Let's face it. For the last 30 years the conventional wisdom for how to run the economy was some level of austerity. Government spending had to be controlled or it would really hit the fan.
The current Federal government is showing that this does not appear to be true. It is spending like a drunken sailor to support Canadians during these hard economic times and the sky is not falling. Indeed, many people are realizing that if the government was not doing what they are doing things would be much worse. That is one advantage to living next to the dumpster fire to the south. Canadians can see for themselves what could have been without the current government support programs.
The problem for conservatives in this country is Canadians might get used to this and they may decide they do not want to go back to the old ways. As I stated here the breakdown of the Conservative consensus that has dominated political and economic discourse for the last three decades or so has already begun. I stated that it could break down completely in the next decade or so. This Pandemic could accelerate that and the longer the government has these programs in place the greater chancees that the acceleration of that process will occur.
Unfortunately for the Federal Conservatives they decided to be visible instead of relevant during the crisis so they have put themselves out of contention to prevent that acceleration. Although, they are trying by trying to pin the lack of enthusiasm for going back to work on these programs instead of the fear of a deadly virus still stalking the land. So, it is up to the Conservative government in the provinces to try to stop it. That could very well be a reason why both Ontario and Quebec have decided to begin opening up their economies even though the evidence that they have managed to gain control of the pandemic situation is decidedly mixed. And if anybody believes that politics, both micro and macro, are not playing any part in the decisions that all governments have been making in the last three months I would like you to contact me. I am planning on building a bridge between Vancouver and Shanghai and I need investors.
In the short term the other consideration for the Federal Conservatives is the longer this pandemic continues to disrupt the lives of Canadians the larger the scar on the psyche of Canadians will be. In normal times a disaster is on the front pages for a few days and then life goes on only leaving scars on those most effected. This may not be the case for the pandemic. It is impacting all Canadians and its impacts are still being felt. It will be remembered the next time Canadians go to the federal polls and how the different parties acted during the crisis will be remembered. So, Conservatives are hoping that going back to some kind of normalcy will reduce the scarring and give them a chance in the next election. My guess is the longer this goes on the less of a chance they have of winning. Indeed, there will come a time when they may not even be able to be competitive.
Of course, that may change if the government blows the recovery but again the longer this goes on the more tolerant Canadians may be to accept Liberal economic policies for the recovery and not the usual Conservative policies that we have seen in the past. And if this really goes on long enough we could reach the tipping point where that situation becomes permanent and the Conservative consensus collapses.
