Monday, May 10, 2010

The First Law of Economics

Harper once called himself a "trained economist" on a CBC interview. For the record, he has a master's degree from the University of Calgary, has never taught, run a business, met a payroll or had any direct connection with the Canadian economy - but he still knows how to run it. He was the head of the Canadian Taxpayers Federation, a mild-mannered sounding group whose real objective is reducing government to the size of something you could drown in the bathtub. All taxes are bad, according to these guys, although they and their appointed friends in the government are living high off the hog thanks to these taxes. Hmmmm...a slight disconnect here.

Harper was in Germany on Saturday - stunningly bad timing considering it was VE day - to demand, along with his sidekick Angela Merkel, that the rest of the world "rein in its spending". Astonishing hypocrisy considering the growth of non-elected Con partisans on the company payroll in Ottawa.

Today I read that Angela Merkel's party lost an election in the north of Germany on Sunday, which puts her party in a non-majority standing. She won't be able to force through her tax cutting measures. Looks like the German government is in as much disarray as everywhere else.

As for the "trained economist" blather, here's a wonderful quote from an Australian podcast called Ockham's Razor on the problem of peak oil.

The peak of oil production is past

The flat oil production plateau of 2005 to 2008 was a brilliant illustration of the fact that the predictive powers of economic theory are very limited. In spite of its technical jargon and its liberal use of mathematics, economics is more art and guesswork than a science. That's why the First Law of Economics states that for every economist there exists an equal and opposite economist.

Most of the economic policies and bank regulations were in place before Harper took command of the ship. He was busy trying to deregulate everything, including a push for zero down/forty year mortgages and allowing U.S. mortgage lenders and their lack of any checks or regulations to operate in Canada.

It was sheer luck and fortunate timing. The world started to melt before Canada had boarded the ice floe. To think that Harper has anyone to thank for it but his Liberal and Progressive Conservative predecessors is a fantasy.

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