Monthly Archives: May 2009

Madely in the morning, May 29

No choice but to be cynical

You can’t believe a word they say. We face a horrendous truth deficit.

Finance Minister Jim Flaherty just said the federal government deficit will be $50 billion this year. And it might. But the fact that he said it makes it less rather than more believable.

Permit me to review the facts, a term here meaning “the long sequence of non-facts that issued forth from the mouths of senior federal politicians.” Continue reading

Would this qualify?

Well, the NDP got that one right. The pile of press releases on my “desk” (actually my e-mail inbox) includes one from our socialist party on Friday that blares “NEEDED: AN ALTERNATIVE TO HARPERS’ CONSERVATIVE IDEOLOGY”. I agree. For instance an actual conservative ideology.

Instead, today’s Globe and Mail informs me that “Finance Minister Jim Flaherty warned yesterday that Ottawa’s budget deficit this year will be ‘substantially more’ than projected only four months ago… He declined to reveal exactly how much the deficit has grown, though, saying he will hold off until June when he updates Parliament on progress in doling out federal economic stimulus spending. Ottawa’s parliamentary budget watchdog, Kevin Page, estimated yesterday the 2009-10 deficit could hit ‘in the neighbourhood’ of $40-billion – up more than $6-billion from Mr. Flaherty’s January forecast of $33.7-billion. A $40-billion deficit would be record territory for Ottawa and an uncomfortable achievement for the Harper government, which came into office eager to trim public spending.”

Well, I should hope it would be uncomfortable for them to out-deficit the dreaded Brian Mulroney. But then again, maybe that’s because I’m a conservative ideologue. The real kind.

All gotcha! all the time

In today’sToronto Star, columnist James Travers claims the PMO is trying to silence the PBO because… sorry, lapsed into Acronyese there. He says the Prime Minister is refusing funding and otherwise making life difficult for the new Parliamentary Budget Officer because, Travers asserts, “In short order, and with gold standard analysis, the budget officer first embarrassed Conservatives by revealing the soaring costs of the Afghanistan war during the fall election. Then he cast deficit shadows over sunny economic forecasts. Retribution in Ottawa is swift and summary.”

This assessment does not merely reflect but contributes to a fairly serious problem. The Parliamentary Budget Office, as I noted recently in a column, was established to strengthen the voice of MPs not compete with, supplement or supplant it and some former MPs are concerned that it’s exceeding its mandate. The PBO claims it’s not, arguing among other things that it automatically makes all its reports public to avoid getting caught up in spin and manipulation. Which I believe is the right approach, also followed by the Congressional Budget Office down in the U.S., which has established itself as professional and non-partisan.

The thing is, it’s very hard to avoid being seized, spun around and used to whack one’s adversaries in the current climate in Canadian politics. It’s especially hard when you’re doing budget analysis given the rather obvious tendency of members of all parties to exaggerate, misrepresent and fantasize about fiscal matters and when journalists as well as politicians have not just a pervasive habit of enflaming controversies, but a material interest in doing so.

I wish I had some really good piece of advice to offer the PBO but I don’t, not least because much of it is out of their hands. For instance the very first Parliamentary Budget Office study, of the costs of the Afghan conflict, was seized upon by politicians who misrepresented the findings without effective challenge from the media. But the PBO, and especially its head and public voice Kevin Page, must be very careful not to appear to quarrel with the government especially when PBO numbers do not sustain the more partisan contentions coming out of the PMO and government caucus.

Meanwhile all the rest of us who care about good governance have a responsibility to grasp what the proper role of various organizations is, to defend them when they do it well and rap their knuckles when they do not. Including, I have to say, journalists who depict everything in government as a cat fight because those are easy to cover and exciting to read about.

More bafflegab

Michael Ignatieff begins a defence of his party’s EI policy in today’s National Post with the words “We’re in a recession that is rewriting the rules of our economy.” Why do they talk like this?

There is much to be debated in the Liberal proposal to make EI more generous because, again quoting Ignatieff’s article, “Improving eligibility will bring help to workers who have paid in but don’t currently qualify. It is also the most effective, rapid and targeted form of stimulus the government can offer our economy right now.”

It is important to discuss whether the immediate assistance from relaxing social program eligibility is, or is not, offset by increasing the dependency effects such programs do, or do not, create. It is important to discuss whether this sort of spending really stimulates the economy or simply takes from Peter to pay Paul without increasing the total wealth of the Apostles. But how are we assisted in having this discussion by a pompous, vacuous and untrue assertion that the rules of the economy just changed?

In point of fact, if this assertion were correct we would be unable to have a discussion at all because theory and experience alike would go out the window, illuminating as they do only the operation of the old rules that we just discarded. Since it is not correct, and there is no rational argument that it is correct, it merely serves to obstruct our relying on what we already know to evaluate new proposals. If it is mere coincidence that this assertion is made by a man whose new proposals fly in the face of past experience it is certainly, from his point of view, a convenient one at this juncture.

Drawing on experience while there’s still time, I note that in his third radio “fireside chat” in the early 1930s president Franklin Delano Roosevelt made a similar, and equally daffy, claim: ‘I happen to know that professional economists have changed their definition of economic laws every five or ten years for a long time.” FDR knew nothing of the sort; he had no idea what professional economists said economic laws were or why except that they said his ideas were bad which they were. But listen to his follow-up: “We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.”

Michael Ignatieff, I fear, is relying on the same notion that just as politicans can change the criminal laws if they don’t like them, they can change the economic laws. But they cannot, and any proposals based on the claim that they can are doomed to expensive failure.

OK, now we know why they talk like that. And why we shouldn’t believe them.