Flaherty: Nuts to fiscal conservatism, let’s buy votes!
Remember when Jim Flaherty was a fighting fiscal conservative at war with the tax-and-spend ways of the McGuinty Liberals? Those days appear to be over: Flaherty has offered financial help to GM. I’m just guessing here, but if you tune into tonight’s At Issue” panel on The National, you’ll see Andrew Coyne, the guardian of fiscal conservative purity, get his knickers in a knot, and Chantal Hébert wryly pokes fun at him. Fiscal conservatism looks like it’s about to hit the wall. Tax breaks appeal to voters when their wallets are flush, but when people lose their jobs, a tax cut is far less interesting, since it would only apply to their EI cheque. So politicians buy votes with subsidies in the hopes of propping up the jobs. In recessionary times, Common Sense Revolutions tend to give way to common sense.
• Ottawa offers to help ailing GM [Globe and Mail]• At Issue Panel [CBC] • Flaherty vs. McGuinty: Many cans of whoop-ass later [Toronto Life] • Common Sense Revulution [Wikipedia]
2 thoughts on “Flaherty: Nuts to fiscal conservatism, let’s buy votes!”
My understanding was that Mr. Flaherty was simply reminding GM that should they wish to build ‘innovative’ cars in Canada, $250 million would be available to them, thanks to a new measure in the 2008 budget. Thus, it appears as if he is actually doing something (in order to appease voters), when in actual fact, he really isn’t doing anything more than he already has promised(in order not to further piss off the already ticked fiscal conservatives like the aformentioned Andrew Coyne).
Give way to common sense? Not quite. Give way to idiocy, yes, but no economist except for the CAW’s pet would accept that subsidies save, never mind create, jobs.
As has been mentioned many times by vey many people, good politics and good policy are frequently opposites. Cutting the GST was great politics many times over, but not exactly wonderful on policy. Offering subsidies to a failing, obsolete company run into the ground by idiots in management and the union can help get some votes and blunt comments from Taliban Jack and his members. It creates great harm to our economy by throwing good money after bad, delays the transition away from these obsolete jobs, and insulting companies that are actually successful in the same industry.
The only common sense here is that of malevolent marxists without any actual understanding of economics and an unreflective view of individual behaviour. We need more CSRs, no subsidies, innovation, competition, and productivity. GM and the CAW are where those things go to die.
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