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The NDP and the macroeconomy: Do not get your hopes too high or too low

Stephen Gordon had a rather glib article in the Economy Lab section of the Globe and Mail where he came to the rather sober conclusion that an NDP government would not be even close to a disaster: more like imperceptibly worse than the other two. Conversely I think that at the macroeconomic level an NDP government would be imperceptibly better than the other two parties if only because an NDP government would be a little more active on the demand side of the economy.

The fact that an economist such as Stephen Gordon and political economist such as myself can basically agree on something is indicative of a rather sober reality. As Stephen more or less notes although in different terms, the reality is neoliberalism is hegemonic and the NDP has internalized and accepted the basic contours of its policy paradigm. The NDP has long since jettisoned, something Stephen celebrates and I lament, any commitment to the types of policies that would restore the government’s capacity to unwind the inordinate amount of power the corporate sector wields over the public. Without such “radical” options in their public policy arsenal they will be more or less forced to make the same type of trade-off’s. The fact is, should the NDP form government, it will be a minority government. Thus they will more or less have to compromise on what little policy innovation they may have in mind.

At the same time, small differences do matter. When it comes to things like poverty, home care, unemployment insurance and health care the extra resources can have a real positive impact on citizens quality of life. Similarly the return to a more balanced foreign policy will also make a contribution to the quality of life of some citizens outside of Canada.

So yes it will be “neoliberalism light” should the NDP form government but that is better than the Conservatives brand of neoliberal chauvinism.

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