Promises, promises as Canada’s handsome prince takes the throne
What anaemic growth? Justin Trudeau wants to fix something that ain’t broke
The photogenic son of former prime minister Pierre Trudeau pledged to run a C$10 billion (HK$59.8 billion) annual budget deficit for three years to invest in infrastructure and help stimulate Canada’s anaemic economic growth.
SCMP, October 21
How the world loves the royal practice of inheritance to power through birth. You pick your prime minister because his daddy was PM.
We have it throughout Asia. South Korea’s president Park Geun-hye’s father was president. Japanese Prime Minister Shinzo Abe’s father was Japan’s longest-serving foreign minister, his mother the daughter of a prime minister. In the Philippines, Benigno Aquino followed his mother to the presidency. Lee Hsien-loong, the sultan of Singapore, inherited from his father and the Asian list goes on longer than I shall let this paragraph do.
It is beginning to catch on in the United States, too. One leading presidential contender is prominent because his father and brother held the job, another because her husband did.
And now we have it in Canada. I recall an occasion in which Justin Trudeau’s short-fused father mouthed an earthy Anglo-Saxon expression at an opposition party tormentor in the Canadian parliament.
He was quickly brought up short for breaching the rules of the House and asked what he had said.
“Oh, fuddle-duddle, or something like that, Mr Speaker,” he replied.
I was a third-year student at the University of British Columbia at the time, sharing a house with three other students and two kittens we had somehow inherited. We quickly named one Fuddle and the other Duddle.
Pierre Trudeau was a man of strong character and Canadians loved him for it. But I cannot recall much that he actually did as prime minister other than dream loudly about multicultural solidarity. I don’t expect more from his son.
Take that bit about running fiscal deficits to stimulate anaemic growth. Anaemic? That growth rate averaged 2.5 per cent a year over the last four years. For a wealthy, stable economy I call that good. It’s enough to double the real wealth of an economy in less than 30 years. Hong Kong’s record was not much better at 3 per cent.
Economic stimulus comes about when people spend money and there are two ways this can happen. Either they spend their money directly on the things they want or their government takes their money from them and spends it.
Either way there is no increase in the amount of money spent. Deficit spending is financed out of thin air in the US but Canada’s government is a responsible one. It sells bonds that its citizens then buy instead of buying other things. Thus the government spends more and the citizens spend less. One minus one equal zero.
Yet there is still a difference. Economic health depends critically on how the money is spent. If directed to goods and services that people most want at the lowest prices they need pay, economic growth inevitably results. Individual citizen choice tends to produce this result.
Justin Trudeau’s Liberal Party, however, has been known throughout its history for the very great fondness of its members for ... ahem ... special privilege, and the very little restraint that its leaders exercise on their followers in this respect.
In Montreal, as you read this, the party’s major backers are still rubbing their hands – oh, those lovely infrastructure contracts, what glorious loot, what frabjous joy. Welcome to economic anaemia, the rest of you citizens.
Likewise the Robin Hood pledges of tax the rich and feed the poor. Leave alone that most of these infrastructure projects will serve the rich more than poor, there are few truly rich people left in Canada, who have not long worked out how to elude the taxman’s grasp. They have had practice.
I doubt that anything Justin Trudeau can do to tax the rich more heavily (assuming that Montreal party bosses will even let him) can increase revenues by even a fraction of a per cent. Canadians will nod, I’m sure, when I say I give this election talk about as much chance as the Saskatchewan Roughriders have at the Grey Cup this year.
But perhaps I ought to speak softly here. The one identifying mark of Chinese Canadians, as much as their ethnic identity, is that they all vote Liberal.