It conjures up memories of David Lewis, back when the federal NDP rhetoric was full of "blue-eyed sheiks" and "corporate welfare bums." Heady stuff, but a trifle problematic.
Take all this talk about "Dutch disease," and how a soaring, resource-driven Canadian dollar is crippling manufacturing.
To be sure, the dollar is currently strong — for instance, trading a little above par for eight of the last 12 months. But there's nothing historically unusual about a strong dollar.
In fact, it was generally above par from 1952 through 1960, from 1972 through 1974, and again in 1976. Throughout the 1960s, it was consistently above 90 cents.
And both the 1950s and 1960s were good decades, economically, averaging real growth between six and sever per cent per annum. Put another way, a strong dollar has been historically compatible with Canadian prosperity.
Indeed, perhaps the real anomaly was the currency devaluation that started in the late 1970s, ultimately bringing the dollar down to its 2002 postwar low of 62 cents. No doubt, this was a competitive assist to manufacturers. But it also meant that Canadian families and businesses had to pay much more for any products with significant imported content.
Think of it this way. If the dollar were to go from par to, say, 50 cents, then Canadians would need to provide twice as many exports in order to pay for the same volume of imports. Or, if you like, run twice as fast to stay in the same place. Intuitively, that doesn't seem to be a particularly desirable proposition.
In any event, there's a lot more going on than just the exchange rate. While the share of Canada's GDP attributable to manufacturing has declined, so too has the relative importance of manufacturing in the U.S., Britain, France, Japan, Germany and Italy. It's a phenomenon common to most major advanced economies.
In part, this can be seen as a function of development itself. Just as the once dominant agricultural sec-tor became progressively smaller as a proportion of the whole, so too has manufacturing. Increasing productivity — which produces higher living standards — inevitably does that.
And then there's the rise of the previously underdeveloped world, bringing new competitors into the game. In the 1960s and 1970s, there was much impassioned talk about the moral imperative to provide "trade, not aid." Well, now it's happening.
Still, although Mulcair's position is substantively flawed, it's politically coherent.
For one thing, it's a neat ideological fit for his party, the federal NDP having a long history of hostility toward the oil and gas industry. Plus it plays particularly well in Quebec, which is now the single most important part of the NDP electoral base.
And most intriguingly, it offers the prospect of aborting the coalition that Stephen Harper's Conservatives have painstakingly constructed. By combining a big win in Ontario with overwhelming strength in the west, Harper won a decisive majority last year.
But if Mulcair can use the "Dutch disease" to substantially detach Ontario from that coalition, then it's a brand new ball game — one that might even produce an NDP government.
And going by the polling-related giddiness of the commentariat, that's perhaps a very real prospect. But is it really?
Barring some extraordinary development, the next federal election is three years away. That leaves ample time for Mulcair's honeymoon glow to dissipate.
Don't forget the Ed Broadbent boom. For a brief period in the middle 1980s, Broadbent's NDP topped the polls. However, when the actual election came along in November 1988, they were back in third place with just a touch over 20 per cent of the vote.
In any event, two recent polls suggest that talk of a Conservative decline may be a tad premature. In May, both Angus Reid and Abacus pegged Conservative support at 37 per cent, exactly the same as in their final pre-election polls last year.
It'll be an interesting ride. Stay tuned.
Original Article
Source: the province
Author: Pat Murphy
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