Less worse off

Stephen Gordon considers how much credit the government can take for our relatively good economic situation.

What of the role of the federal government? The proper way to evaluate policy is to consider the counterfactual: what would have happened if the federal government had behaved differently? I can think of many ways that the government could have made things much worse — the spending cuts that were its initial reaction were certainly ill-conceived. But since that austerity program was abandoned, it’s hard to point to a serious error that significantly deepened and/or prolonged the recession.

So the Conservatives cannot claim all the credit for those cross-country differences: Canada was luckier than the United States and the other G7 countries. The best it can say is that it didn’t make any serious mistakes that made the recession significantly worse.




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Less worse off

  1. “The proper way to evaluate policy is to consider the counterfactual: what would have happened if the federal government had behaved differently? ”

    City Journal ~ What Social Science Does – And Doesn’t – Know:

    Another way of putting the problem is that we have no reliable way to measure counterfactuals—that is, to know what would have happened had we not executed some policy—because so many other factors influence the outcome. This seemingly narrow problem is central to our continuing inability to transform social sciences into actual sciences. 

    Unlike physics or biology, the social sciences have not demonstrated the capacity to produce a substantial body of useful, nonobvious, and reliable predictive rules about what they study—that is, human social behavior, including the impact of proposed government programs.

    The missing ingredient is controlled experimentation, which is what allows science positively to settle certain kinds of debates. How do we know that our physical theories concerning the wing are true? In the end, not because of equations on blackboards or compelling speeches by famous physicists but because airplanes stay up. 

    Social scientists may make claims as fascinating and counterintuitive as the proposition that a heavy piece of machinery can fly, but these claims are frequently untested by experiment, which means that debates like the one in 2009 will never be settled. For decades to come, we will continue to be lectured by what are, in effect, Keynesian and non-Keynesian economists.

  2. Harper hasn’t DONE anything, so there’s nothing to take credit for. There’s just image-adjusting….like his insistence we’re doing better than anyone which simply isn’t true, and his insistence generals pay for their flights which is chickenfeed….but mostly he’s just treading water and waiting for things to ‘return to normal’.

    And that isn’t going to happen.

      • The stocking up on guns and spam is Tony’s idea, not mine.

        I said nothing about that or ‘being doomed’.

        I said Harper hasn’t actually done anything….which is merely factual.

        • You said things aren’t returning to normal.  I took that as a prediction by you of a grim future.  Was it not?

          • Look around the world Bean….do YOU see things ‘returning to normal’?

            Even before this latest mess hit the fan, it was called a ‘jobless recovery’

            Harper regards it all as a minor blip though….and soon 1.5 million Canadians will be in clover as boom times return.

            Ain’t gonna happen.

          • So we won’t be in clover . . . but we won’t be doomed either.

            Sounds kind of dull and non-descript, then.

          • @OrsonBean

            Oh we’ll be doomed…just as doomed as the rest of the world.

            It’ll just come as a complete surprise to Canadians…because Harp isn’t being honest with the country, or realistic about the economy

            It doesn’t require bunkers though, just some brains and intelligent planning and transparency.

            None of which are Harp’s strong points.

  3. I can think of many ways that the government could have made things much worse — the spending cuts that were its initial reaction were certainly ill-conceived. But since that austerity program was abandoned, it’s hard to point to a serious error that significantly deepened and/or prolonged the recession.

    Context please, SG. The initial reaction was before the opposition ganged up and forced SH to prorogue and reformulate.

    -Dot 

    p.s. When will PW be doing a book review of NATO-Russia Relations in the Twenty-First Century. cited at the end of this op-ed?

    http://www.theglobeandmail.com/news/opinions/opinion/vladimir-putin-the-man-who-would-be-czar/article2180755/

    and no mention of R&D in the postscript. Qu’elle conspiracy.

  4. When conservatives are in charge, they’re “lucky”?  A strong economy is the result of luck?  What garbage.

    • No, he’s saying that Canada was lucky (and therefore the conservatives as well) because the conservatives *weren’t* actually in charge. Had they been fully in charge there would have been no stimulus in their budget and so “it didn’t make any serious mistakes that made the recession significantly worse,” would not have applied.

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