“A major cyclical downturn, but nothing that requires major government intervention”
Well, that’s what “Grit Girl” would have people think, with this new and expanded version of a previous attack video, that comes on the heels of today’s figures reporting that unemployment hit a 7-year high, with the loss of another 61,300 bringing the number cut since October 2008 (back when there was no recession, remember) to 357,000 jobs cut, or 2.1 per cent of the work force.
But oh-oh! Here’s what Harper said in context on Fareed Zakaria’s GPS program at the beginning of March:
I’m not generally a Keynesian, but when you have the kind of drops in economic activity we’re having and interest rates near zero and financial sectors, the banking sector not translating investments into saving or savings into investments, you have no choice but to have the government move in, observe those funds and put them to work. Now, one can criticize is it fast enough? Is it effective? Are the long-run benefits sufficient?
But I think the fiscal stimulus does have to be done and obviously, there’s going to have to be major non-market fixes to the financial sector and to the housing sector. We’re just fortunate in Canada we don’t have to do those kinds of policies because they’re fraught with enormous long-run danger in terms of creating moral hazard, risks to future economic decisions. But we haven’t had to do that. As you said, we don’t have the bank failure in Canada and we don’t have on the housing side, we have also regulation on government housing insurance that’s prevented sub-prime type of situation. We have a cyclical downturn but nothing that requires major government intervention.”
So, is it fair to take a remark the PM made about the housing and financial sector and attach it to the mounting tide of unemployment? Especially so when the government is, in fact, taking the plunge into unprecedented deficit spending that could fairly be argued represents a “major government intervention.”
Maybe this sort of thing is pleasing to Liberals and I suppose fair is fair given how the Conservatives lie through their teeth with their malicious attack ads, but I’ve never much subscribed to the notion that two wrongs make a right.