Friday, April 03, 2009

Stelmach Screwing the Pooch

Alberta's oh-so Conservative premier is screwing up, big time. Mardi Gras is over and 'Special Ed' Stelmach has woken up in an alley with his pants around his knees, surrounded by empties. From the Calgary Herald:

The Stelmach government is stuck in the same financial quicksand as the 1980s Getty era and is facing similar "dire consequences" of prolonged deficits and draconian spending cuts due to its over-reliance on energy revenues, warns a new University of Calgary study.

...Former premier Don Getty's regime made two key errors in the mid-to late 1980s of relying too heavily on volatile oil and gas revenues to fund its budget, and then failing to cut spending accordingly when energy prices collapsed -- instead hoping markets would rebound in the short term.

The Stelmach government is headed down an identical path, cautions the report.
"We criticize (the government) for allowing its budget to become so heavily dependent on volatile, energy-related revenues--that is a high-risk strategy;it has been tried before and has failed, with dire consequences," the report states.

In December, 2006, the Financial Post warned Alberta to start acting like grown ups with the Tar Sands Bonanza:

"Alberta’s blue-eyed sheikhs offered a plaintive prayer in the early 1990s as sliding oil prices plunged the energy-rich Canadian province into recession. “Dear God,” ran their plea, featured on a popular bumper sticker. 'Let there be another oil boom and I promise not to piss it away this time.'"

Yet, for all the benefits, a frisson of nervousness has recently emerged that short-term growth may be taking precedence over long-term prudence. Mr Vander Ploeg estimates that the province’s Progressive Conservative government has saved just 8.6 per cent of the C$120bn it has collected in non-renewable resource royalties over the past 30 years."By contrast, Alaska has set aside about one-quarter of its resource revenues in “permanent” and “reserve” funds. Norway has tucked almost two-thirds of its North Sea riches into a rainy-day petroleum fund.

One surprising critic is Peter Lougheed, Alberta’s premier from 1971 to 1985 and now a respected elder statesman. He says his eyes were opened by a recent helicopter trip over the 'oilsands projects. 'I felt it was just really bad,' he says. 'It was the opposite of orderly.'

Although he belongs to Mr Klein’s party, Mr Lougheed puts much of the blame on the laisser-faire approach to oilsands development. 'The thing that’s being completely missed,' he says, 'is: what is the benefit to the citizens from the overheating of the economy?'”

Well Peter that's what happens when you put the Trailer Park Boys in charge of the provincial treasury.


Oemissions said...

A stupid move that governments do from time to time is give each and every citizen a bonus cheque.
Ralpf Klein gave out $400 if I remember correctly.
In BC Campbell gave out $100 for carbon credit.
Pooling money is better.And ofcourse spending it on something necessary, such as public transit is a smarter move.
People take the money but it doesn't mean victory at the polls.

penlan said...

An oft used saying comes to mind: If we don't learn from our past mistakes then we are doomed to repeat them. Or something like that. The thing is we don't ever seem to learn from history. And that's the part I can't figure out. If we can do it on a personal basis, & not that everyone does mind you, then why can't it be done on a national/global one?

Some things are so self-evident & yet they are ignored. Why?

The Mound of Sound said...

I agree with you, Oem, on giving bonus cheques to the public. It's a pretty crass stunt that would be better addressed within tax policy.

Much as it pains me to admit this, I see some merit in Campbell's carbon credit programme. It's a way of ensuring that frugal residents with a small carbon footprint aren't as impacted by carbon taxes on fuel. I find that quite sensible. The cheque is a tangible reminder that a carbon tax exists at the gas pump. There's a value to keeping that in the public's mind.

Penlan, governments today have all but abandoned their historical sense. They've allowed themselves to become obsessed with the next electoral cycle, never looking back and rarely even past that. That's how a chump like Stelmach won such a landslide victory. They do it because it works - for them. That may be a tad cynical but it's true.

Anonymous said...

Here's my theory: Although I'm from California, I have spent a great deal of time in Alberta over the last 30+ years. I remember the boom-bust of the 1970's.

What I have noticed over that time is the growing presence of Texans everywhere in the province. It seems every where I go in Alberta I see Texans in their gigantic diesal pushers waving their Texas and American flags sucking up all the surrounding oxygen.

Watching the local news in Texas when I was in graduate school I was always flabbergasted at how sometimes blatant and sometimes subtle every news item had a laissez-faire and socially right-wing spin. Watching Calgary television reminded me of my days in Texas. Calgary TV news readers used the same value loaded language on social issues and always reported negatively on labor issues.

Here's the point. I believe there are far too many Texans in Alberta informally advising the Albertan government on issues like low taxes, small government, pro business anti-labor economics, and tax-and-spend liberalism.

Am I saying that Canadians are too stupid to make up their own minds. No! What I am saying is conservative Albertans and conservative Texans because of their similar social backgrounds have formed an affinity group whose purpose is to loot for themselves Albertan energy resources and the hell with everyone else. Just like they have always done in Texas and just like these Texans recently did to the United States.

The Mound of Sound said...

Very interesting insights, Anon. Thanks.