The Wise Prime Minister and Mr. M.

The wise Prime Minister had had enough of the one-size-fits-all solutions that the economic advisors of the previous national parties had left behind. She was new, and had to find a new solution. She was also hungry, and didn't feel like ordering from where she was at the PMO building on Sparks. Instead, she put on her grey hoodie, and snuck out past her RCMP detail (who were busy questioning a tourist about his particularly sharp soapstone carving - a subject about which the Mounties were rather sensitive), and jogged down Sparks to Elgin Street. For comfort food on a Friday night in Ottawa after 5PM, Elgin Street was the only real option. It was either Dunn's, the Elgin Street Diner, or International Shawarma.

Being wise, the Prime Minister decided on shawarma as she didn't have to worry about her breath smelling of garlic sauce once she was out of official meetings. One of the Cabinet ministers had mentioned that once, and she only grabbed shawarma on weekends after work from that day on.

Mr. M. was there, as he usually was on late Friday nights, and the wise Prime Minister chatted with him about business. It was clear the store was hopping, and though they served no alcohol, the tiny shop had a certain bar smell about it.

"It looks like business is brisk," said the wise Prime Minister.

"Of course!" said M., "the bars are getting ready for last call, and people are coming here before heading home... or across the bridge to Gatineau."

"But on Sparks, Bank, O'Connor... all of the shawarma places are closed now. Why are you still open?" asked the wise Prime Minister.

"Go into those places at noon, and it will be as packed as this," said M., "but they are all next to high-priced condos and government offices. My store is in the middle of a bunch of bars and just north of some lower-rent apartments. There's a reason why there's a convenience store across the way, too... they must survive on late night slurpee and condom runs." M. laughed to himself.

"So you're saying that only a few blocks north and west of here, there is a totally different type of business environment to here?" asked the wise Prime Minister.

"It's all about location," said M., "if I had the same hours in this store over on Bank, I'd go out of business. I'd need chairs, for the sit-down lunch crowd. No, my restaurant is all about the people who are going to grab a shawarma and eat it on the way home. If it wasn't for these bars and those apartments - and hey, maybe even that convenience store, my model wouldn't survive."

"You mean that other businesses - even businesses in the food and beverage industry - actually increase your sales?"

Mr. M. motioned to the line at his tiny counter that extended out the door, "See for yourself, Ms. Prime Minister."

The wise Prime Minister didn't expect to be so easy to recognise to early in her tenure, and blushed instantly. Mr. M. offered her a mint from a small jar.

"On the house." winked Mr. M., as he reached behind the bar to blast his theme song onto the street - a siren call to the drunk, the lost, and the otherwise sleepless denizens of the East downtown core.

The Wise Prime Minister and the Trade Unionist

The Trade Unionist spoke up, saying, "It's clear, Ms. Prime Minister, that in order to create jobs, you must protect workers. higher taxes on the rich are fine. Too much liberalism in our trade policy ruins our local industry. The only thing you can do to protect jobs is to protect the workers who work in those jobs."

"Go on," said the wise Prime Minister.

"Well,"said the trade unionist,"for example, you can start with strict overtime laws. If all employers have to pay for overtime, then either the workers will get higher salaries, or the employers will have to create more shifts. Tradesmen who work specialized positions will be guaranteed a higher minimum wage. The minimum wage for all workers should be raised."

"But the question of minimum wage isn't a federal one. Every province would have to have a say. What if provinces kept competing for industries by lowering their minimum wage?"

"Of course," said the trade unionist, "certain powers would have to be consolidated at the federal level. We would have to raise the standard for all workers across the board."

"That might be possible when a company becomes big enough to be considered a federal Corporation, but when it comes to local companies, how could we possibly make all the provinces agree to a single standard? Plus, how could we possibly have startup companies survive and grow with rigid, centralized, and draconian labour laws?A strict mandate from Ottawa will never work in a country where the price of milk in Yellowknife is so different from the price of milk in Toronto," said the wise Prime Minister, "even if the provinces gave up their authority over labour, Federal laws on the matter would work in Ontario, but not in nine other provinces."

"But in order to create jobs, we have to protect the rights of workers!" said the Trade Unionist.

"You are right," said the wise Prime Minister, "but we cannot sacrifice the flexibility of traditional family business, and by forcing all labour to abide by national rules, we would create a barrier to new business. We need new businesses - startups, family businesses, small-scale entrepreneurs - to keep the economy going strong. To keep growing, we can't force a single, overarching labour law on all entrepreneurs... especially when labour is the largest expense for almost every small business out there! Every entrepreneur, even if he doesn't hire, adds another job to the economy: his own. More than that, startups create huge amounts of jobs, and the startups that become mid-sized are the biggest job-creation sector in the economy. By raising the single greatest cost to the small entrepreneur, we almost guarantee wiping out the biggest job-creation sector by making it more difficult to cross the magical boundary between small to mid-sized business. It's clear none of the three solutions I have heard solve the problem of job creation."

Almost as if on cue, the Economic Liberal, the Neo Conservative, and the Trade Unionist piped up "No single solution can solve all of the economy's problems!"

To which the wise Prime Minister uttered the only reply under the circumstances: "Of course! There is no single solution..."

The Wise Prime Minister and the Neo Conservative

"Perhaps I can be of help." said the Neo Conservative.

"What is your plan for increasing the amount of jobs in our nation?" asked the wise Prime Minister.

Taking the floor, the Neo Conservative said, "Certainly, Ms. Prime Minister, a degree of protectionism is required in order to protect local industries, but free trade is a good thing if we have companies that can profit by it. Even if companies are not always creating jobs, protecting our own corporations against foreign companies is better than the alternative. But my concern isn't efficiency. I believe that job creation requires job creators, and we must make policies that allow them to profit above all others."

"Go on." said the wise Prime Minister.

"Well, the rich entrepreneurial class are your job creators," continued the Neo Conservative, "they are the ones who need tax cuts so they can go on creating jobs. You can't tax them to death and then expect them to have money left over for job creation. Let them use their hard-earned money as they see fit. They are the visionaries, after all."

"So what you're saying is that we should allow the rich to keep more of their profit because they will create jobs with that profit?" asked the wise Prime Minister.

"Yes," replied the Neo Conservative, "they will have more money to create new ventures, and the new ventures will hire many new workers!"

"You are thinking about things like a bureaucrat and not a businessperson," said the wise Prime Minister, "because if I'm rich, I can write off business expenses to lower my tax rate, correct?"

"Of course." said the Neo Conservative.

The wise Prime Minister continued, "If I am rich and paying lots of tax, I am willing to give more to the economy to get more protection from taxes. If my taxes are low, there is no need to get a tax break, and no need to add money to the economy. I will save it for a rainy day when taxes are higher. Lower taxes means the cost of money is low. If the cost of money is low, I will hold on to it. If the cost of money is high, I will spend it so that I can protect myself from that expense. If you think that it is the entrepreneurial class that creates jobs, then clearly what we need to do is tax them more, not less."

The Wise Prime Minister and the Economic Liberal

The wise Prime Minister called for her Economic advisors. Three men stepped forward: the Economic Liberal, the Neo Conservative, and the Trade Unionist. "Tell me," she said "how can we give our people more jobs?"

Her first advisor, the Liberal, stepped forward and said "we should open our borders to trade, and engage other nations in mutual free-trade agreements. We are a nation with many natural resources to export, and free trade with those who wish to buy our exports would increase sales. Sales increase revenues, and revenues allow companies to expand their workforce. An efficient market, that is the key."

The wise Prime Minister nodded, and said, "Yes, this makes sense. But what of those nations that do not wish to purchase our resources because they have resources of their own?"

"Ahh, then," smiled the liberal, "we will gain access to their markets with our mining and harvesting companies and produce more efficiently than the local corporations. Either way, unrestricted access to their market is beneficial. With barriers gone, the market gains efficiency. That means it's easier for companies to profit."

The wise Prime Minister nodded, "yes, companies profit, but when companies are able to profit efficiently, do they create jobs? I would say they do the opposite. If a company gains profit, it buys out its competitors, it buys back shares, extends its leverage, pays stock dividends, or rewards its executives. It doesn't create jobs."

"But jobs are created when companies can compete in efficient and unrestricted markets," protested the liberal, "When a company wants to expand operations in order to gain more profit, they must hire new people!"

"Sometimes," quipped the wise Prime Minister, "but more profit does not always mean expanded operations. In the rare times jobs are created, those jobs are created where they are most efficient - in efficient markets where the workforce costs less to maintain. Efficiency in a market does not mean more jobs, it simply means more corporate profits. More corporate profits does not mean more jobs, it means a corporation can acquire its competitors and eliminate redundancies. Efficiency is the opposite of more jobs: it is the ability to make more profit by paying less. The idea that efficient corporate profit adds to the welfare of our people is a myth. Corporate profits do not create jobs."