It was about 40 years ago when I first heard Frank Stronach, creator of Magna International, speak. I liked some of what he said and puzzled over the rest. What he had done in business was impressive. He had almost single-handed created an auto parts business that today dominates the industry. He had strong views in support of employees and confusing views on government.
He appears to be a strong believer in profit sharing with employees. That I like. While he is in a position to drive-up base wages in the industry, he does not seem to follow through. While it has often been suggested that his companies could almost build a complete car from the components it makes, he has never appeared interested in moving in that direction.
Stronach is no Elon Musk (best known for his Tesla electric vehicle). They both might be rich and richer but neither seems to understand economics. And it is probably just as well if they do not. They keep making money anyway.
And similar to many business tycoons, they are usually dead wrong in their views on government. Government cannot and should not be run as a business. The objectives are very different.
Stronach wrote a guest column in the business section of the Toronto Star the other day. In the column, he turned up his nose at government incentives to locate offices and factories in this location or that. Instead, he wants government to stop spending money on making rules for business and (in his view) impeding their development. He thinks that in today’s global economy, government is too bureaucratic and inefficient and we are paying too much for the overhead they are demanding of companies.
Stronach is buying into the extreme right-wing economics that says lower taxes are the only answer. He not only suggests that we lower taxes by five to ten per cent per year but his mathematics are terrible. He thinks we could lower taxes by 50 per cent that way in just five years.
Stronach is preaching kindergarten economics in the major Canadian daily newspaper. I think the newspaper could do better.
Copyright 2022 © Peter Lowry
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