Depression prevention

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When the economy starts seriously to shrink, a new set of policy rules comes into play. Call them depression prevention measures. Rule one is to recognize trouble: spending is slowing, and the economy is getting smaller. Rule two is to be clear about what is needed: economic stimulus; because there is no way the economy will stop shrinking on its own. Rule three is to announce quickly government spending measures to prevent things from getting worse.

The Harper government broke the three rules in its economic update, precipitating the formation of a Liberal-NDP coalition, supported by the Bloc. Conservatives pretended the economy was performing well (it had been in recession for most of the months of 2008), that restraint, not stimulus was called for (which would have made things worse), and predicted government surpluses (which was wrong, and the wrong objective to begin with).

Harper thought the Bloc would always vote with him, because it was the only way to avoid an election the Bloc did not want. When his miscalculation blew up in his face, Harper decided to put his political interests ahead of the economy, and the country.

The Harper method is pure American Republican: make the other guy the story. The surprising Liberal-NDP agreement to prevent an economic slide became for Harper the "separatist" coalition, because the Bloc had agreed not to defeat its first two budgets. All were supposed to overlook that the Conservative government shut down parliament in the midst of an economic emergency, and accept that it was necessary to choke off democratic debate in order to prevent a coup d'etat by the unelected separatist coalition.

The success of this strategy depended on media insincerity. Broadcasters and journalists were to say that what was in fact true was not to be believed. The media were to pass on falsehoods as news to readers, listeners and viewers. Unedited statements were packaged without accompanying expert commentary, which would have shown them to be false. Repeating the prime ministers words, the media reported Canada was not experiencing a risk of world depression, though it was. The most unlikely Liberal-NDP pro-economic stimulus coalition was not formed because the Conservatives refused to stimulate the economy, but for other reasons, principally because the opposition parties feared they would lose public funding.

Harper spun like mad to get out of a parliamentary crisis he provoked by not taking depression prevention seriously. The need to withdraw public funding of political parties (presented as a measure of restraint, when stimulus was called for) was among numerous untruths Harper provided the media to pass on to us. Even after he withdrew it, Harper defended the measure because he says it is wrong for political parties to receive public money. If this were so, why have the Reform, Alliance, and Conservative parties, in which he has played such an important role, accepted the money earmarked to them as a result of the political tax credit created by parliament in the 1980s? The measure, like the direct grants to parties according to the number of vote received in the last election that Harper wanted to eliminate, was enacted so that political parties would not be beholden to powerful interests.

Since the political tax credit has the same economic effect for a party as receiving a government cheque, why does he not just abolish it? Because the political tax credit provided the basis for organizing the Reform Party, and is the secret to the success of the Conservatives in raising money.

Not content with outright duplicity, Harper invented a phony national unity crisis. He claimed to represent the West against a power hungry separatist coalition (code for Quebec). Yet, by ignoring the need to act urgently to prevent a depression, Harper was also ignoring that in the depression of the 1930s, not only did Canada suffer greatly, more than other countries, but that the West suffered even more than the rest of Canada!

The ultimate political maneuver was to appoint an Economic Advisory Council to help with the next budget, headed by B.C. Liberal Carole Taylor, and made up mostly of super rich business executives. Every time a business leader is asked what economic measure are needed, regardless of the circumstances, they propose ways of reducing costs to business. Cut salaries, reduce taxes, wave regulations, eliminate bureaucratic waste, etc. Of course business costs are incomes for someone else. If Canada were to follow this very predictable advice when it comes, it will hasten a depression rather than prevent it.

The Harper Economic Advisory council was created to put pressure on the Liberals to ignore the economic evidence, and back a Conservative budget based on advice from Paul Desmarais (fils), and the rest of the super rich. We are supposed to believe this is politically clever, even if the result is economic disaster.

Most leaders know they will be judged by history. Playing political games while the world economy turned sour is what history is going to remember about this prime minister; or, to borrow his own phrase about someone else, Stephen Harper, not a leader.

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