This is an important week for decisions.
This week, maybe you are an investor in the markets. Maybe you are trying to get back into the job market. Or, maybe you are a voter — in Manitoba or P.E.I. or Ontario — and you are getting ready to eyeball a ballot slip, unsure where to inscribe your “X.”
All of those things are happening this week, or may happen. And important decisions need to be made — by you.
A few days ago, an extraordinary meeting took place in the office of Prime Minister Stephen Harper.
It didn’t get as much attention as it should have.
At the time, the national media were understandably preoccupied with the nascent NDP leadership race, or revelations about Tony Clement’s $50-million slush fund, or the efforts of the generals and/or PMO to destroy Peter MacKay’s ambitions with suspicious leaks about $3-million in jet travel.
The meeting in Harper’s office — which deserved plenty of notice, but didn’t get it — involved the prime minister, Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney.
Meetings between governors of the Bank of Canada and prime ministers of any stripe are few and far between.
The government and the bank must always maintain an arm’s-length relationship to avoid even the perception of interference.
The federal government determines fiscal policy — things like setting budgets or spending programs.
The Bank of Canada sets monetary policy — things like interest rates.
Only banana republics blur the two roles.
At the highly unusual meeting between Messrs. Harper, Flaherty and Carney, smiles weren’t much in evidence. And, to ensure there was no confusion, the capable spinners in the PMO press office didn’t deny the government is clearly worried the world could slide back into recession. Or that the government is on top of the European debt crisis, and will do all that it reasonably can to avoid another recession.
Just a few months ago, Harper and Flaherty were practically laughing at the suggestion that further government action — stimulus — would be needed.
Now, they’re not laughing so much.
Economists last week warned the Conservative government that it couldn’t close the door on future job-saving (and job-creating) spending.
BMO economist Sherry Cooper, no wild-eyed Bolshevik, was blunt.
In a newsletter to clients, Cooper warned the Harper government it was literally in danger of repeating the deflationary policies that caused the 1929 stock market crash and the Great Depression.
She went on to say that the fiscal tightening promised by Harper and Flaherty could, in fact, lead to an economic “rout.”
If those chilling words don’t give investors, job hunters — and voters in P.E.I., Manitoba and Ontario — cause for reflection, nothing will. The decisions we make now will determine our economic future in the months and years ahead. And if we make the wrong decision — as Depression-era President Herbert Hoover did, Cooper noted, with rash fiscal belt-tightening — we could be plunged into another recession, or worse.
We have a choice here, and it’s an important one.
We can pretend the European debt contagion is going to resolve itself.
We can pretend that what we see in the U.S. — the presidential-election-year protectionism and fiscal gamesmanship — is just going to go away.
Or, we can choose to heed the cautionary words of Cooper and other economists. Canada, after all, is not an island.
If Europe and America fall, we will too.
This is a week of big, big choices — for investors, for workers, for voters. The choice is to be proactive and smart — or to be ostriches and emulate Herbert Hoover.
And pretend that government can’t be a force for good in tough times.
We all need to ensure we choose very, very wisely.
A lot is at stake.