The damage caused by this current global economic unpleasantness is incalculable, but we can report this much, at least: somewhere in all the excitement Stephen Harper broke his crystal ball.
Remember Master Strategist Guy who won because he could see further down the field than anyone else? Yeah, not so much. During the Unfixed Election-Date Campaign of ’08, he toured the nation reminding everyone he is an economist—he’s been slow to deliver on promises of credentials recognition, but by God, he recognizes his own. He said, “My own belief is that if we were going to have some sort of big crash or recession, we probably would have had it by now.” He said, “We’ll never go back into deficit!” He made fun of Stéphane Dion for promising to address the crisis by holding a first ministers’ meeting and preparing a fiscal update. “Panic,” Harper called that plan.
On the day after the election Harper called for a first ministers’ meeting and a fiscal update. Two weeks later he began calling for deficit spending. Was anything missing in this Olympics of flip-flopping? Yes: some sort of big crash or recession. Well, fear not, he said the other day in Peru. It’s on the way.
The PM’s sudden blindness does not afflict him only when he is peering at the economy. Two years ago he showed his strategic prowess in Quebec by throwing his party’s lot in with Mario Dumont’s Action démocratique. An economist, if Harper knew any, would have recognized that as a clear case of buying at the top of a market. On Afghanistan, Harper and Peter MacKay are now no more reliable in their forecasts for Canada’s military commitment than they used to be when they expounded on the durability of the Canadian Alliance and the Progressive Conservatives.
I need to hammer this last point home because, all kidding aside, I cannot express how appalling it is. Our Prime Minister and his war minister are now saying random things about a shooting war. “Afghanistan remains NATO’s number one priority,” MacKay said last week. “This is not an operation of choice, it is one of necessity. We are in Afghanistan for the long term under a United Nations mandate for as long as we are needed and welcomed by the Afghan people.”
Which is great, except Harper spent the election campaign saying, not only that our troops must come home in 2011, but that our NATO allies’ troops should do the same. I asked a senior diplomat from one of Canada’s most important allies about these pronouncements. The reply: “We just decided it couldn’t be taken at face value.”
Well, that’s just great. Harper promised a foreign policy that would “actually be noticed,” and he has delivered. Ah, yes, Harper. He’s the Canadian who babbles incoherently about Afghanistan. We’ve noticed.
None of this is meant to condemn the choice Canadians made when a plurality of voters elected Harper’s Conservatives in October. After two years of Stéphane Dion, it’s hard to call the electorate’s choice a mistake. But the result is a freshly re-elected Prime Minister whose political instincts, by all the evidence, are shot.
In this environment expect confusion and cue-taking. Harper will continue to contradict himself while letting the rest of the world decide his next steps. That last bit should come as a relief. In private, Harper shows skill as an impressionist. He is said to do a killer John McCallum. Lately he has begun letting this side of his personality shine in public. At the APEC summit in Peru, for instance, his speech sounded like Bush’s. At the next global confab he will sound oddly like Barack Obama. Speaking as a genuine economist—and has he mentioned he’s an economist yet?—he is a late-breaking convert to the virtues of Keynesianism and multilateralism. Leaders everywhere else are applying a fiscal stimulus, so Harper will stimulate his fisc too. The scale of his stimulus will match the size of theirs. Obama is hinting at between $500 billion and $700 billion in assorted actions over two years. Gordon Brown brought in about $37 billion in stimulus for the current year. That suggests the Conservatives will deliver a proportionate $20 billion to $25 billion in stimulus at their next budget.
So the Liberal opposition is on the wrong track when they warn about “ideologically driven spending cuts.” There is spending on the way, not cuts. It will indeed be ideologically driven, but only at the margin. Given a choice, Harper will avoid spending on things that work or last, because we might conclude that’s what government is for. There will, it is true, probably be roads, because roads have an agreeably mid-20th-century feel to them. You can trust roads. Roads don’t attend rich galas. Beyond that, Harper will look for ways to get money to where it can be spent by individuals as quickly as possible. Cheques, tax credits, vouchers, that sort of thing. You should not be astonished if he cuts the GST by another point.
In every case he will wait for Canada’s neighbours, especially the Americans, to move first. He has been rattled by recent events. On Oct. 30 he appointed Lawrence Cannon as minister of foreign affairs and Stockwell Day as trade minister. Five days later the country Harper has always viewed as a model rejected cronyism for meritocracy. It’s the kind of thing that shakes a guy’s faith in himself.