Scapegoats, however wicked they may be, are also the perfect distraction by which to avoid facing our own problems. Sometimes a simple comparison between two “things” forces us to re-evaluate our assumptions about how the world works and, by extension, confront the hard realities staring back at us when we hold a mirror up to ourselves.

Kenya, in the developing world, just completed a major infrastructure megaproject — a 27 km elevated toll highway called the Nairobi Expressway, funded in part by China, and designed to give the East African economy a major boost by removing a major barrier to trade in the region. By comparison, Canada, in the developed world, similarly also recently completed a major infrastructure megaproject — the government-owned Trans Mountain Pipeline to bring oil from Alberta to the port in Vancouver, thus also removing a major hurdle for Canada to access world markets.

On the one hand, the upcoming comparison between these two projects reveals the scale of the rot and corruption that has infested the West. On the other hand, what emerges from the details reveals why Western nations are losing standing in the rest of the world… with alarming geopolitical implications for the future. It has become extremely fashionable to blame China for corrupt and predatory business practices designed to undermine the West — and not without good reason (I have discussed some of these issues in regards to America’s tariff war with China in a previous article here). But as usual, pointing fingers provides a useful excuse to avoid confronting our own even more significant self-inflicted problems, of which there are many and which are at risk of being ignored amidst all the finger pointing. Beneath the headlines, it’s not so easy to distinguish between friend and foe.

If all this sounds a bit vague and wishy-washy, don’t worry, all will become clear in a moment.

We shall begin this story with Kenya’s Nairobi Expressway. If you’ve ever gotten trapped in a Nairobi traffic jam prior to this project being built, you’ll know that Nairobi’s traffic problems make congestion in places like Toronto, Vancouver, New York, or Los Angeles look like child’s play by comparison. It had become an extreme barrier to trade in the entire East African region since, by virtue of geography, almost all trade between Kenya’s provinces and all trade from the coast to the surrounding East African countries flows through Nairobi. It is the hub at the center of the proverbial wheel.

In the early 2000s, Kenya spent somewhere between 5 and 10 years trying to secure funding from Western lenders and institutions in both the private and public sphere, including the World Bank, the IMF, and various Western governments in order to pursue a number of major infrastructure projects designed to resolve these kinds of economic bottlenecks. The Nairobi Expressway was one of them, a major railway expansion project called the Standard Gauge Railway to link Nairobi to the port of Mombasa was another (with further expansions coming to extend the rail lines to Uganda, South Sudan, the DRC, Rwanda, Burundi, and Ethiopia), the upcoming highway improvement linking Nairobi to the port of Mombasa is another, and so on. But all of these efforts to secure funding from the West failed over and over again.

Why?

The “moral” West had extremely strict and paternalistic conditions attached to loans and grants, which demanded governance reforms in exchange for money, imposed strict anti-corruption measures, required extensive environmental and social impact assessments and exhaustive feasibility studies, demanded competitive bidding processes, had lengthy approval and disbursement timelines, and so on. I think you can begin to see the irony of where this is going considering that Canada is the other half of this comparative story, but I don’t want to get ahead of the story…

In the end, after a lost decade of courting Western funding, nothing got done. The approval process stagnated, strangled by Western bureaucracy and “do-goodism”, and Kenya finally got frustrated and adopted a new “Look East” policy that emphasized closer ties to countries in Asia, particularly China and India, in order to get these long-overdue projects built. That Eastern realignment paid off handsomely — China’s Belt and Road Initiative was more than happy to step into the void...

Under this new Eastern realignment, the Nairobi Expressway and the Standard Gauge Railway Project were rapidly and successfully funded by private-public partnerships with the state-owned China Road and Bridge Corporation. In the case of the Expressway, China secured its loans with a 27-year guarantee of toll revenues, a 25% equity stake in the toll road, brought in some of its own contractors to do the work, and bypassed the governance and environmental conditions imposed by rival Western lenders.

Construction of the 3-year project, completed in July of 2022, only took one month longer than anticipated (a 2.78% overrun). However, the US$599-million project was also over budget by 47% (in USD terms), partially due to spikes in construction materials during the Covid era, partially due to the depreciation of the Kenyan Shilling against the US dollar (which increased the cost of dollar-denominated payments), and partially because land compensation costs to reimburse landowners along the route exceeded budgeted amounts. And yes, there were plenty of accusations of corruption scandals that haunted the project along the way, including accusations of elite capture of the project by the ruling family and allegations of fraud during the land compensation payments. And yet, somehow, things got built and the East African economy could finally move beyond this bottleneck in the system.

But now we get to the Canadian part of this story.

The Trans Mountain Pipeline was originally owned by Kinder Morgan. According to 2012 projections when Kinder Morgan announced plans to start the project, it was expected to cost Can$5.4 billion. The regulatory process was expected to take 2 to 3 years, followed by a 3-year construction process, with completion expected by 2019.

By 2017, Kinder Morgan’s projected cost has risen to Can$7.4 billion due to additional regulatory and environmental requirements and legal challenges. And construction had still not begun. By then, investors, especially in the oil and gas sector, were fleeing Trudeau’s Canada en masse. In 2018, with construction still not started, Kinder Morgan got fed up, decided to exit Canada altogether, and sold the project to the Canadian government for $4.5 billion after no private buyers emerged to take on the project. The government of Canada, under Trudeau, was forced to buy it as a project of “national interest” since Canada had pretty much chased off all investors and shuttered all other alternative pipeline projects by that point.

And then the real fun began. The project was finally completed in 2024, 5 years later than Kinder Morgan’s original projected completion date and 33% over the government’s own revised construction timeline set out in 2018 when it purchased the orphaned project.

But the cost overruns are truly monumental on a scale that would make even the most corrupt governments in the developing world blush.

Final cost? By the time the first drop of oil got pumped through the pipeline, taxpayers were on the hook for a colossal Can$34 billion!?! That’s 529% over Kinder Morgan’s original budget of $5.4 billion! Contractors, environmental consultants, bureaucrats, lawyers, and pretty much anyone who found a way to work on the project made small fortunes.

The stories from people who worked on the pipeline are eye-popping. A few anecdotes from people I’ve spoken with suffice to provide a flavor of the clown show that this government-run project turned into.

When puddles had to be moved to make way for construction, the water from these puddles had to be purified to drinking water standards before being pumped into a puddle on the other side of the road. Ant hills had to be meticulously relocated while all construction was put on pause. One environmental inspection shut down work on site because “foreign vegetation materials” had been found on a right-of-way and had to be painstakingly collected and removed from the ground. And what was that offending “foreign vegetative matter”? Sunflower shells thrown on the ground by work crews. And on and on it goes.

A similar story of the nonsensicalness of it all comes from the government-run Site C hydro dam project in northern BC — indigenous groups paid protestors to protest continuously at the site during construction on their behalf, as is the norm on these kinds of projects these days. One such paid protestor decided to get a second job to increase his take-home pay. And, since the Site C project was hiring, he got a job onsite. So, after completing his protesting shift, he would store his protest gear in his truck and cheerfully head off to work on the dam.

But back to the Trans Mountain Pipeline. The government has plans to sell the pipeline now that it’s completed, but toll disputes and the exorbitant construction costs make it highly unlikely that the Canadian government will be able to recover the full costs. While nothing is finalized as of this writing, several First Nations groups are actively working towards an ownership stake, with loan guarantees provided by… the Canadian government (i.e. taxpayers).

~ ~ ~

As Wikipedia so aptly describes, in political jargon, a self-licking ice cream cone is a self-perpetuating system that has no purpose other than to sustain itself *. The Western institutional system has become this kind of self-licking ice cream cone. It’s not naked corruption like in many developing countries, although there seems to be a growing amount of that too these days, but the scale of the problem has become so vast that it’s become every bit as crippling as the notorious levels of corruption and grift that plague so many developing countries. I’m honestly not sure which is worse, although Kenya, by “looking East” appears to have decided that the West has become the greater obstacle to progress.

Bureaucratic stagnation in the West is truly off the charts… so much so that Canada recently passed the One Canadian Economy Act (Bill C-5), which allows the federal government to bypass certain regulations to speed up construction of projects that it deems to be of “national interest”. The government literally had to pass a law to give itself the right to suspend the law in order to get around its own self-inflicted obstructionism and bureaucratic red tape. In other words, by this act, the government is effectively admitting that the only way to get anything important done in Canada anymore is to bypass the law.

So, rather than fixing the problem, the government has chosen instead to create a loophole for itself and its preferred partners — which, to me, looks like a recipe to incentivize massive fresh layers of corruption! It’s also a pretty clear signal to everyone else that “bypassing the law” is the key to getting things done and not getting perpetually stuck in regulatory purgatory. The incentives now favor those who either have cozy connections with the folks in charge or don’t mind operating outside the law; for everyone else, well, get in line and watch your life pass you by.

Of course, the broader geopolitical implications are also less than amusing. Western paralysis, driven by a combination of grift, ideology, institutional overreach, and the realities of the Western self-licking ice cream cone, are not just leading to economic stagnation at home, but are also driving allied countries into the arms of rival countries that do not necessarily have Western best interests at heart.

China’s use of predatory lending as part of its Belt and Road Initiative is well documented as they open the door to “debt trap diplomacy” (such as in the case of China’s loans used to construct Sri Lanka’s Hambantota Port, which eroded Sri Lankan sovereignty and gave China control over a crucial node in global shipping lanes, with significant military implications and which triggered an important shift in regional power dynamics).

And yet, blaming China is, of course, nothing more than a convenient scapegoat. The West’s own predatory lending, uncompromising ideological zeal of both the eco and neoliberal varieties, and the never-ending self-important bureaucratic overreach are driving other countries straight into China’s arms, and we have no-one to blame for that but ourselves.

Trump’s tariff wars against China are equally telling. Yes, China’s poor environmental standards and low labor standards give them a cost advantage. And yes, China doesn’t reciprocate equally when it comes to market access. But blaming China for why so much of Western production has moved offshore is also a convenient distraction. We strangled ourselves with red tape. We drowned ourselves with crippling levels of taxation. We let an endless array of special interest groups dictate what can and cannot be done. We incentivized companies to want to move their operations offshore to get around an increasingly hostile investment environment.

To draw from the Trans Mountain Pipeline example — China didn’t drive Kinder Morgan and its many peers to give up on Canada; the Canadian government did that all on its own. And Kinder Morgan didn’t relocate to China — after 2018, their operations refocused exclusively on energy projects in the U.S. and Mexico.

Ask any small business owner or farmer in the West what their number #1 hurdle is in their business, and they’ll almost all tell you that it’s their own government. Not Chinese competition. Not lack of access to distant Chinese markets. It’s not even our sky-high labor costs. #1 and #2 on the list are crippling regulation and crippling taxation, imposed by the federal and provincial governments, which are to blame for the worst of their struggles. As Elon Musk recently pointed out on Twitter, “our civilization is being slowly strangled to death one regulation at a time.”

Trump’s new tariffs imposed on China won’t lead to a bottom-up economic revival if these other issues aren’t addressed. If they are fixed, you probably wouldn’t need many tariffs, or perhaps none at all, to incentivize corporations to relocate to a much friendlier U.S. business environment. Tariffs are, ironically, an admission that the business environment in the U.S. has become so unfriendly that corporations would rather risk operating in China despite notorious levels of corruption and technology theft and despite an unpredictable self-serving Chinese regulatory environment rather than go through the hassle of making things and building things back on suffocating Western soil. Tariffs are, at best, a Band-Aid on a self-inflicted wound.

In many ways, by imposing tariffs but failing to meaningfully fix the root issues that drove companies to offshore in the first place, America’s woes are only likely to get worse. The protectionism created by tariffs means that domestic corporations at home are now increasingly shielded from Chinese competition, even as competition from smaller domestic businesses continues to be stifled by the same regulatory strangulation and over-taxation.

The stock market may soar because these domestic corporations will benefit from their captive market, but that doesn’t necessarily mean that Main Street will thrive. On the contrary, cheap Chinese products have, in many ways, helped insulate small businesses from the worst of crony capitalism because cheap Chinese tools and cheap Chinese manufactured products have given these suffocated small businesses the opportunity to cut their costs and reduce their capital investments to try to compete with the mega-corporations. The farmer investing in fencing materials and farm implements, the contractor buying power tools, the landscaper buying equipment, and so on now find that the investment hurdle to compete with their larger mega-corporate competitors has become even steeper.

Reaching that first rung on the ladder to claw your way up towards the American dream has become just that much further out of reach. No wonder that the shares of big mega-corporations are soaring. In 2025, most of the rapid rise in the S&P 500 is being driven by a handful of mega-cap stocks even as small companies and Main Street fail to enjoy the same rising tide. And, of course, the Trump administration is celebrating its windfall of tariff revenues (paid, of course, by Americans purchasing stuff imported from abroad). But don’t mistake this centrally manipulated economy for a true free market economy. The little guys are paying the price for this illusion of economic renewal as the squeeze on them continues.

Consider, for example, how the little guy is being squeezed by John Deere and other domestically-produced farm equipment manufacturers. Not only are these tractors eye-wateringly expensive but, to add insult to injury, the internal software in these increasingly computer-controlled tractors is protected by US copyright law. Thus, tractor manufacturers require farmers to pay for a license (or more realistically, to pay a mechanic who can afford to buy a license, which in practical terms usually means a trip to the dealership in order to fix those tractors when they break down. In effect, farmers don’t have the legal right (nor the computer access) to fix their own tractors, and thus are left at the mercy of the dealers.

Prior to these new protectionist trade barriers, cheaper equipment, including tractors, excavators, and other Chinese-made equipment, provided small and up-and-coming farms and businesses a cheaper option to get equipment for their businesses without having to succumb to the monopolization tactics of these mega-corporations. That, ultimately, is the vital ingredient to make a free-market economy function.

As long as the little guys can still challenge the big guys from below, the market has a way to renew itself. But, if the regulatory and tax hurdles are not dismantled and if access to cheap Chinese goods is cut off by a wall of tariffs, crony self-serving corporations who have learned to weaponize the regulatory environment will continue to squeeze out their smaller competitors, thus eroding the vitality of the once free but free-no-more American domestic market.

As a side note: after two decades of farmers complaints about the “right to repair” falling on deaf ears in the West, Canada finally passed “right-to-repair” legislation in 2024 to enable farmers to work on their own tractors, which partially resolves the issue though the regulations are not yet finalized and there’s still the issue of access to diagnostic software and high-cost tools to enable farmers to actually access these proprietary software systems inside their equipment. Europe also finally began passing right to repair laws, starting in 2021, though in Europe these laws mainly cover household appliances and electronics, but farm equipment has yet to be explicitly addressed.

And, in the U.S. the issue also remains unresolved — the FTC finally got around to filing an antitrust lawsuit against John Deere in federal court on January 15th, 2025, and a judge recently denied John Deere’s effort to have the case dismissed, but there’s no word yet on when we’re likely to see a final ruling so American farmers are still held captive to these predatory software laws. If our leaders were serious about reviving the North American economy and creating free-market competition to stem China penetration into the North American market, this should have been solved long ago. Instead, our regulations have been weaponized by our own mega-corporations to shield themselves from the hungry bottom-up competition that is so essential to keeping a free market healthy. This is textbook crony capitalism, and tariffs only make it worse if the little guy gets no relief from the regulatory boot and the tax collector.

Even competition from a player as flawed as China is better than no competition at all. Against the backdrop of the West’s overregulated and overtaxed systems, the Wild Wild West of China’s manufacturing economy provided some relief — a degree of competition to act as a counterforce against overpriced Western equipment and predatory Western rules like the copyright laws that are being exploited by equipment manufacturers to hold farmers hostage to their licensed mechanics.

But as the tariff wall goes up, by choking off access to Chinese competition, Western markets are going to face a reckoning as their self-serving corporations have free rein to squeeze their domestic customers whose alternative options have now become more limited and more expensive.

As for all our Western allied countries abroad, like in East Africa, which is now “looking East”, well, if we don’t clean up our act at home and drop all the hectoring Davos-inspired nonsense that makes it impossible to get things done and tackle the suffocating institutional paralysis that is consuming our institutions, we’re likely to see these allies continue to drift away into the arms of China, India, Russia, and others who don’t all necessarily want to see the West (and Western values) continue to dominate the world. Why wouldn’t they drift away? Just like how Kinder Morgan gave up on Canada, why wouldn’t these countries also find better options. No-one has time to wait forever nor do they have bottomless pockets to pay for a never-ending stream of lawyers, consultants, and assessment fees.

And so, despite all of China’s imperfections, the mere fact that the West has had competition from China, both in our domestic economy from Chinese manufactured goods and out on the world stage means that there’s an incentive to clean up our act. If we destroy that competition via tariffs and other protectionist measures to undermine that competition instead of putting our own house in order first, we are ultimately hurting ourselves, even if it does temporarily look good on paper as the stock market soars. Wall Street is sure to applaud protectionism… but if it comes at the cost of Main Street, is that really “winning”?

While China’s problematic ways of doing business are real and should not be ignored, the best place to start to fix things is to take a hard look at what we are doing to wound ourselves.

I, for one, am getting mighty sick and tired of hearing about every other country’s sins even as our own festering self-inflicted Western problems continue to go unaddressed. You can use tariffs to protect crony capitalism. Or, you can revive the free markets by getting government out of the business of artificially micromanaging our lives. That, for once, would be the one thing that’s truly required to get stuff built again, not just down on Wall Street, but everywhere along Main Street too. So, while I wait for the West to come to its senses, I’ll continue to enjoy my Chinese mower and my Chinese tools while I make sure that there isn’t a spec of John Deere green that comes back into my yard.

In the meantime, I raise my glass to Kenya for getting their Nairobi Expressway and their Standard Gauge Railway project built and wish them all the best for the next phase as construction begins on their 440-kilometer Nairobi-Mombasa Expressway to improve the road link between Nairobi and the port in Mombasa. This project, unlike the others which were funded by China’s Belt and Road Initiative, is actually backed by Americans again. This time funding was secured much more rapidly and more efficiently than earlier failed Western-backed attempts.

It’s amazing how a little competition can clear away the cobwebs and breathe new life into a rotting system. Perhaps the Americans are learning some lessons after all, and perhaps, paradoxically, we have the overhanging threat of Chinese geopolitical competition to thank for that.

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