People share a universal behavioural trait: if there are profits to be made, the effort to get that money will attract investment. This is true in the private sector, the market sector, as well as the public sector.

I think the world has changed dramatically since September 11th. It should force us to recognize that we are going to have to defend the free institutions of our society against those who are simply not willing to belong to a civil order.

It is much more difficult to get implemented politically what might be desirable economically. Even if you came out with an economic argument in favor of equalization - and I think there are arguments on both sides - I would still come down in favour of some sort of a scheme on strict economic grounds.

Once you have an equalization instrument in place, as you have in Canada, there arise tremendous bureaucratic values - bureaucratic rent so to speak - in maintaining the system that you have. To shift to a system that paid the transfers directly to individuals, by having differential rates of federal income tax levied to adjust to provincial fiscal capacities, which would be my preference, you would have huge bureaucratic opposition. People would try to protect the rents they have in the current system of institutions.

America is perhaps excessively mobile in the sense that there is sometimes not enough stability in communities. Dynamism in the economy is not necessarily the "be all and end all".

If you create an artificial scarcity through public policy, artificial rent so to speak - setting up a new import quota or giving out a particular office that is very beneficial - people are going to invest money, time and resources in trying to secure that opportunity. If the value is created independently of the search for it, the search for it is wasted.

If politicians get money to spend and don't have to be responsible for taxation, then of course that will bias their attitude toward more spending as opposed to cutting back on spending.