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At last some good news!


 

Turmoil in Ottawa hampers auto rescue, McGuinty says


 

At last some good news!

  1. Andrew, you got my hopes up, if only for a second. Sheesh.

  2. If we prorogue Parlaiment for up to a year, we can avoid an auto bailout AND an ill thoughtout stimulus package. I guess we must take the good news where we can get it.

  3. you libertarians have very simple policy demands. Shouldn’t any crisis in parliament like the one we are witnessing be positive news to your kind? Like it slows the gears of government policy down to a halt, especially when there is a trend to more interventionalist economics.

  4. Translated Coyne: “Might as well let the auto industry fail, since it certainly wouldn’t affect my job.”

  5. See those Dodge Ram ads on this page Demosthenes? Think they get there for free? Think they are partly paying Andrew’s salary?

  6. Good idea Raging Ranter. Why don’t we just take it a step further though and prorogue permanently!? Let’s wait until all the problems just go away, so we don’t have to make difficult decisions at all anymore! Perfect!

  7. I thought BC Premier Gordon Campbell (who I’m not a fan of) made a good point last week when he suggested that if the auto industry deserves a bailout, the forest industry does too.

    I’m not a fan of doing nothing, but doesn’t it make sense to see how Obama allocates American dollars before deciding which industries to inject Canadian money into?

  8. I knew that when the push comes to shove Three Stooges Rebellion could always count on Dalton “the bright” McGuinty to try to prop them up. Dalton loves taxpayes money and he never misses an opportunity to expand his socialist empire.
    Dalton secured support of CAW so how can Three Stooges Rebelion fail now??
    If Ignatieff holds out much longer he runs a risk of being cast adrift when Liberal Man of War starts to sail again.

  9. Karol’s back!

  10. That’s really what divides the electorate isn’t it? (Apart from raw tribalism pf course) Some think simply by the government spending, you will stimulate spending in the economy. It doesn’t matter where or when it is spent.

    Others, myself included, don’t think this will work in the situation we have now. We have a glut of consumer spending and personal debt, not a lack of demand for goods. We don’t live in a closed economy, we live in a global and corporate one.

    So the question is since everyone is going to be forced to go along with this stimulus package (even the conservatives if somehow they manage to hold power) then the question is how is it going to be spent? Is it going to be used to improve our transport infrastructure? Is it going to be used to revitalize the military and national security? Is it going to ensure the viability of EI or old age pension in the long term? Heck, I’d pay a 60 billion deficit and call it a bargain if it was used to fix and improve infrastructure on First Nation reserves, hash out land claims, and come up with a solution which would allow private property ownership for residents of reserves so a functioning economy can occur. I’d pay it because I’d believe that this money, prudently managed with a long term view, could eventually allow the money to flow back to the government coffers someday to pay it back.

    I don’t believe any of this is going to happen though. In all cases regardless of the party, the spending proposed (and indeed spending by the Harper government prior to this whole crisis) will probably likely just flow to people who already have their money in the government’s pocket. The Big 3, Bomardier, the arts industry, the public service etc. which either don’t need more funds or else have proven themselves to be perennial losers. I have my doubts that even a small percentage of those billions is going to go to people who don’t already receive a check.

    In the end the money is just going to be either squandered or else end up flitted away to various private accounts. The economy doesn’t under perform, it performs based on various factors that make up the economy. If you have a trade deficit, you can’t improve it by simply handing out money for people to spend. If you have a freeze up of lending, the government could lend to fill the gap, but unless you lend with care it is simply wasted. Government can spend money on educating its labour force, but unless it is done with an eye towards what the economy actually lacks in skilled labour it is a waste of resources.

    We all lived under the Mulroney years. The left uses those years to this day as a byword for bad conservative management. The conservatives who felt it wasn’t conservative management went off and started their own party. Mulroney, without increasing the strength of the economic foundation of the country ran up a massive deficit that we still have looming over us to this day despite the fact that we’ve been paying it off longer than Mulroney was in office. He did everything he could to prop up the economy through government intervention, but because it was done to pay off special interests instead of funding a solid economic plan for the future… it is all gone.

    Too bad that nobody in Ottawa seems to have learned a damn thing.

  11. All is not lost. I hear several dealerships are still open and they’ll be happy to take orders from anyone who’s fearful that the government won’t be able to take their money to give to the automakers.

  12. Just because governments are contemplating doing the wrong thing that’s not a reason to have no government. What happened to putting forward your ideas for debate and decicision? Are you saying that governments should do nothing at all or just that they shouldn’t prop up the auto industry?

    I think there are things governments should be doing, just not what the auto manufacturers want.

    Auto industry “assistance” should be to backstop the pensions of auto workers and auto parts industry workers who are eligible for early retirement, and EI for everyone else, instead of trying to prevent plant closures. I think Ontario is on the hook for a lot of these pensions anyway, and the loss of that much income in the province would create a wave of other job losses. Retooling assistance could be considered for parts makers, but nothing for the Big 3 companies which would be better in receivorship than with their current leadership.

    McGuinty hasn’t seemed to notice that he’s also presiding over an unprecedented near total collapse of the forest indsutry in northern Ontario. I think some good can be done with assistance to teh resource dependent communities, but again, direct assistance to the industry is mostly delaying the inevitable.

    I don’t think the forest industry is salvageable as it is currently constituted (mills in Canda selling majority of their output to parent companies in the US). Focus should be on the future of the forests and reducing dependence in single industry communities with strategic investment in seniors housing and assisted living and locally owned forest-related enterprises (smaller/flexible) to help communites retain their population (and value in their homes, these people can’t even leave to get a different job if they can’t sell their houses). Forest rights should be reviewed and reallocated with an emphasis on sustainable jobs over the long term, and with more local decision making over those rights. EI could be used to support owner operator forest businesses for eleigilbe recipients instead of to enforce idleness in order to receive benefits.

    All this depends on functioning governments.

    Forgive me for writing a comment much longer than the original post.

  13. Terry: “Some think simply by the government spending, you will stimulate spending in the economy. It doesn’t matter where or when it is spent.”

    “Some?” Who is “some?”

    Name one Canadian politician who is proposing to pour money into the economy with no targeting. The coalition, having existed for less than a week, has not articulated its stimulus strategy but it’s ridiculous to argue that there won’t be one.

    Reminds me of Fox News: “Some Democrats say their party is pro-terrorist! News att 11!”

  14. Andrew/anyone, I would be interested in learning what, if any, steps you think this government should take to mitigate the harm being done to individual Canadians through job losses, pension investment losses, decreasing home values, and the like. Could you provide a link to anything along this line you have published recently? Thanks.

  15. This typifies how ridiculous and clueless our pols are. Overall, Canadian car sales are up 0.5% this year compared to ’07 but we really need a bailout according to McGuinty and Coalition but everything was just fine last year when we had fewer sales.

    I know that Detroit 3 are hurting but what we do in Canada will be insignificant and US Congress deal is the only one that matters. The Americans will either bailout out their automakers, or they won’t, and what we do means nothing.

  16. By some people I mean Keynesian economists.

    I stated why mere stimulus wasn’t enough to solve economic problems. I also would claim that the other side of Keynesian economics where you attempt to encourage consumer spending by cutting interest rates doesn’t make much sense when you already have a consumer public loaded down with debt because interest rates are at rock bottom.

    I’ve been told that governments have not truly followed Keynesian economic theory properly and have used it for an excuse to spend irresponsibly. My reading of Keynes is that all that matters is increasing liquid capital in the market, and the specific means of spending is not important.

    Even if I’m wrong though, I will stay say that the irresponsible means of spending will rule the day. If it turns out that I’m wrong, and a palpable improvement in infrastructure or innovation emerges worth the money invested, I’ll be pleasantly flabbergasted. As of now, I expect that I’ll just be stuck paying for more baby boomer folly. I expect this no matter which party (or coalition thereof) assumes power over the next few years.

  17. Ryan, not forever. Just until the silly season passes, and we’ve stopped talking about stimulus and bail-outs and the rest of that nonsense.

  18. Terry, Keynesianism was long ago hijacked by mathemtically obsessed types like Krugman, Paul Sameulson, and other such luminaries. The Bank of Sweden even created a phoney “Nobel” prize (it isn’t awarded by the Nobel committee, but by a group of mutually admiring economists) in order to give the study of economics a veneer of scientific credibility. Real mathematicians examine the way economists use their math and they absolutely scoff at it.

    It’s no coincidence that intellectual frauds Merton & Scholes won the Bank of Sweden “Nobel” prize in 1997, and within six months had overseen the most spectacular financial blowup in history (Long Term Capital Management). But they brought precise, excruciatingly complex mathematics to the field of economics, and for that it was felt they deserved a prize. That such math cannot be applied to economics with any sort of reliability has yet to occur on the Bank of Sweden bunch – look who won in 2008.

    Though i will give Krugman some credit, at least he can write cogently, and he has done a good job of pillorying Bush’s voodoo economics. Unfortunately, they didn’t award it to him for his criticisms of Bush. They awarded it to him for his absurd mathematical modeling, in the tradition of Sameulson.

  19. Aren’t more people employed, directly and indirectly, by the forest sector?
    Secondly, the only reason there are no non-multinational home grown canadian auto manufacturers is due to the perpetual lobby of the big three for protection and systemic regulation that makes building vehicles so expensive that only behemouth companies can succeed at it. The sooner we are rid of them the sooner true canadian manufacturers can fill that void.

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