Hail Jane Stewart!
Roman emperors in splendid chariots threw coins to the masses. So what is the problem with ministers at Human Resources Development Canada (HRDC) getting into the act? Pierre Pettigrew might have looked good in a toga and wire-rimmed glasses. Jane Stewart has a noble bearing and comes from a political family adept at plundering the treasury to please the masses. Under her father's guidance, the Ontario Liberal government launched the greatest spending binge in that province's history and left the province with a scourge of debt.
The Canadian media is making a fuss about lack of accountability at HRDC, but that department is just carrying out the wishes of many Canadians, in the manner in which Caesar pleased Rome's riotous masses at the expense of Italy's hard-working provinces.
Accountability is a rarefied sentiment for the media to invoke when criticizing a government that has risen on its promise of plucking wealth from some Canadians for the benefit of others. Perhaps some of us are so used to being bled to transfuse others that we no longer shudder or revolt at the sight of a politician coming our way with syringe in hand.
Most of us may accept being fleeced like sheep, but it is still unpleasant for government to admit that its HRDC programs are slush funds that put money into the pockets of interest groups with the best connections in Ottawa. The thought of poor Manitoba farmers paying taxes to fund a Groundhog Day festivity in Ontario to the tune of $50,000 is so distasteful to our leaders that they must surround the actions of HRDC with the halo of job creation.
The righteous cause of making new jobs gives Prime Minister Chretien the strength to wipe away criticism of HRDC spending as he would some unpleasant matter sticking to the bottom of his shoe. HRDC creates jobs, Chretien has thundered, and problems with accounting will not sway us from our course.
If Chretien had taken a course in economics from experts in the study of job creation, he might have given a different answer to his examiners in the media.
The main problem with spending on job-creation schemes is that government gives money to firms that would have created jobs in any case. The best estimate from the OECD, and from the erstwhile Economic Council of Canada, was that these pseudo jobs made up between 60 and 70 percent of the so-called new jobs created by government spending.
Like Japanese tuna fishermen willing to snag dolphins in their nets, governments have been willing to accept a 70 percent failure rate in targeting job subsidies in order to promote that elusive 30 percent of new jobs. Their ideas are based on the musings of a mid-century British statistical theorist who frolicked with the Bloomsbury group and dabbled in economics. Lord Keynes, who studiously avoided work with his hands and dodged the tedium of an office job, cast himself as an expert on the labour market.
His view was that wages in labour markets are "sticky." They do not move quickly enough to allow these markets to clear. If lots of people are looking for jobs, wages will stick and not come down. The result is a glut of workers who could bring value to firms and consumers, but who, because of the malfunctioning of the private market, are left stranded, like Gilligans lost in buffooneries on a desert island, instead of proudly showing tourists about in their cruise boats. Government spending could rescue these Gilligans by getting them off the island and back in touch with employers who valued their services.
To believe this story you have to believe that the private market likes to waste resources. But why would firms not hire eager workers with skills and a desire to excel? It would make as much sense to leave big bills lying on the pavement.
The gap between workers and employers is not to be found in some failure of the market, but rather in a failure of government. Regulations that make hiring costly, and Employment Insurance premiums that raise the cost of labour, discourage employers. HRDC spending is government's effort to atone for taxes and regulations that destroy jobs. And as far as atonement goes, the effort will not come to much. The money needed to pay for the sins of overtaxion and overregulation will be drained from other sectors of the economy and will destroy at least as many jobs as it creates.
At best, it seems that Ottawa has modeled itself on Caesar who, in the words of his severest critic, Marcus Cicero, seduced the ignorant population by entertainments, public works, food-distributions, and banquets, and who, "by a mixture of intimidation and indulgence inculcated in a free community the habit of servitude."
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