Optimism v. Pessimism – Round One

“It’s snowing still,” said Eeyore gloomily.
“So it is.”
“And freezing.”
“Is it?”
“Yes,” said Eeyore. “However,” he said, brightening up a little, “we haven’t had an earthquake lately.”
― A. A. Milne


A lot of folks these days are pushing back against all the pessimists suggesting that doom and gloom doesn’t help and we should be more like Pollyanna.  As I have written many times (and mentioned again this week on the radio) it is both important to convey the extent of our challenges – short and longer term – and that these challenges are relatively simple to fix.  We are not Greece.  We do not have a massive problem.  But that doesn’t mean we shouldn’t discuss our challenges.  We have a short term fiscal crisis that is pushing up unemployment and holding down taxes.  We have a medium term forecast that doesn’t show much new private sector investment on the horizon and we have a longer term demographic challenge.

This latter issue is the one that has the potential to be the biggest barrier to growth.  In 1971 NB had 333,000 young people under the age of 24.  It was this wave of young people that we needed to find jobs and economic activity to support.  In 2012, there are 206,000 people under the age of 24.  In 40 years, our young population has dropped from 52% of the population to 27% of the population.   I’m not a sociologist but it seems intuitive that a population that is predominately young (75% of the population in 1971 was under the age of 44) will collectively have a different perspective than one that is older (the median age in 1971 was 23 – it is now 43.4).

This guy telling the journalist that he had recently retired and “just wanted to be left alone” in response to why he was protesting against natural gas development keeps ring in my ears.

The problem is that older New Brunswickers should be just as interested in development as young New Brunswickers.  The youth will leave if there is no opportunity.  It is harder for older people to leave if we have to dramatically decrease the scope and scale of public services around the province.

We can’t just turn away from this and hope that everything will come out right in the end.  This is Canada and New Brunswick will never fall off a cliff – as long as Alberta keeps churning out the oil and gas – but we could be in for some very rocky times ahead.

Saskatchewan and Newfoundland are two examples of jursidictions that have completely turned things around – just like we require in New Brunswick.  Saskatchewan in the mid 1990s looked an awful lot like New Brunswick does now.  Their economic renaissance was predominately natural resource-based.  We don’t have the level of resources compared to Saskatchewan (although I think there is much more potential there than some think) so we need a mix of resource and knowledge-based development.

If the price of getting higher public consciousness about our challenges in the public domain is being branded a pessimist – I’ll wear the tee-shirt.


4 thoughts on “Optimism v. Pessimism – Round One

  1. No problems are insurmountable, heck, look at how the country changed after world war two and basically right up to the seventies. The issue is not simply ‘youth’, it is what you mentioned before-activism. The problem is that not enough youth are activists, like they were in the past. However, more of the society is-I was surprised to see that in Saint John about 50 people came out and protested against the attempt to crackdown on prostitution with jaywalking tickets that one city councellor brought out. I never would have expected that in a hundred years.

    However, to be ‘realistic’, we really need to point out that New Brunswick has over a century of ‘underperformance’. We need to realize that many economists have pointed out that Canada COULD be heading for the same ‘fiscal cliff’ as other nations, but since our economy is so attached to the US, it simply is taking longer. So, let’s not pretend that Rome never fell and that romans thought their ‘country’ would last forever. Finally, CBC reported that unemployment in the province is at its highest since….2003. Now, wasn’t 2003 a pretty prosperous time for the country?

    But I have to argue with that notion of ‘pessimism’. I really don’t see any difference between saying “hey, the feds will bail us out” and “hey, the gas companies will bail us out”. They both sound pretty defeatist to me. On the PLUS side, its a global economy and there is NO reason there can’t be hundreds of ‘Radian 6’s in the province.

    And, by the way, Newfoundland has an even higher unemployment rate than New Brunswick. If you count the number of unemployed vs job vacancies, its even higher (11% vs 9%). The lowest unemployment rate in NFLD is St. Johns, at 7%, whereas in Fredericton, its 5%.

    But you can’t live in a world where Eygptians and other arabs are throwing off their yokes of oppression with simple ‘people in the streets’ and not realize that change is easily possible. While I also think its ironic for a guy who ‘wants to be left alone’ to be out protesting and doing everything BUT be ‘left alone’, I hate to say it, but its the fossil fuel train that is the defeatist one. Canada is lagging WAY behind other countries, so while the ‘being left alone’ may not be the best reason to protest-at least he is protesting. And usually THAT is the most important thing.

  2. According to the Contrarian blog, the solution is to eat more chocolate:

    “Writing in the prestigious New England Journal of Medicine, cardiologist Franz Messerli reported his discovery that a nation’s chocolate consumption is closely linked to the number of Nobel laureates it produces. Switzerland, with the highest chocolate consumption in the world, also has the most Nobels per capita.”

    Canada lags in chocolate consumption,and thus produces fewer Nobels. Assuming that correlation is causation, we must obviously eat more chocolate here. Not sure about chocolate consumption in NB, but as we do have Ganongs, I suggest an immediate subsidy to Ganongs in order to supply NBers with as much chocolate as they can stuff down the piehole. Glory, and jobs, await.

  3. “This is Canada and New Brunswick will never fall off a cliff – as long as Alberta keeps churning out the oil and gas – but we could be in for some very rocky times ahead.”
    > I also think that very rocky times may be coming – sooner than we think. With tight oil coming out quickly in the U.S. and no new pipelines for Alberta oil being approved, Alberta/Canada could be about to be hit by two trains: a North American oil glut similar to what we are seeing with natural gas and no infrastructure to put Alberta’s oil in the market.
    Alberta oil currently sells for about $20 less than WTI and the province loses about $15-16 billion every year because of this price differential (incidentally, Alberta’s 2012-2013 budget is built on the assumption that WTI price will be just over $99 per barrel). Now, let’s for a moment imagine a scenario where WTI price falls below, say, $50 because of the two issues raised above (i.e. “only” about 40% below today’s prices, versus a decline of approx. 75% in Henry Hub spot price for natural gas since June 2008). It doesn’t take too much effort to speculate that several oil sands projects would be cancelled, delayed, or slowed down – with serious fiscal effects on the federal government and most provinces.

  4. One thing that I forgot to say in my previous comment: the potential coming of a North American oil glut should be something that worries ALL Canadians and makes the approval of new pipelines a necessity. All of those who think that Asia and the rest of the emerging world will always be open and waiting for Canadian oil could not be more mistaken. There are tight oil (and shale gas) reserves all over the world and, as the technology matures, they will become more accessible both from an economic and a technical point of view.
    Now, if we want to wait, we should be prepared to give up something because we (i.e. our governments) will not be able to pay for services (health, education, security, etc.) and infrastructure (new and maintenance) as we have done so far.

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