Editorial – “I promise not to pee it all away again”

Jeff Burgar

“This time it’s different.”

Those dabbling in stock markets have probably heard those prophetic words. As in, as markets go up and up and up, naysayers keep saying, “Look out. Everything points to coming collapse.” But optimists keep saying, “No. So much has changed. The world is a better place. This time the sky really is the limit.” And of course, “This time it’s different.”

Which, as is usual, is inevitably followed by proof. The crash comes. “This time” is emphatically not different.

Thus, we turn to our provincial government. There, authorities are telling us they are working on “diversifying” our economy. A panel of Alberta experts has been assembled. Announcements will be coming this month and following months. Yup. This time, choke gasp hack, “it’s different.”

Because of course, this is an old, old story. In our boom and bust economy of Alberta, when times are tough, “diversify” is the hoary old story. When times are great, governments totally forget what they or the folks before them, tried to do back in the bad times.

So here we are, on the verge of “new” plans. Or maybe old plans that were shelved. Or maybe plans that will actually get attention, until oil creeps up to $70 per barrel or more. Let’s all say it again. When times are good, the bad times are always forgotten in Alberta. No difference at all, really from the last boom. Or the one before that. Or the one before even that.

A few years ago, we suggested a “super tax” on windfall oil profits. To explain, in almost any business and almost any government, if money is available, it gets spent. Banks happily loan so business can expand. Governments happily build new offices and create new departments. Businesses invest in new equipment and bigger operations. There is money to be made and everybody wants in on the action. Not just in oil, either. The internet boom that crashed in 2000 shows that. The housing boom that crashed in 2008 is another example. The Roaring Twenties. The Tulip Boom back in 1637 even. All fun times. Can such speculations be “curve flattened,” to use that favourite virus example? Our suggestion was the super tax. A suggestion as a way to discourage all the extremes of exuberant and irrational investing and spending that results in booms.

The potential for outsize wealth is what drives much of our capitalist investments. Some say it is wrong to put a lid on extremes. If the potential was not there, people would not invest. In reality, ridiculous profits once upon a time were balanced with the possibility of total loss. These days, “too big to fail” means government bailouts and even willing investors lending a hand when taxpayers are backstopping losses. Is it not fair then, that disastrous losses for any reason, are balanced with taxes on windfall profits?

We are already accepting government, meaning taxpayer, help right across the board in these terrible times. Now is an appropriate time to plan for that day when “the next time it is no different” rolls around.

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