Tuesday, August 25, 2015


In 2008, a floundering candidate for public office made a fool of himself by turning serious economic danger into an opportunity to showboat, only to find that nobody was buying his self-proclaimed leadership (Heilemann & Halperin, Game Change at p. 384-385):
McCain set off back to the Hilton. In the car he called Bush and informed him of his decision, and asked if the president would hold a meeting at the White House for him, Obama, and congressional leaders to discuss the bailout bill. Bush feared such a meeting would inject a destabilizing dose of politics into a fragile situation. He told McCain that his intercession would undercut Paulson and wasn't likely to help solve the problem. After hanging up, Bush instructed his aides, Find out what's going on here. But before they had a chance, McCain was on TV, standing at a lectern at the Hilton, announcing the suspension and calling on Bush to convene a conclave.
The news of McCain's suspension drew gales of derision from the press. No one was willing to give him the slightest benefit of the doubt...that his motivations were anything less than craven...

McCainworld had assumed that the suspension would be viewed as an authentic, characteristic act of putting country first. But...McCain was now seen as a typical, and faintly desperate politician - and his campaign a campaign of stunts.
In 2015, the same is happening in Canada:
Was there any concrete economic reason for Stephen Harper to call Stephen Poloz yesterday, as global stock markets continued their gyrations?  And then to have his office subsequently issue a cryptic and rather foreboding statement about the conversation?

Of course, Prime Ministers and central bank governors talk to each other every now and then — but these conversations, for obvious reasons, are rarely publicized.  And since we are in an election campaign, the meeting was all the more odd.

Poloz himself has no control over the actions of the markets.  And his response to any macroeconomic damage that results is limited to monetary policy adjustments (the next Bank of Canada interest rate decision is September 9), over which the Prime Minister is not supposed to have sway.

The Prime Minister himself can’t do anything about the market chaos, either.  Once the writ has dropped, the government switches into “caretaking” mode, and has no discretionary policy-making authority.

And there was nothing in yesterday’s gyrations, stomach-churning as they were for the buy-low-sell-high crowd, that indicated a need for emergency action by either the government or the Bank.  If anything, it was “par for the course” for speculative markets which are always driven by alternating waves of greed and fear.

So what was the point of the call?  Political optics, obviously — which explains why the PMO’s subsequent spin effort was more important than the phone call itself.

Politicians always follow the “look busy” rule: when bad things happen, they have to be seen to be responding, even if there is little likelihood their actions will have any effect. 
Which raises the question: who will be cast as Sarah Palin and Joe the Plumber as the Cons' campaign follows the McCain path?

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