Keep calm and carry on

Turmoil in the stock market seems to transform Stephen Harper. In 2008, he went from prime minister to tipster, dispensing gratuitous economic guidance.

Turmoil in the stock market seems to transform Stephen Harper.

In 2008, he went from prime minister to tipster, dispensing gratuitous economic guidance.

In 2011, he all but slipped on his old sweater, shook his head in bemused wonderment and admonished Canadians for worrying.

Don’t sweat the small stuff, Uncle Stephen said, even if that small stuff is in the trillions.

“We put too much emphasis on this stuff,” Harper said from Brazil on the morning that millions of Canadians awoke to the sound of their retirement savings being flushed down the toilet.

“It’s way too easy to focus on the trillions that seem to be lost in moves on the markets.”

Three years earlier, Harper infamously told Peter Mansbridge that the stock market plunge was a great chance to make some money, even when the stunned CBC anchor gave him a do-over.

“I think there are some great buying opportunities out there,” Harper said.

Taken at face value, Harper seems a little short on compassion for worried investors when he blithely tosses trillions around like nickels.

But maybe the prime minister has a point, even if his economic training doesn’t always leave him economically eloquent.

He did acknowledge that this week’s volatility is causing pain. He knows that panic begets panic.

His calls for calm were accompanied by calls for a look at the bigger picture, a picture in which Canada has a place of pride.

This week’s sell-off was really a repudiation of political leadership south of the border and the suddenly feckless Barack Obama’s inability to take control.

The historic Standard & Poor’s credit downgrade was blunt in its assessment of what happens when political brinksmanship and partisanship override consensus and compromise.

“The political brinksmanship of recent months highlights what we see as America’s governance and policy-making becoming less stable, less effective, and less predictable than what we previously believed,” the S&P report said.

For Harper and his finance minister, Jim Flaherty, the circus in Washington must be demoralizing.

They can claim to have their economic fundamentals in place, but the performance in Congress is a little like having your drunken uncle sleep over: you can tolerate him until he knocks over a priceless vase. Then it costs you.

The most honest assessment of the global situation and repercussions for Canada came from Flaherty, who in a CBC interview acknowledged U.S. political “factionalism” and wondered whether there was enough political will in Europe to continue the positive actions to deal with the sovereign debt of nations there.

“We’re a trading country, and we will get buffeted by what happens elsewhere, in the EU and the U.S.,” he said.

While Americans bicker, Canada is now basking in international praise for the way the Liberals wiped out the deficit in the 1990s and reclaimed this country’s AAA credit rating. We are being lauded for our stable banking system (a Liberal achievement), our lower unemployment rate and our quick recovery from the 2008 debacle.

But let’s put the brakes on the suggestions that we have advice the Americans can use.

The 1990s are not 2011.

When the Canadian finance minister of the day, Paul Martin, went to work, he toiled in a simpler time, unworried about cascading European debt crises that are the real catalyst for today’s tumult.

The Liberals had the luxury of a majority government. Martin’s fiscal overhaul faced no serious opposition.

In the U.S., the election cycle never ends and re-election is constantly on the minds of every member of the House of Representatives. The member of the House who will put his or her political future in doubt for the greater good is an extreme rarity.

A bicameral system in which one party controls the White House and the Senate and the other controls the House — with an unyielding Tea Party faction further slowing the machinery of government — invites gridlock.

Instead of co-operation for the larger goal, Republican presidential candidates such as Mitt Romney and Michele Bachmann are attacking a wounded president.

Martin raised taxes. The U.S. is allergic to taxes and the debt ceiling deal was vilified by those on the left because it did not tax corporations or the rich.

The Liberals in Canada also made cuts to defence spending that would not be tolerated in the U.S.

In short, as Harper might say, don’t sweat the details. There is little parallel between Canada’s credit shave of the mid-1990s and the U.S. embarrassment of 2011.

Tim Harper is a syndicated Toronto Star national affairs writer.