Our neighbors to the north have reason to gloat: Canadians are on average wealthier than Americans. In a column for Bloomberg View, Stephen Marche points out that Environics Analytics WealthScapes data shows how in 2011 the net worth of the average Canadian household was $363,202 compared to the average American household at $319,970. That gives the average Canadian $43,232 more than the average American. As Michael Adams, who reported the figures last month in The Globe and Mail notes: "these are not 60-cent dollars, but Canadian dollars more or less at par with the U.S. greenback." Adams writes that real estate in Canada is worth on average over $140,000 more than that in America, and "Canadians hold more than twice as much real estate as Americans and, once mortgages are factored in, have almost four times as much remaining equity in their real estate." That said, he adds that America's "liquid (non-real estate) assets are still greater than Canadians’." And that's not all: Marche notes that while Canada's unemployment rate has fallen to 7.2 percent, America's was stuck at 8.2 percent.
So why do Canadians have all this money? Marche, while factoring in "luck," explains it as such:
Since the 1990s, Canada has pursued a hardheaded (even ruthless), fiscally conservative form of socialism. Its originator was Paul Martin, who was finance minister for most of the 90s, and served a stint as prime minister from 2003 to 2006. Alone among finance ministers in the Group of Eight nations, he “resisted the siren call of deregulation,” in his words, and insisted that the banks tighten their loan-loss and reserve requirements. He also made a courageous decision not to allow Canadian banks to merge, even though their chief executives claimed they would never be globally competitive unless they did. The stability of Canadian banks and the concomitant stability in the housing market provide the clearest explanation for why Canadians are richer than Americans today.
We guess now is a good time to stop making Mountie jokes and to start sucking up.
This article is from the archive of our partner The Wire.
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