Monday, January 16, 2017

Sabotaging The Economy


American stock markets have skyrocketed since the election of Donald Trump. The president-elect and giddy investors think they're on the cusp of Reagan 2.0. But, Ruchir Sharma writes, they can't go back to 1981:

The forces that underlie economic growth have weakened significantly since the Reagan years, worldwide. No nation, no matter how exceptional, can try to grow faster than economic forces allow without the risk of provoking a volatile boom-bust cycle.

The potential growth rate of an economy is roughly determined — and limited — by the sum of two factors: population and productivity. An economy can grow steadily only by adding more workers, or by increasing output per worker. During the Reagan years, both population and productivity were growing at around 1.7 percent a year, so the potential United States growth rate was close to 3.5 percent. In short, Reagan did not push the nation’s economic engine to run faster than it could handle.

In recent years, America’s population and productivity growth have fallen to around .75 percent each, generously measured, so potential economic growth is roughly 1.5 percent, less than half the rate of the Reagan era. Any policy package that aims to push an economy beyond its potential could easily backfire — in the form of higher deficits and inflation.

Like all conservatives these days, the Republicans want to turn back the clock:

The nub of the problem here is nostalgia for a bygone era. The postwar world grew accustomed to the rapid growth made possible by the baby boom. Not every country with rapid population growth enjoyed a steady economic boom, but few economies boomed without it. And for most countries, the era of population growth is now over.

The pressure of falling population growth means that every class of countries needs to adopt a new math of economic success, and bring its definition of strong growth down by a full point or more. For developed nations like the United States, with average incomes over $25,000, any rate above 1.5 percent should be seen as relatively good.

As they have done before, the Republicans will sabotage the economy -- and try to blame it on somebody else. 

Image: OpEdNews

Sunday, January 15, 2017

They Have To Speak French


Back in the 1990's -- when Preston Manning burst on the scene -- a new kind of sign sprouted on lawns in my neck of the woods. Its message was blunt: "No more prime ministers from Quebec." The sign's unstated assumption was that French is spoken only in la belle province. But, when Brian Mulroney was running for the leadership of the Conservative Party, Stephen Maher writes, that he

liked to tell Conservatives that they had to choose a leader who could speak both languages. “There are 102 ridings in the country with a francophone population over 10 per cent,” he said. “In the last election the Liberals won 100 of them, we won two. You give Pierre Trudeau a head start of 100 seats and he’s going to beat you 10 times out of 10.”

New Brunswick is our only officially bilingual province. Manitoba has a significant French population. And northern Alberta also has a a significant number of French communities. That's why Maher maintains that, if the Conservatives choose a leader who can't speak French, they'll lose. His or her French doesn't have to be perfect:

It is not necessary to speak both languages as well as the Trudeaus, Mulroney or Tom Mulcair. Stephen Harper never captured the music of the langue de Molière, and Jack Layton’s Montreal street French sometimes sounded too folksy, but both politicians were able to express themselves, which is what is necessary.

It works the same the other way. Jean Chretien’s English was not elegant, but he could communicate enough effectively to hammer home his point.

Chretien's syntax could be just as fractured in French as it was in English. But the message was always the same -- and Canadians knew it.

What does that mean for the Conservative candidates?  In the upcoming French only debate:

Chris Alexander will be good, and Michael Chong, Andrew Scheer and Erin O’Toole ought to be able to unspool some talking points, but Brad Trost, Kellie Leitch and Lisa Raitt face de facto disqualification if they parler Français comme une vache Espagnole.

The same rule will apply to whomever the New Democrats choose to be their leader. Prime Ministers don't have to come from Quebec. But they have to speak French.

Image: J.J's Complete Guide To Canada

Saturday, January 14, 2017

Sunny Ways Don't Work With Him



Justin Trudeau is encountering a lot of blowback these days. His cash for access troubles have him in hot water. And his announcement yesterday that the oil sands will have to be phased out will be met with cold fury in Alberta. But these are nothing compared to the blizzard that's blowing in from Washington. Michael Harris writes:

Forget about Trudeau’s domestic adversaries — his most deadly political foe is a real estate mogul and part-time president of the United States. As Trudeau fares against Trump on a handful of key policy areas, so his government will rise or fall.

That’s not to say that there aren’t domestic issues that matter. There are, including the still-unlamented Bill C-51, broken promises on the environment, and a sophomoric attempt at electoral reform. But Trump will cast a far longer shadow over public affairs in this country than any of them.

Harris goes on to catalogue the types of nasty weather that will blow across the border:

You can be certain that the Trump government will return to one of the preoccupations of U.S. policy: getting Canada to agree to a ballistic missile defence shield (BMD). The Americans have been trying to make this sale ever since Ronald Reagan saw Star Wars one too many times. In 2005, Paul Martin turned down the Americans on joining BDM, even though President Bush personally lobbied him on it.

In the course of throwing other toys out of his policy pram on his way to the White House, Trump has promised to rip up NAFTA. He already has, in a way, because the Tweeter-in-Chief has threatened General Motors, Ford and Toyota with a “big border tax” for building cars in Mexico. That, of course, is illegal under NAFTA — which is why he wants to tear it up.

And if Trump is ready to violate trade treaties and walk away from NAFTA if he can’t get the changes he wants, imagine what he’ll be asking of Canada in these negotiations. You can bet he’ll be playing shamelessly to his own lumber lobby by placing restrictions on Canadian softwood lumber going into the United States.

And while maximizing production in the U.S. and insisting on favourable trade balances with his trading partners, Trump will come after other major concessions from Canada. The Americans have always wanted market access to our agricultural sector, and it will come as no surprise when they demand in a new NAFTA an open door to dairy products.

And that’s to say nothing of Canada’s highly vulnerable auto industry, which will soon catch the eye of a man who would sooner see its jobs in Michigan under his ‘America First’ initiative.

All those clips of Trump in and out of the WWE ring are part of the Donald Trump Show. Sunny ways don't work with him.

Image: Mic/WWE

Friday, January 13, 2017

The Old Order Changeth



Errol Mendes writes that the Post World War II Order is crumbling:

As a new year opens across the globe, the post-Second World War order and the global rule of law are losing out to the rule of individual men.

The trend is most evident in the actions of Russian President Vladimir Putin and his military, along with his Syrian, Iranian and Shia Iraqi and Lebanese allies, who have been trampling the most sacred rules of war and committing the most horrific crimes against humanity against civilians in Syria. In his own country, Putin maintains the façade of a ‘managed’ democracy by crushing all dissent, controlling the media and using his security and intelligence forces to suppress — or murder — opposition voices. And his actions aren’t limited to the domestic; he’s undermine liberal democracies in Europe by aiding far-right and neo-fascist parties, not to mention his ultimate adventure — the seemingly successful manipulation of the 2016 U.S. presidential election.

 In China, the leadership is using its growing military and economic power to defy foundational rules of international law in the South and East China Seas, daring even the U.S. to challenge its claims over one of the most important sea lanes in the world — where $5 trillion worth of goods are transported annually. The Economist sums up how the Chinese leadership intends to ramp up its own crushing of internal dissent in an article titled, ‘China invents the digital totalitarian state’. The hundreds of lawyers and other pro-democracy activists who have either disappeared or are being held in secret jails seem to be just forerunners of what could happen to Chinese citizens in the coming years under the leadership of President Xi Jingping, as he seeks to assume all the major levers of power.

There are times in world history when everything seems to shift. This seems to be one of those times. But the shift does not look like it's for the better. If it is to be stopped, Mendes believes that nations committed to democracy and the rule of law must do three things:

First, they must use all their powers of political, economic and social persuasion to shine a bright light on the ‘post-truth’ fabrications fuelling the new authoritarianism — the terror, corruption and fraud perpetrated by this new generation of strongmen, perhaps by focusing on its undisputed leader: President Putin.
 
Second, they must examine their own glass houses to see how the so called Washington Consensus liberal order has produced too many losers, too many corporate robber barons, while creating a level of social inequality, job loss and poverty that begs the title “neo-feudal”.

Finally, to draw back the millions who may have wandered over to the authoritarian camp, progressive leaders, parties and governments must use the human rights agenda to promote the lives and interests of all. Martin Luther King put it best: “Justice denied anywhere diminishes justice everywhere.”
The clock is ticking.

Image: Robyn Waters

Thursday, January 12, 2017

Unencumbered By The Thought Process

 
Wherever Donald Trump goes, salacious details follow. Jonathan Manthorpe doesn't believe the salacious stuff. He writes:

Intelligence reports don’t work that way. They’re usually a jigsaw puzzle of hints and scraps that require much sorting out by highly experienced analysts to form a consistent picture. Even then, the analysts can’t be sure they’ve got it right.

And there are many unbelievable elements within the documents themselves. For example, the repeated claim that Putin “fears” a Clinton presidency doesn’t ring true. It’s known that Putin despises Clinton, blaming her for inciting unrest in Russia after parliamentary elections in 2011 and in advance of his orchestrated return to the presidency in 2012. But Putin has survived as Russia’s leader since 1999, and is preparing for another six-year term in elections next year. There’s no reason to believe he truly feared Clinton posed a threat to his plans.

But that doesn't matter:

There are still good reasons to accept that Putin wanted Trump to win the U.S. presidency, and that the Kremlin’s spy agencies were put to work undermining Clinton’s campaign. The joint report published on January 6 by the Federal Bureau of Investigation, the Central Intelligence Agency and the National Security Agency is unequivocal on that point.

The conclusion that Putin preferred Trump in the White House is utterly logical. Trump has on several occasions expressed what sounds like admiration for Putin and his firm rule (most would call it ‘authoritarian’). Trump also has expressed the hope that relations between Washington and Moscow, which have been on a steady downward slide since Putin came to power, can be improved.

Putin’s big hope is that the Trump administration lifts or eases sanctions imposed on Moscow in response to Russia’s annexation of Crimea, its occupation of large tracts of eastern Ukraine and its murder of Putin’s political opponents at home. Russia’s economy is overly dependent on oil and gas exports at the best of times. Low international prices for energy have hit Russia hard; the sanctions have made matters worse.

It's interesting that this information has been shopped around for months as opposition research for Trump's opponents -- both Republicans and Democrats. The CIA was not the source. But Trump -- with typical impulsiveness -- accused the intelligence community of leaking the material.

National Public Radio used to broadcast a show with two MIT educated auto mechanics, the Magliozzi Brothers. They joked about folks who they claimed were "unencumbered by the thought process." Regardless of whether or not the latest sound and fury is true, it's becoming more and more obvious that the president elect is one of the people they were talking about.

Image: ncse.info

Wednesday, January 11, 2017

Obama's Farewell Speech



In his last address to the nation, Dwight Eisenhower warned Americans of the threat posed by what he called the "military-industrial complex." Last night, Barack Obama told his fellow citizens that they would have to work hard to protect their democracy from the threat of global Right Wing Populism. There have been several reasons for the rise of the Right Wing:

A shrinking world, growing inequality; demographic change and the spectre of terrorism – these forces haven’t just tested our security and prosperity, but our democracy as well. And how we meet these challenges to our democracy will determine our ability to educate our kids, and create good jobs, and protect our homeland.

He warned that, if Americans do nothing about their dysfunctional economy, they will court disaster:

Our economy doesn’t work as well or grow as fast when a few prosper at the expense of a growing middle class. But stark inequality is also corrosive to our democratic principles. While the top one per cent has amassed a bigger share of wealth and income, too many families, in inner cities and rural counties, have been left behind – the laid-off factory worker; the waitress and health care worker who struggle to pay the bills – convinced that the game is fixed against them, that their government only serves the interests of the powerful – a recipe for more cynicism and polarization in our politics.

And he offered his prescription for their economic ills:

So we must forge a new social compact – to guarantee all our kids the education they need; to give workers the power to unionize for better wages; to update the social safety net to reflect the way we live now and make more reforms to the tax code so corporations and individuals who reap the most from the new economy don’t avoid their obligations to the country that’s made their success possible. We can argue about how to best achieve these goals. But we can’t be complacent about the goals themselves. For if we don’t create opportunity for all people, the disaffection and division that has stalled our progress will only sharpen in years to come.

Opportunity for all. Easy to say. Hard to accomplish. Time will tell if his words ring -- like Eisenhower's -- through the decades.

Image: WITN

Tuesday, January 10, 2017

Conservatives Need To Be Progressive



That's the message Hugh Segal delivers to his fellow Conservatives in today' s Globe and Mail. He begins with a review of recent history:

John Diefenbaker’s surprise defeat of Louis St. Laurent in 1957 reflected Progressive Conservative equilibrium on preserving the role of Parliament, opposing closure and championing of low-income seniors’ real needs. The 1958 Tory sweep was the largest majority in Canadian history and emerged largely because of the arrogance of the Liberals, who moved a non-confidence motion to bring down the Diefenbaker minority government. The Liberals believed that the 1957 Conservative win was simply a mistake by the voters.

Bob Stanfield’s near-victory over the unbeatable Liberal icon of Pierre Trudeau in 1972 (Mr. Stanfield lost by a handful of votes and just two seats) reflected a huge step forward for Mr. Stanfield’s moderation, integrity and concern for the disadvantaged. This surge, which produced a win for Mr. Stanfield in English-speaking Canada, was seen as a victory over the apparent arrogance and condescension of then-prime-minister Trudeau.

Brian Mulroney’s victory in 1984 over the Trudeau legacy championed by then-prime-minister John Turner was more about a moderate position on Canada-U.S. relations, less “my way or the highway” federalism, a stout defence of francophone minorities and a rejigging of Ottawa’s economic and social levers toward the centre from the bureaucratic centre-left.

Segal is delivering a warning to the members of his party who are in the throes of Trumpism:

The lessons of history seem, so far, to have had little impact. Canadians haven’t heard from any candidate about those living beneath the poverty line, the next stage of reconciliation with First Nations, a creative 21st-century federalism, a real-world foreign and defence policy, the inequities of unemployment for younger Canadians, the precariousness of areas of employment or the need for a national strategy for seniors.

They forget that Segal held an influential position in Bill Davis' Big Blue Machine -- one of the most successful political operations in Canadian history. They would be wise to lend him an ear. 

Image: Ottawa Citizen