Friday, June 01, 2007

I'm Conservative, But Did Jim Flaherty Miss Economics 101?

So, Mike drew my attention to this snippet in the local media today. Finance Minister Jim Flaherty stopped by Chesterville, ON, a town that has seen the Nestle plant close, with consequent job losses. His upbeat message? The high loonie is good news for manufacturing in Canada, we're booming, lots of jobs, etc. etc.

Now, I'm not an economist, but it doesn't seem quite right to me that a Finance Minister can stand up and say a high dollar is good for our manufacturing sector, when in reality it is pricing us out of world markets, both in terms of cost of goods and cost of labour. It's partly to blame for the shrinking manufacturing sector and the loss of jobs.

That Jim Flaherty should make this speech in Chesterville, with the Nestle closure still raw, Cornwall's Domtar closure just along the river and Smiths Falls' Hershey closure just north, seems particularly ill-conceived. What were his advisors and handlers thinking?

There is good news in the economy for sure, but can't we have some good old-fashioned political savvy back in the Conservative Party? Let's try to make sure we're pitching the right message to the right audience at the right time. This speech could be seen as adding insult to injury in the audience to which it was addressed; it's not good economics and it's even worse politics.