Tom Walkom takes some consolation from the fact that yesterday Jim Flaherty said the government was willing to spend some money to give the economy a boost. But, Walkom writes in this morning's Toronto Star, if Flaherty thinks a few make work projects will do the trick, he's sadly mistaken. He and his government are wedded to the prevailing economic myth of our time -- that government should get out of the economy:
Throughout much of the developed world, the elements of the welfare state that used to keep capitalism on track through the bad spells — what analysts call the economic stabilizers — have been eaten away.
In Canada, it was a Liberal federal government under Jean Chrétien and Paul Martin that gutted unemployment insurance and welfare. Martin was lauded at the time. But that’s because, with the economy on the rebound, the effects of his cuts were muted.
Now that the economy is in the dumps, the downside of the Martin measures has become evident. Most jobless Canadians don’t even qualify for what is now euphemistically called employment insurance.
Harper’s Conservatives are continuing in the same vein, with their scaling back of old age security, their antipathy to regulation, their attacks on trade unions, their refusal to expand the Canada Pension Plan and their determination — still undiminished — to get government out of the economy in the long run.
This brutal recession has been made more brutal because government has withdrawn from the playing field. On this day when anti-austerity strikes are breaking out across Europe, what Flaherty and his collegues fail to understand is that
capitalism on its own doesn’t work. Corporate CEOs may not want the state involved in the economy. They may hate unions. But they need both if they are to profit. That is one of the great contradictions of our era.
The Government of Canada, like so many others, refuses to see where that contradiction leads.