Ask Andrew transcript

Coyne answers about free trade, the Royals, ditching the penny, abortion and much more
  • Andrew Coyne:
    Hello, everybody. Coyne here. Fire when ready.
  • Crusk:
    Hi Andrew. In the past you have argued for a decrease in personal income tax, but why would a decrease in corporate taxes while maintaining high income taxes not be a better answer to productivity and equality concerns?
  • Andrew Coyne:
    Well, of course, we could do both. Ultimately, all taxes are paid by people, so whether you cut corporate or personal income taxes is not hugely important — either way, what you want to do is make sure that the tax burden is spread fairly, and spread evenly, with as few exceptions or preferences as possible.
    What I’d really like to see is a rebalancing away from income taxes altogether, in favour of consumption taxes, which are far less damaging to economic activity.
  • Critical Reasoning:
    Andrew, what are your thoughts on the Charles and Camilla visit? Do you think there is still a broad base of support for the monarchy in Canada?

  • Andrew Coyne:
    I’m a strong supporter of the monarchy as a constitutional institution, if rather less enthusiastic about some of the current royal family. But I’m in a distinct minority. Support for the monarchy has faded noticeabely in Canada, largely thanks to the enthusiastic disdain of the political classes — in Peter Brimelow’s memorable phrase, the attitude of successive governments to the monarchy has been like that of “the urchin, secretly urinating on a shrub in hopes it will die.” It may be too late for a monarchist revival in Canada: I think the only thing that might have saved it would have been for Prince Andrew to have come over, say, 20 years ago, and found a new wing of the dynasty.
  • Spencer Robinson:
    Assuming that the two biggest issues affecting our future are the deficit and climate change, would a carbon tax (in addition to, or merged with a GST increase) be the best way forward? Or would a cap and trade system be better for the economy/environment in the long run?
  • Andrew Coyne:
    A carbon tax and a cap-and-trade are conceptually more or less identical: in both cases you’re trying to capture the “externality” of carbon emissions by adding the price into the goods and services that use carbon in production. But cap-and-trade is harder to implement, beyond large industry (although Britain looked pretty seriously at personal carbon trading, using carbon “credit cards).
    So you probably need a carbon tax in addition to cap-and-trade, to pick up the 50% of emissions or so that cap-and-trade does not get at. It would have to be on top of the GST as well, since the GST is not (and should not be) carbon sensitive. Although I suppose you could integrate the collection.
    I’d use the revenues from a carbon tax to cut income taxes. I know, I know: that’s what Stephane Dion proposed. Except his “green shift” wasn’t really what it claimed. They used far too much of the revenues to finance spending programs, and were left with derisory tax cuts. If you’re going to get people to sign on to saving the earth via a carbon tax, you have to have something equally memorable on the tax cut side. The BC Liberals’ tax shift was closer to the real thing, and they were re-elected.
  • Lord Bob:
    Mr. Coyne, you’re a prominent sceptic on the possibility of an election, but do you see any of the federal parties starting to distinguish themselves and establish a sort of platform in case one does come?
  • Andrew Coyne:
    Well, as you know, the Liberals are planning a “thinkers’ conference” for January, so we’ll see. They really do need to flesh out their policies, partly because they’re a party that has historically stood for very little — which was fine, when they were the “party of power,” not so fine now that they’re likely a party like the others — and partly because that’s the way they’re going to define Ignatieff for Canadians: you get a sense of someone’s character, their values and guts, by what they stand for, and whether they’re willing to defend it under fire.
    Right now it’s the Tories who have been more policy heavy. Regardless or their merits as policies, they at least give the impression of being a party that’s attending to the nation’s business.
  • jolyon:
    Can Peter Donolo live up to the hype?
  • Andrew Coyne:
    Almost certainly not. He’s an able fellow, with lots of experience and good instincts. But the problems of the Liberal party go a lot deeper than a single individual.
  • Bob(from Los Angeles:
    With Karzai winning by default what should President Obama do regarding whether to send in more troops to Afghanistan and what should Harper do?
  • Andrew Coyne:
    He should make a decision, one way or the other. It’s been three months since Gen. McChrystal’s report, and this endless dithering is not helping anyone. I think the report makes a lot of sense, as do most of Obama’s military advisers — and the defence ministers of NATO. So let’s get ‘er done.
    As I argue in this week’s debate with my colleage Paul Wells, the consequences of pulling out of Afghanistan are severe: for Afghanistan, for the region, for the broader struggle against Islamist extremism. That doesn’t mean there can’t be some point where the costs of staying are worse, but I don’t think we’re there yet.
    If NATO does stay, I think we’re going to come under a lot of pressure to do likewise. It sure seems like the Harper government is trying to establish a little wiggle room of late, but there will probably have to be an election before they’ll be able to overturn the 2011 deadline.
  • Jane:
    How will The National’s new format effect nyour panel discussions?
  • Andrew Coyne:
    I should say we’ve already affected the format: they let us sit down, didn’t they?
  • Pound Foolish:
    Do you think Canada should get rid of the penny?
  • Andrew Coyne:
    I go the opposite direction: I think we should knock the last zero off of every price and wage, ie divide everything by 10. Then the penny would be worth something! Think of it — sure, you’d only be making $5,000 a year, but you could buy lunch for a buck!
  • Anonymous:
    Premier Gordon Campbell received a lot of national media last week thanks to the Olympic events in BC. He’s in his third term now – do you think he will run federally? (Couldn’t help but notice all the “Canada” gear he was wearing, too!)
  • Andrew Coyne:
    From everything I’ve heard, no, he’s pretty much a BC guy. Plus he’s 61 years old, so it’s getting a little late. A year or two ago, I’d say he’d be a pretty attractive candidate, nevertheless. But he’s done himself a lot of damage by flip-flopping on the HST and not coming clean about the state of the province’s books before the last provincial election.
  • julia:
    Hi, Andrew. I was reading through Greg Weston’s piece on Canada’s massive deficit, and I was wondering what your thoughts were on the Conservatives’ sunny optimism in the face of a ton of red ink. Are they going to end up pulling a bait-and-switch, promising no tax hikes and then raising them anyway?
  • Andrew Coyne:
    I wouldn’t put it past them. You really can’t predict anything they will do: they’ve backflipped on so many fundamental positions and life-long convictions in the last few months and years it makes your head spin.
    But let’s be clear: it’s perfectly possible to balance the budget without raising taxes, provided you’re ready to get serious about cutting spending. They’ve raised spending 38%in the last four years. I’m willing to bet that not every dollar of that was sacrosanct.
  • SeanStok:
    How would you compare the current state of political journalism in Canada to that of a decade or two ago?
  • Andrew Coyne:
    As bad as it is, it’s probably a little better. All of the things we most decry about political journalism in Canada — the clubbiness, the pack mentality, the obsession with polls and tactics, the silly personality-driven stuff — was if anything worse 20-30 years ago.
    We’re more aware of our failings now, I’d say. We just don’t seem to be able to break out of our old habits.
  • Anonymous:
    Andrew, I read an essay you posted on your website from years back where you argued for the privatisation of universities. Would you still advocate fee liberalization, presumably with an enhanced student loan system, to allow universities to raise the funds that they need for world-class programs?
  • Andrew Coyne:
    Yes. Talk to any prof who’s still got a functioning brain and heart, and they’re in despair at the state of our universities. It’s not for lack of money, really: it’s institutional rot. They’ve simply gone to seed, and I’m more and more of the view we have to rethink them altogether.
    That needs two things, particularly: one, much more openness to allowing new universities to enter the market, who are freer to try new ways of doing things, unencumbered by the existing universities’ “legacy issues” (read into that what you like.) And two, changing the funding model, to put more emphasis on the students. I’ve long been a fan of converting both the existing student loan system and the grants we send to universities into a single, “student investment” program — what are sometimes called “income-contingent loans,” where the amount you pay back is geared to your income after graduation.
    Lately, I’ve become more interested in a variant on this model, where the funds would be advanced to the students, not by the government, but by the universities themselves, much as a car company will lend you the money to buy their cars. That would align the university’s interests with the students’, not only at the time they’re attending school, but for the rest of their working lives.
  • jolyon:
    Ever since your speech at Manning Networking Conference, I have wanted to hear more about how you are a socialist who believes in markets. How do you square that circle?
  • Andrew Coyne:
    Very simply: markets are social institutions. They’re not simply the absence of government. They’re an alternate way of achieving social goals. Some things can only be done through government, notably achieving a just distribution of income, and we shouldn’t shy away from that. But some things are better achieved through markets, notably an efficient allocation of resources. The key is to let each institution do the thing it’s best at, and not “cross the wires.”
    Give you an example: a whole generation of environmentalists has grown up understanding the market’s possibilities as an instrument for encouraging people to take better care of the environment (see “carbon taxes”.) There’s likewise every possiblity to make better uses of markets in the provision of public services like health care and education — not out of hostlitity to their social goals, but as a way of delivering better public services.
  • Josh:
    Why aren’t the Conservatives more actively pursuing a free trade agenda? Special interests aside, there seems to be broad support for free trade across the country and now seems as good a time as any to open talks with Japan, India and other large economies out there.
  • Andrew Coyne:
    Actually, they’ve been pretty good on this file. We’ve signed several small deals, but the big enchilada has just been launched: free trade with the European Union. If they can pull that off, it’s very big news indeed. We’d be the only developed country with guaranteed access to both of the world’s richest markets, Europe and the States. You could locate your factory in Canada and export into both tariff -free, which would be a strong incentive for foreign investment. Which would be a strong incentive for the Americans to join in — the Europeans’ real objective — and once you had a NAFTA-EU deal, that would get China and India’s attention at world trade talks. So it’s big.
    The other thing I should mention is the Tories have at least threatened to use the trade and commerce power to knock down provincial trade barriers at home — and indeed have sought a Supreme Court reference on the specific measure of a national securities regulator. So I have to give them points on this one.
  • Lorna:
    What are your thoughts on getting rid of the gun registry?
  • Andrew Coyne:
    It’s never been a big issue with me either way. Yes, the registry was a colossally wasteful cock-up. And yes, it was probably unnecessary — we’ve had hand-gun controls since the 1930s, and new purchases of long-rifles have had to be registered for some time back as well. It never seemed worth all the time and trouble to register all the existing rifles in somebody’s attic.
    At the same time, I could never see why people got so hopping mad about it, either. And having gone as far as we have with the registry, I’m not sure it makes a whole lot of sense to scrap it.
  • Brian:
    Andrew: what are your thoughts of the relative weakness / strength of the Canadian housing market? Our average debt per household is higher than the US. Are we not charting the same course?
  • Andrew Coyne:
    I’ll have to take your word for it on the average debt stat, though that would be awfully surprising. But our housing market never got as inflated as theirs, we never had anything like the same subprime industry that they did, and our rates of foreclosure etc are a tiny fraction of theirs.
    Is the housing market over-inflated now? Nobody really knows: one reason I don’t favour the trendy notion that central banks should target asset prices in setting monetary policy. But looking at the broader question of are we building up trouble on the inflation front, that is concerning: central banks around the world have pumped massive amounts of liquidity into their economies — the only stimulus that matters — and will have to look sharp about withdrawing it as their economies recover.
  • Davidv:
    Do you see any threat to Canadian business from the many free trade agreements Harper has signed over the past year or two with countries with significantly lower labour standards, wages etc.?
  • Andrew Coyne:
    No. Countries don’t have to have the same living standards, regulations etc to trade with each other. Indeed, that’s the point of trade, to take advantage of the differences in factor endowments between countries, each specializing in what it does best, what’s known as “comparative advantage”.
    The key point to understand is that every country has a comparative advantage in something, and must by definition. Even if country X can do everything better and cheaper than country Y, it still pays country X to specialize in the things it’s “most best” at, the same way a lawyer who can type faster than his secretary should still stick to the lawyering.
    It’s been said many times, so I’ll say it again: If low wages and crummy work conditions were the be-all and end-all of international competition, Haiti would be the workshop of the world.
  • Anonymous:
    If we had an abortion law, as you’ve suggested we should, what would it look like?
  • Andrew Coyne:
    It might look like most other democratic countries: typically, a fairly strict prohibition in the last trimester (when very few abortions take place anyway), with milder restraints in the second and little or none in the first. That’s not necessarily what I’d favour, but I’d bet it fairly represents the centre of gravity of public opinion in this country, based on some fairly consistent polling over the years. And it’s a kind of “fuzzy logic” way of dealing with the vexed question of “is the fetus a human being.” I could make a philosophical argument that it is from conception, but I know in my bones that a child that’s been nine months in the womb is a human being. Somewhere in between is the point that both moral intuition and demcoratic consensus would recommend.
  • Boss Hoss:
    The Trashmen or The Music Machine? The Gruesomes or The Gravedigger V?
  • Andrew Coyne:
    Trashmen. Seminal band — Surfing Bird is one of the greatest tracks of all time. Had the Beatles not hit in ‘64, they and other emerging American garage rock bands might have made some serious noise of their own. As it is, they all got swamped in the British Invasion, from which it took many years to redover.
  • embee:
    How is it possible in Canada that the various jurisdictions responsible for the H1N1 vacination program have made such a mess of it? Or is it as big a mess as the media is reporting?
  • Andrew Coyne:
    I’d guess not. My understanding is we’ve done rather better than most other countries. There’s an awful lot of Monday morning quarterbacking going on. Vaccinating an entire nation’s population, or even a significant part of it, is a huge undertaking, particualrly in light of unpredictable public responses. First everyone was yawning about it, then they were in a panic.
    People should get their shots, not out of fear — your chances of dying from swine flu are remote in the extreme — but out of a sense of civic duty: if a good proportion of us get the shots, it will help stop the spread of the disease.
  • Andrew Coyne:
    Holy moly. That’s a lot of writing. I’m going to sign off for now, but we’ll do this again soon. Medic! Bandages! Wells!