Monday, September 28, 2009

Arrogant Fools

In his new book, Keynes: The Return of the Master, British economist Robert Skidelsky offers this assessment of New Classical economics, which has driven economic policy for the past thirty-five years:
I therefore believe that the root cause of the present crisis lies in the intellectual failure of economics. It was the wrong ideas of economists which legitimized the deregulation of finance which led to the credit explosion which led to the credit crunch. It is hard to convey the harm done by the recently dominant school of New Classical economics. Rarely in history can such powerful minds have devoted themselves to such strange ideas.

Stephen Harper, who is a graduate of the New Classical School, chose to skip the United Nations Climate Conference last week. It's not that he wasn't in the neighbourhood. He spent the day conferring with the mayor of New York, Michael Bloomberg. But his absence sent a clear message. It was the same message he sent when he refused to show up at the unveiling of Joe Clark's portrait in Ottawa, or when he neglected to show up at the 25th anniversary of Brian Mulroney's first election victory. Harper has expressed contempt for both men in the past. His defenders will simply claim that the Prime Minister is no hypocrite.

But it's not that simple. Given Harper's claim, during the last election campaign, that Stephane Dion's proposed carbon tax would destroy the Canadian economy; and, given his shameful neglect of environmental policy, it seems clear that Harper viewed the conference as a non-event. However, there are better economists than he who understood the significance of that one day meeting.

Last Thursday, in The New York Times, Nobel Laureate Paul Krugman wrote: "It's important, then, to understand that claims of immense economic damage from climate legislation are as bogus, in their own way, as climate-change denial. Saving the planet won't come free (although the early stages of conservation might). But it won't cost that much either." Krugman then went on to cite a Congressional Budget Office estimate that the legislation recently passed by the U.S. House of Representatives "would cost the average family only $160 a year or 0.2 percent of income."

Some commentators, such as Henry Giroux, of McMaster University, would say that those who claim that saving the planet will destroy the economy are lying -- in the Orwellian sense that what they say is the exact opposite of what they mean. A somewhat more charitable interpretation might be that they are simply fools -- like the fools at the beginning of the last century who claimed that The Titanic was unsinkable, or that the Maginot Line was impenetrable. They believe they are invulnerable.

For Skidelsky, New Classical economists and their disciples have been arrogant fools, marching in their own parade. It is time to show them the door.

Monday, September 21, 2009

Diminishing Returns

I admit that I am mildly surprised. I doubted that Stephen Harper would accept Jack Layton's offer to keep his government alive. Indeed, Harper did little to solicit Layton's support. That support probably had more to do with the NDP's readiness to face an election than it did with its stated interest in making Parliament work.

What was even more surprising was the Bloc Quebecois' support -- although these days it's hard to vote against a tax cut. After the dust had cleared, those ads that the Conservatives have been running about Micheal Ignatieff forming a coalition with socialists and separatists -- the ones that end with the tag line, "We can't trust him. We just can't trust him." -- took on a whole new meaning.

The really insightful event of the week was the Harperites proposed reforms to the EI system,which they apparently never brought to the table this summer. The proposed changes are absolutely consistent with the wedge strategy which has defined the government from day one. As Tom Walkom pointed out in The Toronto Star, they are designed to play one segment of the labour force against all the others: "The Prime Minister's proposed temporary reforms are aimed at jobless Ontario auto workers, a key NDP constituency."

These folks are "relatively well paid older workers who find themselves out of a job." They live primarily in the Windsor and Oshawa areas; and, in the last election, the NDP lost Oshawa by only 3200 votes. Draining NDP votes from key Ontario ridings could make up for the seats Mr. Harper will lose in Quebec the next time out. Harper had originally sought to draw votes away from the Bloc Quebecois, by recognizing Quebec as a "nation within a nation" two years ago, until he blew up that support in a frantic effort to keep his government alive after his November fiscal up date -- the one that forecast no deficit. Mr. Flaherty readjusted his figures last week. That number has gone from 0 to $56 billion in 10 months.

Wedge issues have been the hallmark of modern conservatism. They were the core of Ontario's Harris government, whose chief of staff -- Guy Giorno -- is now Harper's chief of staff. They were central to the second Bush administration, whose chief political strategist -- Karl Rove -- was occasionally referred to as "Bush's Brain." In both cases, the strategy was subject to the law of diminishing returns, because it relied on "micro targeting," -- which further subdivided the wedges -- until voters saw themselves only in terms of what distinguished them from their fellow citizens and not in terms of what united them. In the end, politics became the equivalent of herding cats -- and ended in a cacophony of discontent.

Mr. Harper's party is not the only party whose appeal is based on wedge issues. The Bloc Quebecois is founded on the principle of wedge politics. Nationalist voters in Quebec are a large and fairly stable unit -- unless leaders like Pierre Trudeau, Brian Mulroney or Jean Chretien, native sons all -- convince a significant number of their fellow citoyens that Quebec's interests are better served within the government than without.

Michael Ignatieff is no native son. But his grandparents and his uncle settled along the banks of the St. Francis River in Quebec's Eastern Townships. He knows Quebec much better than the Prime Minister. Be that as it may, he now is at what The Star's James Travers calls a "rare moment." Having released his party from the role of grumbling enabler to loyal opposition, he must now "seize this moment between crises to reintroduce himself to Canadians and restore party confidence that it hasn't made another leadership mistake."

Crucial to that mission is a rejection of wedge politics. Ignatieff must convince Canadians that -- while he understands their differences -- he also understands what unites them. Canadian voters have stopped coming to the polls because they have figured out they are pawns in a game where they are being played against each other. Mr. Harris and Mr. Bush both discovered that -- in the end -- wedge politcs is a losing strategy.

Monday, September 14, 2009

The Bogeymen

As Parliament resumes today, an election seems inevitable. Jack Layton has offered the prime minister an olive branch; but, given Mr. Harper's penchant for ressurecting bogeymen -- in this case, "socialists and separatists" -- it appears unlikely that the prime minister will take the offer. Instead, Mr. Harper says, what needs to be done is to "teach them [the opposition parties] a lesson." He tried to do that last November; and we all know how that gambit turned out.

Now Mr. Harper seeks to shift the blame for that "separatist coaltion" to the Liberal Party -- forgetting that, like Dr. Frankenstein, he gave that monster life. He also forgets that his rabid attack on the Bloc Quebcois was seen in Quebec as an attack on all Quebecers. Mr. Harper might wish that his Conservative predecessor, Brian Mulroney, would disappear. But, as Mulroney reminded Canadians last year, you cannot form a majority government in this country without winning seats in Quebec.

It is absolutely true that it is now up to Mr. Ignatieff to make his case. It is not enough to promise that "we can do better." He will have to outline a specific set of policies which give substance to that claim. But, as Jeff Jedras wrote in the National Post, Canadians should not blame the election on Ignatieff: "It's important to note that, in a minority parliament, it's not the job of the opposition parties to support the government. In fact, just the opposite. It is the responsibility of the government to maintain the confidence of the House. And if it can't, if the Conservatives can't keep the support of just one opposition party, then they have some serious explaining to do, and alot of the responsibility to shoulder for any resulting election."

Jedras went on to argue that, "Harper decided long ago to govern like he had a majority, that cooperation with the opposition parties was unnecessary, as long as he could count on the Liberals being willing to do anything to avoid an election. So he played political games every step of the way, forsaking cooperation for gamesmanship and the seeking of partisan advantage."

Those games continue. The Harperites have sought to paint Ignatieff as "the other" -- the same tactic that conservatives in the United States have used against Barack Obama. But Mr. Ignatieff, like Mr. Harper, was born here. And, as Mr. Ignatieff makes clear in his book, The Russian Album, there is a much longer tradition of public service -- inside and outside Canada -- in the Ignatieff family than in the Harper family.

Nonetheless, the burden of proof lies with Mr. Ignatieff. He claims that he has purposely chosen to keep the party platform under wraps until now so that the Harperites would not have the luxury of time to distort it. Given the government's use of fear as its chief political weapon, there may be some wisdom to that strategy. But now that the gaunlet is down, it's time for the wraps to come off.

Monday, September 07, 2009

Here We Go Again

When Michael Ignatieff announced last week that he and his party would no longer support Stephen Harper's minority government, he was -- at least among the chattering classes -- universally condemned. Even commentators on the left offered no support. "Heaven knows the country needs big changes," Gerald Caplan wrote in The Globe and Mail. "But the last thing we need is yet another election that will change nothing." And Tom Walkom wrote in The Toronto Star: "We do not need an election because, in the broadest sense, the choices have altered little since 2008 when Canadians last went to the polls."

Both men are essentially correct. So far we have not been given clearly defined choices -- even though, as Caplan says -- we need to make big changes. Nothing underscores that need more than Marlene Jennings description of Human Resources Minister Diane Finlay's reaction at the most recent meeting of the EI Commission, whose formation saved us from an election last spring. When Jennings challenged Finlay during the meeting, Finlay -- according to Jane Taber's report in The Globe and Mail, "started screaming at [Jennings] at the top of her lungs. . . . 'I have a right to my opinion, she screamed,' said Jennings. 'You are not going to tell me what to think.'"

That is an attitude which starts at the top with the Prime Minister. Unfortunately, Finlay's ardent defence of her right to an opinion is of little comfort to the 500,000 Canadians who have -- according to The Toronto Star -- lost their jobs since the last Labour Day. And it is Harper's opinion -- that the best government is the government which governs least -- which is responsible for our present financial morass. That opinion is also why his response is so out of touch with the times. It would, indeed, be fitting if both the Prime Minister and the Minister of Human Resources woke up to find themselves unemployed.

Now Mr. Ignatieff and his party believe they can hasten that outcome. But, to date, they have not presented Canadians with an alternative vision. Yesterday, the Liberals began running ads under the banner, "We Can Do Better." The slogan is even more alliterative in French, "Nous meritons mieux." But Ignatieff will need more than poetry and soaring rhetoric to succeed. We await his program, even as the Conservatives ready their personal attacks. Let's hope that this is an election about ideas, not about adolescent insults.