Friday, March 28, 2008

How much control do they really have??

THe provincial budget was announced this past week.

In the aftermath there has been a lot of debate about whether this budget did enough or did the right things to stimulate the provincial economy which has been hard hit lately (the combination of high oil prices, the US non-recession, and the high CDN$/low US$ have turned much of the manufacturing industry and the forestry industry upside down). SUch debates are a common part of politico-economic dialogue, particularly in times of recession/downturn/oncoming recession (however you choose to describe the current situation).

BUt I really have to ask of governments have nearly as much control over the economy as they like to believe. In truth I suspect not even close. ANd the control is getting less. I think there was a time when governments had a much larger say in how the economy progressed, when tax regimes and incentives and so on made more of a difference. But in a global economy I really think that there are forces at work far beyond any one government to control.

After all, some of the larger economic units in the world are no longer national economies but instead are multi-national corporations. I would think that they would (do) bully, threaten, blackmail governments to get what they want for operating conditions -- and then do what they feel is best for their profit margin anyway.

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