Expert warns voters of economic pledges
Politicians are clamouring to convince the public they can improve the economy, but University of Toronto political scientist Rod Haddow says voters should be skeptical. What’s happening to the global economy right now? The Chinese economy has been slowing for the last couple of years. And that is going to have an effect on commodity producing industries and on countries that rely on those for exports . . . because (China) was a major purchaser. What’s gone on in the last couple of days is more psychological. There was a good reason to believe, given how far the market there (in China) had risen, that the market was overvalued, and people responded to that with a sell-off. That’s been going on for a week or two, and the world markets responded last week. Can Canada withstand the turmoil? I think we can withstand it, but it’s a question of adjusting. I would not predict when China’s economy might rebound, when commodity prices might rebound, but we’re just going to have to adjust. The people who know those markets are saying we can’t anticipate a turnaround in the next few years. Are we too reliant on commodity exports like oil? It would be good to have a more diversified economy. Governments can do things in the long term to try to stimulate more research and development in industry, and innovation. (But if those strategies work) it will be in the long-term structural sense, it’s not going to have an effect over a year or two. It’s probably one reason why it’s never discussed in election campaigns very much, because it’s not going to pay off in the short term. Should we be skeptical of leaders who make any promises about fixing the economy? Any promise about, “I’m going to make the economy grow,” I’m skeptical. Skeptical doesn’t mean rejecting it out of hand, but there are only so many tools available. And yes, I think skepticism is always justified.