“The question of Election 2015: Can government create jobs and growth?” (The Globe and Mail)”

Doug Saunders (The Globe and Mail):

At some point in late October, after you’ve celebrated your surprising election victory, freed yourself from the speeches and negotiations and cabinet announcements, and paid your visit to the Governor-General, you will sit down in a black leather chair in your oak-paneled office in Ottawa’s Langevin Block, stare through its big windows across to Parliament Hill, and quietly ask yourself the question that has been hanging in the air: ‘”So. Where do I find the levers?”

The levers. During the long months of the election campaign, it was so easy for you to talk about them. Those levers you said you would grasp, and seize, and put into the right hands. The levers you pledged, in vague but evocative terms, to use to shift the economy into high gear, or to restore growth, or to boost employment, or to raise the living standards for the middle class, or to make small business thrive and innovate, or to restore the competitiveness of the manufacturing sector, or to bring back leadership in high technology, or to shift the country away from resource dependency.

So where, Mr. Prime Minister, are those levers? From here at the top, the control panel does not seem easy to reach. But you’re going to be expected to do something significant to change the direction of the Canadian economy, which has not been heading anywhere very encouraging lately. And, besides, you said you would.

And now you find yourself alone, faced with one of the great questions of our age: Just how much can government really change the direction of the economy? Beyond the campaign rhetoric about ‘job creation,’ can government policies and programs actually create jobs? Can they cause significant and lasting shifts in the levels of employment, or economic growth, or competitiveness? Can public-sector decisions make certain industries, or companies, into international winners?

Or is government at best a passive bystander and at worst a clumsy meddler in an economy largely buoyed and tossed by global and systemic forces far beyond its control?

If that question is going to torture the next prime minister, it is because it is the question that is reshaping politics around the world at the moment. The Canadian federal election of 2015 has occurred at a time when the economic role of the public sector has taken on a new and dramatic life. Economists and political scientists are looking at the relationship between the state and the economy very differently than they did before the world economy turned on its head in 2008.

That dramatic change can be seen, albeit sometimes faintly, in Canada’s electoral showdown. It is a campaign that has pitted three distinct responses to that question against each other – a largely hands-off approach with some targeted tax breaks (Stephen Harper); a large-scale, deficit-driven investment plan to restart economic growth (Justin Trudeau); and an attempted strategic shift toward non-resource industries by taxing big business and paying for incentives for tech and manufacturing (Thomas Mulcair).

Full column here