Stephen Harper's economic panic attack

Yesterday (01/11/10), Prime Minister Stephen Harper declared himself Canada's economic saviour, telling BNN that by proroguing parliament, he brings stabiliy to the financial markets. By day's end, slumping commodity prices, not Mr. Harper's preposterous claim, drove the S&P/TSX composite index to its first triple-digit loss of the new year and the dollar fell half-a-cent.

Today, the PM and his finance minister are being lectured by Parliamentary Budget Officer Kevin page on Canada's structural deficit, saying the government hasn't produced any analysis showing the country's deficit is not "permanent and it won't go away."


It's difficult to believe, and even harder to find evidence to show that Mr. Harper's meaty, invisible hand guides Canada's financial sector. If that were the case, would he not simply wave it over this worrisome structural deficit, world commodity demand, and take sole credit for the envious stability of the country's banking sector?

He may yet as Mr. Harper tests, almost daily, such talking points for prorogation as:

• the government needed to change its agenda as the economy moves into recovery (i.e. the government's tough-on-crime agenda was stalled);
• needing to rebalance Senate committees (i.e. after he appoints enough Tory bag-men to give him majority control of the Senate with which to guarantee passage of his omnibus justice bill);
• the country needs a break to enjoy the Vancouver Olympics (i.e. the country needs to see me at every Olympic photo-op).
• the country doesn't need a working, democratically elected parliament when it has me (he hasn't actually tested this last one, but dollars-to-doughnuts he's thinking it).

Which is it? The PM's shot-gun defence of the morally indefensible act of proroging parliament won't help the 39% of Canadians who don't know whose propaganda to believe. (Hint: Not the amazing Mr. Harper's political slight-of-hand.)

Tom Flanagan, a political scientist at the University of Calgary, Harper's former chief of staff and pro-prorogation, isn't alone in refuting Harper's economic theory.

"I think markets are concerned about economic fundamentals. In 2009 ... we had the greatest single advance in the TSX in history and it was in a year of ... constant expectations for an election," Flanagan said. "I think investors look at market fundamentals, they don't look at the antics of politicians."

The markets care as much about Mr. Harper's antics as he cares about what non-Conservatives think. Not a whit.

"There is little evidence that investment opportunities are different in minority versus majority parliaments and only money market returns differ in Conservative versus Liberal governments. The equity market performs better in the late part of the electoral cycle than in the first two years. Furthermore, the Canadian equity investment opportunities are better in Democratic versus Republican administrations and in the late versus early parts of the presidential electoral cycle. The Canadian dollar is also affected by American election outcomes."

The March election that Mr. Harper is maneuvering for would centre on the economy and public finances. But the outlook for the economy in 2010 is not about that election. The economy answers to globalization. Mr. Harper answers to nobody.

The Conservative minority from the last election was as much a result of voters wanting an economist at the helm to steer Canada's ship during a global economic gale as the Stephane Dion Liberal disaster. During the October 2008 campaign, Harper repeatedly used, to great effect, his now familiar panic-attack tactic by delineating a choice between economic risk (the Dion Liberal seperatist coalition) and his "I am the way and the truth" omnipotent certainty. He's preaching the same sermon now, but the choir has changed. Canadians are becoming wise to his tactics.

Before calling the last election, Mr. Harper said:

"Canadians deserve to have a Parliament that works. They want the government to keep governing, to address the issues that matter to them, to keep the country moving forward."

Yes, he said that. So much for Mr. Harper giving us a working parliament, moving the country forward, and his credentials as an economist.