Prime Minister is a poor occupation for the village Idiot

Almost 40 years ago I graduated University with an Engineering degree.  To be quite honest I was not even sure how I was supposed to use the things I learned.  I quickly learned that Engineers broadly fell in to 2 categories; design or operations.  I chose operations and that meant I spent most of my time solving problems.  There was always some piece of machinery or process that was not working properly and it was my responsibility to determine why and offer solutions.

I found I quite liked solving problems and that all problems are solved by first determining the root cause.  This seems very straight forward but for some people it is not.  I can’t count how many times I have solved problems that have persisted for years.  Money had been spent on “solutions” that had never worked because no one had spent the time to correctly identify the root cause.  People who cannot identify the root cause make very poor engineers but often very successful politicians.

Justin Trudeau is a very successful politician.  His success doesn’t just border on unbelievable it crosses the border right in to unexplainable.  How did a man with brain function so low he is barely capable of autonomous respiration become the leader of a G8 country?  This will no doubt puzzle any historian that studies our current dumb ages but this unpredictable situation is having very predictable results.  Canada has a number of serious problems that are not being solved.

The biggest problem for Young Canadians right now is that houses are unaffordable.  Not to worry though Justin thinks has identified the root cause; investors speculating in Real Estate.

“The big thing is we just have to slow down on the speculation, right?” said Trudeau. “I mean, housing prices and values should increase over a lifetime, but you shouldn’t be able to flip a home eight years later and have it double the price.”

Speculation does distort markets but it tends to be a temporary distortion.  In life outside politics reality always intrudes.  The value of the product being speculated on will always return to what supply and demand dictates that it should be.  Usually it does not take long and the price adjusts.  If after 8 years prices are still increasing speculation has little to do with it.  So obviously the root cause is not speculation but that does not matter.  Justin is going to end all of this speculation by taxing home equity.

I mentioned this to another friend, who said, well if it’s a modest hit on million-dollar homes, and it goes to help millennial home buyers, then maybe that’s not such a big sacrifice. In other words, it’s OK to go after the rich folks (or wealthier middle class) in the Robin Hood sense.

Remarkably many Canadians are as poor at problem solving as Justin Trudeau.  There are people willing to accept this “solution” despite how incredibly stupid it is.  This will not help a single young person.  How could it?  The problem for Young people is that houses are too expensive.  Taxing homes will not make homes less expensive.  The underlying value of any product is determined by supply and demand.  This will not get more homes built or lessen the demand for new homes.

Canadian homes are expensive because unrestricted immigration has dramatically increased demand and there has been no corresponding increase in supply.  This is not normal market behavior.  The market has been distorted by government policy.  Municipal governments have been piling on regulations for decades that make new homes expensive and new developments slow to approve.  Demand has been distorted by the federal government and supply has been distorted by municipal governments.

This problem has been caused by government but the root cause is the voters.  Canadians have an unblemished track record of voting for stupid politicians and allowing them to do stupid things.  The housing crisis and almost every other significant problem Canadians face can be solved by doing one simple thing.  Don’t choose the village idiot to run the village.  Justin Trudeau should have been laughed off the stage the first time he threw his hat into the ring.  We did not do that and now our children can’t afford houses.

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