The Rehabilitation of Bob Rae

Posted on: 04 February 2009 by Steve Paikin

Once upon a time, there was a social democratic premier of Ontario named Bob Rae. One day, Rae woke up to find himself in a job he never thought he'd get, at the beginning of the worst recession since the great depression.

What to do?

Good question. His advisors in the ministry of finance bureaucracy told him the recession would be quick and shallow. Turned out it was long and deep.

So Premier Rae tried doing a few things designed to protect people during the worst downturn any of them could remember.

He cranked up government spending, incurring massive deficits.

I can still remember his finance minister, Floyd Laughren, introducing his first budget in 1991 by saying, "Mr. Speaker, we have the choice to fight the deficit, or fight the recession. And we choose to fight the recession."

The deficit clocked in at $11 billion. The punditi were appalled. And so began the inexorable decline of the NDP government.

Rae also told the hundreds of thousands of people who were paid by the Ontario taxpayer that they'd have to take a dozen days off without pay, so the treasury could save money.

The idea for these "Rae Days," as they became known, was to spread a little bit of pain, rather than simply firing tens of thousands of public servants in the middle of the recession.

Rae, of course, was excoriated for following this course, and became a one-term premier, losing to Mike Harris' Common Sense Revolution in 1995.

Fast forward almost a decade and a half, and Rae's half-brained ideas of the 1990's are now becoming the conventional wisdom in the first decade of the 21st century.

Governments everywhere in the world are running massive deficits, in the hopes that government stimulus packages can fill the void of economic activity prompted by a frightened private sector and the tight credit crunch.

Our neighbours to the south are flirting with a deficit of one trillion dollars. Jim Flaherty's budget, introduced last week, forecasts deficits north of $60 billion over the next two years. And Dalton McGuinty, premier of Ontario since 2003, is now warning of off-the-charts deficits to spur on economic activity.

McGuinty has also declined to rule out what will no doubt be known as "Dalton Days," to save money and jobs (this generation's "Rae Days" by another name). Other jurisdictions, including Arnold Schwarzenegger's California, are considering the same thing.

Bob Rae had this to say in yesterday's National Post about the strange turns history sometimes takes.

I e-mailed him on Parliament Hill today, to get some more reaction to this turn of events. Here's what he had to say:

"Governing in a recession is tough - but it's how we treat the vulnerable, how we build solidarity and how we move forward together that matters. (Mike) Harris spent 100 million filling in subway tunnels with concrete."

You can't blame Rae if somewhere deep inside, he's smirking just a bit.