Thursday, June 19, 2008

"This is crazy economics. It's crazy environmental policy" Harper

Crazy economists:

"Carbon taxes are not a bad way to go in addressing global warming," said Doug Porter, deputy chief economist at BMO Capital Markets.

"I think most economists would probably be generally favourable to them. It´s about as efficient a way as is out there."


"TD Bank chief economist Don Drummond analyzed the plan and said the carbon tax is good idea"

“Pollution must have a price tag. Currently it is too cheap to pollute, and too expensive not to.”


"If we're serious about reducing greenhouse gases, we have to have a carbon tax or its equivalent," Mark Jaccard said.


"If people are serious about changing behavior, to reduce the amount of carbon, you do have to increase the price of a lot things. The Liberal is quite straightforward. The reality, if we are going to do it, this is the type of change we need to be looking at"

Economist Bill Robson President CD Howe Institute


Letter sent to British Columbian government, arguing for carbon tax, signed by 70 economists:

"We are writing to urge you to include a revenue neutral carbon tax in your upcoming budget. Your government identified action on global warming as a critical policy goal. We believe that a carbon tax is the most efficient and effective way to reach that goal."

Signed by:

Carbon Tax Letter Signatories

UBC Economics

Siwan Anderson, Paul Beaudry, Mathilde Bombardini, Gorkem Celik, Clive Chapple, Brian Copeland, Michael Devereux, Erwin Diewert, Catherine Douglas, Mauricio Drehlichman, Mukesh Eswaran, Patrick Francois, Giovanni Gallipoli, Robert Gateman, David Green, Yoram Halevy, Joseph Henrich, Viktoria Hnatkovska, Atsushi Inoue, Tsvetanka Karagyozova, Ashok Kotwal, Amartya Lahiri, Thomas Lemieux, Kevin Milligan, Hugh Neary, Donald Paterson, Michael Peters, Angela Redish, W. Craig Riddell, Shinichi Sakata, Henry Siu, Rashid Sumaila, William Troost, Okan Yilankaya

Sauder School of Business

Richard Barichello, Anthony Boardman, Keith Head, Thomas Hellman, Sanghoon Lee, Peter Nemetz, Thomas Ross, Ratna Shrestha, Veikko Theile, Ilan Vertinsky, Ralph Winter,

Faculty of Land and Food Systems

Richard Barichello, Katherine Baylis, Sumeet Gulati, James Vercammen,

SFU Economics

Steeve Mongrain, Gordon Myers, Krishna Pendakur, Arthur Robson, Nicolas Schmitt, Simon Woodcock,

Public Policy

Dominique Gross, Jonathan Kesselman, John Richards,

University of Victoria Economics

Merwan Engineer, Martin Farnham, Elisabeth Gugl, Malcolm Rutherford, Herbert Schuetz, Paul Schure, David Scoones, G. Cornelius van Kooten,

University of Northern British Columbia

Paul Bowles, Ajit Dayanandan, Fiona MacPhail

Canada is in serious trouble, if these "crazy" people are some of our most respected economists. And, what was John Baird thinking, when he hired Drummond and Jaccard (which he himself called "two of Canada's leading economists") to formulate his anti-Kyoto presentation to the Senate?

A simple question, since when do economists endorse a plan which will ruin our economy? If, as Mr. Harper argues, this policy is "crazy", why does it seem to have such widespread support? What are we to make of this headline, from "Oilweek" no less?:
"Economists give Liberal carbon plan guarded praise"

OTTAWA _ The Liberal party´s carbon plan received tepid endorsement Thursday from economists, who say the much-ballyhooed "green shift" won´t by itself solve the climate change conundrum _ but it also won´t leave the economy in tatters...

Crazy isn't it?


Anonymous said...

Great post, Steve.

You should run the media response unit on this for the Liberals ; )

Anonymous said...

Hey, wait a minute, LibBlogger. Harper, besides being the smartest strategist on the planet, is also an economist.

Did you know that? So there.

ted said...

Nice compilation steve

You've inspired me to make a list too of "crazy economists" (Stephen Harper's point of view) from the Pigou Club

wilson said...

Steve quotes:
''TD Bank chief economist Don Drummond analyzed the plan and said the carbon tax is good idea''

the rest of what Drummond said:
(nice try Steve)

TD Bank chief economist Don Drummond analyzed the plan and said the carbon tax is good idea, but added it is going to hit some harder than others.

"I think it will be revenue neutral, but there will be no individual or company in the country that will exactly get back what it pays back in carbon tax," Drummond told CBC News on Wednesday. "There will be a lot of winners and a lot of losers."

ALL the economists said cutting the GST was bad.
Canadians didn't agreed.

Steve V said...

"ALL the economists said cutting the GST was bad.
Canadians didn't agreed."

Yes, proving once again that Harper knows NOTHING about economics. The economists favored a income tax reduction, but Harper plowed ahead because he isn't interested in good policy, just trying to buy votes. The best part, he's actually fallen in the polls since then :)

Slurp, slurp wilson. You got nothin.

Jarrid said...

When you make a $15,400,000,000.00 Tax the centrepiece of your election platform you're a brave soul indeed. You don't have to have Warren Kinsella's political smarts to see the problems with this.

Anonymous said...

Unless its coupled with $15,400,000,000.00 in tax revenue reductions or credits, hence the term "tax shift."

But of course the real challenge is dealing with the simplistic arguments such as yours that will be tossed about ad nauseum over the coming months.

Dion is at least willing to risk that Canadians are adults, as opposed to some who would rather cater to the lowest denominator and basest instincts.

mitch said...

Raising taxes to cool the planet.


Is there anyone who seriously believes that this tax will effectively lower the Earth's temperature?

Taxes to save the poor, we can take.

Taxes to build roads, heal the sick, also acceptable.

Taxes to pretend we can lower the Earth's temperature like some tax-a-dial thermostat.....well the answer to that is obvious.

Dion's living in an academic fantasy world. The fact that an obviously green agenda driven leftist media is going along with it, won't change the idiocy of this one iota.

The fact that this is Dion's one and only policy he's managed to come up with (in between cowering to Harper's confidence votes) means the libs will be in the political wilderness for that much longer.

jarrid said...

Joseph - for the first time in living memory my overall taxes are coming down, not by much mind you but it is noticeable and is helping me get my debt load down as I watch my expenses.

Now this guy comes along and wants to raise my taxes and is practically bragging about it? Look it's not even 24 hours and Dion has all but admitted that this tax is not revenue neutral.

Repeat after me: not revenue neutral. This guy wants to raise my taxes and my blood it boiling.

Paul Wells seems to think that people don't mind tax increases but he must be on easy street with no sense of how the struggling middle class lives. The struggling middle class, you know the one that decides elections in this country.

Anonymous said...

Perhaps we should tell all those European countries who instituted carbon based tax systems in the early 90s that their reductions in greenhouse gas emissions are just illusions. Tell them nearly 20 years after the fact that they were wrong. Don't let the facts get in your way.

Who would have thought being sensitive to the earth we all inhabit would be such a political football?

I have never been an overt environmentalist, and even I can see the need for an adjustment in the way we impact the planet on which share.

I commend Dion for being willing to ask Canadians to aspire to a better future, rather than placate their most negative instincts.

mitch said...


I hate to get all "simplistic" and all, but:

when, like say last year, we experience a devastatingly cold winter, such that Canadians were required to expend a significantly greater amount of heating fuel,

are we going to then retool our tax scheme the following year to corrospondingly reduce the equal amount of taxes that were raised by the excess heating costs?

Can you imagine the bureaucratic and cost nightmare in trying to attached a fixed item like tax rates to a variable cost?

How's that going to work?

If the Libs tell you that the cost to administer this program will be, say 20 million dollars, why would you not believe it will be exponentially higher, in light of the above mentioned complexity, and in light of the gun registry, HRDC boondoggle ect?

I appreciate to you these questions may be "simplistic" (I interpret your definition of simplistic as daring to not blindly follow leftist policies as if they will easily and cheaply provide the utopic solutions promised), but I tend to rely on experience rather than blind dogmatic ideology to guide my decisions.

Anonymous said...

Jarrid, in all honesty I don't want you - or anyone - to suffer. And I commend you for working on your debts and seeking to move ahead.

I'm in a better place - not a lofty place - but a better place than about a decade ago when I was struggling to pay off debts and student loans. And it wasn't so long ago that I forgot what that felt like.

You seem convinced that the liberals cannot possibly be telling the truth when they state they want to make this a shift, and not a drain, on individuals and businesses - turning taxing of income into taxing of the impacts we make on the environment. And they have the decency to be upfront about the fact that they can only work to assure overall revenue neutrality. They have made a point of indicating they cannot promise each individual won't be affected.

They aren't bragging . . . they are being upfront. Perhaps Canadians aren't used to hearing that anymore.

Harper will play upon your fears, and the fears of others. His message is we can change our planet without any change to individual habits or behaviours. That just isn't true. The US, as a good example, has created an illusion of lowering taxes while increasing expenditures and they are now in a horrible financial state.

In the end, it will boil down to whom you trust to lead our country, as all elections are. But it would be wise to consider who is appealing to your fears, and look upon those appeals with a critical eye.

mitch said...

One final parting "simplistic" thought:

If the relatively simple task of entering gun registration numbers ended up costing billions,

imagine what a highly complex cost/tax matching scheme would be like.

And on which side of this tax/cut balance sheet do you think these costs would be borne out?

Anonymous said...

Ok, Mitch, lets make this "simple."

The Liberals led this country out of years of deficits into surpluses, which the conservatives have managed to squander in just two years. Oh, and they managed to do that by selling off national resources and launching new taxes they directly promised they wouldn't.

And that's without getting into the whole scam of open, accountable government they rode into power.

Those are what my years of experience have shown me. I've been around the block a few times myself.

Steve V said...

"If the relatively simple task of entering gun registration numbers ended up costing billions,

imagine what a highly complex cost/tax matching scheme would be like."

Mitch, interestingly enough, British Columbia has yet to hire one extra civil servant, and their plan is in the mail. But, you wouldn't want to acknowledge that, why ruin good fiction.

BTW, that leftist media comment was great. Dead giveaway. Why bother.

mitch said...


we need not debate this,

given that we've obviously got different opinions.

But here's my prediction:

Harper super majority in '09.

As for the comment about past Liberal fiscal responsibility,

the policies of Paul Martin the finance minister (not Paul Martin the PM mind you),

is far closer to the current CPC party than the far left eco fringe party that Dion's created.

ottlib said...


As you stated a few weeks ago it is best to ignore the likes of Mitch and his ilk.

They are not the audience we are speaking to. They will never agree with what the Liberals propose.

So it is best to save our energy for those who would be willing to give this plan a real honest look.

Anonymous said...

What about Kyoto? I haven't read the 44 page pamphlet but does it mention how this will make headway toward the Kyoto targets? Because if it doesn't, then does that mean that Dion is resigned like Harper not to meet the targets. I'm assuming the plan mentions something about this, does anyone know?

Anonymous said...

Oh, mitch, so when called on it, you change your tune. It was "some other liberal" party that did anything positive.

sorry to disappoint but it was the reform party that hijacked another.

but then as you said, your comments were never really about debating sound environmental or economic policy.

Ottlib has it right.

Dan said...

I like how the American Enterprise Institute even favors a revenue neutral carbon tax.

"For these reasons, we conclude that if aggressive actions are to be taken to control GHG emissions, carbon-centered tax reform--not GHG emission trading--is the superior policy option.",pubID.26286/pub_detail.asp

Hat-tip to Paul Wells

Steve V said...


I saw that too. Crazy bastards.

Anonymous said...

Dan - I would say the operative word being "if". Dion has to hope that Canadians accept the premise for his plan: that this will somehow make a difference in the world.

wilson said...

I am not going to get a penny of the tax savings, I will bear the full blunt of the tax, as will many Canadianas.

So, we 'payers' want the most bang for our buck, and want to know
1.which plan hurts the economy the least,
2.while reducing ghg's the most.

It's obvious neither the Cons nor Libs plan will reach Kyoto targets by 2012 (big surprise, eh)

The economy and global warming are important, right...?

Carbon tax on consumers with tax reductions for 3 of 4 tax brackets... vs... mandatory Industry Regulations of ghg reductions of 18% + 2% year every year following.

wilson said...

Actually, we need Libs, NDP, and Cons enviro plans, laid out side by side, to compare the amount of gain and pain of each plan.

Greens are just too wacked out for me to consider.

Anonymous said...

When an employer who's business has heavy carbon producing inputs (too many to mention),

lays off people,

do those laid off people get tax credits equivalent to their lost salary?

do the people who buy the goods (which are now more expensive) get extra money so they can purchase it at a "cost neutral" rate?

Those laid off people who then buy less and thus cause other people to be laid off, do they also get some sort of income replacement credit?

I'm sure Dion the out of touch academic will be a wonderful steward for our fragile economy.

More economic experiments please.

ted said...

To Wilson:

Everybody will get some income tax savings. Even if your income is so low that you don't pay taxes, you will get money from the refundable tax credits. It's your job to try to keep as much as you can of that money. I'm sure you'll do your best.
But from your claim that you will not get a penny of the savings, I could perhaps assume that you are a high income person. Well then, you are in a position to take the lead and invest in energy efficiency (e.g. home retrofits, fuel efficient car) or in renewable energy (e.g. solar hot water). Be a leader!

To Anonymous, whoever you are: A business whose costs increase because it uses a lot of fossil fuels will pass on part of the cost increases. All their domestic competitors will face the same cost increases. Any foreign competitors who do not pay a carbon tax at home will face a carbon tariff when they import into Canada. If this business exports, it might get a carbon tax rebate if it is exporting into countries that don't have a carbon tax. These are called Border Tax Adjustments and they are permitted under GATT/WTO rules.
More importantly, while all of this is happening we will be creating a lot of new green sector jobs. I can tell you that in my hometown of Kingston, Ontario this job creation is already happening because we have such an active and innovative sustainable energy community. A carbon tax will boost this economic sector even more as the true costs of pollution are accounted for.

Check out this website:

RuralSandi said...

Hey, wait a minute, LibBlogger. Harper, besides being the smartest strategist on the planet, is also an economist.

Did you know that? So there.

....just take a look at Harper's resume - he doesn't have much practical experience at all. I don't take much heed to Harper's economist ability - he's never worked a day in his life where he's used it.

Besides - you will always get one or two who will disagree - but it's the "majority" opinion that counts. besides, Harper's idealogy gets in the way of unclouded thinking - and that's not good. there!

Anonymous said...

Harper thinks any nuanced, thoughtful approach to solving problems is "crazy". Who has time for that when you're busy with more important things, like misleading and misinforming.

Anonymous said...

It's nice to see a long list of very rightwing think tanks and economists (ie: the American Enterprise Institute, the CD Howe Institute etc...) I wonder who long before the Fraser Institute and Mike Harris and Preston manning start salivating over the Liberal plan!

There is a reason for this. It's rightwing economics 101 to drive up flat consumption taxes like crazy and to counter that with cuts in income taxes and corporate taxes.

Caveat emptor

Steve V said...


Wrong, the Fraser Institute is against the idea. Oh well, nice theory.

Steve V said...

"Actually, we need Libs, NDP, and Cons enviro plans, laid out side by side, to compare the amount of gain and pain of each plan."

Yes, two binders and a napkin, powerful imagery.

Anonymous said...


You can add a new one to the adult response file . . . Harper just said in a speech in Saskatchewan that the green shift will "screw" the country.

I kid you not.

He really takes this debating issues like adults seriously.

burlivespipe said...

Ok, he's already (thru his delinquent emissary) told people to not invest in Ontario, so now Harper is saying that a plan that aims at taking responsibility for our contributions to Climate Change issue is 'crazy'.
Steve's done a bang-up job assembling all the other 'crazy people' out there.
But no, let's take the word of a 'so-called economist' who promised big on Income Trusts, accountability, no appointments to the senate, security, fiscal responsibility, hospital wait times, etc. but doesn't even have the balls to show to the Canadian public his platform on increasing nuclear power generation?
Like Income Trusts et al, Harper won't campaign on the truth, but will campaign on fear, lies and misdeeds. That must be some potent koolaid. Or the CONs have raised their pay for bloggers, now by the post, because the fear is coming thru the keyboards. 'Crazy'. Right. I'd call it a real debate. Welcome to what democracy is suppose to be like, boys.
Harper's spiel sounds like words from Big Oil's own mouth.