Governments Behaving Badly
By Cam Mather
When our kids were very young we attended a workshop and read books by an educator named Barbara Coloroso. One of the many pieces of advice she offered to parents was; “Say what you mean, mean what you say, and do what you say you’re going to do.” In other words, idle threats don’t work. We’ve all witnessed an exasperated parent in the grocery store who endlessly threatens their child with any number of punishments, but then never actually follows through on the threats. Kids quickly learn that it’s not a threat to be taken seriously. So they keep misbehaving.
As parents we took that advice and even now, long after my daughters have grown up and left home, I continue to take that advice. I try to say what I mean and do what I say I’m going to do. I only wish our government behaved similarly. The current government of Canada campaigned on the fact that our economy was fine in October 2008. Then, as soon as they were elected, they claimed that we had a huge problem and promptly decided to spend $55 billion building roads and bridges. If the theories about peak oil are correct, it is questionable whether all of this new infrastructure will ever be needed or used. Apparently they didn’t say what they meant during the election.
During the election campaign they spent plenty of time talking about getting tough on crime. They talk about it incessantly. Then Stephen Harper prorogued (prematurely dissolved) parliament and dozens of crime bills died before being passed. They also don’t do what they said they were going to do. Eventually the electorate will equate the Conservatives as the government that talks tough on crime, but doesn’t follow through, ever.
Our conservative government has lost all touch with its fiscal roots in an attempt to stay in power, at all costs. But if they’re spending like the left leaning parties, what good are they? They seem to like to use the strategy that if you say things often enough and with enough conviction, people will believe you.
One of Prime Minister Harper’s favorite talking points these days is that the Canadian economy was spared the pain of the U.S. because our banks are regulated so much better and are so much healthier. It’s funny though, as things were falling apart during the financial crisis I can remember our finance Minister making lots of announcements about the government’s plans to backstop the banks.
First, we, the taxpayers, bought $70 billion worth of bad mortgages from the banks through CMHC (Canadian Mortgage and Housing Corporation). Not bad if you’re a bank. Make stupid loans; pass them off to the taxpayers. Funny that sounds like what happened in the U.S. with the $700 billion TARP, and since we they have 10 times the population, sounds like we’re right in step with our neighbors. Taxpayers bailed out banks that made questionable loans.
Then we, the taxpayers, put up another $200 billion to backstop the banks in the Emergency Financing Framework. If Canadian banks are so superior to other country’s banks, why did we have to put another $200 billion? Meanwhile, there’s our Prime Minister on every podium he can find bragging about our superior banking system. It scares me because so often fate punishes the arrogant.
Of course our Prime Minister is fighting a tax on banks to avoid such taxpayer-backed bailouts in the future, because we don’t need it? Huh? Sounds like we need it more than most judging by the volume of money we’ve put up. Moral hazard means that if you bail out corporations when they behave poorly, they’ll just keep doing it. You know, like the parent in line at the grocery store yelling at the kid to put down the gum. Finally they relent to shut the kid up, and the kid knows he can just keep tossing gum in the cart because the parent will yell a lot, but eventually just buy it.
Stephen Harper is that parent in line at the grocery store with a badly behaving child without a clue as to how to deal with them. Stephen needs to take a parenting course. He’d govern better. And he’d stop rewarding banks that behave badly.
Meanwhile, the G8 and G20 gangs are on their way to Canada, and we, the taxpayers get to pay for security. $900 million is almost a billion dollars, and more than we spent on security for the Olympics. A billion here, $70 billion there, $200 billion over there, pretty soon we’re talking real money.