6 ways Stephen Harper is wrecking the Canadian economy with his foolish embrace of American Republican-style Casino Capitalism
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by Murray Dobbin
October 6, 2008
It's perhaps understandable that Stephen Harper is far ahead of his
rivals when it comes to poll questions about who is the best at
competent "economic management." Like George Bush in the U.S., Harper
has deliberately framed himself as the "strict father" figure — in
charge, hard-edged, a firm guiding hand when things are increasingly
uncertain.
Dion just seems inept, unable to capitalize on the Liberals' mythic
record of the 1990s.
Jack Layton, despite some good economic planks in his platform
(including cancelling $50 billion in corporate tax cuts), is new to
the economic policy fight. In virtually all previous elections, the
NDP has avoided economic policy. Tagged as irresponsible spenders for
a long time, this line still gets traction for Harper.
But the record tells the story and you would be hard pressed to find a
government or a prime minister who has been more inept — or more
accurately, simply absent — in guiding an economy. It is critical to
understand that Stephen Harper doesn't actually believe in a "firm
hand on the economy" because he is ideologically committed to a pure
form of laissez-fair economics. While he claims the "fundamentals" are
strong, he can take no credit for it and has no idea about how to
avoid their deterioration. He believes in the "invisible hand of the
market," not the firm hand of the state.
And stunningly, Stephen Harper believes this even as he watches the
economy of the country he reveres enter into a period of spectacular
self-destruction.
There are at least six areas where Harper's disdain for the economic
role of government does harm to Canada's economy. They are:
1. Merging Canada with the sliding United States. Harper's overarching
economic policy is deep integration: tying Canada permanently to the
U.S. market, an economy that is headed for permanent chaos: a
financial crisis, huge government deficits, consumer demand dropping
like a stone, and demand for Canadian goods (even energy) in steady
decline. It will only get worse, much worse. This isn't just a
financial crisis, this is the end of the 60-year era of American
global leadership.
Yet Stephen Harper is so married to laissez-faire ideology he seems
incapable of recognizing the reality that virtually every other world
leader is now trying to come to grips with.
2. Eroding our infrastructure. Harper keeps talking about us being
competitive but he is squandering any competitive advantage we might
have by failing to fund the rebuilding of our crumbling economic
infrastructure. In the next decade, the infrastructure deficit will
become a full blown crisis but Harper's $60 billion tax cuts means the
government will have no money to respond to it.
3. Destroying our surpluses. Those tax cuts harm Canada in another
way. Harper has put Canada on the road to budget deficits by
eliminating the healthiest surpluses the country has ever had. When
Canada's export economy gets savaged, as it will in the next year, the
only fall back position is the domestic economy — potentially one of
the biggest in the world. But Harper's laissez-faire ideology once
again prevents his government from stimulating that domestic economy
through government spending. That would mean increasing the federal
money for health, education and social assistance, creating a national
child care program or putting millions into much needed home care. But
even if Harper changed his mind and wanted to do so, his tax cuts make
such economic stimulus virtually impossible.
4. Increasing risks by deregulating. Just as the world is calling for
renewed government regulation and intervention on the economy, Harper
is headed in the opposite direction on several fronts. His
deregulation economic agenda will affect every other aspect of
Canadian life: self-regulation in food safety; self-regulation in
airline safety; "harmonising" regulation with the deregulated U.S. on
pesticide residues on fruits and vegetables; abandoning separate
Canadian testing of new drugs and much more.
5. Giving way too much to big oil. The specific example of the total
deregulation of the tar sands development demonstrates that Harper's
political dedication to the Alberta oil industry is such that he is
willing to see the rest of the economy completely distorted. Unwilling
to press for a rational, staged development, Harper has ensured that
tar sands expansion will continue to keep the value of the Canadian
dollar high and make our manufactured goods uncompetitive. In
addition, unfettered tar sands plant construction drives up the price
of building materials making other development prohibitively
expensive.
6. No planning for growth. Lastly, Harper simply has no answer at all
when it comes to promoting new long term economic growth in Canada and
his laissez-faire ideology means that we are falling further and
further behind those countries that are actually using the power and
organizing capacity of the state to create sustained, modernizing
economic growth. China, India, South Korea and Brazil are the growth
centres of the world because they ensure a close collaboration between
capital (business), universities and the government, carefully
engaging in long-term planning of industrial development. Harper has
literally no industrial development strategy or policy. Instead of
focusing his tax cuts on growth industries, his across-the-board cuts
see most of the billions go to the oil, banking and insurance
industries — the ones least in need of tax reduction.
Canada has lost 300,000 industrial jobs in the two and half years of
Conservative rule, and under Harper's steady hand Canada has gone
backwards in terms of the technological content of its exports. We are
slowly devolving back to our status as a hewer of wood and drawer of
water. Harper's response last week to the loss of Canada's best jobs?
"I think you have to be honest with people: the government can't go in
and say 'We can guarantee your job. We can't protect your job.'" He
means that he won't protect their jobs.
Where have we seen this before?
Harper's economic strategy, if it can be called that, is looking more
and more like George Bush's: tax cuts and military spending. While
gutting our revenue by $60 billion over five years, Harper laid out a
plan to spend $490 billion (in addition to the annual defence budget)
over 20 years to build up the Canadian military. This economic policy
is well on its way to bankrupting the U.S. and could do the same to
Canada.
We could instead bring together unions, capital, universities and
provincial governments and make Canada a leader in green technologies,
potentially providing hundreds of thousands of high-paying jobs and
literally thousands of profitable companies. But under Stephen Harper,
Canada's economic ship of state just drifts.
Our economy is completely on its own, pulled this way and that, and
ultimately down, by faltering corporate globalization and the
catastrophic collapse of American casino capitalism.
Murray Dobbin writes from Vancouver. This column has appeared in The
Tyee.
Loaf of Bread
> Murray Dobbin writes from Vancouver. This column has appeared in The
> Tyee.
Real objective my roving socialist fruitcake.
You couldn't be bothered providing the link to the story you pilfered
form Judy Rebik's trotskyist website rabble.ca. Pure intellectual
dishonesty on your part.
GaryRock
GR
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