Robin Williams once said of Canada, “it’s like a loft apartment overlooking a really great party.” But a study released this week said that while the U.S. has been partying, it appeared that Canadians’ net worth had leaped ahead of Americans’:
The average Canadian has quietly become richer than the average American. Over the past five years, net worth per Canadian household has exceeded net worth per American household (total combined value of liquid and real estate assets minus debt) for the first time.
The Time Magazine blog sneers:
Watch out, Americans: Your thrifty, socialist neighbors to the north have stealthily become richer than you.
Over the past five years, the average net worth of Canadian households has exceeded that of American households. So for the the first time in history, Canadians are wealthier than Americans — by more than $40,000, on average.
Not so, writes Elizabeth MacDonald at Fox Business. In fact, she says, ignore it:
The study is impenetrably absurd, and so are the pundits touting it….
Set aside the oversights, including that it appears the study uses U.S. government statistics that leave out Americans’ massive 401(k) accounts as Americans are not required to report these retirement accounts on tax returns. The study attempted to use estimates here, but the disclosures are poor.
Similar, too, is the fact that the study ignores Canada’s microscopic defense spending, which amounts to a fraction of the U.S. military budget. For decades, Canada has relied on the U.S. for its own defense and protection, and instead blows its money on a flawed single-payer health system that is growing more expensive and whose long wait times for exams and doctor or hospital visits has Canadians flying down to the U.S. for health care.
Pundits on the study also ignore the fact that academic data shows health spending is growing at a faster clip in Canada than in America, that heart disease and cancer mortality are worse in Canada, and that lack of MRIs and scanners are worse in Canada, as are the long wait times for care….
But the big problem with such analysis is that even the study’s authors oddly admit they ignored government debt spending, which is turning America weirdly less “capitalist-competitive” and more “me-too socialist.” Moreover, America is sliding into the very kind of government central planning that Canada is running away from, and that’s the problem.
But in order to keep up Robin Williams’s pronouncement, it’s time we stopped partying and started sobering up to the economic realities so that studies like this don’t become true in the future.
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Comments
I dunno the other work of Elizabeth MacDonald…and it may be fine…but in the quotes you cite, she’s coming off as an idiot.
Defense spending has little-to-nothing to do with personal wealth.
Dittos several other items she mentions.
But NOBODY can argue with the fact that Canada has done better than the U.S. over the past several years, despite its long flirtation with socialism.
Hell, I remember several months last year when ONE sparsely populated province created more jobs than did our whole nation.
1. I dunno the other work of Elizabeth MacDonald…and it may be fine…
I glanced at another column. It doesn’t look fine. My most generous guess is that she is a victim of the Peter Principle.
…but in the quotes you cite, she’s coming off as an idiot.
Her Canada column would have gotten me thrown out of my AP English class in high school.
2. Bullshit that contradicts my core beliefs is easy to screen out. Bullshit that panders to them is dangerous, but not when the pandering is as flagrantly incoherent as MacDonald’s.
3. Fox is trademarking MacDonald’s column, perhaps with the intention of manufacturing a media personality. Big money can be made by dumbing down Americans while pretending to inform us. Even Wikipedia gags.
4. NB: Fox’s Elizabeth MacDonald, afaic a byline to avoid in the future, is not Heather MacDonald, whose writing has impressed me when I’ve encountered it.
Heather MacDonald is a bona fide BRILLIANT researcher and author.
And a clans-woman if that is her maiden name…
Hi Ragspierre and GS,
I think I get where Ms. MacDonald was going with her pull quotes. It’s all about all things being equal.
If Canada had to spend, per capita, the same percentage of their tax revenue as the United States does on Defense, their tax burden would proportionately be higher (or they would be taking on more debt) and thus there would be less “wealth” per capita. Because Canada effectively piggy-backs on the US for national defense, this is less of a drain on their economy. Ditto on the other things she mentions.
Additionally, Canada didn’t suffer the credit crunch as significantly, nor did they see the pullback in home values the US did because purchase of a house required a much larger down-payment, making the homeowners significantly less likely to default, because they actually had skin in the transaction, as well as their homes being far less likely to have been over-valued in the first place.
I think the appropriate analogy would be that the study’s authors are comparing a peach to a watermelon. Both are fruit, both are juicy and sweet, but a peach is both more dense and 1/10th or smaller the volume, while a watermelon is more spread out and MUCH larger by volume.
As for her writing, it does leave quite a bit to be desired because she could have been more clear about her steps to get to her conclusions but on the other hand it is reasonably clear in terms of individual ideas, separating them and keeping them in discrete chunks.
I guess this is a matter of whether you look at macro or micro economics for your data.
And, frankly, I don’t know or care from where some of these claims derive.
Our defense spending is a TINY fraction of our redistribution of wealth via various government programs.
True?
IFFFFFFF our defense umbrella is really a salient factor, why doesn’t it apply to Ireland, and make them more wealthy than are we? Or Mexico?
That, is, of course, sort of a big macro determination effecting “net worth”. What if the data came from a much more limit…and rational…set of worths of households, normalized in one currency or the other?
As you note, Canada did not suffer nearly as badly as did we by the housing bubble/collapse. It should be noted they did not suffer the same panic around their banking that we did.
Why? They are LESS regulated in some areas around their finance sector than are we.
So, what made the difference?
What made the difference (in both the US housing and banking crises) was that Canada didn’t do any of the silly “social policy” actions which were direct outcomes of the expansion of the “Community Reinvestment Act” whereby banks in the 90s were directed under threat of suit by the Department of (In)Justice under Janet Reno to loosen mortgage criteria in order for more minorities to qualify. Failure to do so would result in a Civil Rights complaint in no uncertain terms.
The banking and real-estate crises are linked because once these banks who were forced to make these “toxic” loans finished with them, they desperately wanted them off their own balance sheets because they KNEW that the individuals were not going to be able to pay.
So, the banks took a vehicle developed for Triple-A paper (aka investments) to give investors exposure to real estate holdings (A Real Estate Investment Derivative) with a <.1% default rate and expanded it first to lesser grade paper AAa and kept going until they were making derivative packages with REIDs containing JUNK paper (which had a 5% or worse default rate).
Where the banks got into trouble was that they didn't sufficiently -disclose- (according to the Courts and Congress) that these REIDs now included this "Junk Paper." Largely because the banks knew the REIDs wouldn't SELL above discount if they had. The bottom fell out of the market when the homeowners stopped making payments and thus the income streams dried up, which impacted the pension and investment plans which held these REIDs as "cash-flow" generators (which had been sold as "non-default" products.
The biggest fallout was AIG, which had "insured" these REIDs against failure to pay, because that was a requirement of the banks selling the packaged loans. AIG materially mispriced the insurance they were selling. Why AIG went under was that suddenly everybody realized that AIG might be on the hook for ALL the REIDs hanging out there, pulled their money from AIG stock, creating a cash crunch, and crashed the system. Same thing with the other major investment houses who held REIDs.
Good afternoon Chuck,
1. IMO Michael Adams’ Globe and Mail piece overstates his thesis. Here’s my idea of a starting point for a reasonable discussion among reasonable people:
However, instead of reining in Adams’ likely exaggeration, MacDonald leads off with
She goes on to uncork prose which IMO is a good deal more impenetrable than Adams’. (Btw she does not link to Adams although she harshly criticizes him. She does link to Time. Unprofessional and inexcusable.)
2. As I contemplate MacDonald’s level gaze, trademarked byline, and gobbledygook, I realize that she is only a trigger for my anger. My real anger is at smug condescending American elites who grossly underperform while they grossly overpay themselves.
Are Leftists even capable of honesty? We live in a strange and sick new world, and it’s one we should have seen coming. There are two distinct classes tranches or classes now, in one epic conflict for the conduct of a society. Call the conflict Ruling Class vs. Country Class, elitist vs. everyday Americans, or Left vs. Right. It is really this: Totalitarian Liars Who Will Say and Do Anything to Achieve their Utopia vs. the rest of us flawed and freedom-loving people just hoping to live our lives and be left alone. But they will never leave us alone and never let us just “live our lives.” And the leaders of our team just haven’t gotten the message yet.
The largest problem we in Canada have is a smaller poplulation and tax base of 35M vs U.S. 314M (hence the lack of defense spending, fewer MRI machines, etc) and the spread out geography. I would love the option of private medicine even on top of supporting the public system. Maybe one day…
They do have curling though. And that Montreal Steak Seasoning is da bomb!
Canada also has Terrance and Phillip. 🙂
Having a booming resources sector, plus a housing market which hasn’t augured in, certainly helps. So does counting retirement (superannuation) funds. As well as outsourcing a great deal of not just your defence but also your medical R & D (investment in drug development, technology innovation, etc).
I’m no economist, and don’t even pretend to play one on TV, but just for interest’s sake here are the latest figures on household net wealth I could find at the Australian Bureau of Statistics (ABS):
But like I said, I’m not even a 1/32nd economist. I don’t know how different countries calculate their figures or anything. In the morning (it’s currently 1:40am AEST) I’ll ask the economics nerds over at the Cat what they reckon any of this means (if anything).
S_dog -you don’t have to ask at Catalaxy .It is the average thing that looks confusing. They have distributed the wealth across all households when many have not got a brazoo.
So far only theoretically mostly 🙂
I wish the disliker would reply why they ticked it rather than run away. i don’t want to bore readers but my figures are well bove this & have been averaged down . I am in no way exceptional here.
I view talk about Canada prospering while we have problems in the same way I viewed the stories about Japan continuing to prosper during one of our other recessions: both of those economies are very much dependent upon our own, and our problems will eventually get to them, regardless of their prudence.
I think US defense spending does contribute to our wealth, in much the same way as other elements of our infrastructure, such as highways. Just because it’s hard to measure doesn’t mean it’s real. One could reasonably argue that US defense spending prevented WWIII, turning it instead to a cold war, which, by the way, we won. The Islamist war, or The Long War, which has the same goal of world conquest shared by the Japanese, the Nazis, and the Russians, is also being contained off our shores and mostly out of our markets.
Pax Americana is not just an expression of our wealth, it contributes to our wealth by averting the wholesale destruction of yet another world war with would-be conquerors. I am sure we spent a pretty penny on that STUXNET virus, for example, but that item alone may have bought two years of containment of Iran’s nuclear bomb-making capability. That means our military hasn’t had to mobilize, our economy hasn’t staggered, we haven’t had the blood of our citizens and our customers poured out like water. That is a real form of wealth.
yeeps.
Just because it’s hard to measure doesn’t mean it’s NOT real.
“Watch out, Americans: Your thrifty, socialist neighbors to the north have stealthily become richer than you.”
As I recall Canada has had a conservative federal government for a couple of years.
It is the US that is trending Socialist, or at least fascist, with its Federal government policies.
As I recall Canada has had a conservative federal government for a couple of years.
For six and a half years. That was the period during which they allegedly overtook us wrt individual wealth.
To be fair, according to MacDonald, Canada recovered its AAA rating under the Liberals in 2002.
Article intended to make us jealous of our neighbors or angry that they benefit from our military and our R&D spending? What’s the point? My best friends growing up were from Canada. Their parents came to the US to get rich, something much more difficult to do in Canada. Where do they live and spend their $$$… in the US.
The study said the average Canadian had $140,000 more in real estate than the average American (after the real estate crisis), but their average net worth was only $40,000 more. But if we included the national debt, Canadians would be even further ahead.
The median net worth for Canada is $89K, versus $53K for US. That would indicate there are billionaires raising the average in the US, compensating for our (probably) larger lower class.
http://www.washingtonpost.com/blogs/ezra-klein/files/2012/07/medianwealth.jpg
meh, Canuckistan has been developing its natural resources, cut corporate taxes to 6 percent and plans to offer zero tariff on importation of manufacturing equipment.
Allowing foreign countries like China to move in, and finance major infrastructure projects meant to facilitate plundering the American economy with cheap goods.
Canada’s Asia-Pacific Gateway & Corridor Initiative
http://www.gateway-corridor.com/
You really should head over the Willow Run Tea Party Caucus website and view some of (former TV journalst) Vince Wade’s videos.
Chinese “Espianoge and Conspiracy” at the University of Michigan.
http://willowruntpc.ning.com/video/spies-on-campus-the-fbis
The Chinafication of America from Michigan’s Point of View
Michigan’s Renaissance Zone Act?????
Select Tax Breaks For State ‘Renaissance Zones’ Program Returns One-Fifth of Predicted Jobs
http://www.michigancapitolconfidential.com/17155
Wayne State University’s own legal research say’s these “Renaissance Zones” have the same self-governance structure as Tribal Reservations… act as a “system within a system”, and are therefore unaccountable to taxpayers.
Can somebody please tell me what Romney’s proposed “Regan Economic Zones” are?
I tell ya Sarah Palin is way ahead of most people on what’s really happening that’s why she recently chose to speak at a Willow Run Tea Party Caucus event.
And that New Bridge to Canada with Chinese loot is joke, meant to give Canada all the tolls and put longtime owner of private Ambassador bridge, Matty Moroun out-of-business.
Yes I noted she chose to speak at a small Michigan rally . interesting indeed & furhermore she spoke for 35 minutes .
On the ball Octea!
Canada is so darn wonderful that they all come to the United States for life-saving medical care and shopping. As for the 40K greater value, it’s not a benefit of socialism; it’s because their government didn’t do crazy Marxist things like ours has.
I grew up about an hour from two major Canada-U.S. border crossings. Parking lots of doctors’ offices were full of Canadian license plates. Same thing with any large shopping center.
If Canada and socialism are so wonderful, why don’t these know-it-all pundits go live there? A: Because they know it’s lies and propaganda. A leftist professor was slamming America at a seminar, and I asked him why he didn’t move to Canada — he shut up and never spoke to me again.
That’s one of those wonderful enduring phenomenons about America:
Her Worst Critics Prefer to Stay
Whoa, no need for hyperbole.
Obviously, not all Canadians come to the U.S. for healthcare. That would be 35M patients! The accurate figure is more like 40,000 per year. If we had private health care option(pretty please, P.M. Harper) that stream of patients to the U.S. would dry up pretty quickly.
We never have and never will never be able to match American defense spending but neither are we freeloaders. WW2, Gulf War, Afghanistan, Libya – our numbers are small but mighty.
NZ & Australia have private options on top of compulsory . this aspect of Canada health can be improved if the will is there -or the need. Canadians are not pushovers so I can only think they are ok with Canada health.
Long Live The Queen.
There are a few cases before the courts now challenging waiting lists as unconstitutional and arguing for the private option. I sure hope they are successful.
Ask Liam Neeson what he thinks about the Canadian Health care system.
I’m sorry Elizabeth MacDonald spilled the beans. This has all been a plot to pacify our northern neighbors, allowing some token success to lull them to sleep. Soon comes the action. Read here for all the details.
Isn’t Canada the largest single supplier of oil to America? If one were to believe the angry left’s claim that America’s only reason for going to war all over the place is to steal other peoples’ oil, then one would think invading Canada should be a lay-down misère.
Another good reason!
Canada is as different to the USA as is Mexico.
Canada was born of the British Empire & retains many properties also found in other current British Commonwealth countries. (for better & for worse but on average very good )
The Heritage Foundations ranking of Enterprise Freedoms has many former colonies right up there.
1 HK
2 Singapore
3 Australia
4 Nz
5 Switz
6 Canada
7 Chile
8 Mauritius
9 Ireland
10 USA.
1 2 3 4 6 8 9 & (ok I have to put you in ) & 10 all were Briitsh Empire colonies. The dates of independence range from 1788 to 1990s. Only 4 are Anglo sorry Irish ).
Oh and notice the Uk is not amongst them. They chose to go Euro & smugly turned away from the Commonwealth & they lost. 🙂
Thought they were going bankrupt because of universal healthcare…
Not bankrupt yet, but it does take up nearly 40% of our provincial economy in Ontario and we are deeply in debt thanks to Dalton McDoofus (Provincial Premier)and his green energy boondogles.
Now the provincial govt. is thinking of cutting doctor’s compensation. What could go wrong?
rightatthebeach: but it does take up nearly 40% of our provincial economy in Ontario
You mean 40% of Ontario’s government spending. The aging population is the primary factor in increased costs, and those increased costs will be there regardless of healthcare system. As a percent of GDP, Canada spends about 10%, while the U.S. spends about 16%.
I don’t care if they are richer, more socialist, or have bigger bank accounts, or whatever. My heart lives here in the U.S. God Bless the U.S.A. My Home Sweet Home!