning this is a combination of Others not cousins)
    2) it is party to a federation which would probably want to wet its beak if the pot got large enough.

    Further reasons against Norwailing are outlined below by Max Fawcet and Andrew Leach

    http://www.albertaoilmagazine.com/20...is-not-norway/
    http://www.macleans.ca/economy/the-c...ur-oil-riches/
    Last edited by Safir; 14-03-2016 at 02:55 PM.

  2. #2

    Default

    I agree, but we have about 5 or 6 threads already on this. Do a search of Norway on thread title under advanced search. See for example:

    http://www.connect2edmonton.ca/forum...ghlight=Norway

  3. #3

    Default

    Alrighty then. Let the moderator take it off.

  4. #4
    C2E Hard Core Contributor
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    Default

    1) ethnic homogeneity has absolutely zero bearing on whether or not the creation of a sovereign wealth fund is a beneficial policy.

    2) there is no conceivable way the Constitution Act provides for a mechanism the federal government could use to "wet its beak" under our current political system, except to reduce transfer payments to a level at which equality of service is enjoyed by every province. They already do that through equalization transfers of federal income tax dollars. So another non-point.

    The MacLeans article (on top of being poorly written) only actually makes one argument in all of its colourful rhetoric: that the creation of a sovereign wealth fund sacrifices quality of life today in order to help people in the future. Even if we were to take that as true, I would argue that is a sacrifice well worth making, and that we are selfish twats if we ruin our children's future in exchange for a big-*** truck today. However, it is not true. At all. The creation of a sovereign wealth fund allows us to smooth out booms and busts (which would help us now), invest more heavily in diversification (which would help us now), and indirectly force us to limit growth to levels sustainable through operational income, (which would help us now).

    The "Alberta Oil Magazine" article makes three arguments: that our size and position as a province within federation means we can't be expected to set up a sovereign wealth fund (this is patently false, the size argument is particularly ridiculous); that our decision to download benefits in low taxes has benefited private industry over public good (yes, that is literally the issue - we sent all of the benefits to select individuals, and now as a society we are left with nothing), and that oil pricing differences mean that income is unpredictable (that is a reason we SHOULD be saving income instead of relying on it for operational spending, not the opposite).

    Altogether two very poorly thought out articles, with no real arguments besides empty rhetoric.

  5. #5

    Default

    Quote Originally Posted by Jaerdo View Post
    1) ethnic homogeneity has absolutely zero bearing on whether or not the creation of a sovereign wealth fund is a beneficial policy.
    .
    Here's a quote from the Cosh article. I hear the word 'community' a lot in North America, but I see little of it. Nobody will want to spend money for the 'funny people with smelly hats' (Syrians notwithstanding)

    Norway, you’ll notice, is the indigenous home of a nationality. Norwegians, even those without children, perceive their oil fund as a sacrifice for their collective posterity. Alberta has awkwardly open borders and little national consciousness. As an Albertan, I cannot see the point of saving for some invader’s dotage.

  6. #6
    highlander
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    Default

    OK, so we shouldn't save because we're racists who can't bear the possibility that the children of strangers might benefit?

    I haven't read the article yet, but is this actually his argument, or is he just claiming that enough Albertans are selfish jerks to have shifted the mood against saving responsibly?

    I'd wager a guess that anyone young enough to be paying actual taxes on earned income during a boom time should count on living long enough to see a bust when those savings will come in handy.

  7. #7
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    Default

    We have a wealth fund... it's called equalization. Think of our wealth fund being spent every year as an investment throughout all of Canada.

    So yes, we have a wealth fund. You can see the results from it in Quebec, Nova Scotia, New Brunswick, PEI, Ontario, Manitoba.

    So on behalf of those provinces, please stop your Norwailing.

    (I love it explained to me like this. Simply brilliant.)

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