Tuesday, November 25, 2008

Flaherty all over the map

Like others, I watched Jim Flaherty's actions on Monday with interest and did my best to try to keep track of his evolving positions as the day proceeded. I think this CBC update tonight gives you a sense of the rudderless Flaherty who is doing nothing to reassure that he knows what he's doing: "Flaherty hints at early budget to stimulate economy." Here's the trail he left as of the end of the day:
Finance Minister Jim Flaherty may table the next federal budget early to include infrastructure spending and other provisions to stimulate the ailing economy.

In a speech Monday evening, Flaherty said the Canadian economy is rapidly losing speed, and demands government action before the March budget is tabled.

Earlier in the day, he made no promises that a stimulus package would be forthcoming when he delivers his economic update later this week.

Flaherty later said any package would be included in a sooner-than-scheduled budget, although he did not give a specific date. His officials also suggested that announcing stimulus measures before the next budget is a possibility.
That's about it. Here's what happened on Monday, as best as I can figure it. He seems to have been blindsided by a number of economists who were reported to be insisting on a major stimulus sooner rather than later, in this Globe report from this morning. The spring would be too late, they warned. So Flaherty played up his talk on infrastructure spending in a speech this afternoon in Toronto, principally the $33 billion that is already in the pipeline. Pogge has more on that issue, as well. Quoted in the Globe report on the speech, this is what Flaherty said about this week's update:
Mr. Flaherty also said that this week's economic update would be “just that” and not include any major moves meant to stimulate the economy, but budgetary measures, such as a cap on public sector salaries, may be included.
Linda Diebel reported this inaction as well and the obvious political peril for the Harper government:
Although Canada is likely headed for recession, Finance Minister Jim Flaherty says his government has no plans to introduce an economic stimulus package before next spring's budget.

Instead, Flaherty said today he will table only an economic update to Parliament on Thursday because his government has already acted on the tax side to combat the economic crisis.

"We've made dramatic tax cuts already," Flaherty told reporters after a luncheon speech today in Toronto to the Canadian Council for Public-Private Parnerships.

Asked how people losing their jobs now can wait until the federal budget next March, Flaherty replied:

"We have a stimulus of almost 2 percent of GDP in the Canadian economy . . . Fortunately, we acted in advance of other countries who have had to play catch-up on that stimulus."
Yeah, that GST cut is sure helping the workers of the nation right now. So Flaherty seemed to be testing out his message at his speech in the afternoon, that they've already done enough.

But word soon came after the Diebel report that oopsie, the government changed its mind and may now be willing to do something before the budget in the spring:
Ottawa is considering a multibillion-dollar economic stimulus package before the next federal budget in an effort to ensure Canada's response to the unfolding global economic crisis does not lag behind the United States and other countries, government sources say.

Finance Minister Jim Flaherty repeated Monday that the government is not ready to unveil major new spending measures in Thursday's economic update. The fiscal statement will update the House of Commons on the state of the economy and likely forecast a budget deficit for the 2009-2010 fiscal year as growth slows to a crawl.

But sources within the Tory government said the minister is leaving open the option of introducing an economic stimulus package focusing on accelerated infrastructure spending before the budget, expected in February, if the economy continues to deteriorate. (emphasis added)
And then the final twist, an early budget, as reported in the CBC item at the beginning of this post. Quite the day of evolution for Deficit Jim on Monday. Not exactly embodying a steady, wise hand on the economic tiller. More like flying by the seat of their pants, reacting and not leading. These Conservatives should be striking no fear, on economic matters, into the heart of any Liberals.