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Almost two years ago a remarkable thing happened. Stephen Harper, the prime minister who once wrote a dissertation describing why deficit spending couldn’t possibly help the economy, declared himself a Keynesian. Mr. Harper once would have described himself as a classical liberal, a student of Hayek and Friedman. Suddenly he abandoned his own intellectual history and embraced policy formulas that he once railed against.
Many have said that he did it for pragmatic reasons. The opposition parties and the political climate in general conspired to force Stephen Harper to act against his will. I have never really been convinced by this argument but even if it is true it does not explain Mr. Harper’s full hearted embrace of the flawed ‘stimulus’ theory.
Basically the 2009 budget was the Conservative Party of Canada winning by surrendering before the battle could be fought. Instead of presenting a conservative position in the tradition of intellectual thinkers such as...well such as Stephen Harper, and negotiating a compromise with the Liberal Party, the Conservatives skipped the negotiations. They simply presented the position of welfare liberalism and faith in the government’s ability to fix all problems to win Liberal support. In the process the Conservatives abandoned any defence of conservatism.
The consequence of this has been profound.
Liberal leader Michael Ignatieff has lately been saying that a second round of ‘stimulus’ may be needed. Harper’s government is meanwhile sticking to March 2011 as the deadline for all stimulus spending. Mr. Ignatieff makes the point that the government doesn’t know what the economy is going to look like in March so how can it rule out any new spending?
Mr. Ignatieff’s position makes a certain amount of sense, or at least it smacks of intellectual consistency. Once you accept that deficit spending can be a good thing, you can never automatically rule it out. The Conservatives don’t really believe in this stimulus notion and they truly want a balanced budget, so they do not want to leave a door open for more spending. Yet by publically embracing Keynesianism they have stripped themselves of any coherent argument against stimulus spending.
If it was a good idea in one recession why wouldn’t it be a good idea in the next recession? Or the recession after that and the one after that one? Canada has drifted back into the 1970s and a political dynamic that blindly calls for the government to spend Canada into prosperity with no dissenting voices.
We have two Keynesian parties with no one standing up for Hayek.
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17 comments:
We need stimulus spending because there truly isn't a "chicken in every pot." I'd rather we have a deficit we can tackle, than to have the livelihoods of millions of Canadians shattered.
Anon,
That is a false arguement:
1. People have still been laid off and there is no evidence that the stimulus package prevented even more people from being laid off.
2. Government revenue comes from taking money out of the economy. Even government loans takes money out of the economy. That is capital that could have been used to create new jobs. In fact this would have been a more effecient way to do it.
3. Most of the industries that the government supported, such as the auto industry, has been weak for years and continue to be weak. The reality is that those jobs are gone and all that the government is doing is delaying the inevitable.
So the choice isn't between a deficit with a recession or a depression. The true choice is between a deficit with a recession or no deficit with a recession.
You answered your own question in your second paragraph:
Many have said that he did it for pragmatic reasons. The opposition parties and the political climate in general conspired to force Stephen Harper to act against his will.
Once again, the same advice: wait for a *majority* government before you start accusing the Prime Minister of abandoning conservative principals. You know where we would be right now if he hadn't embraced the strategy that got us to this point, right? Yes, exactly...back in *Opposition*, where the Liberals would do their best to keep us.
Tell me, which do you like better...being the government, or being the Opposition?
Fred,
Did you read the next paragraph? Stephen Harper didn't TRY to make ANY conservative case. He fully embraced the Liberal Party's world view.
If he had publicly said that he would personally choose to do one thing, but because he is a minority leader he would negotiate with the Liberal Party. Then that would have been fine. He would have made a clear case for conservatism while remaining pragmatic.
Instead of that, he picked up the mantle of Keynsian theory and defended it. His government continues to defend it to this day. Do you really think at this point he will be able to, once in a majority, suddenly change his tone? What if we go into recession again? How can the Harper government possibly argue that stimulus spending is not a good thing in the future?
I don't think that it is really any particular strategy that has won and kept Mr. Harper in power. He defeated a tired and corrupt party in 2006 and in 2008 he defeated the worse leader of the Liberal Party in history. And both times he only got a minority. So you can't with any credibility claim that any 'strategy' on the part of Conservative Party is working.
As for your last question, it doesn't really matter to me. If the results are going to be the same than who cares which colour is the headings of the PMO's press releases? If the government is not conservative than it is not conservative.
More to your point, Hugh, Harper was the biggest spending PM in our history even before the recession, don't forget, preferring to fund his deficit creating tax cuts with bank loans. Worse, he defended regional development agencies, like ACOA, and not only expanded their budgets but created new regional development agencies (like in Southwestern Ontario), thereby not only increasing the size of government immensely but make a strong statement of support for the government's responsibility in funding and directing the economy.
Harper could have tried to make a deal with the leaderless Liberals in 2009: agree to this moderate stimulus plan and these tax cuts, and we'll give you some breathing room to rebuild your party.
Or he could have showed limp support for stimulus but called on other fundamental values as an excuse: the Canadian people are demanding action from its government and, in a democracy, we have a responsability to the people.
Or he could have gone with the minimum amount of stimulus and just kept it at clearly government works like infrastructure, instead of the huge amount he did spending taxpayer money on such vital "infrastructure" as a private girl's school soccer field, a senior's lawn bowling club that was already built, the already profitable Calgary Stampede.
Instead, Harper brags that he never had any input at all from anyone but himself, that every penny was absolutely necessary, and even now that his deficit spending saved the Canadian economy.
After a decade of balanced budgets and surplusses together with tax cuts and growth, where the Liberals re-branded themselves or tried to as fiscally responsible - i.e. they moved the centre of Canadian fiscal politics to the right - Harper has no only not kept ground but actually moved the centre of Canadian fiscal politics to the left, far to the left.
Harper started his political life as a supporter of Trudeau and he started his political career as a supporter of Mulroney. So it should not be too much of surprise that, despite the intervening decade of pretending to promote fiscal responsibility and accountability, that he should end with a legacy of Trudeau-like deficit spending and Mulroney-like contempt for accountability.
I believe that PMSH has tried to stick to the old adage "Give the people what THEY want, (until he gets his majority), and then give them what YOU want". Problem is, he hasn't been able to buy them off to get that majority, so he's left holding the bag of debt from the biggest spending Canadian government yet.
Don't get me wrong, I'd FAR rather have Harper in there than any other choice that we have available, but I agree that his Conservative principles have been left at the wayside while trying to gain popularity.
The real tragedy is that we have a population and press that demands all this socialist spending, and when he gives it to them, they're still not happy.
Fred: Rewind to late 2008, when this whole mess hit the fan. Harper had two paths. One was the one he took - remove the last party standing up for fiscal discipline from the debate, and try to hold onto government by pandering. The other was to stand up for fiscal responsibility and let Dion take the government in a transition that the bulk of Canadians would have viewed as being little better than a coup d'etat. Put the most incompetent leader that the Liberal Party has ever produced into the biggest mess since the Depression, sailing against a tide of public opposition, into control of the most fragile coalition ever to take form outside of Italy, and let him implement the policies that you would otherwise. Yeah, you lose government for a couple years - though it's still a minority, so it's not like you lose all your power. But you have so much attack material for the next election that a child could win a majority, and the country isn't noticeably worse off because of it. Oh, and if you have any understanding whatsoever of how our Constitution is designed, you also get the added bonus of following the country's laws instead of asking the GG to exercise power on your behalf that you're no longer entitled to.
Why Harper did what he did is a question that will probably vex me until the day I die.
Why Harper did what he did is a question that will probably vex me until the day I die.
Not me. I fully understand what he did, and why. And I'm no happier about it than any other conservative.
Let's start with the PM's apparent failure to recognize the recession when it first hit us. As far back as two years previous, Stephen Harper was publicly predicting an inevitable "slowdown" to occur as the US economy faltered (not exactly rocket science, given the close ties between our economies). He knew, as did everyone else, that a recession was coming.
Why then did he start denying it? Why did he give the Liberals the excuse to jeer him for not seeing the recession coming? Because he knows (being an economist and all) that the fastest way into a recession is to TALK ABOUT IT. Do that, and you panic people. And they stop spending...which then pushes the country into recession that much sooner.
The story on the 'stimulus' is very similar. Harper knows full well that the government can't actually 'create' employment...they can only create the conditions for private industry to create it. He also knew that the 'stimulus' package would do little or nothing to lift the country out of recession. But he knew one more thing: that the opposition parties, with the help of the always-willing news media, would CRUCIFY him if he didn't play along. "Harper hates poor people!" "He only represents the rich!" (etc, etc...)
He held his nose and did what he had to do. And now, even the mere mention of cutting off those 'stimulus' funds (that the opposition parties demanded, don't forget) even though the recession is clearly over has the Liberals and NDP ranting and raving that we still need them.
You think Stephen Harper should have fallen on his sword and sacrificed his government for 'principle', do you?
(and make no mistake: that is EXACTLY what would have happened; the Liberals would have brought the government down immediately. They knew that Canada was in a good position to ride out this economic downturn, and they knew that either they or the Conservatives would take credit for the recovery, too. They may be Liberals, but that doesn't necessarily make them stupid..;)
I'm happy that we didn't take the bait, myself. And once again, more than willing to wait for a majority to see what Stephen Harper is really made of...
After a decade of balanced budgets and surplusses together with tax cuts and growth, where the Liberals re-branded themselves or tried to as fiscally responsible - i.e. they moved the centre of Canadian fiscal politics to the right - Harper has no only not kept ground but actually moved the centre of Canadian fiscal politics to the left, far to the left.
That's nice. It's also typical of minority governments, which is why they are not good governments. Look at the national debt left to us by Pierre Trudeau: forced to let the NDP write his budgets, he put Canada so far into debt that we are still trying to dig our way out.
(this is a good point to raise any time people start talking about "proportional representation". NO THANK YOU. The last thing we need is imitate the fast-sinking European nations that have embraced this political/financial nightmare)
And hey, thanks for all those NDP talking points, Ted, We can always count on you...;)
Oh Freddie Freddie Freddie. Still making up excuses, eh?
Do we need to remind you, again, that:
1. Harper's 2007 budget shattered spending records.
2. Harper's 2008 budget shattered even his own spending record.
3. He hasn't make a single significant spending cut in almost 5 years.
4. The type of things he is spending on - record breaking spending on polling, record breaking spending on photo ops, record breaking spending on his own office (which he increased in his so-called austerity budget.
5. Increasing the budgets of regional development agencies and even creating wholly new ones.
All before his mindboggling spending on pork and fake lakes and sidewalks to nowhere and private girl's school soccer fields and senior's lawn bowling clubs and the already profitable Calgary Stampede and fishing/hunting magazines.
And if you want to pass the buck on the spending and not take responsibility for his own decisions - I thought that was a key principle of conservatives - and blame the minority government situation.... well, you point to Trudeau - who would be jealous of Harper's spending abilities and was already a big spending type - but interestingly and tellingly you fail to mention three other conservatives, far more recent than Trudeau of two generations ago, facing a minority government and what they chose to do in minority government situations, i.e. Howard in Australia, Merkel in Germany or Cameron in the UK.
They all acted like moderate to strong fiscal conservatives and immediately started to reign in spending, rather than shatter new spending records.
So the weak excuse of a minority government is just that, a weak excuse and trying to avoid responsibility for Harper's fiscal mess.
I really do feel sorry for you that facts and reality so continually show such bias toward your positions.
Ted Betts said...
Oh Freddie Freddie Freddie. Still making up excuses, eh?
Do we need to remind you, again, that:
1. Harper's 2007 budget shattered spending records.
Two words: minority government.
2. Harper's 2008 budget shattered even his own spending record.
Two words: minority government.
3. He hasn't make a single significant spending cut in almost 5 years.
Two words: minority government.
Need I go on, Teddie? Even your tiny brain should be able to process a concept that simple. Stephen Harper is not nearly stupid enough to fall for any of those traps, and you HATE that, right Teddie? You HATE the fact that Stephen Harper plays the game so well that you don't dare try to bring him down. All you can do is whine and snivel from the sidelines, in a never-ending (but laughably inept) series of attempts to insult your moral and intellectual superiors.
You're the gift that keeps on giving, Teddy...:)
(Thanks for sharing your usual Liberal talking points with us, though...)
Poor poor Little Freddie.
His leader has abandoned any semblence of being a conservative, has become the reincarnation of Lyin' Brian, and all he can do is invent a new reality to live it, it hurts so.
Other than being dumb on crime, is there a single conservative action that Harper has taken?
Nice legacy so far: biggest spending PM in our entire history, converted a surplus into the biggest deficit in our entire history, breaks promises with the ease and frequency of breathing, governs only for the sake of keeping power for himself.
With that kind of record, I really don't blame you at all for inventing an alternate reality. Why not blame everything you don't like on everyone else? Makes life so much easier than facing reality, doesn't it.
Fred, if he plays the game so well then explain to me why it takes some crisis like the coalition proposal to get the Conservative support above 40%. Tell me why this government enjoys the lowest mandate of the Canadian people in Canadian history.
I'm sorry to burst your bubble Harper is not some sort of mastermind.
Ted Betts said...
Poor poor Little Freddie.
His leader has abandoned any semblence of being a conservative, has become the reincarnation of Lyin' Brian, and all he can do is invent a new reality to live it, it hurts so.
If you say so, Teddy. If Stephen Harper is no longer a Conservative, then he must be (gasp!) A LIBERAL now? Poor hapless Michael Ignatieff had better hope not...
Hugh MacIntyre said...
Fred, if he plays the game so well then explain to me why it takes some crisis like the coalition proposal to get the Conservative support above 40%.
Political reality in Canada (in a word: Quebec). But don't worry about those numbers...they always go up when an election is called (or even threatened).
Tell me why this government enjoys the lowest mandate of the Canadian people in Canadian history.
That's easy: it doesn't.
I'm sorry to burst your bubble Harper is not some sort of mastermind.
Compared to his competition, he's Einstein...
Fred,
Which Prime Minister had a smaller caucus (by percentage of total MPs) than Harper?
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