Business in Calgary

How Mainstream Became Extreme • Frank Atkins
By Frank atkins
How Mainstream
Became Extreme
I
consider myself to be a moderate
conservative economist. I advocate
market solutions where viable, I
do not like chronic deficits and debt
and I believe that smaller government
allows the private sector to flourish.
Ten years ago these were considered to
be mainstream ideas. I do not have any
solid evidence of this, but I am willing
to bet that if someone had polled
the economics profession 10 years ago
and asked, what do you think of this
Keynesian idea that without government
intervention the economy will
collapse into chaos, the overwhelming
majority of economists would
have said that this is an outdated idea.
Then came the downturn in 2008,
which appears to have revived the
Keynesians, who now call themselves
progressives.
The interesting feature of the 2008
downturn in Canada is that it was not
as bad as the downturns of the early
1980s or the early 1990s. If you are
interested in this, you should read Statistics
Canada’s publication, How did
the 2008-2010 recession and recovery
compare with previous cycles? by
Philip Cross, published in January 2011.
The new progressives do not want to
read articles such as this, as it takes
away their belief that big government
is the only counter to the economic
chaos created by the 2008 downturn.
It gets worse. These new progressives
then tell us that they are open to hearing
all opinions, but then they are
shocked to learn that some people may
disagree with them. Their answer to
this is to dismiss their critics as sadly
misinformed individuals who cannot
see the truth. This is much the same
tactic that is used by the man-made
global warming catastrophe crowd.
Here in Alberta we have (at least)
two perfect examples of this new
breed of progressives. First we have
our minister of finance, Doug Horner,
who believes in deficit spending and
accumulation of debt. Mr. Horner
appears to believe that the whole budgeting
process is just a bit too difficult
for us to understand, as we (the taxpayers
of Alberta) do not seem to be
able to grasp that debt is not really
debt in the traditional sense, as we are
issuing debt to pay for infrastructure.
Apparently, if we ever get into serious
financial difficulty we could always
sell a road or two. Further, Mr. Horner
has made the whole budgeting process
so convoluted that it is difficult to tell
the actual size of the deficit that the
government is running. He dismisses
his critics without ever really giving
any indication that he understands
that there may be problems associated
with this type of fiscal policy. The idea
of responsible fiscal policy advocated
by the Wildrose, the Canadian Taxpayers
Federation and the Canadian
Federation of Independent Business is
now considered to be extreme.
Second, we have Mayor Nenshi who
has a long wish list of government
projects, and an apparent unlimited
desire to raise taxes to pay for these
projects. Mr. Nenshi is perpetually
exploring what he calls new ideas for
raising revenue. Apparently, if city
hall finds a new method of raising
money, they will no longer have to
raise property taxes every year. Mr.
Nenshi calls this tax reform, and
implies that somehow this is not the
same as raising taxes. In response to
criticism of this, Mr. Nenshi responded,
“As politicians, we have to ignore
those fringe elements and focus on
what’s right for the community.” Mr.
Nenshi does not entertain the notion
that higher taxes may not be right for
the community. Apparently, those of
us who advocate low taxes and less
government are now fringe elements
and espouse extreme views. BiC
Frank atkins is an associatE proFEssor
oF EconoMics at tHE UnivErsity oF
calgary, a sEnior FEllow at tHE
FrontiEr cEntrE For pUBlic policy
and a MEMBEr oF tHE advisory Board
oF tHE institUtE For pUBlic sEctor
accoUntaBility.
12 • March 2014 BUSINESS IN CALGARY | businessincalgary.com