Thursday, December 18, 2008

Stephen Harper: Economist

September 15, 2008: "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

The next month: Dow Jones plunges 2,340 points


October 7, 2008: "I think there's probably a lot of great buying opportunities emerging in the stock market as a consequence of all this panic." - Stephen Harper

Six week later: TSX down over 2,000 points



September 26, 2008: "All the fundamentals of the Canadian economy are good. It's not the time to do anything new, wild or stupid." - Stephen Harper

September 26, 2008: Harper accused Dion of attempting to "drive down confidence in the Canadian economy without foundation, and quite frankly, sitting on the sidelines, virtually cheering for a recession."

October 6, 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 spiralling out of control." - Stephen Harper

October 8, 2008: Asked if running even a small deficit would be bad in these difficult times, Mr. Flaherty said flatly: “Yes, it would be.”

October 10, 2008: "This country will not go into recession next year and will lead the G7 countries." - Stephen Harper

November 22, 2008: "These are, of course, the classic circumstances under which budgetary deficits are essential." -Stephen Harper

November 27, 2008: Flaherty predicts recession, offers no stimulus package

December 15, 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

December 16, 2008: Canada's leader [Harper] says depression possible

December 17, 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

December 18, 2008: Harper says deficit could hit 30 billion

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31 Comments:

  • You know, I was waiting for someone to put it all together. Thank you for the effort

    By Blogger Pearce Richards, at 10:03 AM  

  • Mixed messages for sure.... he's sort of jumped the shark on this issue by now.

    By Anonymous jason bo green, at 10:25 AM  

  • Thank goodness we have a trained economist keeping a steady hand on the wheel!

    Good choice, Canada!

    By Anonymous Anonymous, at 10:59 AM  

  • Not that being fair is required, but shouldn't you also pair these statements with what the 'experts' were also saying?

    The Bank of Canada and the IMF, with the most info at their finger tips, reading all the indicators, were saying the same.

    By Blogger wilson, at 11:01 AM  

  • o/t any truth to the rumor that an NDP & Bloc coalition are going to go the GG to form the Official Opposition?
    Iggy only has 77 seats.

    By Blogger wilson, at 11:03 AM  

  • I never heard that rumor... man, just when we thought it couldn't get anymore interesting!

    Please Santa, more drama for us lonely nerds here in Canada!!


    Back on topic.... sometimes I wonder if, much as we crave honesty from politicians, just how effective it would be with us voters if they admitted, "Well, we don't really know what's happening or what might happen - just hang tight." I'd like it, but I doubt the general populace would be very favorably responsive.

    By Anonymous jason bo green, at 11:14 AM  

  • wilson - In fairness, Harper gets a pass on the first two statements up top.

    However, Harper was off-side from the experts on everything he said during the last two weeks of the election. Everyone knew we were heading towards deficit (not that Dion or anyone else would admit it either) and recession then. Harper was being attacked on all fronts.

    And his "we need stimulus" one week at the G20 followed by his fiscal update which lacked just that is also a head scratcher.

    By Blogger calgarygrit, at 11:15 AM  

  • wilson - I'm fairly sure that BQ/NDP coalition is a joke, right? If so, it's pretty funny, and it illustrates the silliness of this whole coalition business.

    By Blogger calgarygrit, at 11:15 AM  

  • let this be a lesson: having a *Masters* degree in economics -- or in any other field -- does not prepare anyone to run a modern economy.

    Harper has managed the economy not based on anything special he learned in his "Master's" degree -- but based on a right-wing libertarian ideology -- a fully discredited paradigm to everyone in academia outside of neoclassical economics departments.

    By Anonymous Anonymous, at 11:45 AM  

  • Can we not by now dispell with the idea that Harper is an "economist" - he never worked as one and has shown no abilities as one - and as a "master tactician" - he has leaped and lurched from and taken advantage of unexpected circumstances, but he's shown little planning capability.

    By Blogger Ted, at 12:24 PM  

  • The Bank of Canada and the IMF, with the most info at their finger tips, reading all the indicators, were saying the same.

    Um, no. They were not. They were predicting a recession and negative growth during the election.

    When Harper released his fiscal update and predicted growth of 0.5% and a small surplus, true economists were predicting a 0.5% negative growth and Harper's own budget chief was saying we were already in deficit.

    Erratic. Reckless. Making it up as they go along. That's your stable hand, folks.

    By Blogger Ted, at 12:27 PM  

  • What do you say to someone with a Master's degree?

    "Can I get fries with that."

    By Anonymous Tim N, at 12:49 PM  

  • Also, I know he has a MA in Economics, but did he write a thesis? If so, I would like to read it.

    By Blogger Nitangae, at 1:40 PM  

  • It doesn't seem that he did write a thesis. Probably a wise choice if his intention was to become PM, but doesn't suggest a very significant MA (I think nasty comments about University of Calgary are out of order - an advantage with Canada is that we don't have quite the university hierarchy that places like USA, South Korea or Japan have, and a good MA in the University of Calgary is still a good MA. There is no sign, however, that our PM received a rigorous training as an economist. A real sign was in a previous election when he said that "of course, I don't like any tax, I am an economist." which is utter nonsense I believe, from an economist or a non-economist)

    By Blogger Nitangae, at 1:48 PM  

  • so somehow being "optimistic" in a time of uncertainty is wrong.

    calling a "spade a spade" is wrong, when all evidence is we are in a recession.

    spending our way out of a recession is "wrong".

    rescuing the auto industry is "wrong".

    By Blogger art, at 2:50 PM  

  • art - I think the evidence is that Harper didn't call "a spade a spade" earlier...

    By Blogger calgarygrit, at 3:08 PM  

  • The only leader who's ever earned the title of "economist" was Jed Bartlett...c'mon, people! He won (OK, shared) a Nobel prize!

    By Anonymous Anonymous, at 3:13 PM  

  • Please keep in mind that some experts are claiming that reduced growth constitutes a recession, or are using alternative definitions for the term.

    The simple fact of the matter is that we will not know until sometime around March (after the numbers are restated) whether the fourth quarter shows negative growth, and we won't know until around May or June whether 1Q09 shows negative growth. Presuming both show negative growth, that's when we'll know if we're into a recession: after two quarters of negative growth.

    As it is right now, we're close to the line, but as of September (the last month for which official figures are available) we're still in positive growth territory. And that was before the price of gas came down.

    By Blogger paul.obeda@, at 4:56 PM  

  • If you laid all the economists in the world in a straight line, they wouldn't reach a conclusion. Of course, economists don't get laid. That's why they call it "the dismal science".

    I think the so-called "recession" is actually a global adjustment that is going to have long term consequences.

    Currently, about 80% of the world's resources are controlled and used by about 20% of the world's population (North America, Europe, parts of Asia).

    China and India, with roughly 30% of the world's population, now aspire to the same standard of living as we currently enjoy. This would require another 120% of resources available, which obviously doesn't compute.

    Demand in the "most developed nations" is almost at a saturation point; we live well beyond our needs, and our "wants" are created by endless promotion and advertising. But at some point, no amount of marketing will convince people that they really "need" a third car, a fourth big-screen TV, etcetera. It's the law of diminishing returns, as far as marketing to the well-off is concerned.

    On the other hand, there's nothing but potential in marketing to increasing demand in China and India (other less developed nations, too).

    I would submit that it's in the interests of commercial concerns and institutional investors to reduce material expectations in "the West" in order to free up resouces to make products for "new" consumers in currently less developed economies, many of which have less stringent restrictions on things like labour laws, environmental concerns, etcetera.

    This is not "conspiracy theory", but rather the predictable outcome of people acting in "self-interest". And I don't see that changing any time soon.

    I would suggest people get used to the idea of less material wealth, and start seeking "quality of life" as opposed to "quantity of life".

    By Blogger Party of One, at 6:03 PM  

  • I for one, supported the Harper who wanted to "stay out of the way" and let the economy do it's thing.

    Liberal's who criticize Harper for wanting to cut-back in government spending in a down time are of course hypocrites if they supported the Chretien government doing the same in the early nineties.

    Unfortunately, a lot of those cutbacks just resulted in provinces having to accept an increased burden on funding and led to some shortfalls in social spending. But actually, i think the long term effects of that downloading were good for the financial health of the country.

    If anything, the Liberal Party under Chretien-Martin were pursuing a Friedman/Monterist style to economic governance as much as the United States was in the same period.

    Now that same Party is turning around and attacking Harper for not being Keynesian enough.

    Part of me things that both the Liberal Party and Conservative Party need to die. I'd say there is a good half of both the Cons and the Libs who, outside of partisan politics, could see eye-to-eye on a great many things.

    By Blogger Mike Brock, at 6:17 PM  

  • Yes, I agree. Harper himself said that Canadians want minority gov'ts and that pattern may continue into the future: the Conservatives can't win a maj. without Quebec and the Liberals can't win a maj. without the West. So, coalition governments are the future. I agree with Brock that the traditional party names no longer work. The future is coalition govts and like minded MPs will have to work together to either form new parties or form coalition governments as in Europe in order to govern Canada. I think that is good since we don't have democracy in the present format except during election time. Maj. governments in Canada have been detrimental since once in power they are not accountable to anyone. It is my opinion that right of center Liberals should unite with right of center Conservatives and either work together in a coalition or form a new party.

    By Anonymous jonevan, at 11:24 PM  

  • Stephen Harper isn't an economist -- He's a politician. Big difference.

    By Anonymous rc, at 12:00 AM  

  • Reminds me of George Bush Jnr. He was saying that the Americane economy was 'strong' all thru summer.

    By Blogger JimTan, at 3:03 AM  

  • I clearly recall Paul Martin saying during the campaign that the Canadian government was in deficit. He wasn't pulling that out of his hat but from his lecture of available information.
    But hey, why listen to someone with the wealth of knowledge of business and government like Paul Martin when you have a policy wonk like Harper doing a good job at bashing around a Frenchie. Oh, Canada - and Canadians in particular - you will never learn.

    By Blogger Loraine Lamontagne, at 4:33 AM  

  • Let me understand - this week the Liberal Party is not in favour of the Government running a deficit? A couple weeks ago, the Libs were complaining that the Govt wasn't going into deficit far or fast enough.

    By Blogger paul.obeda@, at 10:15 AM  

  • Nice overview :) I think many politicians changed their opinion very quickly!
    But I don't agree with some commenters saying something like "...to know how to run economy". I think economy runs on its own and the more you try to control it, the worse. I believe this crisis was caused by these efforts. And the same with deficit - we don't have money for something? Let's borrow it! More? Ok, let's borrow more! THIS is the main cause of crisis!
    Take care and merry Christmas!
    Lorne

    By Anonymous life insurance broker, at 12:35 PM  

  • Paul:

    It is not just that Harper created this deficit by a combination of record spending and record tax cuts, it is not just that the deficit could have been avoided and was caused by Harper's policies even according to Harper's own budget chief, it is that Harper has been flip flopping all over the place on the deficit.

    Earlier this year he said that even in a bad economy deficits were very bad. During the election only a two months ago he was telling us we would not be in a deficit. Only a few weeks ago he told us we would have a $100 million budget. Now he says deficits are essential and will last for 5 years.

    How can you trust a guy like that? Is he outright lying to us or, worse, completely incompetent?

    By Blogger Ted, at 9:17 PM  

  • Ignatieff's position on how to solve the economic problems we face over the last 4 months has changed from a huge environmental tax increase being the solution to realizing that it would hurt Canadians. Yet Harper has no credibility for being optimistic? Imagine the alternative - a huge tax increase when the rest of the world is doing the exact opposite. Oct 9 08 "And he (Iggy) noted that he had first proposed a similar type scheme in his unsuccessful bid for the Liberal leadership. “But as you know we are in an economic situation that changes everyday,” he said. “A responsible politician needs to acknowledge the economic situation as it and a Liberal government needs to act according to the facts and economic data of the moment. I am absolutely convinced that the Green Shift is the best way to solve the crisis,” Feb 27 08 "You can't win elections if you're adding to the input costs of a farmer putting diesel into his tractor, or you're adding to the input costs of a fisherman putting diesel into his fishing boat, or a trucker transporting goods," he said yesterday in Edmonton. Speaking of former leader Stéphane Dion's Green Shift plan, which would have sharply raised taxes on energy, Ignatieff told reporters: "You've got to work with the grain of Canadians and not against them"

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