Mr. Obama, You Can Learn From Canada

To start with, it has a healthy financial system and affordable higher education. Many Americans think mainly of Eskimos and hockey when they think of Canada. Some might think of Michael J. Fox and James Cameron. They should be thinking of a functioning financial system and the most robust economy in the developed world. Unlike the U.S. and Europe, Canada has emerged relatively unscathed from the financial crisis. Its unemployment rate has been improving for the past year and stands at 8.1%. Canada's minister of finance, Jim Flaherty, is already calling for an end to government stimulus, even though the government debt stands at less than 35% of gross domestic product, less than half the level in the U.S.

Why is Canada doing so well while America's doing so poorly? For one thing, its financial regulations have emphasized dullness rather than encouraging exotic financial instruments. The big five banks have never been allowed to merge, and they've only dabbled in investment banking and subprime mortgages. Also, the banks' chiefs have never received huge bonuses like Lloyd Blankfein at Goldman Sachs. In other words, the banking system has been forced to be conservative--as a banking system should be.

Canada also has good immigration and education policies that have set it up for continued strength. There are lessons President Obama can learn from Canada as worries of a double-dip recession in the U.S. linger.
A speech by Jean Charest, the premier of the province of Quebec, says it best. He said that Qubec needed to continue to attract the best people from around the world to come and work there. It is the policy in all our provinces. This is something that is going all wrong in the U.S., as America erects yet more obstacles to immigration in the name of preserving American jobs. Those anti-immigration policies are foolish and will hurt America in the long term.

Let me tell you a story to illustrate just how useless America's immigration policy has become. A young Harvard graduate who also was a Rhodes scholar at Oxford University got a job offer in the US. He was a very impressive and brilliant young man. He had an offer in hand from one of the big private equity firms in New York--but despite his credentials, he couldn't get a working visa. Yes, a Harvard graduate and Rhodes scholar with a job offer in hand was unable to get a visa from the U.S. government. As a result, a Canadian company snatched him up and he will greatly enrich the thinking pool in that business.
This young man is exactly the kind of person America, or for that matter any nation, needs. Why couldn't he get a working visa? Because immigration is an issue that has become so freighted with fear that people can't think about it rationally. This has been especially true recently, as scared people like the Tea Partiers have looked for scapegoats for America's economic mess--though in reality the pendulum has been swinging this way since Sept. 11, 2001. Immigrants are easy targets, but rarely are they the problem.