The scene most people remember from “A Few Good Men” is the one in the courtroom where Tom Cruise emphatically asks Jack Nicholson for the truth and Nicholson looks Tom Cruise right in the eye and angrily says “you can’t handle the truth”. That, in a nutshell, is where we are regarding public policy options today. We’re in the home stretch of an election campaign and neither of the leading parties is being particularly honest with voters. Honesty is bad for political popularity. Even as voters say they want truth from their politicians (and are increasingly supporting anti-political movements like the Peoples’ Party), the reality is that if any politician were to be genuinely truthful, his or her career would be over in a heartbeat.
As I have mentioned previously, the widely accepted post-COVID playbook has been to slash interest rates and hand out money. Politicians of all stripes and in various countries are doing it. It is not an approach that lends itself to a particular spot on the political spectrum. In short, everyone is doing it because it is just about the only thing that can be done to avoid both a public health and economic catastrophe. The problem is that, now that the policy is entrenched, how do we move away from it? The short answer is that we can’t. The longer answer is that politicians are fully aware of this, but can’t say so publicly because it’ll hurt their chances.
The two main parties in Canada, the Liberals and the Conservatives, are talking about how they will grow the national economy. The Liberals are using some variation on the Davos-themed ‘build back better’ mantra and the Conservatives are putting forward an platform that assumes 3% GDP growth for the next decade – even as the Parliamentary Budget Office is optimistically projecting only 1.75% growth over the same timeframe. Maybe some party can put some magic beans in the platform, too.
Political leaders won’t say it explicitly, but they are pursuing Modern Monetary Theory (MMT), which suggests governments can spend as much as they like as long as there is no meaningful inflation and as long as overall growth exceeds the inflation rate. Alas, inflation is hovering at its highest level in 30 years (well over the high end of the decades-old 1% to 3% range) – while economic growth is stubbornly below 2%. The truth is, we’re cornered. The politicians know it, but most voters haven’t clued in yet.
Voters insist they’ll vote for (or at least seriously consider) policy options that are well-thought out. Voters lie just as much as politicians do. The problem is that there’s Bullshift in politics, too… and in the end, people vote for whoever tells them the happiest story that seems to be plausible. As such, the truth about how our options have reached a dead end has no place on the hustings. We get the government we deserve. My guess is that the election on September 20 will produce a Pyrrhic victory. Whichever party forms the (almost certainly minority) government will be out on their rears in two years when people realize that the heady promises of economic growth were nothing more than a story that they never should have been naïve enough to believe in the first place.