Andrew Coyne: The things no party leader will say in Thursday’s debate
The three main party leaders will meet Thursday night to persuade you of one thing: that their plans for the economy are so vastly dissimilar, so entirely opposed, as to make the choice between them not merely a matter of who should run the government for a while but almost existential.
While modesty might impose some limits on the claims they will advance for their own plans, no such restraint will apply to their opponents’. Make the wrong choice, we will be given to understand, and the result will be a calamity, a disaster, a rapid descent into chaos. We would appear, as Woody Allen once said, to stand at a crossroads, one path leading “to despair and utter hopelessness,” the other to “total extinction.” (“Let us pray that we have the wisdom to choose correctly.”
So it is perhaps worth pointing out in advance that none of this is true. We are not poised over a chasm, the merest step to the right or left spelling our doom. The differences between the parties, while real, are comparatively slight. The Liberals, it is true, would run deficits, while the other two parties say they would not, but not even the Liberals are pledged to run deficits of more than a few billion, or for more than two or three years. The Tories would not raise taxes, while the other two parties would, but no one is proposing large moves in tax rates either way.
Policies have real effects and a given policy might be expected to do more good (or harm) to the economy than the alternatives. Possibly, it might even be said that one party’s policies, taken together, are superior to the others’. But it is all at the margin. The economy will survive, whoever is elected, and will look much the same four years from now under any party — the same, that is, as it would under another party. Events, especially in the world economy, will have much more impact on our economic fortunes than anything any of the parties have in mind.
Indeed, for all their emphasis on the things on which they disagree, there is much more on which the parties are agreed. This is perhaps best expressed in the negative: by the things that none of the party leaders will say in the debate, beginning with the above — that the economy doesn’t much care who is in power.
The government doesn’t actually “run” the economy, at least in the way that people in politics like to pretend. Governments have little ability to influence the rate of economic growth in the short run, at least in the positive sense: though they can certainly screw it up, notably by letting inflation get out of hand. It is achievement enough for any government that it avoids doing so. But I doubt you will hear any of the leaders say, “If elected, I promise not to screw things up.”
Likewise, you are unlikely to hear any of the leaders say that it doesn’t matter whether we run a deficit, at least of the kind that any of them are talking about. It doesn’t matter in a negative sense — a $10-billion deficit would scarcely be detectable against the continuing decline of the debt-to-gross domestic product ratio — and it doesn’t matter in a positive sense: whatever miracles might be claimed on behalf of “fiscal stimulus,” a deficit of one-half of one per cent of GDP is not going to work them.
You will hear none of the leaders confess that subsidies to this or that sector, of the kind that all of them will boast about, are a less-than-zero-sum game, since whatever jobs and investment are created in the one industry come only at the expense of jobs and investment in all the rest. Neither will any of them say that the same applies to all the special credits, deductions and exemptions that now festoon the tax system, personal and corporate.
In particular, no leader will acknowledge what every economist will tell you: that cuts to the small business tax rate are a bad idea, not because small business owners are typically better off than average — though that is true — but because there is no evident economic advantage to favouring small businesses over large, especially so far as the higher general rate deters small businesses from becoming large.
Perhaps the leaders will discuss trade. Though all will profess to favour it, none will cite the benefits it brings in more and cheaper imports, as opposed to more exports; and while each might mouth the words “free trade,” all would quickly add that it should also be “fair,” meaning that should any country be so foolish as to offer a discount to our consumers, via export subsidies, we should immediately tax it away from them.
No leader will say the plain obvious truth, that supply management in agriculture, perhaps the most egregious known assault on the consumer interest, should be abolished. None will vouch that government should be doing rather less than it is — that it should properly be confined to the things that only government can do — and that the notion, in particular, that it should continue to enforce a monopoly for the state, in the case of home mail delivery, over a service it refuses to deliver is simple madness.
That politicians should be in broad agreement on these and other economic matters is not surprising, when you think of it. Economists, often said to be in chronic discord, in fact agree on many more things than they disagree. But the sorts of things on which you might find consensus among economists — that resources are scarce, that everything has a cost, that more of one thing means less of another — are exactly mirrored in the consensus of politicians: that we can have more of everything. Which I anticipate will emerge as the unstated conclusion of the evening.
