Quote:
Originally Posted by Cyro
I'd personally like to here the response to your question as well. Can't wait.
EDIT: I'm going to have to edit this post, as the quote has changed. I'd still like to here thoughts on my initial question.
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The simple answer is probability distributions and the complex answer is probability distributions.
Statistics can't be looked at in a vacuum and they can't be looked at the way TrueViking is looking at them. For the most part, economic statistics exist on a bell curve in what's called normal distribution. We get some outliers on both sides of the distribution - otherwise known as the tails - and we get a cluster of the majority data points that exist somewhere around the mean. Over time, things generally revert to the mean when faced with similar conditions in the long term.
We have been here before. We saw population growth numbers like this in the mid-80's. We also saw them decline fairly rapidly starting in 1986 to about 1991 and then hold fairly steady at nearly zero growth until about 2009. They also looked very similar to that leading up to that unusual growth. That is not an insignificant sample. In an earlier post, TrueViking said that I'm staring at the bogeyman of the 90s all the time and that 'things have changed', but actually, nothing has changed except that the province has decided to accept a few more immigrants in the interests of growing the population. This is certainly a viable alternative, except that after only four years of outsized growth, the feds have already stepped in and started to control our growth plan. Why? Because they can. Because they're on the hook for a significant portion of the costs associated with the population and because as the old saying goes, you don't build your business on somebody else's real estate. Immigration is the domain of the federal government. If you're intending to control your growth through it, you'd better not already be a have-not province that can't handle its existing population as evidenced by the sheer amount of equalization payment the province receives annually. This isn't unlike telling somebody on welfare to stop having kids if their only income is the child tax benefit. So they cap us. Which they have. Which wouldn't be so bad except that we've had three (!) years of net positive interprovincial migration rate since 1972, the last in 1985, and that's only where the data goes back to. Those years were only 1128, 1997, and 439 people - in other words, statistically insignificant and almost what one would consider the margin for error. Natural growth rates have been fairly steady in the territory of about .4% annually - again, statistically insignificant - so that's irrelevant to the argument. It would behoove somebody to do the digging into which segment of the population is actually growing and extrapolate from there whether there was cause for celebration. I'm not going to look for those statistics.
So one might argue at this point that Manitoba is a fine place for immigrants and things are relatively steady for them and the conditions are better than where they're coming from at the very least, but this doesn't account for Manitoba in the grander scheme. Immigrants that land here aren't forced to stay here. The growth rate for the province was pegged at 2.4% last year. That would have ensured employment growth and opportunity. Except that we
actually saw 2.0% growth which is below the national average. It also happened in a year where inflation was 2.3% and where the unemployment rate had also increased. That means: fewer people have less discretionary income to buy more expensive things. Immigrants don't stay in these conditions. They move to greener pastures because they aren't rooted here like others.
This takes me back to my original point about normal distributions. TrueViking is cherry picking statistics - like housing starts - to make the case that everything is on the up and up. Distributions - as any statistician will tell you - do not exist on curves that are straight lines on a 45 degree angle to the moon; they generally follow normal distributions where fundamental conditions remain mostly similar. Since we don't have a natural resource base to justify outsized growth within an economy that is
already growing below the national average even as housing and land prices increase, we have to look at some other event. Something like interest rates. It isn't any coincidence that as the cost of capital decreases, something that is heavily reliant upon leverage (borrowing) would trace upwards. Something like, say, real estate. It's safe to say that in today's case, we're most likely looking at tail events. In other words, these things being held out as future indicators of success are actually the precise reason they're unlikely to continue - they're the exceptions we use to prove the rule. As factors even out (interest rates, federal intervention in immigration, etc... ), we're more likely to see the same very slow growth we've more traditionally seen over time after removing the aberrations from the broader data set.
We can't be planning massive expenditures on the basis of a few outlying data points. This city already
has an infrastructure problem. Building more in swamps and other undeveloped lands is ridiculous and indefensible. This also
generously leaves aside the fact that a public infrastructure project has a virtually assured cost overrun.
The city needs as close to a guaranteed investment as they can get. Nothing except unbridled, poorly-supported optimism tells us this plan is even close to realizable. You don't solve an existing infrastructure program by making the most outlandish decision you can while risking adding to the problem. You make the decision that results in the least risk.
EDIT: Furthering the argument that things like starts and in-process construction are poor indicators are that the planning of these events is always happening on an exceptional lag. Planning starts when statistics are at one point and the actual supply of the good happens somewhere around 1-2 years later. That means as the stats are changing, people are forging ahead regardless or unknowing of what the newest data reflects. One has to assume that as inventories begin to increase that situation can only get worse before it gets better because the supply curve - especially with a long term asset - has already started outpacing the demand curve.
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, but both perspectives hold merit.
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