Michael Ignatieff begins a defence of his party's EI policy in today's National Post with the words “We’re in a recession that is rewriting the rules of our economy." Why do they talk like this? There is much to be debated in the Liberal proposal to make EI more generous because, again quoting Ignatieff's article, "Improving eligibility will bring help to workers who have paid in but don’t currently qualify. It is also the most effective, rapid and targeted form of stimulus the government can offer our economy right now."
It is important to discuss whether the immediate assistance from relaxing social program eligibility is, or is not, offset by increasing the dependency effects such programs do, or do not, create. It is important to discuss whether this sort of spending really stimulates the economy or simply takes from Peter to pay Paul without increasing the total wealth of the Apostles. But how are we assisted in having this discussion by a pompous, vacuous and untrue assertion that the rules of the economy just changed?
In point of fact, if this assertion were correct we would be unable to have a discussion at all because theory and experience alike would go out the window, illuminating as they do only the operation of the old rules that we just discarded. Since it is not correct, and there is no rational argument that it is correct, it merely serves to obstruct our relying on what we already know to evaluate new proposals. If it is mere coincidence that this assertion is made by a man whose new proposals fly in the face of past experience it is certainly, from his point of view, a convenient one at this juncture.
Drawing on experience while there's still time, I note that in his third radio "fireside chat" in the early 1930s president Franklin Delano Roosevelt made a similar, and equally daffy, claim: ‘I happen to know that professional economists have changed their definition of economic laws every five or ten years for a long time.” FDR knew nothing of the sort; he had no idea what professional economists said economic laws were or why except that they said his ideas were bad which they were. But listen to his follow-up: “We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.”
Michael Ignatieff, I fear, is relying on the same notion that just as politicans can change the criminal laws if they don't like them, they can change the economic laws. But they cannot, and any proposals based on the claim that they can are doomed to expensive failure.
OK, now we know why they talk like that. And why we shouldn't believe them.