Will Keynes Win The Canadian Election?

Bill Scher

Canada’s Liberal Party – nine years after losing the prime ministership and four years after being relegated to third-party status – is on the cusp of regaining control of the government Monday. If so, it has John Maynard Keynes to thank.

A Liberal win would be a stunning comeback. The party lost the government to the Conservatives due to scandal. Then it lost its official opposition party role when its triangulating leader Michael Ignatieff – who had supported the Iraq War – was eclipsed by the more leftist New Democratic Party.

Ignatieff resigned his leadership position after the humiliating 2011 defeat, but still contending on the way out that the Liberals should represent “the vital center of Canadian politics.”

But the current Liberal leader, the youthful scion Justin Trudeau (son of legendary Prime Minister Pierre Trudeau) has seized the vital center not through triangulation, but by outflanking the NDP on the economic left.

Trudeau had a rough go in the first half of the year. Conservatives pounded him as a pretty boy, gaffe-prone empty suit. “Just Not Ready” remains their tag on him. But the ruling Conservatives, who never have won the majority of the popular vote, have lost popularity as the economy weakened.

That left the NDP on top of the polls in the summer, peaking in the CBC Poll Tracker with 37.4 percent on August 24th. The Liberals were in third place with 25.9 percent.

Three days later, Trudeau shook up the race in late August with a simple idea: Increase deficits to invest in jobs.

The Keynesian plan for three years of annual deficits under $10 billion, was quickly amplified with an ad “Escalator”, showing Trudeau – who possesses a gait of steely confidence – trying to walk up a down escalator symbolizing the Conservative economy. After slamming the NDP for also offering “more cuts,” he lays out the Liberal plan as the escalator switches gears: “Now is not the time for cuts … We’ll kickstart the economy by investing in jobs and growth, and lowering taxes for our middle class. That’s real change.”

The YouTube version of the ad has over three million views. No Conservative or NDP ad has touched one million.

By September 17, before a major debate, the NDP poll number dropped to 31 percent, and its lead over both parties shrunk to two points.

In that mid-September debate, not only did the Conservative Prime Minister Stephen Harper attack Trudeau for temporarily abandoning a balanced budget, but so did NDP leader Tom Mulcair. He was hoping to score points for fiscal responsibility with an electorate still unsure if his party was ready for prime time.

Trudeau didn’t budge an inch. The stunned moderator, in the middle of the debate, synthesized what was happening to Canadian politics before the public’s eyes: “I think what we’re seeing tonight is an extraordinary exchange of ideas between a now centrist NDP and a deficit-favoring Liberal Party.”

The NDP’s numbers continued to sink and haven’t stopped since.

As of October 13, the Liberals now lead the pack with 35.1 percent and the NDP is stuck in third with 23.3 percent, a complete reversal from late August.

Now, the Liberals are not tacking leftward on everything. Trudeau has indicated support for the Trans-Pacific Partnership, saying “The Trans-Pacific Partnership stands to remove trade barriers, widely expand free trade for Canada, and increase opportunities for our middle class and those working hard to join it,” but knocking Harper for not being transparent during negotiations. Mulcair is squarely opposed to TPP as harmful to Canadian logging, mining and dairy interests.

Trudeau was also supportive of the Conservatives’ recent counterterrorism bill, which the NDP attacks as anti-privacy, though now Trudeau says he would make changes to it.

But a Trudeau comeback victory would make a strong case that standing for more spending and higher deficits when an economy is in trouble can be a compelling election message.

Yes, it’s Canada. But don’t forget, Canada has been led by Conservatives for nine years, while America has had a liberal Democratic president for nearly seven. Even Canadians have conservative impulses when it comes to taxes and spending.

But Barack Obama won re-election precisely because his Keynesian Recovery Act staved off a depression. Trudeau got the message, and unfortunately for the NDP, Mulcair didn’t.

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