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Who's Right? Mr. Dodge or Mr. Harper?

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  • Mar 20th, 2009 1:03 am
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Poll: Who's right about the Canadian economy?

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[OP]
Sr. Member
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Mar 5, 2007
627 posts

Who's Right? Mr. Dodge or Mr. Harper?

This post is with regards to the following story:

http://www.cbc.ca/canada/story/2009/03/ ... onomy.html

For those who do not want to read the entire thing, here are the Coles notes:

1. Prime Minister Harper and the Bank of Canada are predicting that the Canadian Economy will rebound back to GDP growth by the end of 2009.

2. David Dodge, former head of the Bank of Canada, has been very critical of Mr. Harper and the Bank of Canada's (BOA) assessment of the economy and believes that the Canadian economy will not rebound during 2009. Mr Dodge also predicts that capitalism as we know it will experience a significant change and that this recession will be long and deep for Canada.

3. Mr. Harper and the BOC are standing by their statements.

So who do you think is right?

I'm siding with Mr. Harper on this one: our economy is in much better shape than many of the other Western Nations and our bank system is arguably the most sound and strong in the world right now. We were one of the last developed nations to actually go into this recession and I think we'll be one of the first out of it.
7 replies
Deal Expert
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Aug 18, 2005
21031 posts
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Burlington-Hamilton
Eh, Harper has to put on a good show, and if he goes on with doom and gloom then it will prolong the delay before any recovery. Good morale (or bad morale) are often self-fulfilling prophecies.

Dodge isn't part of the BoC anymore so he has far less accountability, and thus can articulate the real situation.

Honestly I hope people believe Harper because "confidence" is a significant part of this equation.

But will capitalism forever change? Doubt it. The more things change, the more they stay the same. We will have other deep recessions in the future. It might take 50 years for us to get here again, but it will happen.
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Jun 14, 2003
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Of course, Harper is right. He is conservative. Bush is more right though. :D
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Deal Addict
Oct 30, 2008
2120 posts
58 upvotes
Toronto
Personally I think they're both a little bit off. No way there will be a rebound this year. The full effect of this recession has not yet hit. It takes months for that to happen. The culminating effect of the unemployment figures we've seen in the past few months coupled with the tightening of the credit market will show around the summer. By that time the Canadian banks will be writing off hundreds of millions if not billions of personal credit debt. Moreover, the stimulus package unleashed in the States will take, according to most estimates, about a year and a half to make any difference at all, provided that the initial amount will be enough to begin with. As such, I certainly don't see how we'll start seeing recovery until at least mid to late 2010. I really don't understand how some out there can simply predict that it takes just over a year to fix this magnitude of a crisis. It will take years.
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Jul 18, 2003
6749 posts
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Etobicoke
While Canadian economy is in better shape than many other countries, we are also an export based economy. So, unless the economies in countries we export to starts to improve, there will be little sustained growth.

Some of the largest Canadian businesses, oil, forestry, mining, etc. are all heavily dependent on exports. Canada is too small of a country (population and industry wise) to be able to have enough internal consumption to support the capacity of our raw material collecting capability.

So, I'm with Dodge on this one. We're stuck in recession until our customers get out of theirs.

However, I don't know if Dodge's prediction that capitalism will be forever changed will come true, though. That remains to be seen. With Obama's bail out package (buying stakes in AIG, telling AIG how to run their company, etc.) and Britain's nationalization of massive banks such as RBS, Western capitalist countries are slowly turning into socialist/communist states like China, which used to have a huge portfolio of run-down state-owned enterprises. Of course, we will never arrive at the level China once had, where the state used to own everything (and it still does, today, to some degree - there is no real private land ownership in China). But the current trend is towards more and more government involvement in private enterprises.

I believe, at some point, the ideological alarm in west will go off and people will wake up to the fact that we are not socialist states. We only pretend to be so the society can have stability. The government can only do so much and the rest will just have to swim or sink. At that point, old capitalism takes over and all will be back to normal.

We'll see.
Sr. Member
Mar 6, 2007
659 posts
31 upvotes
David Dodge - no contest.
Deal Fanatic
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Jan 14, 2004
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Markham
I hope Mr. Harper is right about the recovery, but things sure aren't looking very great.

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