Stephen Harper and Shaky Economic Times
What Stephen Harper is Doing (or not doing) that puts Canada’s Economy in Jeopardy:
- Merging Canada with the sliding United States. Harper’s overarching economic policy is deep integration: tying Canada permanently to the U.S. market, an economy that is headed for permanent chaos: a financial crisis, huge government deficits, consumer demand dropping like a stone, and demand for Canadian goods (even energy) in steady decline. It will only get worse, much worse. This isn’t just a financial crisis, this is the end of the 60-year era of American global leadership. Yet Stephen Harper is so married to laissez-faire ideology he seems incapable of recognizing the reality that virtually every other world leader is now trying to come to grips with.
- Eroding our infrastructure. Harper keeps talking about us being competitive but he is squandering any competitive advantage we might have by failing to fund the rebuilding of our crumbling economic infrastructure. In the next decade, the infrastructure deficit will become a full blown crisis but Harper’s $60 billion tax cuts means the government will have no money to respond to it.
- Destroying our surpluses. Those tax cuts harm Canada in another way. Harper has put Canada on the road to budget deficits by eliminating the healthiest surpluses the country has ever had. When Canada’s export economy gets savaged, as it will in the next year, the only fall back position is the domestic economy — potentially one of the biggest in the world. But Harper’s laissez-faire ideology once again prevents his government from stimulating that domestic economy through government spending. That would mean increasing the federal money for health, education and social assistance, creating a national child care program or putting millions into much needed home care. But even if Harper changed his mind and wanted to do so, his tax cuts make such economic stimulus virtually impossible.
- Increasing risks by deregulating. Just as the world is calling for renewed government regulation and intervention on the economy, Harper is headed in the opposite direction on several fronts. His deregulation economic agenda will affect every other aspect of Canadian life: self-regulation in food safety; self-regulation in airline safety; “harmonising” regulation with the deregulated U.S. on pesticide residues on fruits and vegetables; abandoning separate Canadian testing of new drugs and much more.
- Giving way too much to big oil. The specific example of the total deregulation of the tar sands development demonstrates that Harper’s political dedication to the Alberta oil industry is such that he is willing to see the rest of the economy completely distorted. Unwilling to press for a rational, staged development, Harper has ensured that tar sands expansion will continue to keep the value of the Canadian dollar high and make our manufactured goods uncompetitive. In addition, unfettered tar sands plant construction drives up the price of building materials making other development prohibitively expensive.
- No planning for growth. Lastly, Harper simply has no answer at all when it comes to promoting new long term economic growth in Canada and his laissez-faire ideology means that we are falling further and further behind those countries that are actually using the power and organizing capacity of the state to create sustained, modernizing economic growth. China, India, South Korea and Brazil are the growth centres of the world because they ensure a close collaboration between capital (business), universities and the government, carefully engaging in long-term planning of industrial development. Harper has literally no industrial development strategy or policy. Instead of focussing his tax cuts on growth industries, his across-the-board cuts see most of the billions go to the oil, banking and insurance industries — the ones least in need of tax reduction.
Excerpted from Six Ways Stephen Harper is Wrecking the Economy by Murray Dobbin