Sunday, May 15, 2011

On The Subject of Fiscal Stewardship

Only time will tell what kind of opposition Jack Layton's New Democrats will become. But four days after the Conservatives abandoned their pledge to balance the nation's books by 2015, Haroon Siddiqui examined Stephen Harper's claim that his party is the party of adult financial supervision while the New Democrats are wreckless, spendthrift adolescents.

It's true that New Democrats have never formed a government in Ottawa; but they have formed various provincial governments; and they have a long history of dealing with government finances. That history, Siddiqui writes, is revealing:

Allan Blakeney in Saskatchewan (1971-82) produced 12 balanced budgets. When his successor, Tory Grant Devine, left a huge deficit and a $14 billion debt, the NDP’s Roy Romanov (1991-2001) balanced the books. In Manitoba, Ed Schreyer (1969-77) produced surpluses in eight of his nine budgets. When his successor, the Conservative Sterling Lyon, racked up a deficit of $200 million within four years, his NDP successor Howard Pawley cleared it and created a surplus. (Pawley’s memoir, Keep True: A Life in Politics, published by the University of Manitoba Press, has just been released).

Only Bob Rae in Ontario (1990-95) left a big deficit, a legacy of a debilitating recession as well as poor management.

By contrast, look at the conservatives’ record — the deficits and debts created by Ronald Reagan, Brian Mulroney, Stephen Harper and Mike Harris.

It is also interesting to note that the last finance minister in the Harris-Eves regime was a man named Jim Flaherty. Of course, during the election campaign, Harper and Flaherty referred to the Rae government as a fiscal catastrophe. But, to be fair, Rae came to government at the beginning of a recession. And -- like Mr. Harper-- he left a deficit in his wake. It is one of Canadian history's political ironies that Rae -- who used to show his exasperation by referring to the Federal Liberals as "the red army chorus" -- has joined that party.

The history of Conservative governments -- on both sides of the border -- is a history not just of deficits, but of record deficits. Their claim to prudent stewardship is -- in financial terms, at least -- a fraud.


janfromthebruce said...

I also blogged with reference to this article today. But I put a link to an article that originated to the Hamilton Spectator - part of the mythmaking of Rae's govt and to do with money management.

Owen Gray said...

I agree, Jan, that Rae has been given a bum rap. To me, his intervention at Algoma and deHavilland were two of his finest moments.

If Rae does emerge an the Liberals interim leader, we should expect a barrage of Conservative attack ads.

By now it should be easy to smell the refuse.

ck said...

The thing about Conservative voters is that, in reality, they don't care about deficits. In fact, I would go further to say that they really don't mind paying more taxes if it's sold in conservative ideological ways or if they're fooled into thinking they're paying less.

Today's Conservatives simply don't like programs that involve the existence of bureaucrats or government agencies, thus, they really don't want any services. They think (both sides of the border), if a government service doesn't work, then scrap it altogether rather than fixing it.

Also, I've noticed, they'd rather go without things like pensions and health care as long as their neighbour is deprived of those things.

They don't, however, mind paying for tough crime laws and more prisons, regardless of proof that they don't deter crime levels, so long as they hear in the media a dope dealer is getting the death penalty or a house burglar is put away for life.

They don't mind paying for the military, as long as we're at war with someone deemed the enemy by the all powerful US of A.

Most still believe in trickle down economics, despite the fact that it has proven to be an abject failure.

And yes, now that magic trick where they believe they pay less taxes despite the fact that payroll taxes and EI preniums had actually gone up. Not a hard trick, it appears.

I remembered arguing with someone on Twitter shortly after Harper announced he was cutting over 500 public servants in Service CAnada. This person thought his taxes were honestly going to plummet due to this lay-off. Couldn't have been further from the truth.

Let's also remember how many of those American tea-partiers were screaming about how the "Mad Kenyan Marxist Muslim" had started 'taxing them to death' when in reality, their taxes had either stayed exactly the same or in some cases, had actually gone down.

Like I said, folks today are basically self-centered. They don't mind paying extra taxes, or don't even realize they're paying taxes as long as we're going further back to the days of classic capitalism and that there are no programs that involve helping their fellow man.

Owen Gray said...

Not a very inspiring situation, is it, ck? Perhaps most depressing is how ignorant people are of their government's conventions and its history.

And the Harperites have capitalized on that ignorance. It's all pretty cynical.

ck said...

Exactly, Owen, take austerity for instance. It had proven to fail in the Great Depression with then president Herbert Hoover. It also failed in Britain with the Snowden budget of 1931 (I think it was).

Most recently, austerity proved to fail in Ireland when then PM, Brian Cowen implemented austerity in 2008. That led to yet another bank bail-out by the predatorial IMF. But did the Irish learn? Noooo, Cowen attempted to implement an even more austere budget that ended up failing. Not sure what the new coalition of Fine Gael and Labour are doing, but given the senior members of that coalition, Fine Gael, are right of center, much like Cowen's old Fail Fianna, I'm not counting on much.

Iceland, on the other hand, refuses to bail out their banks and while they haven't escaped the global economic crisis, they're doing better.

Prominent economists like Paul Krugman have written about austerity budgets being failures, but again, no one gets it. Austerity budgets are all the rage. It's the new "keeping up with the Jones's".

Oh, not sure if you noticed, but the markets didn't exactly react all happy go lucky over the Harper majority. In fact, didn't the TSX actually go down?

Owen Gray said...

Economists like Krugman and Robert Reich are clearly upset. They agree that while history doesn't repeat itself, it rhymes.

But the David Camerons, the John Boehners and the Stephen Harpers of the world have tin ears.

And when the general public has no sense of what happened during the Great Depression, there are few who will listen to the Krugmans and the Reichs.