Wednesday, February 11, 2009

The First Test of the Politics of Recession

There are likely to be at least two provincial elections this year, one in Nova Scotia where a minority government is coming up to the end of its third year, the other on the west coast.

The first will likely be in B.C. on May 17. In lotus land the economy of Gordon Campbell is tanking just as the Olympics construction boom is winding down. Despite the downturn the most recent Mustel Poll suggests the BC Liberals have a 14 point lead coinciding with growing concern about the economy. However, this column in the Tyee by former Socred cabinet minister Rafe Mair argues strongly that Liberals are in deep trouble as various "chickens come home to roost". One example he cites:
...just a few weeks after he stated bluntly that we would have a balanced budget in 2009, Premier Campbell was forced to get amendments to his own law requiring a balanced budget so that his government can bring two consecutive massive deficits.

Campbell had to acknowledge this after the poll was taken. Indeed none of these laws, which can be found in many provinces, will prevent deficits in a recession. They are symbolic and will in all cases be ignored the minute a government finds it necessary, but the message will reflect negatively on the governments such as Campbell's that are compelled to break their earlier commitment.

Recessions will force governments to deliver many examples of bad news. This process is only just getting underway.

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