The Politics of Depression

I was listening yesterday to a panel of Ottawa pundits yakking about the current situation and getting themselves in a tizzy about whether Michael Ignatieff had handled his Newfoundland MPs astutely when he authorized them to vote against the budget.  They really don't get it.

We are in a severe economic downturn (see this employment chart originally from U.S. Speaker Nancy Pelosi).  The economic crisis will soon begin to dictate political outcomes.  Incumbent governments of all political stripes face defeat.  Polls in Canada since the election suggest that the public remains in these early days in a "wait and see" frame of mind.  This will not last long.  

Historically recessions and depressions cause incumbent governments, particularly at the national level, to lose office:

1.  The Herbert Hoover example is the most obvious but in Canada, Mackenzie King lost in 1930 in part because of the depression just beginning to unfold.  Five years later the same fate befell R. B. Bennett.

2.  The early eighties deep recession contributed to the Mulroney landslide in the 1984 election, when the Liberals were reduced to 40 seats.

3. The early nineties downturn was critical to the PC demolition at the polls in 1993.  The same recession contributed to the defeat of both the Peterson and Rae governments in Ontario in 1990 and '95 and the defeat of the Bourrassa/Johnson government in Quebec in 1994.

It is clear that there will be a series of defeats of incumbent governments in Canada over the next few years.  Gordon Campbell might survive in B.C. as his opponents are the "dreaded socialists", but a national election - likely this fall or perhaps as late as spring 2010 - will make Michael Ignatieff the Prime Minister and the vote on the budget by Liberal Newfoundland MPs will be long forgotten.

The situation in the U.S. is quite different from Canada.  More on that in a future post.