The Fox & The Grapes....an Aesop Fable that resonates today.

A Fox one day spied a beautiful bunch of grapes hanging from a vine trained along the branches of a tree. The grapes seemed ready to burst with juice, and the Fox's mouth watered as he gazed longingly at them.

The bunch hung from a high branch, and the Fox had to jump for it. The first time he jumped he missed it by a long way. So he walked off a short distance and took a running leap at it, only to fall short once more. Again and again he tried, but in vain.

Now he sat down and looked at the grapes in disgust.

"What a fool I am," he said. "Here I am wearing myself out to get a bunch of sour grapes that are not worth gaping for."

And off he walked very, very scornfully.

The moral of this story? There are many who pretend to despise and belittle that which is beyond their reach. When things are too hard...SOUR GRAPES!

There's a lot of sour grapes being expressed in our country right now. Why? Things are out of reach. They're "too hard." People are giving up. This all comes down to attitude in my opinion and to facing reality and making change happen. It's ultimately about cognitive dissonance. People change their attitudes to justify their failures or to reduce their sense of disappointment from not being able to achieve their desired results. Things they once coveted become "not worth it anymore." They rationalize their outcomes. They blame things beyond their control instead of dealing with reality and anticipating outcomes. Then, they ultimately do what the fox did. He went from, "I'm gonna get me some of those juicy grapes" to "uh...who cares...those grapes are probably sour anyways." But despite this mental/attitude shift, you know what doesn't change? The fox failed ... and the grapes are still hanging there in all their tastiness... ready for someone/something else to pick them. I wonder if the fox should have tried harder. Maybe he didn't think hard enough to find a solution to his problem. Maybe he could have partnered with a squirrel. Something like..."hey squirrel...I'll show you a chestnut tree if you climb up there and get me some of those tasty grapes." Win/Win...feel me?

I see this attitude everywhere....all day long. When things don't work out we quit and then we run to the government to save us. But this is unrealistic and unsustainable. The government can't solve all of our problems. At best they can support us by creating policies that lead to entrepreneurialism and creation and innovation and investment in the future. But the reality is that we live in a fast paced, dynamic and competitive world that is full of uncertainty and unintended consequences. We need to be nimble, adaptable and resilient more than ever. Government also needs to be nimble. Unfortunately, this isn't the case.

Based on the 2024 IMD World Competitiveness Report Canada slipped four spots to 19th place. We were 8th in 2020. During the same time period we slipped from 10th to 19th in Government Efficiency and 10th to 27th in Business Efficiency. Here's the overall ranking...

We're going backwards while others are moving forwards. Take the USA and Mexico for example, our two largest trading partners.

Everybody knows the United States-Mexico-Canada Agreement (USMCA) replaced NAFTA in 2020. The results for the USA have been very good. The results for Canada, not very good! But for Mexico? Depending on what you measure the results have been good to great. Why? Lots of reasons. Primarily, its because of the Country's extremely low wage base. Did you know that when the USMCA was signed Mexico had a lower per capita income than China did? Now its about 7% higher than China's. The numbers below are as of October 2024 and are from the IMF's website.

Take a look at the USA, the green line at the top. It's rocketing upwards! Now look at Canada's, the second line from the top. It's essentially done nothing for 15 years. In fact it went down over the past 2 years.

Another major reason that the USA and Mexico economies are doing well is due to onshoring/re-shoring/re-industrialization. Everybody knows that the USA is digging in to maintain is hegemony in the world. Their main target? China! But the Chinese aren't stupid and the rest of the world doesn't want to be left in the cold so everybody adapts. The prize? The much sought after golden goose...the USA consumer. Mexico is the benefactor. Why? Because under the USMCA, "Made in Mexico" doesn't mean 100% "Made in Mexico." Companies from all over the world are moving capital into northern Mexico to circumvent USA trade restrictions. As of 2023, Mexico is now the largest exporter of goods to the USA...MORE THAN CHINA! Here's some more graphs...

Cargo volumes from China to Mexico is OFF THE CHARTS!

Cross-border truck visits from Mexico to USA is OFF THE CHARTS!

China's contribution to Mexico's value added exports is OFF THE CHARTS! Look at Canada, its the thin grey line just below the top...its done nothing!

Some people seem to think that Mexico's success will wane depending on whether Harris or Trump wins the election. Personally, I disagree. I believe the geopolitical forces and USA centric nationalistic politics at play will intensify regardless of who wins the election. As for the USMCA it will be re-negotiated in 2026, but we all know each nation has already started to prepare for this situation. I guess we'll have to wait and see what happens.

In Canada, people have started to become alive to our dire economic situation and they've started to get active. For example, the Canadian Manufacturers & Exporters Association just published a report titled Regulate Better, Grow Faster: CME 2024 Regulatory Burden and Red-Tape Survey. (see Report here)

The bottom line of the report? Here it is...

"The results reveal that the increasing complexity and volume of regulations are impeding investment, output, and employment opportunities. These challenges are likely contributing to declines in labour productivity and real GDP per capita, posing serious risks to the future prosperity of Canadians and their communities."

The CME recommends that we deregulate our manufacturing sector by implementing the following:

1) Create a Federal Minister of Regulation and Red Tape Reduction

2) Assign Economic Mandates to All Regulators

3) Establish a Regulatory Credibility Committee to Improve the Consultation and Analysis Process for new Regulatory Initiatives

The point of each of these recommendations is to shift the government mindset away from over-regulation towards one that promotes accountability for economic results. Regulators need to apply an economic lens to everything. This is what we're missing. TOO MANY REGULATORS, NOT ENOUGH CREATORS ..... MAKES THINGS TOO HARD!

AND WHEN THINGS ARE TOO HARD, SOME PEOPLE GIVE UP....BUT SOME PEOPLE FIND WAYS TO MAKE CHANGE HAPPEN. ITS TIME TO GET US SOME OF THEM TASTY GRAPES!

ben

p.s. my Italian heritage appreciates this grape reference!