Tuesday, February 3, 2009

Harper Sells Out

I didn't say it first. I thought it though. I hoped someone in the Canadian press would talk about it. I don't subscribe to Maclean's, but on my daily reading of LewRockwell.com, I came across a link to this article in Maclean's titled "The end of Canadian conservatism: How Harper sold out to save himself".

While Andrew Coyne, the author, is directing his criticism solely at the Canadian stimulus plan and the Conservative Party of Canada, he does a fantastic job pointing out the extraordinary gamble the stimulus packages being offered all around the world are taking:
A $34-billion deficit next year, after all, is barely two per cent of GDP, and even four years and $85 billion worth of deficits, if the budget’s projections hold, would barely budge our debt-to-GDP ratio. But if they do not—if the economy fails to recover on cue; if inflation spikes when it does, and interest rates soon after; if all those billions in new spending, once in place, do not prove so easy to trim back; if the assets the government acquires with all of its borrowed money do not turn out to be worth what they cost—then we will head into the approaching demographic storm loaded down to the gunwales. It’s a monumental, even reckless gamble.
Timing the market for even the brightest investor is near impossible, let alone government bureaucrats.

I remember watching Harper in the debate during the election last fall. He said flatly that there would be no budget deficits. Either he lied, or he's ignorant. Either way, it has triggered regret for voting Conservative last fall. The significance of these deficits is even larger than simply Harper's selling out though, he's changing the political playing field and pushing it to the left and towards the increasing power of the state. Coyne did well to point this out a number of times in his article:
When the “right” is defined as $34-billion deficits, record spending, and bailouts for everything in sight—when every other party is to the left of that—people lose the ability to think in any other way. They forget there was ever a contrary view.
He continues the point:
Conservatives, then, should think hard about whether they can afford to support this government any longer. Its sole contribution at this point is to limit debate, to rule out of bounds any serious discussion of alternatives, since “even” a Conservative government now believes in an all-pervasive, ever-expanding state.
With this new budget, how could any fiscally conservative individual ever support the Conservative Party of Canada and simultaneously lament about Trudeau?

Coyne continues to do his lamenting on the giant increase in the size and scope of government:
These temporary hardship cases turn out to include such perennial wards of the state as farming, forestry, mining, and . . . shipbuilding. “In recent years,” the budget notes laconically, “the industry has experienced declining demand,” the remedy for which is apparently to increase supply (“Budget 2009 provides a catalyst to increase activity in the sector”). Then it’s off to automotive bailouts, support for the cultural industries, permanent increases in equalization (inequality among the provinces may go down, but equalization always goes up), tax credits for home renovations (you thought it was hard to get a contractor on the phone now?), “an improved rail system,” slaughterhouses, hockey rinks, broadband, the Manege Militaire drill hall in Quebec City . . . The government will be everywhere, and everything.
He concludes his piece by essentially defining the essence of what is the budget and where it will take us:
More broadly, how in good conscience could the Liberals, or the NDP for that matter, vote against a budget they might have written? Every line of it seems to have been composed in a kind of haze of Keynesian nostalgia. We are back to the bad old days of the 1960s and ’70s, when savings were a dirty word and consumption was thought to “drive” the economy, when economies were “pumps” to be “primed” by wise and far-seeing policy-makers pulling levers on the wall. And in another 20 years or so, when we are drowning in debt and the new-old wisdom has been discredited again, perhaps a new political philosophy will arise, and a new party to give voice to it. We might call it conservatism.
Its refreshing to see an honest conservative voice speak up out of and above the collective drone of the mob.

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