Pen as Sword - Social Commentary, Politics and Economics

Oil and Extractive Economies … part 2 …

Alberta Oil WellsThe so-called “Alberta Advantage” rested on the foundation of zero public debt, low personal tax rates, low corporate tax rates, and a royalty structure which encouraged exploration and development of resources. This in turn created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities. The free enterprise system that controlled the provincial economy gave rise to the richest territory in North America.

Albertans generate Canada’s most robust per-capita gdp, and per-capita investment in Alberta is more than double that of the next-highest province. Relative to population, Calgary has twice as many corporate head offices as Toronto, and with business growth almost four times the national average, the Edmonton-Calgary corridor, as shown in a major economic study (by TD Bank) is/was the most productive real-estate in North America.

The obvious success of this model lead many workers and entrepreneurs to depart their home socialist regimes in other provinces for the green fields of Alberta. Unfortunately, even more migrants of another type arrived as well to sink their fangs into the rich arterial supply of government largesse which the successful economy fueled. Virtually all of these vampires and tapeworms took up residence in Redmonton and UCLA North(U of A) and proceeded to agitate against the very system which provided them with a comfortable albeit parasitic life.  However, it is not unnatural, even in nature, for the parasite to metastasize until the host dies. The Alberta Advantage is on the verge of disappearing, sucked down into the quagmire of  despair called Socialist Public Policy.

Wells in AlbertaAlberta has always had a classic extractive economy, totally dependent on Oil, (see image on right – oil development points), and Agriculture, and very little else, oh yes, there is a little light manufacturing but virtually all of it is related to the domestic oil industry. We also make a lot of noise about Alberta being a centre of educational excellence and world-class research, all of which is little more than the window paintings that shops use to dress up the product display, which as said, is all about Oil and Agriculture.

Horses & wells in AlbertaThanks to Lucky Pierre and the Federal Liberals, (remember the NEP?) we here in Alberta experienced an absolutely horrendous decade in the 80’s during which we endured double digit inflation and dollar devaluation courtesy of the Federal Liberal Finance Minister, the Honourable Hauptsturmführer Mr Paul Martin, last heard of as a failed Liberal Prime Minister in some place called Kanadastan.

With 21% interest rates and a 62 cent dollar, I knew many folks personally who lost their homes because of being unable to meet the ever increasing floating mortguage payments resulting from the amazing Central Bank interest rates. That process pretty much defines extractive economics – compensating for socialist government incompetence and sleaze by destroying all the little independent workers and turning everyone into wards of the state.

Ah yes, but our betters in high office know it all and are so much brighter then us, and we plebes must simply knuckle under, suck it up, and kiss ass, unless one decides that the future is to join the enemy and ride the government bubble to the top of the political food chain like some folks I know well. They have never ever actually “produced” anything in their entire lives except excrement, greenhouse gas, and policy papers, just take, take, take, all the way to the bank. Yes, But that’s a story for another day.

Ralph-KleinSo, back to Alberta, the late lamented Good King Ralph undertook to wean the province off the political crack cocaine of debt in the 90’s and Alberta families and workers made large sacrifices to unburden future generations from a debt filled future. Yes, yes, the King had his flaws just as every man does, but miracle of miracles, he actually succeed in weaning Alberta off debt and left us free and clear on July 12th, 2004.

On that day, Good King Ralph announced “Today I’m very, very proud to announce that Alberta has slain its debt,” Premier Ralph Klein said on Monday in Calgary. “Never again will this government or the people of this province have to set aside another tax dollar on debt,” Klein said. “Those days are over and they’re over for good, as far as my government is concerned, and if need be we will put in place legislation to make sure that we never have a debt again,” he added. Do not forget, the difference between societies is not really one of Capitalism versus Communism (known as Socialism here) but rather the working out of systems which value the unique talents and individual abilities of their people more or less. The more they are valued, and recognized and rewarded, the more successful the system.

Of course the National Liberal Propaganda Ministry (aka the CBC), the BBC, Pravda and all the rest of the sniveling slobbering leftist troglodyte media painted the entire effort as riding on high oil prices and the backs of the “little people”, those anonymous cyphers that fill up so many Liberal statistical summaries of “human resources”. The day any Liberal shows an ounce of genuine compassion for “real” folks instead of just trumpeting how they are all for the people will be a cold day in hell.

You know the crowd, that special clique of “brights”, the “feelings” community, of the Canada Council and the rest of the chattering classes everywhere who are absolutely certain that they are SO superior to and more intelligent than the regular rubes on main street. You know, all the ones who are employed in governments and services,  have never done anything else in their lives and (in Canada) see Toronto (or Americans see Washington) as the centre of the known universe – continually entertaining a simmering hatred of all things “American” and “Albertan”, it must be that they reflexively hate all things that begin with “A”, eh? I wonder who American Liberals hate?  Oh! Right! Everybody else on the planet except mass murderers, dictators, terrorists and deviants of every sort. Don’t agree?  Just check out the “Being Liberal” Facebook site referenced many times in many posts in this blog.

Well, they ought to know, since we the “little people” are the poor brain dead masses (so called) that need leading, and they have been bum humping us into same-sex servitude ever since CBC-TV was invented. And before some Pink Tribe wanker objects that I am being bigoted and homophobic and maybe even Nazi for using that term, the reality is that it is just a rude colloquialism describing the bare assed facts about putting one’s penis (and probably other objects) in places they were never designed to go, (Captain Kirk notwithstanding).

oil fireimagesAh! Those were the days. That was 2004.  Flash Forward! Now we role along, 10 and a half years later, to a steady drum-roll of huggers building their phantasmagorical fortress of dissimilitude about the reality of oil, and we have had that famous Alberta Advantage pissed away by our know-it-all betters and are well on our way to re-establishing Alberta as just another debt ridden extractive slave economy. North Korea (or Poland, Russia, Ukraine, Saudi Arabia, China, Yemen) here we come. Well, maybe not quite as bad as there but then they have had a hundred years or so head start on us.

No doubt these pics were of real sites, but they amount to no more than 1 dot on the Alberta map (see image above). The rest look like the other pics above, but who cares about truth when you have trillions of global warming tax dollars to get and nothing to loose. Just grind the little people into dog food in a failed economy and “Move On”. And while we are at it let’s post a cutesy snarky witty captioned pic on “Being Liberal”.

suncoroilsandsOur new Socialist masters have yet to release a budget or even a review but are all set to establish a deficit of $8.4 billion this year. Nowhere is it more obvious that this is NOT a celestial domain than in the daily reality of these gibbering minions,  given free reign to plunder the Alberta Advantage to the benefit of their friends, cronies and running dogs, and of course a couple of legions of zombies who obediently drink the Cool Aid  and chant the mantras and vote like they are told, all with nary a concern nor smidgen of accountability for the future.

Over the last ten years the successors to Good King Ralph, namely “Steady Eddy”, “The Red Queen”,  and now “The Running Woman” have lead the pack in a all out race to the bottom (the left) which has seen Alberta increase government spending by an average rate of 7.4% per year, all accompanied by the smoke and mirrors mantra of “we have to keep pace with growth!“. Reality, as usual, is somewhat different than these dream spinners would have you believe. Growth in Alberta has seen a yearly average of less than 5% a year, well below the rate which the government is saying is substantiated by “growth demands” driving the budget.

The reality is that if the government had actually spent only to keep up with “growth pressure” it would have spent only about $39 billion a year instead of the current $50.3 billion, or to put it another way, if they were actually only trying to keep up with growth they would be spending $10.7 billion less than they claim they have to … more than the entire provincial budget deficit.

Instead of acknowledging that they have drastically overspent, the government and their slobbering lapdog socialist media choose to explain the disaster as a “revenue shortfall”. Another way of saying this is “We don’t have enough of your money to pay the bills for our promises”  and they plan to resort to the traditional socialist method of raising taxes instead of dealing with their spending problem. Because of their self interest they are proposing major new tax increases to help close the gap between revenue and spending.

Low oil prices have no end in sight. In fact, reliable predictions indicate perhaps 10 years before oil prices might begin to rise. I would expect the Saudis to keep pumping the price low at least until all the frackers have gone tits-up and the Iranians are no longer a threat. Alberta has the third highest proven oil reserves in the world and the lowest personal and corporate taxes in North America. That is just a couple more items in the Alberta Advantage.

But if, in their wisdom, the socialists decide to dramatically hike the royalty rates to who knows, the personal tax rate from 10% to who knows, and the corporate tax rate from 19% to who knows, then who knows how far the talent, treasure and ability will run before they stop to set up shop. Everywhere else socialism sets up all the folks with get up and go just get up and go. Never been an exception in the history of socialism and they just keep sucking the life blood out of every jurisdiction they take over. Why would anyone think we will be any different? Well, maybe they will just pass laws limiting who and what can go?  Sure, that’ll work! And maybe they will pretend to pay us. And maybe we’ll pretend to work.  Been tried before in lots of places. I wonder how it will go down in Albertastan?

(continued)

Cheers

Joe

CSRDisclaimer for nitpickers: We take pride in being incomplete, incorrect, inconsistent, and unfair. We do all of them deliberately because we know it just picks your butt.

 

 

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One thought on “Oil and Extractive Economies … part 2 …

  1. Pingback: The Destroyers … | Not My First Rodeo

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