Categories: Capital Read, Inside the Queensway

Managing expectations the Jim Flaherty way!

by kadyomalley on Monday, January 12, 2009 3:29pm - 18 Comments

Fresh off the Canadian Press newswire (emphasis added):

Finance Minister Jim Flaherty says the government is not looking to cut spending as it prepares to table its budget later this month, but notes that Canada is caught in a worldwide recession and drastic actions are required to help Canadians.

“This is not a cutting exercise. We are in extraordinary times. It calls for some extraordinary thinking,” Mr. Flaherty said in Victoria on Monday. “The deficit will be substantial.” [...]

First thought: Wow, the folks at the Fraser Institute must be wondering why they bothered to show up for today’s pre-budget confab in Victoria, what with recommending that the government take exactly the opposite approach (well, except for the tax cuts, which are still on the table as far as we know). Also, good for CP pointing out that these are, in fact, closed door meetings and not the usual pre-budget free-for-all held by the Finance committee.

Second thought: Is this the first time that the word “failed” has been so casually employed to describe last fall’s economic statement? Not that ITQ is arguing that it wasn’t, but technically, it hasn’t failed yet, at least as far as being voted down by the House of Commons.

Final thought: “Extraordinary thinking” and a “substantial deficit,” huh? Oh, minister. Are you trying to get out in front of the unnamed senior PMO official who predicted that you were poised to bring down one of the most important budgets in modern Canadian history? I mean, I get the part about priming public opinion for a sudden slide from the black to the red, fiscally speaking, but it’s getting tough to tell the difference between your fiscal prognostications and the worst case scenarios that the opposition parties have been coming up with for months. Then again, maybe you figure that this way, if you manage to keep the deficit under say, $60 billion, even fiscally conservative voters will be pleasantly surprised.

Tags: committeeless pre-budget consultations, Fraser Institute, Jim Flaherty, unexpected candour

More by kadyomalley

http://carnewsandviews.com jwl

What is so ‘extraordinary’ about allowing a $40 Billion + deficit without cutting anything. Flaherty sounds like Ontario Finance minister a few months ago who claimed to be making ‘tough’ decisions while budgeting for a $500 million deficit because he, too, refused to cut anything.

So Flaherty thinks he is ‘extraordinary’ for behaving like a typical pol by refusing to make any tough decisions, besides Paul Martin who is looking pretty good at the moment, and instead claiming heroic character for doing nothing?

I will be interested to see who these fiscal conservatives are that will be pleasantly surprised by a $40 Billion + deficit. I think Cons are going to suffer ‘extraordinary’ damage to the brand once they unveil their budget and cons have some time to ponder how un-con the Cons are.

TobyornotToby

“Tough decisions” have deepened previous recessions by withdrawing spending and eliminating jobs at exactly the wrong time. One of the things governments can do “for” the unemployed in the manufacturing sector is to not add competition for the positions that are available by laying off a bunch of government workers.

http://carnewsandviews.com jwl

I agree that now is not the time for mass lay offs but it’s not an either/or situation. I recently read article about how public sector salaries and benefits are 40% higher than comparable jobs in private sector. Seems like some room to cut there to me. Or how about ending subsidies to corporations, media, arts/other interest groups and the like. Or eliminating the hundreds of quangos that do little and are little more than sinecures for people who should have proper jobs.

There is all kinds of fat that can be cut with few actual lay offs. I am not against deficits but there should be some attempt at balancing budget. Like SAB says, Flaherty thinks he is extraordinary because, according to him, it’s ever so hard to balance a $220 budget when Canada was getting along just fine a few years ago while spending $150 billion or somesuch.

SAB

ha ha I agree jwl – “how will we ever decide where to throw the billions of dollars?”

I’ll take some and I PROMISE to spend it within 30 days IN CANADA. Perhaps that will help. I’ll even make a really big sacrifice and take all of it.

Sisyphus

Where’s Pink Floyd when we need him ?

Dave

jwl: “Flaherty sounds like Ontario Finance minister a few months ago who claimed to be making ‘tough’ decisions while budgeting for a $500 million deficit because he, too, refused to cut anything.”

Which is, of course, a 90% reduction from the surprise $5 billion deficit left behind by none other than Jim Flaherty!

oompus boompus

He DOES strongly resemble an Ontario government, but I wasn’t thinking of the current fiasco at Queens Park. Flaherty and Harper are reminding me of Bob Rae and his spectacular attempt to spend the province back to fiscal health.

“I agree that now is not the time for mass lay offs”

It’s either lay off the pencil-pushing drones who are sitting in various ministries and departments consuming huge salarys and benefits, or accept that there are going to be a lot of bankruptcies and layoffs of the non-drones whose paycheques are being plundered to support the drones.

If you choose ‘A’ then there will be plenty of profitable, growing companies at which they can apply for new jobs. But if you choose ‘B’ and try to keep as many people as possible sitting on their tails in unproductive, unprofitable jobs, then they’ll lose their jobs anyways, or more likely lose the spending power of the their wages and benefits, when the foundation of the economy crumbles under the weight of too many bloated dependents and not enough motivated entrepreneurs and workers.

Since they seem to be such committed socialist/opportunists who are now married to the idea of “making Big Government work”, Harper/Flaherty will probably start coming up with all kinds of silly stop-gap stuff like “Rae Days”, once economic reality starts to bite their behinds. For starters. Anything in the Trudeaupian or Chavezian line is possible after that, and if they don’t do it then the Libs will.

Jenn

Here’s the thing about Rae Days. With so many public servants on strike, or threatening a strike right now (here in Ontario we have the teachers of course as we do every year, and in my town there are the outside workers, and I’m sure some part of Canada Post is unhappy, etc.)

Let ‘em.

Yes, roads will be a mess but fewer people have jobs to get to anyway. We won’t get the bills we can’t pay, so what does that matter? The kids haven’t learned anything at school in about thirty years, so a few months of not learning won’t hurt them (it might help as the parents, being laid off and all, might take it upon themselves to teach their children some stuff they actually need to know).

The striking workers can feel good that they’ve stood up for themselves and insisted on whatever exhorbitant thing they want this time. The governments can feel good because they will save a whack of money with no pink slips to make it look bad.

And for once, the taxpayer wins!

Oh right. The taxpayer can NEVER win. Sorry, I was dreaming there for a minute.

oompus boompus

P.S. The abovementioned drones are not the only ones needing to be kicked off the gravy train, nor are they the worst offenders. The work that the drones are doing, such as it is, mostly has to do with collecting money from ‘A’ (productive worker in safe riding) and giving it to ‘B’ (unproductive worker in swing riding). It is both the drones, and the people in column ‘B’ on whose half they extort money, who need to be cut off.

Fat chance, I know, but nature has a way of sweeping countries into a very deep pit when they ignore the laws of economics for too long. “¡Bienvenida a norte argentina!”

http://myblahg.com Robert McClelland

I understand the Cons are going to subtitle this one “The League of Extraordinary Budgets”.
Michael

A strong hand on the tiller…driving us towards the rocks.

- “My own belief is if we were going to have some kind of big crash or recession, we probably would have had it by now.” (Stephen Harper, Sep. 15, 2008)

- “All the fundamentals of the Canadian economy are good. It’s not the time to do anything new, wild or stupid.” (Stephen Harper, Sep. 26, 2008)

- “I know economists will say well, we could run a small deficit but the problem is that once you cross that line as we see in the United States, nothing stops deficits from getting larger and larger and spiraling out of control.” (Stephen Harper, Oct. 6, 2008)

- Asked if running even a small deficit would be bad in these difficult times, “Yes, it would be.” (Jim Flaherty, Oct. 8, 2008)

- “This country will not go into recession next year and will lead the G7 countries.” (Stephen Harper, Oct. 10, 2008)

- Flaherty predicts a surlust predicts a recession, but offers no stimulus package, November 27, 2008

- “The truth is, I’ve never seen such uncertainty in terms of looking forward to the future. I’m very worried about the Canadian economy. [...] Obviously, we’re going to have to run a deficit.” (Stephen Harper, Dec. 15, 2008)

- “It’s quite clear on the basis of the forecasts, and the continuing decline in the forecasts, that there will be a deficit.” (Jim Flaherty, Dec. 17, 2008)

- “This is not a cutting exercise. We are in extraordinary times. It calls for some extraordinary thinking[...]The deficit will be substantial.” [...] (Today)

Dave

It is NOW the time to do something new, wild, and stupid. Obviously

Liz

In the over-used word of Stephen Harper: obviously!

john

“but technically, it hasn’t failed yet, at least as far as being voted down by the House of Commons”

But technically, didn’t it die on the order paper when the House prorogued?