stand back or you’ll get some of stephen harper’s economic genius on you


Supporters of Conservative leader Stephen Harper like to tout his credentials as a trained economist. Today, Prof. Harper taught me something I did not know about recessions. Apparently, they respect a rigorous form of scheduling and are never late for their appointments.

“My own belief is if we were gong to have some kind of big crash or recession, we probably would have had it by now,” Harper told reporters as the U.S. financial system continued its Britney-class meltdown.

Are you writing this down, aspiring economics graduates? We can’t possibly have a recession in Canada because we haven’t had a recession in Canada yet. Also, our banking system will be fine if we manage to increase regulatory oversight and sprinkle it with fairy dust.

The good news is that Conservative leader Stephen Harper’s theory about recessions is destined to be torn to shreds on Oct. 15 by Prime Minister Stephen Harper, when he announces that Canada is in recession.


stand back or you’ll get some of stephen harper’s economic genius on you

  1. Your normal level of wit, humour and insight appears to be in recession…

  2. The Calgary School is probably considered pretty rogue, anyway. I mean, when your chief legal theorist is Ted Morton, you’re not exactly aiming to be taken seriously.

  3. Well, what do ya know, it says right on the back of Harper’s diploma, ‘This artifact is guaranteed recession-proof.’
    Why don’t we just skip talking to the sweater and talk to the psychic sweater-picker-outer from now on…

  4. That opens up the following line of attack:

    First: list any three recent economic indicators that clearly show Canadians’ wealth and/or future economic prospects dwindling.

    Second: provide the PM’s quote

    Third: ask what planet the PM is on.

    Finally: sit back and watch Canada turn red with rage. Seems to me this could become Harper’s Let Them Eat Cake moment.

  5. I’ll try to translate it for you, since it appears as though you’re having so much difficulty with the topic of economics.

    The mortgage crisis hit about a year ago. We’re still not in recession. In fact, the US figures are showing some amazing reslilience despite some of these problems.

    In other words, if the economy is as bad as you want it to be, why aren’t we in recession yet? Maybe it’s not that bad.

    Got it? Didn’t think so.

  6. thanks a lot, dennis. i had completely forgotten that the credit crisis is over and not at all getting progressively worse and escalating into the worst financial meltdown in 75 years.

  7. Um, Dennis?…

    Did you happen to catch the news today about the implosion of the stock exchanges? And how that was caused by the collapse of all those huge US financial institutions? And – it gets funny and relevant here – how those institutions are tanking because of the mortgage crisis from a year ago. Just putting it out there.

    But I’m not worried, because if Uncle Stephen says nothing bad will happen, that’s good enough for me.

  8. Seriously, Alberta may need those firewalls after all.

  9. Wait.. I thought Mr. Harper was claiming that we shouldn’t trust Dion in these uncertain economic times. I guess since we have certainty now, we can trust Dion all we want.

    After all, it’s not like Dion took a 12 billion dollar surplus and converted it to a near deficit during good economic times.

  10. After all, it’s not like Dion took a 12 billion dollar surplus and converted it to a near deficit during good economic times.

    Yes, he got rid of that wonderful bit of overtaxing by giving it back to us. I don’t know about you, but when the government takes more money than it needs, it should be given back.

    You want to government to make up stuff to spend it on? Good for you, you wealthy person you.

  11. I’m waiting to see which of the other parties promises a cash injection for the Calgary economics department.

    At the very least, they will need to repair their image if people start thinking Mr. Harper’s handling of our economy is representative of the education they provide.

  12. Perhaps, Harper received reassurances from his astrologer/make-up artist that the stars will align for his coveted majority and that Canada will dodge the US economic crisis? Um, not.

  13. Eric, a lot of that went into spending, not tax cuts. And cutting the GST doesn’t give it back to “us” in any grand collective sense – in fact such tax cuts skew the benefits toward higher income earners with more disposable income.

    I agree that the Liberals could have pared back the suruplus budgets a bit, but most of us feel more secure if our income covers a bit more than our bills, as opposed to living “paycheque to paycheque”.

  14. The mortgage crisis happened how long ago, and we’re still not in a recession?

    That was Harper’s basic logic, and it seems pretty good to me.

    Maybe some people should stick to trying to be funny instead of hoping for economic suffering.

  15. Conservatives are the new liberals.

  16. Eric-Vancouver: from a recent press release by Canadian Taxpayers’ Federation:

    “Williamson said the 2008 federal budget set spending growth at 3.4% this fiscal year. Instead, it has “swelled an eye-popping 8.4% in the first three months of the year. This is two-and-a-half times the 2008 budget plan,” he said.”


    In other words, Harper didn’t give it back to us, he spent a LOT of it. Coincidentally, the spending seemed to focused on ridings on the Cons’ target list for the 2008 election. Odd…

  17. The mortgage crisis happened how long ago, and we’re still not in a recession?

    That was Harper’s basic logic, and it seems pretty good to me.

    Don’t you understand that there is a fundamental difference between the banking system here and the US…?

    “Duh…okay boss! If you say so, boss!”

    You can only plug so many holes before the dam breaks, Dennis…

    By the end of the year, all of the high points of CPC economic (mis-)management (encouraging a high dollar, doing nothing about fuel costs, approving then removing 0/40 mortgages, and of course that absolutely useless GST reduction) will come to fruition.

    Ideological morons, I say…


  18. Pay no attention to the worlds largest bank collapse today! All is well in the land of Harpernomics!

  19. Encouraging a high dollar? Smart, it improves every Canadians buying power and therefore standard of living. Kept inflation in check, kept fuel prices from rising even more insanely. And wonder of wonders, the “high-dollar recession” never happened. The Chretien “prosperity” was on the back of the poor weakened loonie, and business leaned on that crutch rather than embark on efficiencies and productivity. I am VERY happy that such an economic environment has lifted. Sure, it’s a petro-dollar that’s responsible for most of the increased C$ value, but it was absolutely a wise choice to let the loonie soar.

    Doing “nothing” about fuel costs? Well now, this will get interesting. What shall we do, class, shall we help the economy by lowering taxes on fuel, shall we kill the economy by Zimbabweing our micromanaging of the private marketplace, or shall we all dance through green grass because we can’t afford to drive? Discuss.

    Cutting GST? Yes, dumb move, but it was a campaign promise. There were so many opportunities for other smarter tax reductions before cutting the GST.

    Razor-thin margins, teetering – gasp – on the brink of a deficit? Given the debt paydown over the last several years, we are so comfortably ahead of where we were that a single year or two with a bit of red ink is no big deal at all, as long as it does not become a habit. It will say a lot about those who break out in hives if a fiscal year goes ever-so-slightly below zero once or twice.

    Government bloat? The single most damning indictment of the Harper government. The military still needs more, if we are going to ask it to do anything useful (we are and they do), so what gives with the absolutely insane drunken-sailor spending in all other departments the last couple? What is dangerous for this country is that the single most damning indictment of the Tories stands a good chance of having been far worse if the government was led by any other party.

    “Responsible management for uncertain times” is a far better message than “La, la, no recession here…” Here’s hoping they live up to the former, and give up entirely on teh latter.

  20. Dennis writes: The mortgage crisis happened how long ago, and we’re still not in a recession?

    Which is the fundamental problem with Dennis’ analysis. Dennis (and presumably Harper) thinks that the mortgage crisis is something that happened in the past. Economists (that is to say REAL economists) know that this crisis is ON GOING. This is an ongoing problem, which is why Merrill Lynch just got bought out by Bank of America over the weekend, and the Dow had it’s worst drop since right after 9/11 TODAY.

    No matter how appealing, Harper’s “it hasn’t happened yet, so it won’t happen” argument defies all logic (and, possibly, several laws of physics). I’d say it’s an argument that is best ignored, but it’s actually a much worse (and more dangerous) argument then that. It needs to not be ignored, but DERIDED.

    Good work Feschuk.

  21. I thought Harper’s statement was fine. He isn’t denying there are financial problems worldwide but he’s also remaining calm.

    What’s he supposed to say Scott. Convert your assets into gold bullion as fast as possible or else your doomed?

    PM’s have an inordinate amount of influence over the economy and if they panic, watch all hell break lose.

  22. jwl –

    remaining calm is saying: “canada’s fundamentals remain relatively strong. this is a troubling time but i’m reasonably confident we can weather it.”

    bullshitting the public because you’re desperate to keep the economy together until you’re re-elected is making the absurd claim that if a recession were to happen, it would have already happened by now.

    an important difference, i’d say.

  23. Scott,
    I don’t get why you are so agitated about Harper’s remarks, which seemed pure vanilla to me.

    Also – there is no recession in the States or here, so Harper is technically correct on that score.

  24. I don’t pretend to be in the same league of economic expertise as Feschuk, but I thought the blog entry on Worthwhile Canadian Initiative titled “Why the US GDP numbers aren’t so good, and why the Canadian GDP numbers aren’t so bad” was pretty informative.

    Seems to me it’s not totally crazy for a politician to make a prediction of the future performance of the economy based on how it has weathered the storm for the past year.

  25. “Seems to me it’s not totally crazy for a politician to make a prediction of the future performance of the economy based on how it has weathered the storm for the past year.”

    Good point, assuming the storm won’t get any worse. Yesterday’s events suggest that we’ve only had to weather the first few drops of rain, and that the real hurricane is yet to come. Or switch the metaphor to ‘snowflakes’ and ‘blizzard’, if you’d rather. :)

  26. I have no idea if it’s true that we’ve only seen the first few snowflakes of a blizzard. Harper could be wrong, could be right. My only point is that it’s not a crazy lying-liar thing for him to say, and it’s not abnormal to try to forecast the economic situation of the country. There’s no doubt that Harper is more politician than economist right now, and that he would never admit it if he thought a recession was imminent. But unlike Scott Feschuk, I just don’t see anything outrageous about his comments.

  27. Scott- as you can see, we are all very sympathetic to your concerns.

    Can’t you just get back to mercilessly mocking them all, regardless of the truthiness of whatever they may be saying?

  28. All I know is that no matter who forms the government, in February “the economy will be much worse than previously thought.” How’s that for an economic prediction.

  29. JWL:

    Umm . . . The Calgary School of Economics (the neoconservative theory of the name, not any similarly-named institution) is a derivative of the Chicago School of Economics (same distinction), which clearly states that government action has little effect on the economy.

    Not that I buy into said theories, being a Kennedy-era Galbraithian myself (or I would be if I was in government), but saying the PM has inordinate influence over the economy goes against the economic principles preached but not practiced by the CPC. It also goes against the mini-me neoconservatism the Liberal party practiced but preached against under Chretien.

    Your politics remind me of driving in Montreal. Whichever side of the road is convenient . . .

  30. Let’s not confuse Mr. Harpers economics training with his politically expedient statements. Obviously one of the factors leading to his calling an election now is his concern the Canadian economy is tanking. Maybe his timing is just off a bit. He should have called the election a month ago.


  31. Shenping

    I would say Chicago School of Economics would argue that government has a hard time getting people to behave in a way they wish.

    They wouldn’t argue “government action has little effect on the economy” because that’s bollocks. I don’t recall M Friedman ever arguing that it didn’t matter if the government taxed income at 20% or 80% because it has little effect on the economy.

  32. Good counter-argument, JWL, especially the first part. I seem to recall that Milton was referring more to things like minimum wage legislation, interest rates & money supply. Ie, increase minimum wage, & minimum wage-paying businesses will increase prices by an equal amount, & higher-wage-paying businesses will adjust to follow suit to increases to minimum wage. This assumes that mom-and-pop businesses have the same ability to predict government as Wal-Mart, & ignores things like the time & cost for restaurants to change menus, but it undoubtedly happens to a degree, over time. And with WalMart profits being what they are, I don’t know if they will be too quick to pass on prices & lose market share.

    However, Friedman was against stimulus spending in most forms. I think he viewed them as little more than an increase in the total money supply, which would then cause inflation that would cancel out any economic gains caused by the stimulous. He based this on observations of the 70’s oil embargo, & how standard Keynesian responses had some disastrous results, especially for people on fixed incomes. I think the question is whether or not this is a demand shock, like the 1930’s, where a Keynesian approach might have validity, or a supply shock like the 1970’s, which government involvement probably won’t help. Evidence supports a demand shock to me, but it’s impossible to know for sure until after the fact. There’s been a certain amount of price gouging by oil companies, which is supply & is a large part of what effecting the auto industry, but there hasn’t been a lot of hoarding & shortages, which are characteristic of supply shocks.

    Given how corporate taxes work in Canada, lowering them in a recession might not be a good idea. Paying employees, doing R&D & developing new products & innovations are all tax-deductible, while paying dividends & sucking money out of the company is not. Higher taxes might encourage management to grow the company in anticipation of lower tax rates down the road. During a recession there is a tendency for investors to hoard their dollars & invest them in safe, low-return things like GIC’s & money-market funds instead of investing in companies that grow the economy. Cutting individual income taxes may increase overall spending, especially to lower income-earners, but in recessions, consumers are more likely to pay off debt than to buy. Milton largely ignored these effects.

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