Election 2015: Trudeau’s Court of Economic Advisors
“I don’t read newspapers, I don’t watch the news. I figure, if something important happens, someone will tell me.”
Justin Trudeau’s surprising confession in a 2001 Globe and Mail essay (“Something I’m Passionate About”, Feb.3) raises three questions: 1) does he read newspapers and watch the news now?; 2) if yes, does he read the Report on Business, Wall Street Journal and the Financial Times or watch BNN, CNBC, or at least CBC’s Bottom Line? ; 3) if no to question 2, who tells him when something important is happening in the Canadian economy?
This last question is particularly important as many Canadians this election are increasingly seeing Mr. Trudeau as the leader in progressive economic policy change. Who has provided, and continues to provide the advice that has informed an election platform that includes three consecutive years of deficits, tax cuts for the middle class and immediate investments in infrastructure? That task seems to have fallen to Trudeau’s Economic Council of Advisors, unveiled last December.
Members include: Scott Brison (former Bay Street investment banker), Chrystia Freeland (Thomson Reuters business journalist), John McCallum (former bank chief economist), Ralph Goodale (former finance minister under Paul Martin), Kevin Millligan (UBC prof and CD Howe fellow), Barbara Stymiest (former TSX Group CEO) and Frank McKenna (former NB premier and recently chair of the TD Financial Group).
Quite a Bay Street team tasked with fulfilling the Main Street dream!
Of further puzzlement is the apparent endorsement of immediate government borrowing to finance infrastructure investment by both David Dodge (who as Finance Deputy Minister, helped orchestrate Paul Martin’s “Hell or High Water” austerity budgets of the mid-90s) and Kevin Lynch (who as Clerk of the Privy Council, was an architect of Stephen Harper’s Advantage Canada and Economic Action Plans).
This time it’s different, eh, David and Kevin?
The pedigree of this court of economic advisors conjures skepticism about what further progressive policy advice will flow from this court of advisors. For example, what’s in store in year 4 (the balanced budget year) of a Liberal government after three years of “investing now for Canadians”. Back to 1995 for an austerity budget? I hope someone is advising Mr. Trudeau of this political risk in an election year.
Perhaps by year 4, Trudeau will have simply superseded the conventional conservative wisdom that a federal balanced budget in itself has any justification.
Economist William Mitchell:
http://bilbo.economicoutlook.net/blog/?p=31487
“There is no rational economic reason, for a currency-issuing government, to think that a balanced fiscal position is responsible, desirable or even possible.
The fiscal balance should never be a policy target – whether it be an immediate aim or some stretched goal into the future.
The relevant goals should be about the outcomes that make societies prosperous and inclusive – goods schools and hospitals, good public transport, full employment, strong income support safety nets for those who cannot work, socially responsible minimum wages etc.
***
Forget the deficit. Forget the fiscal balance. Focus on what matters – employment, equity, environmental sustainability. And as we would soon see – the fiscal balance will just be whatever it is – a relatively uninteresting and irrelevant statistical artifact.”
Exactly right. Total flimflam. Mulcair made a colossal blunder in ceding the progressive wing to the Liberals. I was expecting an obituary and now it looks like a coronation.
En passant, Canadian Business (magazine) recently gave us http://www.canadianbusiness.com/blogs-and-comment/why-the-federal-government-shouldnt-balance-the-budget/ and http://www.canadianbusiness.com/blogs-and-comment/now-is-the-right-time-for-the-federal-government-to-run-a-deficit/, written by two different guys, if you can believe it. One referenced that IMF report on the dumbness of governments paying down debt in periods of little to no growth. My point is that our business mastadons and fer-god’s-sake the IMF may have seen the error of their ways, kind of, so perhaps the future Emperor Justinian’s advisors are just reflecting that fact. Perhaps four years from now they’ll get to MMT.