I feel the article below depicts everything I've been thinking, feeling and generally ranting about the last couple of months.........
Crisis? What crisis?
MADELAINE DROHAN
Globe and Mail Update
December 4, 2008 at 12:32 PM EST
OTTAWA
—
Canada may be in a political crisis, but it is not in an economic one. Why do so many people prefer to believe that we are?
In the rancorous debate in the House of Commons last Tuesday, the words “economic crisis” were uttered 51 times by members of all political stripes as they wrestled for control of the country. On Bay Street and Main Street there is constant talk of economic meltdown and frequent references to the Great Depression as if we are poised on the brink of a similar precipice.
The facts don't back this up. There are trouble spots, certainly, especially in the North American auto industry and the forestry sector, both of which were already in decline long before banks started toppling on Wall Street. And there is no denying that the U.S. economy is in bad shape, which will eventually have some as yet undefined impact here.
But the latest figures show the Canadian economy was still growing through the end of September, unemployment remains low and most forecasters are calling for a modest contraction next year, which while unpleasant is hardly a nightmare scenario.
Clearly there is something to be gained from saying we are in a crisis, even if we aren't.
The political motivation is easiest to identify. The Liberals, New Democrats and Bloc Québécois could hardly say they wanted to topple the Harper government because it intended to cut their funding. That would look too self-serving to voters. Blaming the government for not reacting to a non-existent crisis is a much easier sell.
The Conservatives, meanwhile, started out dealing with the facts, insisting that the current situation did not call for extraordinary measures. This message was somewhat spoiled when they also tried to argue that hard times called for partisan cuts. By mid-week they'd given up all pretense of defending reality and were invoking the non-existent crisis as a reason that the country needed the stability only they could provide.
The only consensus among the warring politicians was on the supposedly dire state of the economy. There was a competition to outdo each other in misleading and irresponsible statements about where the economy was heading.
John F. Kennedy, the late U.S. president, once said that the Chinese character for crisis had two elements – danger and opportunity. It is the latter that explains why many companies and indeed whole sectors are backing the crisis theory now.
The banks were in there early, calling for extraordinary government aid because of the impact on Canada of the global economic crisis. The Harper government is in the process of borrowing $75-billion dollars, ratcheting up interest-bearing debt in the process, in order to buy mortgages from the banks. Somehow this generous gesture on the part of Canadian taxpayers, who might well have wanted to spend the borrowed money on other things, has slipped below the radar.
The North American car makers also have their hands out, claiming they need help to survive the crisis, even though it has been clear for some time that they were in deep trouble of their own making. “Help us out of the hole we dug,” is not a winning argument when it comes to prying loose government money. So the crisis is invoked yet again, in both the U.S. and Canada
The car makers are far from the only ones who gain from a crisis atmosphere. All those infrastructure projects that the federal and provincial governments have vowed to speed up mean extra work for engineering firms, designers, suppliers and builders. Who among them would dare mention at this delicate juncture that things really aren't that bad?
Then there are the media. Alarmist headlines and stories are so much more fun to publish or broadcast, regardless whether they reflect the facts. Bad news sells, is the maxim. Journalists don't like to think that they are selling a product, but their corporate owners are keenly focused on the bottom line.
That may not mean there is overt pressure to consciously slant coverage towards the negative. But every journalist worth his or her salt knows subconsciously that a crisis story is more likely to hit the front page or lead the broadcast than some namby-pamby item about things going better than expected.
This deluge of bad news and catastrophic predictions eventually seeps into the public consciousness, frightening people into spending less and saving more, thus helping to create a real crisis. That said, it was heartening to see an Ipsos-Reid poll this week in which 56 per cent of respondents said they thought doomsday predictions of severe recession in Canada were exaggerations.
There is still common sense to be found in Canada, just not among our political, business or opinion leaders.
