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Having been out of the country for several weeks, it takes Ha fewdays to catch up on the very busy Thomas Mulcair. And when onedoes, the overwhelming sense is d j vu. It conjures up memories of David Lewis, back when the federal NDPrhetoric was full of "blue-eyed sheiks" and"corporate welfare bums." Heady stuff, but a trifleproblematic. Take all this talk about "Dutch disease," and how asoaring, resource-driven Canadian dollar is cripplingmanufacturing. To be sure, the dollar is currently strong for instance, tradinga little above par for eight of the last 12 months. But there'snothing historically unusual about a strong dollar. In fact, it was generally above par from 1952 through 1960, from1972 through 1974, and again in 1976. Throughout the 1960s, it wasconsistently above 90 cents. And both the 1950s and 1960s were good decades, economically,averaging real growth between six and sever per cent per annum. Putanother way, a strong dollar has been historically compatible withCanadian prosperity. Indeed, perhaps the real anomaly was the currency devaluation thatstarted in the late 1970s, ultimately bringing the dollar down toits 2002 postwar low of 62 cents. No doubt, this was a competitiveassist to manufacturers. But it also meant that Canadian familiesand businesses had to pay much more for any products withsignificant imported content. Think of it this way. If the dollar were to go from par to, say, 50cents, then Canadians would need to provide twice as many exportsin order to pay for the same volume of imports. Or, if you like,run twice as fast to stay in the same place. Intuitively, thatdoesn't seem to be a particularly desirable proposition. In any event, there's a lot more going on than just the exchangerate. While the share of Canada's GDP attributable to manufacturinghas declined, so too has the relative importance of manufacturingin the U.S., Britain, France, Japan, Germany and Italy. It's aphenomenon common to most major advanced economies. In part, this can be seen as a function of development itself. Justas the once dominant agricultural sec-tor became progressivelysmaller as a proportion of the whole, so too has manufacturing.Increasing productivity which produces higher living standards inevitably does that. And then there's the rise of the previously underdeveloped world,bringing new competitors into the game. In the 1960s and 1970s,there was much impassioned talk about the moral imperative toprovide "trade, not aid." Well, now it's happening. Still, although Mulcair's position is substantively flawed, it'spolitically coherent. For one thing, it's a neat ideological fit for his party, thefederal NDP having a long history of hostility toward the oil andgas industry. Plus it plays particularly well in Quebec, which isnow the single most important part of the NDP electoral base. And most intriguingly, it offers the prospect of aborting thecoalition that Stephen Harper's Conservatives have painstakinglyconstructed. By combining a big win in Ontario with overwhelmingstrength in the west, Harper won a decisive majority last year. But if Mulcair can use the "Dutch disease" tosubstantially detach Ontario from that coalition, then it's a brandnew ball game one that might even produce an NDP government. And going by the polling-related giddiness of the commentariat,that's perhaps a very real prospect. But is it really? Barring some extraordinary development, the next federal electionis three years away. That leaves ample time for Mulcair's honeymoonglow to dissipate. Don't forget the Ed Broadbent boom. For a brief period in themiddle 1980s, Broadbent's NDP topped the polls. However, when theactual election came along in November 1988, they were back inthird place with just a touch over 20 per cent of the vote. In any event, two recent polls suggest that talk of a Conservativedecline may be a tad premature. In May, both Angus Reid and Abacuspegged Conservative support at 37 per cent, exactly the same as intheir final pre-election polls last year. It'll be an interesting ride. Stay tuned. - - - - - - Troy Media columnist Pat Murphy worked in the Canadian financialservices industry for over 30 years. Originally from Ireland, hehas a degree in history and economics. The e-commerce company in China offers quality products such as RFID Wristbands Manufacturer , RFID Proximity Card Manufacturer, and more. For more , please visit Smart RFID Tag today!
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