Larry Smith is an economist at UW.
When he visited CFFB in January, Larry softened that introduction by letting us know he has experience with family business…he grew up in a small town…he went through the child labour experience. That was the first hint of the presentation uniqueness about to follow.
Larry talked about the serious disruption caused by economic recessions and the importance of being able to do economic forecasts. During the recession of 1980-1981 Canadian economists could forecast. Similarly, about a decade later the Governor of the Bank of Canada visited Kitchener and confirmed he would be raising interest rates to fight inflation. That allowed Canadian economists to forecast the danger that became the economic downturn of the early 1990’s.
In the last 5 years we have experienced another recession. This time inflation is gone, we are seeing a long-term, systematic decline in exports to the U.S. Larry explained, this is not a retreat. It is disengagement so, in the future, the U.S. will not pull us down with them.
About the U.S. economy:
- During the 1990’s the growth in the U.S. economy was mostly ‘Internet hype”…so the U.S. took a major hit in 2000
- Without mentioning names, a U.S. President ruined the economy
- one of the lowest taxes in the world/large military budget/less money for other sectors/major universities lowering enrolment & reducing class time
- more-recently – the U.S. has not had a budget for almost 4 years
- “The largest economy in the world has no fiscal plan.“
“America, which could stimulate the economy around the world, is missing in action.” “The U.S. has to elect a President who is decisive and can knock heads.” And – the U.S. is still Canada’s largest market. We are separating from the U.S. What about the rest of the world?:
- despite all its problems when compared to the U.S. Europe is well-governed
- Japan has had 8 Prime Ministers in the last 3 years
- China has 16,000,000 census takers/the entire Chinese government is 7 people
- India do not educate rural people/wealth is for the elite
- Canada may be seen as an oasis of dopiness
About Canada’s economy:
- we face rising competitive pressures
- millions of Latin American people are not our competitors [ex, Brazil & Mexico]
- the Philippines, Indonesia, China, and India are all expanding as competitors
- forecast: slow growth at best for the foreseeable future
- everyone is facing competitive pressure
Larry summed up the Canadian situation, “We are in the most challenging economic environment we have ever encountered since I became a practising economist.” “This year it is hard. Next year it will be harder.” A message for 20-year-olds: “Your life will be more difficult that your parents’ and your grandparents’.” The standards for getting a job keep rising and co-op programs around the world are providing work-experience for young people. Employers want to hear good answers to questions like, “What ideas do you have for me, your employer?” “Young people need to know they must offer ideas.” Is there a way out of this dilemma?
- there is no magic way
- we must not shave profit margins
- we must not reduce quality
“In your hearts, you know what you need to do…” “Let us motivate ourselves. Let us steel ourselves to do things that we may not find comfortable and attractive.” Canadians must INVENT: “I own a Canadian family business. I am an inventor.” “Is that how you introduce yourself?” Invent – and have the ability to move quickly. “Your work is going to be exciting, scary…the antithesis of boring.” “You have the characteristic the market will reward the best.” And in closing, Larry said – “With resolve to do what you need to do, I wish success to all of you in the exciting times in which we live.” An amazing presentation Larry…captivating, educating, & energizing. Thank you!