“The choice for Canadians is crystal clear,” said Harper. “Continuing our low-tax plan to complete the recovery and create jobs, financial security, stability and certainty for Canadian families and businesses. Or the high-tax, reckless-spending Ignatieff-NDP-Bloc Québécois agenda that will stall our recovery, kill jobs and produce political instability and economic uncertainty by re-opening constitutional debates. On May 2, I urge all Canadians to choose continued stability for Canada.”
Conservative Party News Release, April 30, 2011
So how do you like economic stability so far?
In the first week of stability-inducing majority government, Canada’s economy experienced:
– A decline of almost 400 points over the week in the TSX composite, the worst weekly loss all year.
– A decline of almost 2 U.S. cents in the value of the loonie.
– Turmoil in commodity and futures markets, sparked in part by new U.K. rules limiting speculative positions in the silver market. The resulting downturn spread to other commodity prices (including oil) which had also been bid up by speculators.
– A miserable GDP report (issued the Friday before the election) showing that Canada’s real output was actually declining in February, casting doubt on the viability of the recovery.
– A jobs report issued this Friday that had a positive headline number (58,000 more Canadians working in April), but was gloomy in the details. 70 percent of those jobs were part-time, and almost two-thirds were in the public sector — many of them at Elections Canada working on an election that Mr. Harper said all along was “unnecessary” and economically damaging. In the goods-producing side of the economy, employment was falling (largely reflecting the impact of a sky-high loonie on manufacturing).
Of course, none of these developments can be attributed to the outcome of Monday’s election. But that is precisely the point: Stephen Harper’s Conservatives can hardly claim to usher in economic stability, when the trajectory of Canada’s economy is increasingly determined by developments in global financial and commodity markets, which themselves are in thrall to the mood swings and enormous financial power of speculators and other short-horizon financiers.
Indeed, by integrating Canada’s economy more closely into the global commodity system, accelerating Canada’s precarious dependence on resource extraction and export, and reducing the extent to which government policy (whether through taxing and spending, regulation, or other tools) can smooth out the resulting economic peaks and valleys, it could be credibly argued that Conservative majority rule will make us more vulnerable (not less) to the sorts of economic instability that dominated the first week after their re-election.
And you’ve gotta know that if the election outcome had been different (with a Conservative minority, or — god help us all — another party actually coming first), last week’s turmoil would certainly have been blamed on the Liberals and the NDP, global market forces or no global market forces. In that aspect, the Conservatives’ claim to be the guardians of economic stability is a non-refutable hypothesis. If economic instability occurs on their watch, it is the result of “global market forces.” If it occurs on someone else’s watch, it is the result of “high-tax, reckless-spending” politicians.
Canada suffered a serious economic downturn under Harper’s government, millions of Canadians continue to experience hardship and insecurity, per capita GDP and hourly productivity are still lower than when he was elected in 2006, and Canada’s economic performance since the financial crisis has been middling at best compared to the broad sample of industrialized countries. Yet the Conservatives, with vague appeals to “prudence” and “good management” (backed by important, vocal support from business and the private media) played the economic card effectively in this campaign. Some day we will adequately educate Canadians about how our economy really works, and the Conservatives will lose their “free pass” on economic credibility.
This article was first posted on The Progressive Economics Forum.