Editorial: June 2011

Beware of politicians trying to talk themselves into a job.

Thank goodness we won’t have another federal election for a while. I am tired of politicians telling me how hard I have it. You know the line: “Canadian families are struggling to make ends meet.” Oh, really?

According to Statistics Canada, 2009 marked the first time household spending has declined, year over year, since 1997, and that decline was 0.3 per cent from the year before, in the teeth of a recession. Does spending one third of a cent less per dollar count as a struggle? Certainly not when you look at the 17 per cent rise in couple-family incomes between 2004 and 2008, or the fact that only around 63 per cent of our incomes go to taxes, shelter, transportation and food. 

Those are statistics and statistics can lie, so I like to support them with something I call the look-around test. Look around you. You know lots of people who live in Canadian families. You deal with hundreds more in your business. With such a broad association, the people you know must be at least somewhat representative of society in your area. Are they working two jobs in order to cover the heating bill? Or are they scratching their heads a bit over how they are going to pay for Junior’s university. One counts as a struggle, the other does not.

I understand that politicians trying to win an election must tell us there are problems they need to solve for the same reason deodorant companies need to tell us we stink. Frankly, I think the deodorant companies have a better case. But such talk irritates me for reasons additional to its mendacity. Two reasons, in fact.

In the first place, talking about how poorly Canadian families are doing on national television has some of the nature of a self-fulfilling prophecy. It creates an environment of nervousness and uncertainty. It causes people to reflect on the negative and overlook the positive. This is a great atmosphere for an opposition party trying to create the conditions for a change in government, but a very poor environment for businesses trying to persuade people to part with their cash. We can debate the severity of the effect, but such talk must create a chill in consumer behaviour.

Second, the implication of such talk is we need government to rescue us from whatever economic ill is causing us to struggle. The idea that government is somehow in control of the economy has gained so much ground in this country that it can now rest as an unstated assumption behind the political message. Yes, there is much government can do to wreck the economy. There is also much government can do to help those who are suffering from economic reversals. But the notion that a government — any government — can bring about economic growth or stability is risible. Attempts by governments to fiddle with economic levers have invariably led to a cascade of unintended consequences, few of them good. Just look at recent history in the United States. Government incentives to loosen lending policy in the ’90s led to unsafe banking practices, which led to global financial collapse. The resulting effort to bail out the world’s banks now threatens to swamp the U.S. government in a level of debt equal to the total output of its economy for a year. Generations of Americans will pay for that little policy slip, without receiving even the value of an invasive airport pat down for their money.

Canadians are good at making money, and good at taking care of themselves. When it comes to the economy, government serves us all best by staying out of the way.