Leave It To Stephen

Bob Rae, the former premier of Ontario and now the Liberal Foreign Affairs critic, says that watching Prime Minister Harper operate in the House of Commons is like watching reruns of a 1950's television show -- a show he calls Harperville.

"Harperville is a land of conformity, not freedom or diversity," writes Rae. It is a land where "Daddy goes to work and Mommy stays home. There are good guys and bad guys. The bad guys get killed or go to jail. . . Daddy definitely knows best and his word is law. If you like Daddy you can talk to him or even have your picture taken with him. If Daddy doesn't like you, he will be very stern with you, and he won't even talk with you."

Looking in the rear view mirror, the Conservative Party has been playing and replaying the same theme throughout this election. It's called Leave It To Stephen. The problem, of course, is that the world Harper tries to personify never existed -- except on television. The world was never that simple and the lines were never that clearly drawn. But he and his party are betting that, surrounded by terrorism and economic uncertainty, Canadians will come around to the conviction that Stephen Knows Best.

However, one needs to ask the question, "What, exactly, does Stephen know?" For openers, it's worth remembering that when George W. Bush was looking for countries to join his Coalition of the Willing, Harper -- unlike Jean Chretien -- couldn't wait to join the parade. That show hasn't ended yet, even though Mr. Bush declared "Mission Accomplished" four years ago. And, on the subject of economic management, Harper has -- in less than three years -- spent money, reduced taxes, and left the cupboard bare -- even though he started with a $14 billion surplus. Over the last couple of weeks, world markets have reminded us how that show ends.

And what promises has Harper made during this election? Not many. But he has vowed that he will lock up fourteen year olds for life, if their crimes warrant it. And, on the subject of government support for the arts, he has declared that "when ordinary working people come home, turn on the TV and see a gala of a bunch of people at, you know, a rich gala all subsidized by taxpayers claiming that their subsidies aren't high enough, when they know those subsidies have actually gone up -- I'm not sure that's something that resonates with ordinary people."

And how does all of this mean spirited pettiness translate into policy? The result, writes Jeffrey Simpson in The Globe and Mail, is that "policy incoherence between Ottawa and the provinces reigns everywhere. The Harper preference for 'open federalism' means provinces can do what they want, enter international agreements, frustrate national coherence."

We have had twenty-five years of this kind of hokum. And, as we head to the polls, the consequences are all coming home. The central question of this election is the question Groucho Marx asked two generations ago: "Who are you going to believe? Mr. Harper or your own eyes?"

The Smart Money

"If all else fails," John Kenneth Galbraith wrote, " immortality can always be assured by spectacular error." From a Galbraithian perspective, the present Titans of Wall Street have achieved both immortality and infamy.

Their errors, wrote Robert S. Samuelson last week in The Washington Post, were essentially three: "First financial firms have moved beyond their traditional roles as advisers and intermediaries." Instead of counselling investors, they have become aggressive players in the market, placing their own bets on winners and losers. "Second, Wall Street's compensation is heavily skewed towards annual bonuses." That compensation system has encouraged a short term focus on the next quarter or, at most, the end of the year. The long range health of the institution the Titans serve has disappeared from the corporate radar screen. And "finally, investment banks rely heavily on borrowed money, called 'leverage' in financial lingo." In the case of Fannie Mae and Freddie Mac, the "leverage ratio" exceeded 60:1.

Anyone who goes to the track and puts down a two dollar bet on a horse running 60 to 1 is a romantic. Someone who bets millions on the same horse is certifiable. But the movers and shakers at the big firms convinced themselves they had gamed the system and squeezed the risk out of it. By spreading that risk to hundreds of thousands of ordinary folks around the globe, they believed they had inoculated themselves against failure. What they did not count on was the horse coming up lame. And, as the Titans discovered that tens of thousands of people could no longer afford the houses they lived in, all those interest payments supporting their own house of cards dried up -- at the same time. When people cannot pay their debts, their lines of credit are cancelled.

What the American government now proposes is to take all those bad bets off the table and to revisit them at a more propitious time, or -- if that time is a long time coming -- to let American taxpayers cover them. Such a solution allows the high rollers to exit with the shirts on their backs. But the real question is, will the home owners also be covered? Will they keep the roofs over their heads?

In 1936 Franklin Roosevelt explained the crisis he faced this way: "Private enterprise, indeed, became too private. It became privileged enterprise not free enterprise. Freedom," he declared,"is no half and half affair. If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the marketplace."

For the last three decades, "freedom" has been used as a synonym for "privilege." The rescue package which is currently on the drawing boards is necessary. But, unless ordinary citizens get the same kind of relief being offered the Brahmins of Wall Street, we will only succeed in freeing up credit so people can once again go deeply in debt. The essential illusion of supply side economics is that demand will keep pace with supply. If you increase the supply of goods, you will magically increase the demand for them. During the last thirty years we have let demand keep pace with supply by going more deeply into debt. But last week proved -- beyond a doubt -- that debt has its limits.

Besides taking bad debts off the table -- as Roosevelt did -- the government needs to put money into the hands of ordinary citizens and create essentially a new Works Progress Administration. This would be no mere make-work project. When the bridge across the Mississippi River collapsed two years ago, that tragedy underscored just how badly the nation needs to renew its infrastructure. The retired investment banker Felix Rohatyn -- who helped rescue New York City from bankruptcy thirty years ago -- has suggested that what the United States needs is a National Infrastructure Bank, whose task would be to rebuild the nation's rotting roads, bridges, electrical grid, etc. If they are left neglected, more than Wall Street's house of cards will fall. If they are attended to, lots of people will be able to stay in their homes. To pay for the new program, the government could begin by taxing back some of those executive bonuses. No one needs hundreds of millions of dollars a year to live comfortably.

Last week should have tolled the death knell for supply side economics. Despite all its statistical data and Laffer curves, it has essentially been an excuse for greed. As Galbraith also wrote, "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."

Palinmania

In the last two weeks, the Governor of Alaska has achieved pop star status -- and she has generated a great deal of controversy. I suspect that the controversy is intentional. For, in the final analysis, Sarah Palin is not a game changer. She is a diversion.

The problem for John McCain is that the wreckage of the policies he has championed -- whether they be his support for the Iraq War or his support for Freidmanesque economics -- is everywhere. That is particularly so today, when Lehman Brothers -- an investment bank which survived the Civil War and the Great Depression -- has filed for bankruptcy. With gas prices at record highs, with high paying manufacturing jobs disappearing in droves, and with people being evicted from their homes in record numbers, any politician who focuses on his or her record -- and the legislation which helped create this perfect storm -- is courting disaster.

So, instead, both Mr. Obama and Mr. McCain are focusing on the future. Both men have adopted "change" as their campaign theme. McCain has come late to that theme, having discovered that experience won't sell anymore. But there is a critical difference between each candidate's definition of change. Obama represents a cosmopolitan future -- his background symbolizes it. It is a future where -- unfortunately -- economic growth takes place in cities rather than small towns, and where progress -- economic and global -- requires interconnectedness between people, technology and governments.

McCain's definition of change is the one which got Ronald Reagan elected three decades ago. As Joe Klein wrote last week in Time, Reagan's "vision of the future was the past. . . .In his presidential debate with Jimmy Carter, Reagan talked about an America that existed 'when I was young and when this country didn't even know it had a racial problem.'" It was an America where most people grew up in small towns -- like Reagan's hometown of Tampico, Illinois or Palin's hometown of Wasilla, Alaska -- people who, Palin says, "run our factories . . . fight our wars . . . and are always proud" of their country. As Ms. Palin surely knows, there are very few factories left in small towns. And, as Frank Rich wrote in Sunday's New York Times, she neglects to mention that the source of her homage to just plain folks is Westbrook Pegler. When Pegler wrote the words Palin borrowed, Harry Truman was president. Pegler hated the president from the heartland -- just as he hated Eastern European Jews, who he thought were probably Communists. Indeed, Pegler believed that Senator Joseph McCarthy was his nation's saviour. I doubt Palin was aware of the source; she simply spoke the words she was given.

Unable to defend the present, and substituting the past for the future, the McCain campaign has instead decided to sell the American myth of the old frontier -- something which Palin is supposed to symbolize. She and McCain are the self reliant settlers who, in Huck Finn's words, "light out for the territory," and who -- good heartedly -- stand in opposition to a corrupt society. The problem is that "the territory" no longer exists, even as the corrupt society survives.

All of this says a great deal about McCain. The man who made his reputation as a straight talker is no longer rooted in the present. And Sarah Palin is McCain's desperate attempt to get voters to focus on something other than the present. Like Shelley's Ozymandias, he stands like a broken statue -- among the ruins.

The Cult of the Magician

Even before the Governor General dissolved Canada's 39th Parliament yesterday, the Conservatives were running campaign ads. On television we were treated to a warm and fuzzy Stephen Harper -- a family man -- who was trying to appeal to women voters, a demographic which -- to date -- he has not impressed. On radio, voters have been bombarded for sometime with ads trashing the Liberal Greenshift proposal -- and linking Stephane Dion's name to it at every replay. This ad is presumably aimed at the male population, who (supposedly) are hard headed and who hate taxes -- any taxes.

What both ads attempt to do is to frame the election in terms of personalities rather than programs. Harper is the strong but caring leader in uncertain times. Dion is the unrealistic egghead who is, Mr. Harper says, as radical as Pierre Trudeau.

It has been interesting to hear Harper conjure up Trudeau's ghost. It shows, first of all, that he has no appreciation of Canadian history -- perhaps because he was eleven years old during the October Crisis of 1970. But, more than that, Harper's resurrection of Trudeau reveals that he has fundamentally misunderstood the man and his importance to the country. Harper, unlike Joe Clark, does not have to face Trudeau in a debate. Those of us who remember can imagine what Trudeau's reaction to Harper's "Quebec, a nation within a nation" resolution would have been.

However, in one sense, Harper is like Trudeau. He is trying to don the cape of what Richard Gwyn called The Northern Magus -- the Canadian magician. By focusing on personalities rather than programs, Harper is using the time honoured magician's trick of creating a diversion. Better to focus on the man rather than on what the man has done -- and to create the illusion of prosperity.

And what has been done is much bigger than Harper himself. It is, indeed, ironic that the election was called on the day that the American government decided to bailout Fannie Mae and Freddie Mac. Not only is it the biggest bailout in American history. It also reveals the literal and figurative fraud behind neo-conservative economic theory. That theory has led to the concentration of wealth at the top of society, while the wages of the vast majority of North Americans have remained stagnant.

At the same time, the gurus of the theory claimed that they wanted to make home ownership affordable for all. Instead of raising wages as the cost of housing went up, these folks made it easier for the middle and lower classes to go into debt. In the United States that policy spawned the sub prime mortgage. In Canada it spawned the forty year mortgage. In both cases, when interest rates rose, homeowners were caught in the downdraft.

The rest of the Harper record is, likewise, a fraud. The man who promised transparency has consistently thumbed his nose at any type of parliamentary oversight. The man who promised to banish corruption from the capitol has not answered allegations about the "financial considerations" which were offered the late Chuck Cadman; or the allegations surrounding the financing of the last Conservative election campaign. Last, but certainly not least, the man who claimed to know a lot about economics has been a prodigal son. As with Fannie and Freddie, taxpayers have been left holding the bag -- and, having blown through a $12 billion surplus, that bag is getting heavier. By calling an election, the prime minster is trying to make all these troubles disappear.

Last week, at the Republican National Convention, Rick Davis -- John McCain's campaign manager -- claimed that the American election was going to be about personalities. Americans heard a great deal about McCain the war hero, while McCain himself announced that "change is coming." Now the Republicans are in the ludicrous position of running against themselves. It will take a real magician to keep the Republicans in power. But polls suggest they are making headway.

Just as polls suggest that Mr. Harper is in striking distance of a majority government here. However, as Barack Obama keeps reminding his audiences, the election is not about him. It's about them. Harper is desperately trying to make the Canadian election about him. But it's about -- in fact, in any democracy it's always about -- us. The task of separating illusion from reality is now in our hands.

A Few Words of Praise for Lyndon Johnson

As a young undergraduate, I had neither respect nor admiration for Lyndon Johnson. My opinion of him was colored by the Vietnam War. And when -- as a graduate student -- I entered The University of North Carolina the year after he left office, I was certain that history would judge him harshly.

History has not been kind to the man who escalated the war and did so under questionable circumstances. The same pattern has been repeated under another president from Texas. But, as Johnson's biographer Robert Caro -- who has written three volumes on Johnson and is working on a fourth -- reminded his readers last week, the ascent of Barack Obama would not have been possible if Lyndon Johnson had not used his considerable -- if sometimes dubious -- skills to pass the Voting Rights Act of 1965.

"In March of 1965," Caro wrote, "black Americans in the 11 Southern states were still largely unable to vote. When they tried to register, they faced questions impossible to answer -- like the infamous "how many bubbles in a bar of soap?" -- but also the humiliation of trying to answer them in front of registrars who didn't bother to conceal their scorn. Out of six million blacks old enough to vote in those 11 states in 1965, only a small percentage -- 27 percent in Georgia, 19 percent in Alabama, 6 percent in Mississippi -- were registered."

When Johnson went before Congress in March of 1965 to argue for the Voting Rights Bill, there were protesters outside the White House. Their numbers would grow as the war continued. Johnson would go to bed at night, hearing the echoes of "Hey, Hey LBJ! How many kids did you kill today?" and knowing that he was the most hated man in America.

The war wrecked Johnson's presidency, because he insisted that he was not going to lose Southeast Asia the way Harry Truman had lost China. That dogged determination resulted in the deaths of tens of thousands of American soldiers. But it is one of American history's great ironies that it was that same stubbornness which gave African Americans the right to vote. For all his flaws, Johnson believed in the power of the franchise. "Just give Negroes the vote," he said, "and many of these problems will get better."

"Many of these problems" -- poverty, violence and hopelessness -- are still with us. But when Barack Obama accepted the Democratic Party's nomination for president last week, the world changed. Win or lose, there will be no more humiliation as black Americans register to vote. There will be lots of unease among some white Americans. You can see it in those who try to define Obama as a foreigner or an alien.

Racism is not dead. The basic question this election will answer is, "How alive and well is it?" But if Obama wins, it will be because he has increased voter turnout in all of American society. And for that, he -- and people the world over -- have Lyndon Johnson to thank.