Friday, January 9, 2009

Artificial Stimulation

It's frigid winter in Canada but happily whatever bleak near-Arctic conditions that led to Prime Minister Harper's brain freeze in December seem to have abated. The provocative and disingenuous economic statement issued by Finance Minister Jim Flaherty in December looked to be the biggest political blunder since the accursed regime of Joe Clark. But the evidence is that the master tactician Stephen Harper that we used to know has retaken occupation of his body. There's evidence of that in the Prime Minister's interview with Maclean's which deserves a close reading.

The Conservative Party's current danger is that if this recession turns out to be severe enough to cause people to start using the D-word, there are only two roles cast for the governing party to audition for: Saviour Of The People Who Protected The Average Canadian and Cold-Hearted Bastard Who Let The Country Go To Hell To Let Big Business Make More Money. F.D.R. or Herbert Hoover. R. B. Bennett starred in the latter role, while Mackenzie King, being very versatile, got to play both parts, the latter in 1929-30, and the former 1935-on.

In order to avoid being cast as the villain in this morality play, the Conservatives need some method acting. They must think, react, and act as if they were people who genuinely believe that a giant "economic stimulus" is what is needed to ameliorate this recession. This is made difficult by the fact that our conservative comrades to the south of the border are vigourously decrying, by radio, television, Internet and all manner of printed word, the uselessness and inefficacy of Barack Obama's forthcoming stimulus program, plus the evidence that FDR's New Deal did nothing to end the Depression and probably exacerbated it. Not to mention the humongous resultant deficits of a huge stimulant injection, which have led Michelle Malkin to name the promised legislation the Intergenerational Theft Act.

Stephen Harper seems to realize the Conservatives' position. From the Macleans interview:
A...I still think the underlying reality is that Canada enters this recession in a pretty strong position compared to most Western industrialized countries. We're entering the recession later; all the indications are it will not be as deep here and we should be able to come out of it sooner. If you look around the world at what other countries are now doing, they're things that Canada did over a year, year and a half ago, particularly some of the big tax reductions they're talking about in the United States, and the sales tax cuts that Prime Minister Brown has bought in Britain.
Q: So why do we need all this stimulus spending, and $30-billion deficits, if we'll be able to ride this out in six months?
A: Well, the reality is that the situation is, notwithstanding all of that, still worse than forecasters were indicating three, four months ago, and we've got to make sure we don't have a deep and prolonged drop in economic activity. So in our judgment, that is going to require fiscal stimulus. Obviously large-scale spending and deficits—even short-term deficits—are not something I particularly relish.
Q: Then why do them?
A: They are what is necessary for the economy now.

Do you sense a certain coherence and conviction in this defence? "They are what is necessary for the economy now" -- not a stirring call to action, is it. Not something likely to win over skeptics and disbelievers, were there to be any. But in his position the Prime Minister unfortunately cannot let himself be fully candid. Later in the interview Harper reminds us that his survival in the last election, despite an economic meltdown in the middle of it, is something of a marvel itself. And now the stimulus package is necessary to avoid a "deep and prolonged drop" not in "economic activity" but in "the Conservative Party's standing in the polls."
There's a chess game going on now between Stephen Harper and Michael Ignatieff and the two are circling each other warily. (Wait -- that's before a boxing match isn't it. Anyway....) Stephen Harper wants to avoid being defeated over the budget because of the possibility that the G-G will deny him a dissolution and the Liberals will take over (probably renouncing any full coalition with the NDP) and never be crowbarred out of power. And another election doesn't look like much fun either even though the Tories are ahead in the polls. So there will be money for infrastructure, both for "shovel-ready" projects and longer term enterprises. (At a minimum the Conservatives can serve the country be ensuring that infrastructure money goes for genuine infrastructure projects, not fixing roofs of municipal hockey rinks in Liberal-held ridings, where a lot of Jean Chretien's "infrastructure" money seemed to end up.) There will be tax cuts, skewed at least somewhat toward the lower and middle classes, despite the evidence that in times like these tax savings are used to reduce debt or saved and not for stimulative spending. And there will be at least some changes to EI to evidence specific concern for the unemployed. (The Government could do worse than to take the Grits' advice and eliminate the two-week waiting period between unemployment and eligibility for EI benefits. That has always struck be as one of the most purposeless and illogical features of welfare policy.) It seems uncertain what Ignatieff's designs are, although the tea leaves seem to say that he is not anxious to take a chance at doing anything that might trigger an immediate election.
Harper's moves may have helped him to recover from the seeming disaster of the December economic statement. His stated plans to avoid making secondary legislation matters of confidence may indicate a desire for a Commons that is stable at least into the fall. But now he must face the consequences of compromise: if the government must budget like Liberals to survive, and must allow the Left to defeat conservative measures without risking dissolution, what do conservatives actually get out of being in government at all? I guess we do have to wait for the budget and Ignatieff's reaction before planning our moves too far ahead. It would be nice if we could be sure that Harper the Chess Master is back in full control of himself again.

1 comment:

caz said...

He's never lost control. The future will hold that to be true.