Do nothing but increase productivity
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It’s barely been six weeks since inauguration and I don’t know about you, but the prospect of nearly four more years of this shit show has me a little bit depressed. And the Democrats appear to be even more useless than usual in reining this in or, you know, propose an alternative that might appeal outside the faculty club. James Carville, who used to be very good at this game (he is widely credited for Bill Clinton’s victories) has an oddball suggestion: The do-nothing plan.
With no clear leader to voice our opposition and no control in any branch of government, it’s time for Democrats to embark on the most daring political maneuver in the history of our party: roll over and play dead. Allow the Republicans to crumble beneath their own weight, and make the American people miss us. Only until the Trump administration has spiraled into the low 40s or high 30s in public approval polling percentages should we make like a pack of hyenas and go for the jugular. Until then, I’m calling for a strategic political retreat.
I have yet to win a presidential election on behalf of my choice candidate, so it is with a certain humility that I raise my hand in mild protest. I get what he’s saying. But please, let’s not assume people will magically want what they rejected a few months ago just because Trump is as bad as everyone knew he would be.
We badly need a credible, viable and appealing alternative. Sexy, even. Something that makes people want to vote for it, with no need to hold their nose.
I don’t follow American politics as closely as I used to, so I don’t have a good grasp of who’s up and coming and interesting. I like New Jersey Senator (and former Newark mayor) Cory Booker. And this one fellow who caught my attention because he was on Ezra Klein’s show a few weeks back, Representative Jake Auchincloss of Massachusetts.
Quick bio lifted straight from Wikipedia: “Auchincloss studied government and economics at Harvard University, graduating with honors. He served in the U.S. Marine Corps then returned to school and earned a Master of Business Administration (M.B.A.) in finance from the Sloan School of Management of the Massachusetts Institute of Technology.” Also, he just turned 37 years old.
On his twitter bio, he says: ”Build an economy that works like Legos, not Monopoly.” It’s cute, but also profound. He’s keen to talk about an abundance agenda, which he explains thusly:
Imagine if you were going to build your car. And instead of buying a car at a dealership, you stood in your driveway, called up a general contractor and had them subcontract out the various parts of the car. And people came to your driveway and built the car piece by piece. Imagine how much that car would cost. A lot more than the typical car, right?
Well, that’s how we build houses. And it doesn’t actually have to be that way. And in fact, it is tied to the abundance agenda that I know that you and Derek Thompson and others have been pushing to the front of the policy conversation.
The abundance agenda makes the case that if you’re trying to lower the cost of living for the typical American family, you need to unlock supply rather than subsidize demand. You need to build more stuff.
I agree with the abundance agenda, and I agree with it across different sectors. But I think it’s incomplete.
You can’t just unlock supply if it’s a supply of a sector that has low productivity gains. You first have to turn those services into products and then unlock supply. Yes, we need zoning reform to expand supply. But we also need to lean into off-site construction to turn housing production away from stick-built, where it’s highly service-intensive, and toward modular construction, where it’s more factory-intensive.
This dovetails nicely into issues we’re having with productivity in Canada, particularly in construction. Smart people have been talking about how to position ourselves so we don’t just survive this calamity (and the VP that’s bound to be even worse than Trump in the Oval Office) but use it to propulse Canada to a place where we become wealthy and diversified enough that whatever erupts from the White House doesn’t affect us as much as it does now.
This necessarily means increasing productivity, which has been lagging especially hard since the pandemic. Here, for instance, is what the analysts at TD are saying about it:
Over the decade prior to the pandemic, business sector productivity grew by a respectable rate of 1.2% annually (Chart 1). Since 2019, it has ceased to expand at all, setting Canada apart as one of the worst performing advanced economies, not to mention in stark contrast to the United States (see earlier report).
We wish we could tell you that only a single or handful of industries are the culprit. However, the woes are widespread. Relative to growth in the decade prior the pandemic, only a few service industries have managed to improve their performance. Those working in the goods sectors have felt the downshift the most, where productivity has gone in reverse in the years since the pandemic. What does that mean? To get the same output, it now requires more hours from workers. Hard to believe this could occur in a digital age.
There is one sector in Canada that wears the Scarlet Letter more prominently than the others: construction. Due to its increasing size within the economy, its declining productivity has been an increasingly important source of overall weakness.
There are plenty more analyses like this one. For instance this, or this, or this. And also this. And that other one. What the hell, here’s one more.
Now, whenever you start talking about this, you'll get economic illiterates (though in fairness, they're pretty ignorant of most other important things, too) get all huffy about how hard people work. Increasing productivity doesn't mean working harder. It usually means working smarter. It also means investing in technologies and education. No, not just four-year degrees. Advanced mechanical skills. Stuff people need to work better and smarter, not just harder.
Former Bloc leader then Quebec premier Lucien Bouchard — last seen leading the Yes forces to an almost-victory in 1995 and who has since been working quietly as a partner in a big law firm — co-signed a manifesto in La Presse last week calling on a renewed focus on entrepreneurship. For those of you who follow these things, it will remind you of the famous “manifeste des lucides” that Bouchard and a bunch of other Quebec worthies signed in 2005 to try and get Quebec to shake off its post-referendum blues and become something of an economic and prosperity powerhouse. Precisely so as to be able to call its own shots.
There’s a lot of support for this kind of focus on improving productivity across the country, and now with the urgency of having to deal with constant threats of tariffs or annexation or whatever other bullshit Donald Trump comes up with, I can’t think of a better thing to focus on.
I’m no economic genius, but one thing I know is that insisting on indicators that don’t matter won’t help us get there. For instance, putting more value on where people work (office vs anywhere else) than on deliverables. And protecting some Canadian producers from competition by other Canadian producers. We have easy pickings getting rid of anti-useful interprovincial trade barriers — everything from restrictions on booze to physician licensing to regulations that say a particular kind of transport truck can drive at night in one province but not the neighbouring one.
There are possible solutions out there. Many of them. A solid one is increasing domestic competition — we even recently updated the law that governs such things for precisely that reason. I don’t know enough to know which solutions need to be implemented first or why. But I do know that trying to resist becoming more productive — by working smarter and better — will make us way more vulnerable to the king of tamper tantrums next door than we have any right to be.