On July 09, 2010, I wrote a diary entitled:
Canadian Unemployment 7.9% Why?
In that diary I stated the purpose of the diary was to head off the expected right wing spin that Right Wingers would say something to the effect of "you see, conservatism works, liberalism fails".
Well, we now have solid evidence as far as job creation is concerned, that conservatism fails and liberalism works.
For those who have forgotten, in July 2010, U.S. unemployment was at 9.5% although the situation was improving.
US Jobless rate 9.5%
Canada’s unemployment situation was measurably better with a July 2010 rate of 7.9% - a full 1.6% points better than the U.S.
There were a number of factors responsible for this difference, and in my 2010 diary I pointed out that it had more to do with the policies of the previous Liberal government preventing “too big to fail” banks and the Opposition’s demand for stimulus spending. The employed picture for Canada was better, despite the Conservatives, not because of them.
History has now proven me right.
Fast forward now to January 2012.
In May 2011, the Conservatives won a super majority in Parliament and no longer had to listen to the opposition when crafting economic policy. By January 2012, the full effects of Conservative policies, including tax and spending cuts, were being widely felt.
By January 2012 effects of the Obama government’s policies are now wide spread and are being fully felt.
So the two governments, with the very different priorities and methods can now be compared. What is the difference after 18 months?
U.S. Unemployment January 2012 – 8.3%
Job gain – 243,000
Fifth straight drop, lowest level of unemployment in 3 years.
Unemployment drops to 8.3%
Canadian Unemployment January 2012 – 7.6%
Job gain – 2,300
Seventh month of disappointing results.
January Jobs Report
So, over an 18 month period, under President Obama, the U.S. has seen its official jobless rate fall from 9.5% to 8.3% a drop of 1.2%.
Over the same period, Canada, has seen its official unemployment rate fall from 7.9% to 7.6%. A drop of 0.3%.
The gap between the U.S. rate and the Canadian rate is now only 0.7%
What is more, this is happening despite the fact that Canada was starting from a much stronger position with smaller deficits, a strong financial sector and a vigorous housing market.
It needs to be pointed out that the majority of the job gains occurred when the Conservatives were in the minority and couldn’t enact their full agenda. The start of disappointing employment numbers almost exactly coincides with the Conservative majority win in May 2011.
Simple comparison says it all in my book. If conservative policies of low taxes and reduced spending during a recession worked, the U.S should be bleeding jobs and Canada should be booming.
The fact that the exact opposite is occurring, despite the fact that Canada started from a much stronger position, proves it: Conservatives don’t know how to run an economy.