Economy is the worry of the day, and at every possible level, from provincial to global scale.
That the international markets started the year with the worst tailspin in recent memory has already unleashed a feeding frenzy that has got lots of investors, business executives and financial planners thinking on how to get through the gloomy season with the least possible losses. Even the most optimist of observers are now admitting the possibility of $20 per barrel oil price before they can even start to think of $50 again. Recession in the US is now reemerging as a serious possibility with negative interest rates looming in the horizon, just as Bank of Canada chief Stephen Poloz started to speak about the same, in what might be a possible attempt to warm the public to the until recently unthinkable idea.
Nationally, our new finance minister, Bill Morneau, has started touring the country to hear voices before he takes on the unenviable task of putting together a budget that should inspire at least some hope of growth under the dire circumstances.
In the province, the local branch of Canadian Federation of Independent Business (CFIB) rang the alarm bells and appealed to the Notley government to hold an “emergency debate” at the Legislature on what it called “Alberta’s economic crisis”, a proposal jumped at by the Wildrose as one would predict. CFIB based its appeal on Statistics Canada data which showed significant declines in permanent employment numbers in the province and on its business confidence survey showing the bar had hit a record low in Alberta.
The feeling of panic is spreading and there clearly are a lot of opportunities to make political capital out of the economic doomsday scenarios.
Going back to 19th century, we find that what we today call “economy” had a different name, it was called “political economy”, because those who laid down the theories of how it functioned, from Adam Smith to David Ricardo to John Stuart Mill to Karl Marx, all knew that whatever economic decisions were made, they all had political implications as a result of their impact on the society. It was more in the second half of the 20th century that economy was distilled into an independent area of expertise although its connection to the domain of politics remained as strong and vital as ever.
And in the course of the developments in late 20th century, the focus of the economy also changed, with the political links still intact but its social aspect sliding down rapidly in importance.
In the post World War II environment, the economy was focused on development, a concept that embraced growth alongside an equitable distribution of the fruits of that growth. Beginning with 80s, however, the focus shifted significantly: With the neo-liberal policies and regulations launched during the Reagan-Thatcher era, and enhanced by later governments and administrations, including that of Bill Clinton’s, the social, and consequently the political, aspect of the economy started to be increasingly ignored with a lot of negative consequences.
It was none other than a prestigious Princeton University publication in the US that declared last year that the country was no longer a democracy, but an oligarchy, governed by elites. Thankfully, we are at a much better position in Canada in terms of our democratic credentials, but the impact and the influence of our southern neighbour not only on us, but throughout the globe is a ringing reality.
Presumably, the current economic difficulties heralding a much bigger crisis in the making will just create more economic hardships for those with meager means as compared to well to do individuals and families.
While free market lovers may not like the idea, it is at such times that governments have to intervene in the economy to ensure that the population is covered by a social safety net and in that context Mrs. Notley will be well advised to heed the call for a debate on the economy, regardless of any concerns that she may lose some political clout.