NEIL REYNOLDS

• Globe and Mail Update

March 4, 2009 at 6:00 AM EST

Prime Minister Stephen Harper went on CNBC's The Kudlow Report in New York last week and left economist Larry Kudlow, the show's exuberant host, dazzled out of his mind. Rightly so. In its own way, it was one of the finest seven-minute performances by a Canadian prime minister in the entire television era.

Mr. Harper was assertive without hint of the aggressor, confident without hint of the braggart, critical of the United States (and, implicitly, of President Barack Obama) without hint of the anti-American.

In his subsequent blog on this interview, Mr. Kudlow called Mr. Harper “an impressive statesman.” Canada, he said, was “lucky to have him at the helm.”

It was, simply put, a memorable conversation. Excerpts would make excellent Conservative TV commercials in the next federal election. Here are a few selected excerpts of their exchange:

Kudlow: “The Canadian banks appear to be in much better shape than the American banks. Why?”

Harper: “Well, it is true. We have, I think, the only banks in the Western world where we're not looking at bailouts.”

Kudlow: “No TARP (Troubled Asset Relief Program) money, sir? No TARP money?”

Harper: “We haven't got any TARP money. The reasons are complex. You know, first of all, that our banks are private. We don't have a Fannie Mae or a Freddie Mac equivalent mucking around in the system. [Fannie Mae and Freddie Mac] are institutions with a difficult private-public mix. Sometimes, private-public mixes have the worst of both worlds. We don't have anything like that …”

Kudlow: “Do you have leverage ratios that might have been enforced? That's clearly one of the breakdowns here in the States.”

Harper: “Well, we do have leverage ratios. What's ironic is that our own banks had not actually achieved those ratios. They were actually working under them. Part of what …”

Kudlow: “They were underleveraged?”

Harper: “They were underleveraged.”

Kudlow: “Wait. Wait. Canadian banks were underleveraged?”

Harper: “Under what they could have been …”

Kudlow: “I didn't know that there was such a thing on this entire planet earth.”

Mr. Harper proceeded to stupefy Mr. Kudlow with further homegrown revelations.

Harper: “Our corporate tax rates will be the lowest in the G7 in the next few years – [at] 15 per cent in 2012.”

Kudlow: “Wow.”

And, on the touchy subject of the Alberta oil sands:

Kudlow: “President Obama has people all over his administration [who are] totally hostile to the oil sands because of the carbon problem.”

Harper: “Well, we believe that there is a carbon problem there, also. And we're prepared to work to reduce the carbon footprint of the oil sands. But President Obama himself has talked about [the carbon problem of] coal-fired electricity. Carbon emissions from coal-fired electricity in the United States are 40 times the emissions from the oil sands.”

As for the possibility that the U.S. would cut off oil imports from Canada:

Harper: “If you look at American needs for energy and where Americans can get it at a reasonable price, [such a policy] is completely unrealistic. We will do what we can to reduce the carbon footprint. But there should be no illusion. Economic reality will hit those [oil sands] environmental policies pretty hard when someone goes to implement them.”

And, finally, as for the risk that the U.S. will turn protectionist:

Harper: “If you try to stimulate a national economy at the expense of the global economy, we're going to make the whole situation worse around the world. I think – [based on] my conversations with President Obama – that he understands how serious it is to avoid a protectionist drift in this economy climate.”

In separate sound bites, Mr. Harper has said these things before – but not comprehensively in such a persuasive context. Perhaps it's the difference between interviews with journalists at home, and an American TV host who didn't already know the answers. But it was in the context of Fannie and Freddie that Mr. Harper made his most important observation – the wisdom of keeping the private sphere and the public sphere separate: Be careful about “mucking around.”

This is advice, sadly, that President Obama will not heed. If President Franklin D. Roosevelt was the revolution and President Ronald Reagan the counterrevolution, Mr. Obama is the counter-counterrevolution. The pendulum swings. Fannie Mae, of course, was a product of the original revolution. (Mr. Kudlow himself, an economist who once worked for the U.S. Federal Reserve as a Democrat, served as an adviser to Fannie Mae during the Reagan presidency.) The Obama counter-counterrevolution looks like it's now back to the future – with much mucking around and perhaps with comparable results.