Re: “Mike Harris is okay by me…” (October 18)
Kevin Smith wrote a piece in this paper defending Mike Harris using an economic philosophy reminiscent of Adam Smith.
The “logic” (read: archaic and superficial) reads straight from The Wealth of Nations a manifesto published in the 19th Century that said an unrestricted marketplace would create wealth for everyone. As long as the money is generated, a mystical and unintelligible force would drop a few pennies in everybody’s pocket.
History, and a better understanding of the free market economy in the second half of this century, have proven that more wealth — a higher GDP in the Introduction to Macroeconomics text — does not mean Ontario will maintain its standard of living. The “trickle-down effect” doesn’t work.
The provincial Conservative Government’s policies are designed to free up business in Ontario. With no labor legislation, a job will no longer be something to count on. The employed will have to compete with the unemployed to keep jobs because there will be no legislation to keep businesses in check. The unemployment rate is close to 20 per cent in real terms (the government figures only account for a percentage of the labor force, not the population), so job competition is extremely high. The competition will allow employers to lower wages to increase profitability.
The result will be less personal disposable income per capita, and that means a drop in consumer spending and a shrinkage in Ontario’s flow of currency within the province.
Ontario does not have a lot of homegrown corporations. The current trend is towards globalization, so the provincial economy sees very little of what a corporation makes anyway. And, if you read the paper you would know that Harris wants to put off his tax-cut pledge because of another recession. Talk about timing.
One last thing. Ontario’s economic glory ended in the early ‘70s with the rest of Canada, through inflation and the OPEC crisis. If you look back before Bob Rae, you’ll find that David Peterson’s Liberals ran up a huge debt in the ‘80s boom. It is economic LOGIC to reduce spending in a boom, and spend out of a recession, at least according to John Maynard Keynes (he lived in the 20th century). Bob Rae tried to spend Ontario out of its recession. It didn’t work, but he cannot be held accountable for the mistakes his predecessors made. Ontario’s economy was on its deathbed when he came to power.