My mother would have made a great finance minister.
She had a knack for survival. The same way many men and women of her generation – those who survived the Great Depression – understand such things, she practised the rules of sustainability (reduce, reuse, recycle) throughout her life. She saved autumn seeds for the spring garden. She continued to use every piece of clothing in her wardrobe until its threadbare areas overtook those parts that were intact. She never dumped the last of the morning coffee, preferring instead to reheat it with her lunch or an afternoon snack. And she saved her pennies for the things her husband or children wanted, but maybe couldn’t afford. Why?
“Always saving for that rainy day,” she would say.
If her thrift didn’t make her a candidate for the finance minister’s job, then certainly her foresight would. Anybody with a pinch of intuition could have predicted the financial implosion of 2008. But apparently, nobody – not Harper, not Flaherty, not even Ignatieff, Layton, May or Duceppe – saw this downturn in the economy coming, or else they would have made it an election issue last fall. None of them did, so for the past three months they’ve all been scrambling to save face and – each according to his/her political philosophy – to save jobs and consumer confidence.
Consequently, I don’t think the political stripe of the federal government matters today. It’s clear that every one of the Canadian federal party leaders would have opted for deficit budgeting the way the Conservatives have this week. Ottawa plans to spend its way out of recession to the tune of $64 billion over the next two years.
“Getting money in consumers’ pockets,” the prime minister said, for the long term.
As I see it, there’s some of my mother’s and her generation’s wisdom inadvertently hidden inside this budget. And I truly believe the federal finance gurus have stumbled into it entirely by accident. It’s the idea of giving tax breaks for home renovations.
For the past three months, all we’ve been hearing from Ottawa and Queen’s Park is the need to spend billions on the country’s deteriorating infrastructure, to invest tax dollars in “shovel-ready” projects, such as roads, bridges, water mains and sewers. But to most politicians that also means throwing money at relatively high-profile structures – what they refer to as “the biggest bang for the buck.”
To most Canadians, however, the closest form of infrastructure is the family home, the sidewalk and driveway or the garage. What ultimately could save this sinking economy is average Canadians deciding to take what savings they have to patch and repair. All it may take to get people manufacturing, buying and selling again is a broken window, an unfinished basement, a leaky roof, a dilapidated backyard garage or a fallen down fence.
In other words, maybe the key to digging ourselves out of this recession is digging into our own yards and homes to fix instead of replace. You see, maybe our politicians can’t see the forest for the trees, or, more appropriately, they can’t see the infrastructure for the nuts and bolts.
Which reminds me of a golden rule of economics I learned from my semi-retired brother-in-law. Years ago, Bill Doig and his father H. T. ran an industrial supply store in Saskatoon. They sold hardware fasteners – of every shape and variety – to mechanics, builders, farmers and anybody involved in repair. Bill often pointed out to me a rather interesting axiom about their nuts and bolts business. It appeared to him that the business did most poorly when the prairie economy was robust and vice versa.
In other words, when times were good, everybody threw away the old gear and bought new. When times were tough and the economy was in recession, they made do with the old and/or they repaired it to make it last until the good times returned.
“As far as our business was concerned, it made me hope for the bad times,” he admitted.
So you see, there’s a lesson in all this from my mother, the household finance minister, and my brother-in-law, the former nuts-and-bolts economist. It’s maybe not the big issues that influence the economy or people’s attitudes about it. Perhaps the tipping point in restoring the economy to realistic levels of buying and selling is not about financing mega-projects, but about the infrastructure under your own roof.