Given a world stage, Harper argues for Depression economics and Cold War politics

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"Wise" is not a word frequently used to describe Stephen Harper or his policies. Partisan, ideological, narrow, secretive, devious, or controlling come up more often.

The opposite of wise is foolish or ignorant. Both are brought to mind when assessing the performance of the Canadian prime minister at the G20 leaders summit in Russia last week. 

The G20 economies account for about 85 per cent of world economic activity. The economic prescription Harper offered to the assembled leaders was for countries to reduce their national debt-to-GDP ratio. In essence, the PM wants governments to get smaller. His assumption is this creates more room for private wealth creation.

The G20 governments did not pick up his suggestion. A worldwide reduction in government spending was tried in the 1930s. It resulted in a worldwide Depression.

The world economy is already suffering the effects of ill-considered austerity policies promoted by Canada as host country at the 2010 Toronto G20 summit.

Spending cuts adopted in Southern Europe and promoted by the European Central Bank, the European Commission and the IMF -- with the backing of the U.S. treasury, have had disastrous implications for employment and incomes while increasing deficits and raising debt-to-GDP ratios.

The IMF has recanted. It now says government spending deficits (which when accumulated constitute the national debt) have a strong multiplied effect on economic growth, leading to job creation. Reductions in government spending to reduce the national debt in fact have the opposite effect. They slow down the economy and create more joblessness.

Harper plans to follow his own advice, however. In Russia, he announced that Canada would balance the national budget by 2015, and reduce the debt-to-GDP ratio to 25 per cent by 2021 from its current level of 33 per cent.

Hidden behind the numbers are the Harper government reductions to transfer payments to the provinces for health care, and reductions to old age pension payouts.

One debt-to-GDP ratio should worry the Conservative government. That is the growing indebtedness of Canadian families.

Low interest rates encouraged a build-up in household debt. Even modest interest rates will increase sharply debt service payments for households struggling to maintain current income levels. Conservatives have yet to announce a plan to help indebted Canadians face interest rate hikes.

Stephen Harper has never asked why Canadian wages fail to keep up with growth in output per hour worked, which is a main reason (along with low interest rates) why people went into debt in the first place, and why family indebtedness continues to grow.   

The G20 meetings are supposed to be about the economy, but because of differences over the civil war in Syria, leaders brought foreign ministers along for corridor talks. Neither Harper or Foreign Minister Baird have strong backgrounds in international affairs. A mark of its disinterest is that the Conservative government has provoked a strike among foreign service workers.

Instead of relying on Canadian diplomats for advice and direction, Conservative foreign policy reflects whatever direction the U.S. establishment takes, with a bias towards Republicans.

The Canadian diplomatic strategy was to denounce the host nation for backing the Syrian regime. The U.S. is funding rebels without anybody knowing for sure who they are, and what they are planning to do if successful in overthrowing the Syrian government.

U.S. President Obama is seeking Congressional support to bomb Syria because of alleged use of poison gas by the regime. European leaders want to see a report on the use of chemical weapons from UN inspectors before authorizing any action.

Under international law, only the Security Council can authorize the use of military force. Both China and Russian have indicated their willingness to veto military action directed at Syria, and have already exercised a veto twice on Syrian resolutions brought to the Security Council.

In a display of vintage Cold War rhetoric, the Canadian prime minister attacked his Russian hosts for their threatened veto over U.S. military action through the UN. The Syrian civil war has so far left over 110,000 dead, and created 2 million refugees, with no end in sight. The Russians have called for an international conference to end hostilities.

The standard Canadian position would be to support bringing all the regional actors together for needed peace talks. U.S. intervention in Syria is understood to be directed against Iran, an ally of the Syrian regime. Since the Conservatives proudly broke off diplomatic relations with Iran, Canada is no position to play a diplomatic role in the region or at the UN. Instead Canada backs a U.S. attack that may or may not succeed in gaining Congressional approval, and is highly likely to make a dangerous situation worse.

It is bad enough seeing Canada offering foolish advice to other nations on international economic issues. Having ignorance become the face of Canada abroad when it comes to international politics is downright shameful.

Duncan Cameron is the president of rabble.ca and writes a weekly column on politics and current affairs.

Photo: pmwebphotos/flickr

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