Saturday, August 29, 2015

A Fundamental Realignment


Justin Trudeau, Tom Walkom writes, has done the country a favour. For the last two decades, the word "deficit" has been synonymous with "doom." But the two words are not synonyms. And now is the time to run a deficit:

But economists of all political stripes agree that if government is ever going to spend money on things like bridges and sewers, now is the time to do it.
First the spending is needed. Torontonians found that out last winter when the bitter cold caused ancient water pipes around the city to fracture.

Second, interest rates are at rock-bottom lows. As the U.S. economist Paul Krugman notes in his New York Times column, the world is awash in capital. Investing in public works is a much better use for this capital than, say, stock market speculation.
Third, the Canadian economy is stagnant. It may or may not be in recession (my guess is that we did suffer a recession in the first six months of the year but are now out of it).

Neo-liberals have convinced voters that governments are like households. Households have to balance budgets. But, in hard economic times, government debt can stimulate an economy and help households  balance their books.

Prime Minister Harper was absolutely gleeful when Trudeau  said he was willing to run a deficit -- something Harper has done, better than any prime minister in Canadian history. But that deficit was caused as much by tax cuts as it was by the global recession.

He won't tell you that, of course. Honesty is not his strong suite. The Duffy Trial has underscored that point. And the NDP has bought into the neo-liberal characterization of deficits. Now the Liberals are to the left of the NDP. 

Our politics is undergoing a fundamental realignment.


Ron Waller said...

Trudeau is running on Reaganomics income tax cuts. This is the real reason he plans on creating big deficits. (He's doubling infrastructure spending over a 10 year period. Not engaging in a Keynesian-style big-government infrastructure make-work program.)

Reagan created big deficits with tax cuts. Mulroney created big deficits with tax cuts. Bush Jr. and Harper created big deficits with tax cuts.

Pretend all you want a fundamental realignment is happening. But it's just more of the same kind of nonsense we've had over the past 35 years: i.e. "neoliberal"/neoclassical economic ideology. Tax cuts create jobs. Tax cuts create growth. Tax cuts pay for themselves. Requires a lot of pretending.

Both Trudeau Jr. and Dick Cheney believe that deficits don't matter. The latter had an agenda to bankrupt government and put it in a fiscal straight jacket. "Starving the beast."

What's Trudeau's agenda? He probably doesn't know himself. He hired market fundamentalists like Kevin Milligan to do the thinking for him.

Ontarians got fooled into believing the Liberal party was the real party of the left. First thing they did when they got elected? Privatize the electricity system.

In any case. The die is cast. Trudeau landed the marlin on this gambit. But just watch after he gets elected: oh no, we can't legalize marijuana it will interfere with trade with the US; oh no we can't change the electoral system, Canadians love First-Past-the-Post voting; oh we can't deliver on that infrastructure spending, the books are worse than we thought. But Jr. will have ridden his daddy's coattails to power despite running on everything he opposed.

Rural said...

It seems to me that the Conservatives are not conservative, the Liberals are not liberal. the New Democrats are not democratic and the Greens are not all about green. Its a strange world this politics thing, Owen!

Owen Gray said...

What's the old line about making strange bedfellows, Rural?

Owen Gray said...

You have every right to be cynical, Ron. Given the past history of the Liberal Party, your cynicism is understandable. But I hope you're wrong.

Anonymous said...

Yep, seems the NDP had foolishly bought into the balancing the budget act at any cost. Mulcair must have mistakenly thought it was a politically smart thing to do, just as Trudeau had done with supporting Harper on C-51. Will it cost the NDP votes? We will find out.

If he forms government, Mulcair is going to live to regret saying this .... but I suspect progressive voters will forgive him for running a small deficit if he can justify the spending.

However, let us not forget that it was the Liberals, specifically Paul Martin, who had promoted this neoliberal thing about balancing the baudget at any cost. He had cut transfer payments to the provinces drastically and also used the EI funds to balance the budget, just as Harper subsequently learnt to do so from him. Both used about $50B of EI funds. Here to jog your memory (Lol):

So if there waa any realignment, it was likely as much against previous Liberal government promoted idea, eh?

Owen Gray said...

I agree, Anon. The Liberal turn to the right helped make Harper possible. Now necessity may be dictating another course of action. However you look at it, though, it's time we had a real debate about deficits.

Kirby Evans said...

Ron maybe right or wrong about Trudeau. However, it seems to be that he is consistently wrong about the NDP. He is like a broken record of superficial analysis concerning the NDP, and fails time and again to name any actual policies of the NDP that make them in any way left. Meanwhile, he ignores Mulcair's consistent career in Quebec as a privatizer and 'free-market,' Thatcherist. Trudeau might hire 'free-market fundamentalists' but Mulcair doesn't have to hire them because he is an expert himself on this matter. Ron may be correct about the Liberals appearing more left than they are, they certainly appeared that way in the Ontario vote. But this dream that the NDP continues to be in any reasonable sense left of centre is pure fantasy. The simple fact is that the NDP has adopted the Neo-Liberal program more or less wholesale and their obsession with "no deficits" etc. demonstrate this. The Ontario election is a good example and Ron should pay attention to his own words. Kathleen Wynne may be the same old story, but Andrea Horwath was just as bad. My local NDP candidate in the Ontario election (a CUPE employee btw) reacted to Hudak's promise to cut 100,000 public sector jobs by saying that the NDP would also lay off that number of people, only he promised to make smarter cuts than the Cons.

There IS a fundamental shift going on in this country, but its import is not the Liberals shifting left, rather it is the NDP totally abandoning its traditional political ground. We can learn from people like Jeremy Corbyn in England and Bernie Sanders in the US (and a lot of the millennials in general) it is time to bring the original goals of the left back. And the NDP belongs in the dustbin of history.

Owen Gray said...

I have a hunch that Ron will have a response, Kirby. But I agree with you. The big shift in this election is about the road the NDP has chosen to travel.

The Mound of Sound said...

What Kirby said. Twice.

Owen Gray said...

Ditto. Twice.

thwap said...

Right. Put the NDP in the dustbin of history. As long as you put the Liberal Party of Canada in there too. Along with the harpercons.

Either that, or we can build to have our own Corbyn moment with the NDP in Canada.

And we can do that after we dispose of the party that produced stephen harper who shits upon the very basic forms of parliamentary democracy.

I wish I could say that the Canadian Left could produce such a thing by sheer force of will, but we're hopeless. And part of that hopelessness stems from believing a few nice words from Justin Trudeau of the fucking Liberal Party constitutes a "fundamental shift" in Canadian politics.

Shameless enough to drag Paul "Austerity" Martin (or is it Paul "Screw the Red Book" Martin?) out to condemn the NDP for proposing austerity!

Scotian said...

What Kirby said. Thrice.

Also, especially on how Mr. Waller there is clearly a Dipper partisan who sees all the motes to logs in the eyes of Liberals, yet fails to see the clear-cut forests within his own sides eyes. I'm also a little tired of Dippers using the Harper frame of Trudeau being some sort of moron without any real brains who has to have everyone else do the real thinking for him. It is insulting and not supported by his actual life and record, and I for one find it not just rude but dishonest and a classic example of how Dipper CPCer, same old sneer, as in they both love the politics of personal destruction when it comes to Trudeau in particular and Libs more generally.

Owen Gray said...

What you write about the politics of personal destruction is spot on, Scotian. Mr. Harper has imported that virus from south of the border.

Owen Gray said...

As I wrote to Ron, thwap, you have good reason to be cynical. But change has to start somewhere -- most particularly with the original offenders.

Ron Waller said...

I remember the same nonsense during the Ontario election. The Liberal platform is left of the "right-wing" Margaret Thatcher NDP. Except if you bothered to gloss over the platforms.

So let's compare platforms this time around. Mulcair is running on universal daycare. Trudeau is running on Harper-like tax cut daycare. The neoclassical ideologues on Team Trudeau says this makes economic sense. But they think the 19th century was an economic golden age.

Mulcair is running on reversing Harper's $36-billion cuts to healthcare transfers. You know the ones in the commercials: Harper won't be there for you. Neither will Trudeau. He already factored the cuts in to his tax-cut heavy budget.

If anyone is familiar with macroeconomics, the new unilateral health funding strategy Harper implemented -- the market fundamentalists on Team Trudeau are on board with -- is pro-cyclical. What that means is that funding drops in a recession when provinces get hit with heavy costs from automatic stabilizers. Steady funding is very important.

The PBO says that there is a fiscal imbalance thanks to Harper's health cuts. That provincial costs are "unsustainable." According to Statistics Canada, since the 1990s, the federal share of total government spending went dropped 40% to 30%, while the provincial share rose from 40% to 50%. This is thanks to Liberal and Conservative downloading. Here Trudeau is a part of the problem. Mulcair does his homework. Understands there's more to politics than motivational speaking.

Mulcair is running on carbon pricing. Trudeau is running on NOT. He has some BS plan that basically lets the provinces do what they want. Do people seriously consider this leadership on the environment? Especially at this late stage in the game? Do we really want to waste more years being disgusting environmental freeloaders the world rightfully hates?

So this is a very important election. But you wouldn't know it from some of the punditry out there (who are ethically challenged, to say the least, in their application of journalistic integrity.) Mulcair is also running on electoral reform. That would put an end to the nonsense horse-race polarizing politics that plague election campaigns.

Ron Waller said...

"We can learn from people like Jeremy Corbyn in England and Bernie Sanders in the US (and a lot of the millennials in general) it is time to bring the original goals of the left back. And the NDP belongs in the dustbin of history."

Now you're just being silly. But anyone who thinks Trudeau is another Bernie Sanders doesn't know jack shit about economics -- or what Sanders is actually talking about.

Trudeau has neoclassical ideologues on his team he consults as "experts". People like Bernie Sanders and Robert Reich are talking about returning to the centrist Keynesian economic policies we used during the post-war era (1945-1980) when modern living standards were created. Back then the highest income tax bracket was 70%.

The NDP is the only party that is anchored in the left and supports Keynesian economics. They have to appear serious on the economy not offend the sensibilities of Red Tories who hold far too much sway because of our barbarous voting system, First-Past-the-Post. But then again, they plan on fixing our voting system as almost all other developed countries have done. Then an actual majority of voters will be represented in government. Not a tiny minority of Red Tories.

Mogs Moglio said...

Oh ye of little faith. "And the NDP belongs in the dustbin of history." Have none of you ears or eyes? It has been mentioned here by Owen and others also and on other blogs I enjoy visiting, that Steve Joe's presence in the Canadian government/political/power scene has bent and warped Canadian politics. Have you never played chess? Anticipate your opponents moves and be there waiting, waiting and waiting to take them out of the game.

Trudeau voted for Bill-C-51 for many reasons the most compelling was to shut the Harper campaign down from sayin "Trudeau a troubled truant, from battling terror, terror loving weakling." Let alone Steve hides in closets. Steve has dragged us into the 'Twilight Zone' of American Republican and Tea Party adolescent antics. I don't see Mulcair Trudeau or May stooping as low as harper who limbo's under the Canada US border South to ratchet up his histrionics. And even though he criminalizes Canadian Organizations who parallel and work together with American ones to strengthen the holistic message. Harper sees no shame in idolizing all that is wrong in America and bellying up to their 'bar' of dirty tricks campaign deceptions and well turning Canada's election into cross between a Philippine entertainers election farce and a good old mud raking mud flinging American mud wrestle.

So yes harper's sheer force of will backed by Canada's Oligarchs and the Koch bro's oil-soaked money infiltrating harper's campaign (plus the Republican dirty tricks team) has dragged all political parties far off their normal base and platform. "Difficile à tribord" [Far far far right] in order to keep pace with the schmuck harper's dominance in the press thanks to the wealthy media moguls who think like him and the American far right camp. Left moved to centre centre right moved to right to keep apace with harper's totalitarian slant. When harper is ejected expect Mulcair and Trudeau to rebound back to home territory like an unwinding elastic band once the irritating tension [harper] is removed.

Now swallow your petty fears and vote strategic. Me in my con incumbent riding I can already smell the roses the NDP contender is polling at 46% all others Libs Cons Greens and the rest of the ill fitted pack shares 54% it is a no-brainer who I will vote for. May i remind you -OUT THE CONS- is the election cry of 2015 no time for petty grevances this election is about saving Canada by ousting all cons not who's political ideology will get the next crack at the kitty.

"He's just not ready?" Was harper when he the professional student turned professional career politician?

'Mulcair will destroy the economy?" Has harper not already given it a 21 gun salute? Sure he draped the Canadian flag around it before lowering it into the grave. But mistake not who pulls his strings and who benefits from his destructive passion to destroy Canada and Canadians.

The only thing we need be concerned about now is eject the harper cons. Let's let the rest unfold without second guessing the future unless you are one of these:

Or these:

Let the chips fall where they may and unfold in due time but right now the job is to oust harper and his crooked cabal of crime achieving cons...

Owen Gray said...

It really is a matter of voting for the opposition party that has the best chance of defeating Harper, Mogs. It's interesting to note, though, how our opposition parties are not running true to form.