In the 1980's, America's economy began to rust out. Ronald Reagan told the unemployed in cities like Detroit, Baltimore and Garry, Indiana that they should move out of town and seek work in one of the burgeoning McDonald's franchises. Michael Moore chronicled the fate of the newly unemployed in his film, Roger and Me. The plight of those left behind was illustrated most pathetically by a woman whose hand painted sign advertised that she sold rabbits "For Pets or Meat."
In the second decade of the new century, the Economist reports that Canada has developed its own rust belt:
IF YOU visit south-western Ontario and the Niagara peninsula you will see scenes of industrial decay. Steel mills, vehicle-parts factories and food processors sit abandoned, their car parks studded with tufts of grass. The region has the look of a rustbelt, and that has Canadians worried.
Manufacturing took a beating in the late 2000s and early 2010s, when high oil prices drove up the value of the Canadian dollar, making factories less competitive. But Canada should now be recovering from that bout of Dutch disease. The “loonie”, as Canadians call their currency, has been dropping along with oil prices. On August 25th it fell to its lowest level in a decade against the American dollar. That, plus the strong economy in the United States, the market for three-quarters of Canada’s exports, should have scraped off much of the rust.
So far it has not. Factory sales rose 1.2% in June, but were 3.1% below their level of a year earlier. The failure of manufacturing to respond to the tonic of a weaker currency is one reason why the economy probably contracted during the first half of 2015.
Now Canadians are starting to suspect that much of what they lost may never come back. In 2000 manufacturing accounted for 18% of GDP, not much lower than the share in Germany; by 2013 that had dropped to 10%, about the level in Britain and the United States. Factory employment has fallen by about 500,000 since 2005, to 1.7m. In the decade to 2012, some 20,000 factories shut down.
History is repeating itself. Neoliberalism doesn't die. It just finds new places to take root, peddled by new snake oil salesmen. Reagan claimed that it was "Morning In America." Stephen Harper claims that the sun is rising on a brave new world.
Most of us are watching the sunset.