Global Agenda: Nice job, bye

Paul Martin was responsible for making Canada the only G-7 nation to boast a surplus in both its current account and gov't budget in recent years.

paul martin 88 (photo credit: )
paul martin 88
(photo credit: )
Canada, as we have had cause to mention before in this column, is the only G-7 country to boast a surplus both in its current account and in its government budget over recent years. The man primarily responsible for that was Paul Martin, who served as finance minister for the period from 1993, when the Liberals wrested power from the Conservatives, and who became prime minister only a couple of years ago. In the interim, he oversaw the restoration of the country's fiscal position and set the Canadian economy on a course of steady, stable growth. Of course, it could be argued that Canada has had an easy time of it, because its economy is inevitably tied to that of its giant neighbor. So long as the US economy grew, indeed so long as American consumers continued their prolonged binge, Canada was going to be fine. But that is, if anything, a reason for being lax rather than tough. In any event, Martin delivered the goods as finance minister, and in spades, which is why he got the top job when his predecessor eventually stepped down. But, as USA Today noted in the wake of Monday's election, in which the Conservatives emerged as the largest party and Martin resigned as Liberal leader, "The vote showed that Canadians are weary of the Liberal Party's broken promises and corruption scandals." In other words, Martin's successful record in the Treasury was not enough to save him from the public's disappointment over his own and his government's failings in other areas. There is a lesson in this, but what it might be is open to debate. One possibility is that making people better off reduces their need to focus on "bread-and-butter" issues, so enabling them to give greater thought to "softer" issues such as sleaze and scandals. On this basis, Martin was a victim of his own successes - but also a victim of his own failures, in that he failed to act decisively (or at least to present the impression of so doing) in response to the series of scandals that have gradually undermined his administration. Another is simpler, but less inspiring: After the Liberals had been in office for a long time, the public was ready for a change, and the scandals were simply an excuse for achieving this goal. This is a common feature of Anglo-Saxon democracies, where the idea of giving the other lot a chance - and even of taking a chance with the other lot - is seen as legitimate and desirable. One example is the British electorate's massive swing away from the Conservatives to Labor in 1997, after 18 years of Tory rule. As soon as Tony Blair convinced a good chunk of the public that Labor was fit to rule again, the party was returned to power on a landslide. The fact that the Conservatives under Thatcher had revived the British economy was of no avail to them, given the stream of scandals that engulfed John Major's post-Thatcher governments. But the other problem with economic success is that it's all relative. Even those who are genuinely better-off can always whine about some group that has done better than them, whilst those whose situation has hardly improved, if at all, certainly feel hard done by. For them, the candidate who boasts of the country's achievements under him is merely rubbing salt in the wounds of this section of the electorate - as our own Mr. Netanyahu may have noticed. The answer cannot be to avoid successful management of the economy, since failure in this sphere is unlikely to be an election asset. The conclusion, depressing though it may seem to professional economists, is that a successful economic policy is at best a necessary, but hardly ever a sufficient condition for election victory - even in advanced economies with no major geo-political problems. As for our own part of the world, there are two kinds of countries in the context of this analysis. In Israel, the idea that economic policy can and should be an election issue at all is very new, whilst examples of successful economic management are rare, so the "Paul Martin syndrome" has yet to be tested. The rest of the region offers no examples of successful economic management in the Western sense and, indeed, no examples of an elected government being defeated in democratic elections by a rival party. Until this Wednesday, that is - but that's another story.