Policy-makers, especially in Canada, need to be thinking longer-term and more “sensibly” about their recovery plans, [former Bank of Canada Governor David Dodge] said, rather than setting up spending plans that just paper over today’s problems or “piss money down a rat hole” in the hopes of a quick recovery. [1]

I just about fell off the chair when I heard that quote on the CTV 11 O’clock news.  Big thank-you to Alice in Canada for picking up the link.[2]

This sort of thing just doesn’t happen here.  However, Dodge has for a very long time been deep into the doo-doo that resulted from the ABCP affair, and appreciates the size of the hole we’ve dug ourselves better than just about anyone.

Still, it’s not every day you see a recently retired central banker going nuclear.  Dave’s gonna be off a lot of Xmas card lists now, but I expect he feels that bringing important fiscal issues into discussion is worth the price.  Shai Dorsai!

UPDATE: Our fearless leader responds [3] with the courage of a potbellied, smirking Pinocchio.

OTTAWA — Prime Minister Stephen Harper yesterday played down bleaker economic predictions from former Bank of Canada Governor David Dodge, saying forecasts are "all over the map" right now – though conspicuously absent from his latest remarks was last week’s controversial assertion that this country will emerge from recession faster than its peers.

……

And obviously Canada’s national paper is a big fan of Dodge.[4]

So thank you, sir, for throwing a nice big bucket of cold water on all the upbeat talk coming out of official Ottawa, all the prime ministerial predictions of a return to speedy growth, and asking the rude question: Is this really what’s going on the Canadian economy? Or is this just a [insert profanity here] forecast?

“I think anybody would be dreaming in Technicolor to think that you’re going to get through this by the third quarter of this year,” Mr. Dodge told The Globe’s Heather Scoffield in an exclusive interview Tuesday.

————————–

[1]: "Rosy outlook from Harper and Carney ‘unrealistic,’ Dodge says — Long and deep recession will fundamentally alter the nature of capitalism, David Dodge says in an exclusive interview a year after he left the Bank of Canada", by Heather Scoffield, Toronto Globe & Mail, March 18, 2009.

[2]: "Pissing Money Down a Rat Hole", AliceInCanada, March 18, 2009.

[3]: "PM defends economic confidence against Dodge’s criticism: Harper says forecasts are ‘all over the map’ ", by Steven Chase, Toronto Globe & Mail, March 19, 2009.

[4]: "The crude facts, courtesy of David Dodge", by Derek DeCloet, Toronto Globe & Mail, March 19, 2009.

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