Yesterday morning at the Calgary Zoo, I ran into the seasoned old pro Bell. He was there covering the speech of Stephane Dion at the annual Grit Stampede Breakfast. After exchanging the usual pleasanteries interspersed with a few loud guffaws, he introduced me to reporter Jason Fekete of the Calgary Herald who was standing nearby. I had never met Fekete before. He seemed like an earnest young man and was friendly enough. However, the introduction was perfunctory and fleeting. Hardly an opportunity to size up the personality and skill set of the young scribe.
Dion went on to wow the crowd of 500 or so party faithful with a forty minute exposition of his 'Green Shift' policy, delivered articulately and passionately without a note. The crowd gave him many warm and long bursts of applause throughout the speech, ending with a heartfelt standing ovation. It seems that there are a lot of 'Green Shift' sympathizers in cowtown. I have heard Dion speak many times in the past, but this was his very best outing and his listeners rewarded him accordingly.
After the festivities had concluded, I returned home and picked up my morning edition of the Calgary Herald which I had yet to read. I was disappointed but not surprised to see that the second most prominent story on the front page was - as you might expect from an organization that is in the throes of a steamy love affair with Bush's pal Steve Harper - a negative story about the Liberals. It was written by Fekete who I had just met. The headline read "Grit's blog slurs Alberta." The piece was about the incendiary musings of maverick Ontario Liberal MP and former Tory, Garth Turner. Turner has mused like this before. He's a loose cannon. All parties have had loose cannons. I would question whether Turner's musings - like pitbull stories - are the right stuff for front page treatment. For that I don't blame Fekete. It was probably the work of one of his rag's many Conservative cheerleader editors. So be it.
But as I read further into the story, I did find something in Fekete's story that, well, . . really pissed me off. It was the invoking of the mother of all of our fears - Alberta's potato famine, its holocaust. Yes, the Ace up every RAT (ReformAllianceTory)'s sleeve, and the rabbit in every RAT's hat - the National Energy Program! The evil and dreaded NEP!
Now, being a Grit in Alberta, I need not dwell on the fact that I do not like the mention of the NEP. Of course, I don't. After all, our opponents have been flogging us about the NEP for - believe it or not - more than twenty-eight years! But what I really dislike is when it is made to look a lot worse than it was. When history is cast aside in the interests of advertising revenues or pamphleteering, or pandering to an important well-heeled segment of the Herald's dwindling readership. That is when it really gets to me.
The offending paragraph of Fekete's article reads: "The NEP - which set domestic oil prices lower than the world price and steered energy exploration out of Alberta - crippled the province's economy for a decade, but it was compounded by a collapse in world oil markets."
A fair interpretation of Fekete's words is that it was the NEP that caused our economic woes for ten years, and the collapse of world oil markets did not make things any easier. This is nonsense!
These are the facts:
1. The NEP was introduced in October, 1980.
2. Brian Mulroney and the Tories were elected in September, 1984.
3. Mulroney's Western Accord ended the NEP in March of 1985.
So, Fekete's history lesson so far is that the life of the NEP was four and one-half years - not a decade.
But here's more history - economic history, in this case - for Mr. Fekete:
- Between October 1980 and December 1980 when the slowdown began to take hold in the oil and gas industry, as well as other parts of the economy, interests rates - led by the Federal Reserve Board of the United States - rose from 13.5% to 20.50%.
In other words, NEP came into force and interest rates shot to the moon, just like that. There was no lag in time between the NEP and spiralling interest rates. Think of it - homeowners facing twenty percent mortgage rates. Investment loan interest in the same levels of the stratosphere. Business in times like that has only one way to go - down! It went down. And it got worse:
- By September 1981 - one year after the introduction of the NEP - interest rates were still hovering at 20%.
- Through 1980, the average price of a barrel of oil was $37.42 US (inflation adjusted to 2007 $97.68 US).
- Through 1984, the average price of a barrel of oil was $28.75 US (inflation adjusted to 2007 $59.47 US).
- Through 1986, a mere 6 years after the NEP and almost 2 years after the Western Accord that trashed the NEP, the average price of a barrel of oil was $14.44 US (inflation adjusted to 2007 $28.29 US - about 29% of the real value of a barrel of oil in 1980 when the NEP was initiated).
- Between 1987 and 1990 the average price per barrel ranged from $17.75 US to $23.19 US (inflation adjusted to 2007 $33.56 US to $38.02 - 35% to 38% of the real value of a barrel of oil in 1980 when the NEP was initiated).
And so, there was little lag in time between the NEP coming into force and collapsing oil prices. What this history tells us is that the NEP was literally the least of our problems.
See, Historical Oil Prices http://www.inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp
See, Historical Interest Rates http://research.stlouisfed.org/fred2/data/PRIME.txt
So the NEP - as bad as it was, and it was not good policy admittedly - was only a factor that lasted not more than four and a half years. A long way from a decade. Far more trouble came to the oil and gas sector because of high interest rates and plunging oil prices (caused in part at least by high interest rates), all of which started at about the same time the NEP came into force. The NEP did not set interest rates or oil prices. It was those high interest rates and low oil prices that caused far more economic havoc for Albertans and lasted a helluva lot longer than the NEP.
Politics being what it is, I can understand why politicians sometimes misrepresent facts or skew them a certain way so as to reap some political gain. That's politics, and if one is involved in politics, it goes with the territory. But why should a newspaper do the same? What about the old newspaper value of informing the public - informing the public of the facts, not myths, so the public can make intelligent choices. That's what newpapers used to stand for, and what too often these days, they do not stand for.
Back a long while ago, when the Calgary Herald was a venerable newspaper of record, it would have accurately reported all of the economic facts about the NEP. Those days are clearly over now that it has become merely a cheap Conservative/Fraser Institute pamphlet.