Inkless Wells

Inkless Wells

Paul Wells on all the latest out of Ottawa—along with the occasional post about jazz. Follow Paul on Twitter: @InklessPW
He also offers his thoughtful perspective of Stephen Harper’s last 10 years in his recent eBook, The Harper Decade.

The rise of the Conservative nanny state

by Paul Wells on Monday, December 15, 2008 6:50am - 239 Comments

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When I wrote my most recent cranky, cranky column for the print magazine — whose thesis is that Stephen Harper so thoroughly despises Parliament and all the… the… people in it that he cannot stand to make the place function — a few commenters replied, in effect, that this was excellent news. A Conservative’s goal should be minimal government, they said. One way to achieve minimal government is, simply, to jam a stick between the spokes.

“Can’t one ‘care about the economy’ even if one doesn’t ‘believe… any government can do anything to affect its course’?” wrote David Mader (whose own blog is a thoughtful home for this sort of sentiment) in our comment board. “Indeed, isn’t the core premise of free-market conservatism that because government can’t really affect the economy’s course, those who really care about it should simply leave it alone?”

Sure. Great. Fine. Whatever. Have at it, brother. Except here’s the funny thing. The problem with Stephen Harper’s recent approach — I’m thinking roughly since smilin’ Guy Giorno came in with a mandate to make the operation “more political” — is that it is so shatteringly inept as to fail consistently to produce any coherent result, including the result the party’s own best advocates might desire. Which is why Colleague Coyne is in such a snit this morning. Having painted himself, all full of swagger and bravado, into a corner, the prime minister is now going to walk out on a carpet of tax dollars. Bail out the auto industry? That was last week’s concession. Now it’s forests and mines. And that cutting-edge sector of the future, boats, under the stewardship of every small-government conservative’s favourite freshly-minted Atlantic Gateway minister. In this context, it is poignant that some of Harper’s defenders still seem to believe the fight is about public funding for political parties. That one didn’t last 48 hours, and that time it was John Baird, who at least likes to play a small-government conservative on TV, who got sent out to swallow the government’s policy whole.

This, then, is the difference between the Mark I Harper, circa 2002 to 2008, and the shiny new malfunctioning Harper T-1000: the old guy used to calmly choose his concessions to statism (supply management? You bet! A bridge for every riding in Quebec? Sure!), whereas the new one blunders into one crisis after another and then uses the Money Gun to fight his way out. Deficits are “essential,” he said in Peru. Not so much to save the Canadian economy, it turns out, as to save his own political shanks.

If the fall update had contained fewer irritants, trivial in dollar amount but lovingly designed to infuriate the opposition parties and their client groups, it could have built the case for principled, effective dissent from the Keynesian orthodoxy driving most Western governments’ response to the crisis. Harper could then perhaps have looked like Angela Merkel, whose reassuring blandness is not merely a fleeting campaign-ad affectation and who, in a polity designed to produce ever-precarious parliamentary coalitions, has managed to set a markedly different course from the rest of panic-spending Europe. Instead Harper went in like Moe from the Three Stooges. And as a direct result, everything he is so proud of defending — the cuts to party funding, the dissent from deficit spending, the sink-or-swim approach to economic management — is falling away.

On his own blog a while ago, David Mader asked how come Liberals are celebrated for being jerks (Jean Chrétien) whereas this Conservative prime minister is pilloried for it. Here’s one answer. While indulging his inner jerk, Chrétien achieved what Liberals wanted. To pay the price for his inner jerk, Harper is about to deliver what Liberals want.

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  • kody

    Sean:

    wrong.

    Variable costs (as opposed to step variable or fixed costs) abound:

    More commerce, more trucks, thus more road repairs.

    More businesses, more audits, therefore more auditors required.

    More sales, more taxes need to be administered. ect ect

    I’m not saying the government doesen’t need to be more efficieint. In fact I called the comment above regarding government waste “the best comment of the year.”

    Once again, I object to the raving anti-Harper sentiment, and the penchant to throw away facts/context to get there.

  • catherine

    Kody, Our real GDP has risen between 2.5 and 3% per year since Harper was elected, so that accounts for less than half of the increase. If you take uncorrected GDP, then spending does show a marginal decrease as percentage of GDP — but less than half the decrease of our provincial budgets over the same period.

    Efficiency means looking at what is provided/achieved relative to the cost. None of these numbers give any evidence of efficiency. If there was substantial waste before Harper as Peter claims, no one has provided any evidence of waste reduction.

  • Dennis Prouse

    Yes, Jean, I always get off the bus when tax increases are being proposed. That is because tax increases act as a disincentive to productivity, and cause a flight of capital. If you can cite an economy that taxed its way to prosperity, I would be interested in hearing about it.

    Tax cuts, however, must be paid for through productivity gains. This was the problem with the last U.S. “stimulus package”. Remember the cheques that the U.S. government mailed to everyone last April? That was all borrowed money, a.k.a. deferred taxation. The growth in government spending in the U.S. has been shockingly irresponsible. For our part, our growth in government spending in Canada, while not nearly as high, has still been troubling in both Liberal and Conservative governments, More could have been done during the boom to both lower taxes and cut the national debt, actions that would have left Canada in better shape to fend off the global downturn. It truly was a lost opportunity.

  • http://wells kc

    Brad swallows
    I follow your argument that returning the surplus was consistent and arguably the correct thing to do, if you accept canadians are overtaxed, as a whole. Surely it’s here Harper went astray. If the gst was useful in bringing down our national debt, doesn’t it follow that it might later prove useful again in tackling other headaches, like ,i don’t know… climate change. But of course there’s politics- that always has to trump commansense. I see you conveniently leave out the bit about H’s gov then proceeding onward to become the largest spending gov of all time. No objection personally to con policies that are consistent, and make good sense. i don’t see much of that here though.

  • sf

    “Alberta Girl “: There is not point trying to make sense of Harper Derangement Syndrome. The only thing you can do is recognize the symptoms so that you can take appropriate evasive action, and go elsewhere for reasonable conversation.

  • sf

    “Alberta Girl “: There is not point trying to make sense of Harper Derangement Syndrome. The only thing you can do is recognize the symptoms so that you can take appropriate evasive action, and go elsewhere for reasonable conversation.

  • http://wells kc

    Alberta girl
    It’s also important to keep a grip on reality
    Harper’s stike in the eye happened before the coup attempt, not the oher way round
    harper arguably prorogued HOC for self interest ie lossing a confidence vote. A time out was added bonus
    On the qestion of the economy he’s been all over the place. If he is in fact going to do what everyone is screaming at him, then i guess we’ll all have nobody to blame but ourselves. If you’re confused, don’t worry to much, so’s most everyone else.

  • http://withoutanetcanada.blogspot.com/ Without A Net (Jean Proulx)

    If you can cite an economy that taxed its way to prosperity, I would be interested in hearing about it.
    ——————

    Oh…I’ll see your one economy and raise you an entire region. How about Scandinavia?

    On the other hand, you know who doesn’t pay a lot of taxes? Somalis.

  • Mulletaur

    Brad : until our accumlated debt is for all intents and purposes zero, and as long as the surplus was being used to pay down the debt in good times, nobody was against this. Taking away the federal government’s fiscal room to maneuver when the economy is heading towards recession is the purest folly. Now we have nothing to cushion the blow of recession – even without spending money propping up the car industry or any variety of other industries, stimulus packages, etc. we are heading into deficit based on automatic stabilizers such as unemployment insurance and welfare. Actually, the federal government currently is in deficit – Flaherty has cooked the books once again by showing revenues he doesn’t have from asset sales, just like he did when he was Finance Minister in Ontario. But apparently you do not recognize the reality of the business cycle or its impact on fiscal outcomes.

    As Wells has pointed out before, lower taxes means less revenue. Lower GST means less revenue. The Laffer Curve is meaningless for consumption tax and anyway has such a small effect for a change between a 7% and a 5% GST rate that it has virtually no effect. I have said it before and I will say it again : Harper’s GST cut has created a structural deficit. The federal government can no longer finance itself without running a deficit. Time to face reality. Harper – Not A Leader.

  • Francien Verhoeven

    Putting 54 billion of EI money into general revenue, and shifting some of the federal financial burdens onto the provinces are two ways for eliminating deficits.

    In fact, there is evidence.

  • sf

    Without a Net: Sweden was rich long before their excessively high tax rates. Same with Denmark. Norway is a petrol nation. Somalia is a failed state in constant civil war with no effective government at all, it is not an absence of taxes but an absence of government that is the problem.

  • Francien Verhoeven

    Jenn,

    I think it is very normal to express one’s opinion on an act of the party leader one does not agree with.

    I wonder how many NDP’ers have written Jack expressing concern about his complete election promise reversal. Or does the NDP party not express disagreement with its leader?

  • Francien Verhoeven

    “So what is is – do you want him to do something for the economy or not? Make up your minds, because it is extremely confusing trying to wrap our heads around just what it is that you people want from the Conservative Government.”

    ———————-

    Alberta girl,

    they want Harper gone. Out. Now. It’s really that simple.

  • http://wells kc

    alberta girl
    you’re right!

  • http://wells kc

    francien
    my mistake. You’re right!

  • Francien Verhoeven

    kc,

    I never knew this was about being right or wrong. All I’m looking for is some reasonable explanations through argumentation. Isn’t that what all reasonable people would be looking for?

  • http://wells kc

    francien
    yes the to and fro of argument is good. Trouble is all i ever see from you is a lot of toing and little or no froing.

  • Francien Verhoeven

    but kc,

    when posters circumvent the real issues by simply skimming over the surface or veering off in all directions just so they can miss the point, would be pointless, would it not?

  • Peter

    Mullet, That 2% GST cut put $12 Billion in the hands of Canadian taxpayers annually, $12 B i l l i o n !!.

    You state “meaningless for consumption tax and anyway has such a small effect for a change between a 7% and a 5% GST rate that it has virtually no effect. I have said it before and I will say it again : Harper’s GST cut has created a structural deficit.” In order to state that with a shred of credibility, you must be able to argue the corollary with a straight face; i.e. a 2% increase from 7% to 9% would have had no deleterious effects on the economy. Clearly the Federal Government would not be in deficit, so why not? Those 2 points don’t do much after all. In fact, by your logic, how about 15%? We should all be knee deep in cash, I doubt the Mercedes dealers could cope with demand.

  • http://withoutanetcanada.blogspot.com/ Without A Net (Jean Proulx)

    sf – Sweden was rich long before their excessively high tax rates. Same with Denmark. Norway is a petrol nation. Somalia is a failed state in constant civil war with no effective government at all, it is not an absence of taxes but an absence of government that is the problem.

    ——————-

    Actually, no. Scandinavia was a traditionally a poor region of Europe It was with the rise of the welfare state that they became one of the most prosperous regions on earth (or in human history for that matter) and its people started to enjoy probably the highest quality of life in the world.

    In any event you do not challenge the fact that even with their “excessively high tax rates” they are somehow still rich. And what’s more that wealth is spread much more evenly in their society. Interesting that.

    RE: Somalia – Nice to hear a conservative cite the “absence of government” as a problem. That may be a first for me. Baby steps.

  • madeyoulook

    Nice to hear a conservative cite the “absence of government” as a problem. That may be a first for me. Baby steps.

    Well, stick around, pal, you might continue to learn a thing or two, maybe even start to walk. If your brain wants to equate conservative principles of limited government with anarchy, then your brain needs help.

  • http://withoutanetcanada.blogspot.com/ Without A Net (Jean Proulx)

    sf – ha! nah, just as close to anarchy as possible right? just so long as the taxes go towards paying for police and the army.

    nothing more to say about how Sweden’s “excessively high tax rates” have somehow miraculously correlated with one of the richest countries in the world? No? We’re moving on?

  • http://withoutanetcanada.blogspot.com/ Without A Net (Jean Proulx)

    whoops sorry. that last comment was directed at madeyou look not sf. i get you guys confused.

  • madeyoulook

    Buddy, if you want to believe that “the rise of the welfare state” has led to Swedish utopian prosperity I won’t stop you. I’m not movin’ on. IKEA’s founder, however, sure as heck did — taking his wealth away from that confiscatory paradise.

  • http://wells kc

    madeyoulook
    Are you serious.The welfare state has not played a role in the general rise of prosperity since say the second WW? If you want to argue that at some point the wf states contradictions begins to outweigh it’s benefits, i’m with you.

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