Last election call for action – denouncing Harper’s economic “plan”

October 9, 2008

Well my friends, this is it - the last few days before the scariest election in a while. I told a friend six weeks ago that I was confident that Stephen Harper, our misanthrope P.M. would ultimately throw the election away because he just can’t help being who he is. His character will come out, I said. And it did. In a completely unnecessary and reckless blunder he referred to the biggest crisis of capitalism in 75 years as a “buying opportunity.”  That sealed his fate. It might even give the Liberals a minority govt.  We will see.

But it is no time to feel sorry for him or let him off the hook. We need one more letter on the state of the economy and Harper’s complete inability and refusal to do anything to deal with it. It is the only election issue at the moment and your letters have a better chance of getting published as a result.

FRAMING: We need to frame our response to Harper’s economic plank in his “platform” by portraying him as both inept and cold-hearted in the face of the coming disaster for Canadians. His almost religious commitment to laissez fair economics makes him incapable of stimulating the economy and protecting jobs in the coming recession; his lack of empathy for ordinary Canadians who will suffer makes him unfit to govern.

Facts and arguments for a short letter are pretty basic - perhaps it is  best to just use your own moral indignation and sense of disbelief to write the letter. But if you need some suggestions... you could paraphrase or quote directly from today’s “Open Letter from Canadian Economists”

[see: http://www.progressive-economics.ca/2008/10/07/open-letter/ ]

* Harper is misleading saying the economy’s “fundamentals” are strong. The economists letter states: Since harper became PM “Economic growth has largely stalled.  Productivity has declined. The recent expansion was largely propelled by high commodity prices and a housing bubble - both of which are now ending.”

* “Labour markets have weakened, and employment is poised to decline further as the slowdown takes hold. Some sectors have already been badly hit. Over 300,000 jobs in manufacturing have been lost. Yet less than 40% of unemployed workers qualify for Employment Insurance benefits.”  Are these strong fundamentals?

* Mr. Harper has the gall and the arrogance to suggest that the global meltdown is a “buying opportunity” in the stock market. Is this a sick joke? Fewer than 10% of Canadians actually ‘play” the stock market but many have lost upwards of 25% of their retirement savings in this stock market fall - because the Canada Pension Plan is invested in the market, as are private pension funds and mutual funds in people’s RRSPs.

* Canadian have never been more indebted - is this one of the strong fundamentals? The economists’ letter states: “Canadian households are more indebted than ever, with $1.25 of debt for every dollar of disposable income.”   This means that along with falling hose prices, Canadians are going to radically cut back on their spending. This will deepen the recession.

* Harper seems incapable of imagining the plight of Canadian workers faced with losing their jobs and made it clear he does not believe the government should work to try to protect them: "I think you have to be honest with people: the government can't go in and say 'We can guarantee your job' We can't protect your job." [http://tinyurl.com/3j2xhx ]   Instead, in his economic platform he proposes to increase the threshold that foreign investments (big job killers) are screened.

* Every government in the post war period has recognized that there needs to be a mix of tax cuts and spending to stimulate an economy in trouble. But the Harper Conservatives are committed to$60 billion is tax cuts over five  years and just $8.7 billion in new programs over the next difficult four years - that’s $2 billion a year in addition to the current $200 billion federal budget or about a 1% economic stimulus. And half of this is actually tax cuts as well.

SEPARATE LETTER SUGGESTION:

Today Harper took credit for changing the mortgage regulations eliminating the no-down-payment mortgage. But it was his government that allowed them in the first place, in 2006:

* In 2006 Jim Flaherty invited "new players" -- that is, U.S. financial corporations -- into Canada's mortgage insurance market and doubled the amount of government money available to back up private insurers from $100 billion to $200 billion. These companies - including the infamous AIG Insurance Co. - starting offering the  no-down-payment, interest only, and 40-year amortization mortgages. CMHC later followed suit.   Forty percent of new mortgages approved in 2007 were amortized over 40 years - adding hundreds of thousands of dollars to the cost of the average mortgage.

Only in July did Harper finally ban these dangerous mortgages (similar to sub-prime) months after it was clear they were driving the housing bubble. The new rule comes into effect as of the day after the election, when much of the damage will already have been done.

For a full article on the issue see:  http://thetyee.ca/Views/2008/10/08/HarperEcon/

 

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