Tea Party Time

Amid reports that Democratic and Republican leaders have reached a budget deal, Jeffrey Simpson's analysis of  American politics, in today's Globe and Mail, offers some valuable perspective. The reasons for the problem are well known:

The U.S. spends way more than it raises in revenue and, therefore, borrows massively; it imports more than it exports; it has an almost double-digit unemployment rate (9.2 per cent); it has the highest degree of inequality in the Western world; its public pension plan isn’t adequately financed.

Nothing new there. But Simpson's take on the Tea Party is spot on. They are Ronald Reagan's children. Like Reagan, they want to turn back the clock and live in a mythical America:

The radicalization of the Republican Party that has been proceeding apace for three decades reached its apotheosis in the Tea Party, whose view of limited government is infused with a strong sense of betrayal and loss. The Tea Party retreats into a nostalgic view of earlier times (even as far back as the Founding Fathers) when life was simpler, governments smaller, the country unchallenged, and American exceptionalism a source of pride rather than the creator of problems, including flights from reality.

The Tea Party has no coherent answer for anything. It exists to cut government and, as such, reflects a conservative view that the best way to shrink government is to starve it. Eventually, went this line of thinking, the deficit/debt problem would become so intractable that, as long as taxes weren’t raised, the only available option would be to slash spending – which is what’s happening now in Washington and at the state level.

There is no guarantee that the deal will be passed. The Tea Partiers -- and some Democrats -- may scuttle it. There is an even larger argument that the deal goes in exactly the opposite direction from what the United States needs -- more stimulus. But Americans have brought themselves to this moment.

Canada is not immune from Tea Party thinking. Stephen Harper and Rob Ford offer Canadians the same vision. But despite their devout wishes, they cannot turn back the clock.

We await the future.

The Vultures Are Circling

John Boehner is in the same spot he was in a week ago, when he walked out of budget negotiations with President Obama. He doesn't have the votes. The difference this time is that he doesn't have the votes for his own plan, not the president's.

In today's Globe and Mail,  Jeffrey Simpson suggests that Canada should take advantage of American weakness:

In the longer term, the U.S. fiscal mess offers Canada opportunities to improve its comparative position – but only if Canada invests in the minds of its people and its competitive infrastructure.

There is so guarantee that will happen. The newly elected Canadian government has taken its inspiration from the Republican Party, and it advocates policies similar to Boehner's. But Americans should understand that what is happening in Washington is carefully being monitored in government councils around the world  -- more out of self interest than sympathy.

If the traditional advantage the United States has held over most countries is diminished, you can be certain there are plenty of nations which will seize the opportunity to improve their own situations. Simpson writes:

The great advantage the U.S. enjoyed over Canada (and many other countries) in its publicly financed universities, research funding, graduate fellowships and faculty hiring will diminish. The K-12 system, where teachers already are paid much less than their Canadian counterparts, will be further assaulted by cuts.

If Canada were smart, it would realize it needs to invest in the things that will make the country more competitive, while we bring down budget deficits by spending less on things that don’t.

What is presently being played out in Washington is tragic -- and, unlike a Greek drama, the ending has never been inevitable. But the ending could indeed be of Greek proportions.

This entry is cross posted at The Moderate Voice.

When Ignorance Drives The Bus

When Margaret Atwood wrote this week that  Rob and Doug Ford's campaign to cut public services was "swiftly approaching the 'let them eat cake stage,'' Doug fired back, "Well good luck to Margaret Atwood. I don’t even know her. If she walked by me, I wouldn’t have a clue who she is.”

He then suggested that, for Atwood's opinions to be taken seriously, she should  "go run in the next election and get democratically elected. And we’d be more than happy to sit down and listen to Margaret Atwood.” In another time and place, the Fords would make for great comedy. They would be Canadian Archie Bunkers. But, because they hold considerable power, they are not funny.

They also appear to be no friends of Toronto's Public Library System , which The Globe and Mail notes, is the busiest library system in North America -- busier than New York City's -- whose population is four times larger than Toronto's. But, the Globe asserts, the value of  libraries should not measured solely by their circulation,

because no public service puts democracy on display more than libraries. Toronto and other cities that have invested in them foster a learning and reading culture. How? By democratizing knowledge. And the value of the system is inseparable from its density.

Doug Ford claims -- erroneously -- that, in his ward, there are more libraries than Tim Horton's. He obviously hasn't been in any of them for a long time. If he had occasionally paid any one of them a visit, he would know who Margaret Atwood is.

The Fords provide yet another vivid illustration of what happens when Ignorance is in the driver's seat.

Another Mountain To Climb

The news that Jack Layton is again  battling cancer is very distressing. On a personal level, it must be a tremendous set back for the man and his wife, who have each previously battled the disease. On a political level, it is also a setback for an  Official Opposition which is just beginning to find its legs.

There is no doubt that the public is on Layton's side. As Adam Radwanski writes in this morning's Globe and Mail,

There is no overestimating the extent to which Mr. Layton’s personal popularity has propelled the NDP’s surge. By far the most charismatic of his generation of federal leaders, he has consistently polled ahead of his party. With each of the four elections under his leadership, the NDP’s image has revolved more and more around his own. And the more Canadians have seen him, the more they’ve liked him – taking the party from 8.5-per-cent national support in the last election under his predecessor to nearly four times that figure earlier this year.

That is why his present circumstances are particularly galling. The man has had enough to deal with lately. But, more importantly -- as Radwanski correctly notes -- Layton has been the "glue" which holds his party together. The NDP is,

a party that could very easily fracture, both between its idealists and its pragmatists, and between its newly dominant (and quasi-nationalist) Quebec wing and everyone else. Mr. Layton is the New Democrats’ glue – partly because New Democrats have to defer to his popularity, and partly because he effortlessly straddles these different groups. But if he’s all that’s holding them together, then sooner or later they’ll fall apart.

Interim leader Nycole Turmel has her work cut out for her.

And Stephen Harper -- as Lawrence Martin has pointed out on more than one occasion -- has had an extraordinary run of good luck. The task  of defining the government now falls to Ms. Turmel and Mr. Rae. It is they who must show that the "Harper Government" has taken on the personality of the man who leads it  -- spendthrift, mean spirited and arrogant.

The Dangerous Mr. Frye

Jim Bronskill reported in ipolics yesterday that the now defunct RCMP Intelligence Service kept a substantial file on the late Northrop Frye. He came to their attention because of "his involvement in the anti-Vietnam War movement, an academic forum on China and efforts to end apartheid in South Africa."

In these days of raging paranoia, it is interesting to note which of Frye's activities made him a potential enemy of the people: his opposition to the Vietnam War and Apartheid, and a trip which predated Nixon's outreach to China.  Bronskill reports that: 

The Mounties seemed to first take note of Frye in 1960, when he served as a sponsor of the Toronto Disarmament Committee. In 1963, the RCMP flagged Frye’s participation — along with luminaries including communications theorist Marshall McLuhan and political scientist C.B. Macpherson — in the planned Norwegian quarterly Co-existence.

The benefit of hind sight illustrates how benign Frye's' activities were. But the targeting of Frye should give us pause when we are told that there are all kinds of criminals in our midst. It should provide some context for the Harper government's list of  "30 most wanted suspected war criminals."  The Globe and Mail reports that:

The foreigners are now deemed priority targets to kick out of Canada because they “violated human or international rights” in their homelands, according to the list posted online Thursday. The cases, some of which date back 20 years or more, mostly appear to involve failed refugee claimants who went underground after their bids for asylum failed.

This is a government which insists that unreported crime is a national epidemic -- despite Statistics Canada's recent report detailing the fact that crime rates in Canada are the lowest they've been in forty years. But, as Jeffrey Simpson writes:

These findings don’t matter for the Conservatives. They’re convinced that, for their supporters, the perception exists that crime is rising, or at least is being fought with inadequate measures. Crime is a hot-button issue for the faithful, and one that can be conveniently pushed when the party needs to raise money – because, don’t forget, the other parties are “soft on crime.”

One wonders if Northrope Fyre would be in the government's sights today.

The Children's Hour

Ezra Klein cuts to the chase in today's Washington Post. The White House wanted $400 billion in revenues, and John Boehner knew he couldn't get the deal through the House:

But you can’t get a deal unless you can get the votes. And what’s been clear for some time is Speaker John Boehner cannot get the votes. If you need more evidence, look at the letter Boehner sent his caucus, which is more about pretending that he supports Cut, Cap and Balance -- an absurd and unpassable policy that includes a constitutional amendment making tax increases nearly impossible and capping spending at levels not seen since 1957 -- than it is about informing them as to what’s happened in the negotiations. It’s as if the president walked away from the table and sent out a letter saying that Boehner wouldn’t agree to single-payer health care, and so the negotiations are over.

The simple truth is that the Tea Party now controls the agenda of the Republican Party.This is the party whose presidential candidate confused the birthplaces of John Wayne and John Wayne Gacey. This is the party whose candidate in Delaware claimed to have dabbled in witchcraft.. And, of course, there is Sarah Palin, who advises her followers to "lock and reload."

Perhaps Mitch McConnell's plan to give President Obama the authority to raise the debt ceiling will pass. It is the only option his party -- a party which desperately wants to regain power -- could possibly pass. And that realization simply underscores the fact that the modern Republican Party is run by adults who never grew up.

The world is watching The Childrens Hour.

How Little Wisdom

Paul Krugman has a right to be pessimistic. The powerful elites on both sides of the Atlantic suffer from group think. And, instead of proving the truth of the old adage, "great minds think alike," they offer a vivid illustration of the flip side of that coin: fools never differ.

The movers and  shakers are entirely out of touch with the people whose interests they are supposed to serve:

The disappearance of unemployment from elite policy discourse and its replacement by deficit panic has been truly remarkable. It’s not a response to public opinion. In a recent CBS News/New York Times poll, 53 percent of the public named the economy and jobs as the most important problem we face, while only 7 percent named the deficit. Nor is it a response to market pressure. Interest rates on U.S. debt remain near historic lows. 

And, more than that, they are stunningly ignorant of history -- which could provide them with some guide posts when attempting to find their way through the present crisis:

For those who know their 1930s history, this is all too familiar. If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937: the premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last until World War II finally provided the boost the economy needed. 

When historians review the record of our times, they will surely conclude that our so called "best and brightest" were neither. As Krugman reminds his readers, they will recall another old adage: "You do not know, my son, with how little wisdom the world is governed."

This entry is cross posted at The Moderate Voice.

The Refrain Is The Same

Jeffrey Simpson notes that income inequality in Canada is getting worse. According to a Conference Board of Canada report,

The richest group of Canadians, those in the top fifth of income earners, saw their share of national income rise from 1993 to 2008. Within that fortunate group, the biggest gainers were the super rich, the top 1 per cent. And they got even richer not so much from investments but from basic salaries of the kind paid bank presidents and company CEOs.

From 1980 to 2005, the earnings of the top group rose by 16.4 per cent, while middle-income Canadians’ incomes stagnated, and earnings for those in the bottom group slid.

This song is getting tiresome. But, more than that, the data contradicts the conventional wisdom that tax cuts raise all boats. The truth is that they raise all yachts. They certainly do not spur economic growth. Robert Reich has been swimming against the conventional wisdom for some time. Reducing taxes on the wealthy, he writes, merely  causes the economy to stagnate:

The engine of the United States economy is consumer spending, which accounts for 70% of the overall economic activity.  The middle class simply does not have as much to spend on products, which results in less products and services being sold, which leads businesses to lay off more of the middle class due to lack of demand.  This system creates a cycle as the laid off workers have less to spend leading to even less demand.

And this is nothing new. Reich goes back to the 1920's, which were devoted to the same fiscal priorities:

President Calvin Coolidge slashed taxes on the highest income earners. At the same time he pursued anti-union policies that reduced the bargaining leverage of blue-collar workers, resulting in lower wages for them. The only way most Americans could maintain their slice of the pie was to go deeper into debt. Between 1913 and 1928, the ratio of private credit to the total national economy nearly doubled.

The mounting debt could not be sustained. The collapse began with the Great Crash but continued for a dozen years. Why? When debt financing was no longer available to them, Americans could no longer buy nearly as much of the goods and services they were creating in factories and offices. The immediate result was mass layoffs, leaving Americans with even less money. The longer-term result was continued economic depression.

Despite that history, successive American governments have repeated the same fiscal folly. Stephen Harper is devoted to the same failed economic model. He won election telling us that corporate tax cuts created jobs. The data prove that his claim is simply not true. Worse, the repetition of those failed policies is analogous to the patient in the asylum who claims that -- all facts to the contrary -- he is Napoleon.

Raging Amnesia

George Orwell had a pretty good bead on the future. The only difference between 1984 and 2011 is that things go down the memory hole quicker. Certainly, writes Peter Beinart in The Daily Beast, the Republican Party suffers from a shocking case of amnesia:

If the debt-ceiling negotiations reveal anything about America in 2011, it is this: we live in an age of political amnesia. From the day the Twin Towers fell until the day Barack Obama was elected president, Washington Republicans did virtually everything in their power to increase the deficit.

They forgot that they put two wars on a credit card.  They refused to pay for the prescription drug benefit. And they did these things while reducing taxes. But more than that, they dismantled the regulatory functions of government:

Even more remarkable than the GOP’s deficit amnesia is its regulatory amnesia. Less than three years ago, the American financial system virtually collapsed, leaving an economic disaster that still blights the lives of tens of millions of Americans. That collapse may be partly the result of federal efforts that pushed too hard to make Americans with lousy credit become homeowners.

But it was also undoubtedly a result of the fact that under Presidents Clinton and Bush, the U.S. government egged on Wall Street as it created new and largely unregulated financial markets. Then, in 2010, after a BP oil spill almost destroyed the Gulf of Mexico, reporters discovered that the Department of Interior's Minerals Management Service, which supposedly regulates offshore drilling, was as toothless as the agencies that supposedly regulated derivatives trading.

Now they are railing about the deficit they created. At the same time, they refuse to raise the debt ceiling -- which Ronald Reagan raised a record eighteen times, followed by George Bush, who raised it nine times. And they  blame Barack Obama for it all -- hoping  such a strategy will return them to office.

America teeters on the edge of bankruptcy because the Republican Party is morally bankrupt.

All That Money Can Buy

As the doinoees continue to fall in the Murdoch Saga -- the latest are Rebekah Brooks and Britian's top police officer, Paul Stephenson -- we are reminded yet again that our institutions, both public and private, have been corrupted by money.

The idea that money corrupts is certainly not new. But perhaps what is new -- at least to some -- is the idea that  more money concentrated in fewer and fewer hands leads to political and social paralysis. If anyone doubts that proposition, consider the debt ceiling debate currently taking center stage in the United States. E.J. Dionne writes in this morning's Washington Post that, while this debate has been brewing, Congress has not been focused on the real world:

The most obvious problem is unemployment. The best way, short term, to drive the deficit down is to spur growth and get Americans back to work. Has anyone noticed that Americans with jobs can provide for their families, put money into the economy — and, oh yes, pay taxes that increase revenue and thus cut the deficit?

There is no mystery about the steps government could take. Ramping up public works spending is a twofer: It creates jobs upfront and provides the nation’s businesses and workers the ways and means to boost their own productivity down the road. 

Instead, the powers that be have been working hard to, as Paul Krugman  also writes this morning, "let the bankers walk" because, they argue, not doing so would hold the economy back. But what's holding the economy back is "the overhang of household debt, largely created by the $5.6 trillion in mortgage debt that households took on during the bubble years."

Politics -- on both sides of the pond -- has become a protection racket. Money buys protection for the wealthy, whether they be the Murdochs or the big banks. And, as long as governments devote themselves to the concentration of wealth, it will always be so.

Dionne suggests there is a solution to the problem -- if voters are wise enough to figure out that they have been had:

Every member of Congress who got us into this debt-ceiling fight should be docked six months’ pay. They wasted our time on political posturing instead of solving problems. Better yet, the voters might ponder firing them next year. This could do wonders for national productivity.

This entry is cross posted at The Moderate Voice.

Fearing Nothing But Fear

In a short piece for the Canadian International Council, Roland Paris asks the essential question about Prime Minister Harper: What Is Stephen Harper Afraid Of? It's been clear for some time that Harper, for all his bravado, trusts no one. That has been the source of the Nixonian parallels which Bob Rae and several commentators have noted.

But while his paranoia has been on display domestically for some time,  in a recent interview  with Macleans, Harper extended his dyspeptic view of the world to the international arena. Paris writes:

Harper’s world seems to be full of danger and struggle. In response to open-ended questions on foreign policy, he repeatedly came back to these themes. Most interestingly, he offered a Manichean vision of international relations as a struggle between good and bad, and of moral clarity as the greatest asset and most reliable guide to foreign policy.

This is nothing new. George W. Bush was not a man of nuance. Claiming that "you're either with us or against us," he marched his country into two wars -- the results of which are now pretty clear. But Harper goes much farther than Bush and asserts that war is essential to Canada's identity:

War and conflict figure prominently in this story. In the interview, Harper traced a connection between war and the emergence and development of the Canadian nation, arguing that the War of 1812 “essentially began to establish our sense of national identity” and was the “genesis of the geographically wide and culturally diverse nation we have today.” He then explained that Canada has consistently been “on the right side of important conflicts” – including the Second World War and the Cold War – “that have shaped the world and that are largely responsible for moving the world in the overall positive direction in which it is moving.” There is a theory of history encapsulated in this short statement – one that emphasizes, again, the enduring struggle between moral forces, and the transformative and redemptive potential of this struggle. These “big conflicts,” he explained, have been “the real defining moments for the country and for the world.”

There are many Canadians who would argue that the Canadian identity is precisely the opposite of  what Harper is selling. Like a child who is used to getting his way, the Prime Minister wants to remake the country in his own image.

It's all of a piece. For Harper politics is war. What he seeks both domestically and internationally is unconditional surrender. The problem is that Harper is an arm chair general. He has no real experience of war. If he had actually had that experience, he would know that his position and his vision are ludicrous.

Smelling The Crazy

For Conservatives, Paul Krugman is more than an apostate; he is the Anti-Christ. But his column in today's New York Times is required reading. He writes that it's strange how many people, who have been in denial, are now "waking up and smelling the crazy."

The Republican Party dove off the deep end long ago. They were driven mad when Bill Clinton assumed the presidency:

First of all, the modern G.O.P. fundamentally does not accept the legitimacy of a Democratic presidency — any Democratic presidency. We saw that under Bill Clinton, and we saw it again as soon as Mr. Obama took office.

As a result, Republicans are automatically against anything the president wants, even if they have supported similar proposals in the past. Mitt Romney’s health care plan became a tyrannical assault on American freedom when put in place by that man in the White House. And the same logic applies to the proposed debt deals. 

But Arthur Laffer -- the Pied Piper of Supply Side Economics -- also led them over the edge. Ronald Reagan quickly realized that the Laffer Curve was a fiction. But, having mythologized the Gipper, modern Republicans refuse to see the fallacy:

Supply-side voodoo — which claims that tax cuts pay for themselves and/or that any rise in taxes would lead to economic collapse — has been a powerful force within the G.O.P. ever since Ronald Reagan embraced the concept of the Laffer curve. But the voodoo used to be contained. Reagan himself enacted significant tax increases, offsetting to a considerable extent his initial cuts

Recently, however, all restraint has vanished — indeed, it has been driven out of the party. Last year Mitch McConnell, the Senate minority leader, asserted that the Bush tax cuts actually increased revenue — a claim completely at odds with the evidence — and also declared that this was “the view of virtually every Republican on that subject.” And it’s true: even Mr. Romney, widely regarded as the most sensible of the contenders for the 2012 presidential nomination, has endorsed the view that tax cuts can actually reduce the deficit. 

So the United States finds itself in the embarrassing position of being held hostage by a group of politicians who will not be swayed by facts or logic. They are addicted to a world view that is as wrong headed as the one which motivates the members of The Flat Earth Society.

Who Is The Real Stephen Harper?

To his critics on the left, Stephen Harper is a right wing ideologue. To his critics on the right, he is a Liberal in disguise. Scott Stinson, in The National Post, claims that Harper has succeeded by selling out his conservative principles:

The Tory government has spent at record levels — a 40% rise in program spending over five years. It has vowed to continue escalating transfers to the provinces for health care funding in seeming perpetuity while swearing allegiance to the Canada Health Act. It has interfered in international business deals (quashing the Potash takeover, for example), and domestically expanded a system that funnels billions of taxpayer dollars into private enterprise through development agencies. It has defended the supply-management practices that inflate consumer prices for goods such as milk and eggs. On thornier issues such as abortion and same-sex marriage, Mr. Harper has resolutely avoided taking a social conservative stance, even though there is a wing of his party that would dearly like to see him do so.

Many conservatives have leavened their disappointment with Harper's less than conservative agenda, taking solace in the thought that he will move incrementally to transform Canada. By the time he's finished, they claim, Liberals won't recognize the place.

That's a controversial argument -- and it's a distraction. What is really important is what drives Stephen Harper. He is neither a conservative nor a liberal. His political philosophy is simple: do whatever it takes. Whether it's the attack ads, the intervention in the potash deal, or his foreign policy, it's about -- it's always been about -- putting Stephen Harper in the Prime Minister's Office.

That fact should give Canadians pause.

Come, Let Us Reason Together

I have always thought that Churchill was right when he said that, "the United States invariably does the right thing, after having exhausted every other alternative."  I was a graduate student in the United States during the Watergate Crisis; and, for me, the long and circuitous climax to that challenge proved the truth of Churchill's observation.

But, these days, those of who live outside the United States are beginning to wonder if something fundamental in the American character has changed. As the Canadian columnist Jeffrey Simpson writes in this morning's Globe and Mail:

Reasonable people can disagree on how much spending needs to be cut and how much revenue should be raised. If such people were to accept that a blended solution is the only one that makes sense, then they will find a compromise. This is precisely how the two bipartisan commissions achieved a final compromise. Unfortunately, their advice has been discarded.

The problem, Simpson suggests, is that "reasonable people are in short supply in Washington." The causes of this remarkable development are convoluted. And they fly in the face of American history. This is the country which vigourously confronted the Great Depression, which turned the tide in World War II, and which put a man on the moon. Churchill was right. It took time to do all these things -- but Americans eventually screwed their courage to the sticking point.

When I was a student, I listened to LBJ repeat that line from Issiah until it became a punch line for late night comedians.It would, indeed, be tragic if the United States were to become an international joke.

This entry is cross posted at The Moderate Voice.

Lester Pearson Would Be Furious

Yesterday, John Baird announced that Canada would boycott the UN Conference on Disarmament. Canada's objection, said Baird, was that North Korea would chair the conference:

"It's just absurd to have them in the chair," Baird told a conference call. "The regime is a major proliferator of nuclear weapons and its noncompliance with its disarmament obligations goes against the fundamental principles of this committee."

When it comes to Conservative foreign policy, Baird's announcement is more of the same. Dominic Leblanc has it right:

"Canada is abdicating its responsibility to act and to be heard on important issues such as nuclear non-proliferation, and is giving more radical countries like North Korea and Iran an even greater influence on the outcome of the negotiations," he said.

"From climate change and the environment to the Rotterdam Convention on hazardous chemicals and pesticides, Canada is systematically failing to wield its influence internationally in order to gain partisan advantage domestically."

One wishes that, like Ebenezer Scrooge, Baird would be visited by the ghost of Lester Pearson. His spirit would be furious. A veteran of The Great War, Pearson knew that it was better to talk to your enemies than to try and obliterate them -- for the simple reason that, while you were pummeling them, they were returning the favour. But that is not the Conservative way. The only way they deal with their opposition is to pummel them.

Despite their triumphalist rhetoric, they  -- and Canada -- will find that stupidity is its own curse.

The Danger Of Getting Too Close To Royalty

After the Duke and Duchess of Cambridge left Canada to bask in the glow of Hollywood, the Prime Minister chose to do some basking of his own. Speaking in Calgary over the weekend, Stephen Harper, according to The Globe and Mail

consigned the Liberals and Bloc Québécois to history’s waste basket, adding that his majority win on May 2 reflects the fact that Canadians are essentially conservative people.

If Mr. Harper had any understanding of Canadian history, he would demonstrate more prudence in his public utterances. He certainly would not declare that:

Conservative values are Canadian values. Canadian values are conservative values. They always were. And Canadians are going back to the party that most closely reflects who they really are: The Conservative Party, which is Canada's party.

It truly is remarkable to hear the Prime Minister spin his victory -- which was won with the support of  24% of the voting population -- into a victory for the ages. But this is a man who, while he is politically shrewd, is not noted for his foresight or wisdom. Remember: there was not going to be a recession; and Canada would win a seat on the Security Council. His latest prediction is that cutting government spending and taxes will create jobs.

Apparently, Mr. Harper believes that at least part of the public's adulation for William and Kate  was also  directed at him. It is dangerous to spend too much time in the company of royalty.

Student Debt and Myopic Public Policy

Gary Mason began his column in Thursday's Globe and Mail by reminiscing about the good old days:

Once upon a time, getting money to attend university in Canada was easy. There were non-repayable grants available from the government, and there were lots of good paying summer jobs.

But times have changed. The governments which nurtured the baby boomers now insists that the next generations are going to have to pay their own way, even as the cost of getting a university education skyrockets:

I’d hate to be a student these days. Both the grants and the great summer employment opportunities of yesteryear are a lot harder to get. More parents than ever are being forced to dig into their wallets to help their kids finance an undergraduate degree. 

There are plenty of people who bemoan the cost of going to university. But no one mentions the profits that are made from student debt -- and there is a lot of student debt:

The Canadian Federation of Students says the average debt for university graduates is almost $27,000. Canada’s student loan program is close to hitting its $15-billion threshold years in advance. Why? In part, it’s because the cost of getting an advanced education has gone up precipitously. Today, nearly two million Canadians have student loans totalling $20-billion.

Once upon a time, governments saw education as an investment. Now -- like so many other things -- it is a business opportunity for those who have money to invest. The next generation used to be the foundation of a country's future -- and the source of its pension income.

By undermining the affordability of a university education, we have not only put our children's futures in jeopardy. We have also undermined everyone else's future. If there is one characteristic which defines the last forty years, it is our incredibly myopic public policy.

This entry is cross posted at The Moderate Voice.

The Smart People Flunked History

I have referred several times in this space to Barbara Tuchman's book, The March of Folly. In particular, I have returned to Tuchman's definition of  "wooden-headedness:"

Wooden-headedness, the source of self-deception, is a factor that plays a remarkably large role in government. It consists of assessing a situation in terms of preconceived fixed notions while ignoring or rejecting any contrary signs. It is acting according to wish while not allowing oneself to be deflected by the facts.

If the reader is frustrated by my references to Tuchman, that frustration is entirely understandable.  Progressives these days are feeling increasingly frustrated. Consider Paul Krugman's most recent column in The New York Times. As Western governments -- including Barack Obama's and Stephen Harper's -- talk of cutting spending, just like families do, Krugman writes:

No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts. 

Spending cuts have become an obsession and a consensus. And they are, once again, another example of  the March of Folly. We forget that the "smart" people flunked history.

The Saga Of A Prodigal Son

Bob Hepburn argues, in today's  Toronto Star, that Conrad Black should be stripped of his Order of Canada:

Strangely though, the advisory council that oversees the Order of Canada once again failed to strip former newspaper owner Conrad Black, who was originally convicted in the U.S. in 2007 of fraud, of his cherished award.

Indeed, there’s a bad odour surrounding the panel’s stubborn refusal to act against Black.

Hepburn points out that only four people -- Alan Eagelson,  David Ahenakew, T. Sher Singh and Steve Fonyo --  have had the award taken from them. Each ran quite spectacularly afoul of the law -- which is one of the criteria for revoking the award. Hepburn notes that:

Under its own rules, the council “shall consider the termination of a person’s appointment” if the person “has been convicted of a criminal offence” (Black qualifies on this point) or if the person’s conduct “is seen to undermine the credibility, integrity or relevance of the Order” (Black, who gave up his citizenship when he became a member of the British House of Lords, meets this criterion, too).

It seems pretty clear that -- in the interest of justice -- Black should have his Order of Canada revoked. The case for not reinstating his citizenship is more murky. Lawrence Martin, in a recent column, notes that Jean Chretien's decision to revoke his citizenship remains questionable:

He brought back to life the 1919 Nickle resolution, a declaration without legal standing stipulating that Canadians could not receive British titles. Mr. Chrétien’s invocation of it left Conrad Black no choice but to renounce his citizenship to get the appointment. It’s a fact that needs to be remembered when he seeks to reclaim it.

I hold no brief for Black. His troubles are of his own making. Those troubles are the reason he should not be allowed to keep his Order of Canada. On the other hand, he was born here. That fact cannot  be erased -- something the present government needs to remember when Canadians find themselves in difficult circumstances abroad.

At the moment, Black is a man without a country. There is something deliciously ironic in that. But, despite his legal transgressions -- and the fact that they appear to have taught him nothing -- he should be allowed to return to Canada when he has served his time.

It is a longstanding Canadian tradition to grant the return of prodigal sons, even if they are unrepentant.

Good Old Fashioned Class Warfare

While many members of the chattering class have heralded Stephen Harper's election as the beginning of a bright and beautiful future, Linda McQuaig has always seen it for what it is: a concerted and vengeful attempt to turn back the clock.

In today's Toronto Star, she writes that, by waging a successful bait and switch campaign, conservatives have been able to obscure a good old fashioned class war:

The class war has been relentlessly proceeding. While incomes at the top have steadily climbed, incomes of ordinary Canadians have steadily eroded. The real median Canadian family income hasn’t risen since the late 1970s — even though today’s typical family now has two earners, compared to just one earner 30 years ago. In other words, Canadian families are working about twice as hard to keep up to where they were a generation ago.

One of the Conservatives' prime targets has been unions.They have become what welfare recipients were for the Harris government -- straw men who serve to focus public anger:

With unions weakened in the private sector, conservatives are turning their sights on the last bastion of union power — the public sector, where unionization rates remain a healthy 71 per cent (compared with just 16 per cent in the private sector).

Conservative commentators like to portray public sector workers, struggling to protect their hard-won gains, as a pampered elite. (Meanwhile, the royals, among the most pampered people on the planet, are portrayed as down-to-earth whenever they flash a smile.)

This is an old story. It rests on the axiom that the elect -- religious or social -- are the acknowledged inheritors of the kingdom. And  the poor -- who will always be with us -- have to get with the program.

Speculating on the Economy

Jim Stanford has an interesting piece in today's Globe and Mail. He notes that the Harper government justified its imposed settlement on Canada Post by claiming that the economy was at risk. Apparently, a government which believes in free markets has no qualms about intervening in those markets to rescue the economy. If that's true, writes Stanford, there are more severe threats these days than Canada Post.

Consider the problem of market speculators -- beginning with the soaring price of oil. The cost of a barrel of oil is a clear and present danger to the economy:

Even at $1.25 a litre, gas prices will rip $40-billion from the pockets of Canadians this year. The soaring prices are a big reason why consumer spending has stopped in its tracks – an alarming development that could precipitate a recession. And you can’t invoke “market forces” to explain the prices. They’ve been driven up by speculation, fat oil industry profits and OPEC’s continuing power.

The cost of oil has also driven the rise in the Canadian dollar -- a clear and present danger to Canada's manufacturing base:

According to the OECD, the fair value of our dollar (based on purchasing power) is 81 cents (U.S.). Currency traders have pushed it 25 per cent higher, jeopardizing Canada’s ability to sell anything (other than oil) to world markets. Again, savings on imports aren’t passed on to consumers. But the pain to our export industries and the threat to our future growth are real.

And to cool the rising Canadian dollar, the Bank of Canada will have to raise interest rates -- which will cool the entire economy.

The Harper government argued that -- because Canada Post was vital to the economy -- its employees had to take a haircut, and they imposed wage rates lower than what the corporation had offered. Will they force speculators to take a haircut?

Don't count on it.

Socializing Losses

For the last thirty years, conservatives have maintained that government must be run like a business, adhere to market principles, be lean and mean. But it is always instructive to compare what conservatives say to what they do.

Consider the sale last week of the crown corporation, Atomic Energy of Canada Limited, to SNC-Lavalin of Montreal. Writing in The Toronto Star, Tom Walkom notes that:

taxpayers aren’t guaranteed any money from this sale. In fact, when the back and forth is totalled (Lavalin gives Ottawa $15 million; Ottawa gives Lavalin $75 million), we end up paying $60 million for the privilege of no longer owning that chunk of AECL.

Lavalin gets the lion’s share of the nuclear technology company’s $1.1 billion worth of assets — including land, buildings and tools.

The public, on the other hand, is stuck with all of all of AECL’s $4.5 billion worth of liabilities.

It does not take a mathematical genius to figure out who wins and who loses in this deal. In fact, it's the same kind of deal which was brokered by the big banks in the United States. And, for those who preach the wonders of capitalism, it's a remarkable show of chutzpah. Nowadays capitalization means the privatization of profits and the socialization of losses.

Walkom points out that Mike Harris, the godfather of the Common Sense Revolution, arranged the same kind of transaction with the fire sale of Highway 407. It is also interesting to note that the movers and shakers in the Harper cabinet -- Messers Flaherty, Baird and Clement -- also occupied positions of influence in the Harris-Eves administration.

One of the cardinal rules of business used to be that the best predictor of future performance is past performance. That axiom still appears to hold. But how does one account for such a lack of common sense? Well, there are clearly personal advantages to privatizing profits and socializing losses. As the Star reported on May 11th:

Former Ontario premier Mike Harris, who collected almost $750,000 as a part-time director at Magna International last year, is the company’s new chairman.

After all, one does have to make one's way in the world.

Canada Day 2011

This has been a difficult year. In Alberta, a forest fire ravaged the town of Slave Lake. In Saskatchewan and Manitoba, the Souris, the Assiniboine and the Red Rivers have inundated huge swaths of prairie farm land. In Quebec, the Richeleau River has twice driven its valley dwellers from their homes.

Many of us remain unemployed. Our youth struggle to find a place in society. And the government which recently took office was not -- if one is to believe the polls --  the choice of a majority of Canadians.

There would seem to be little to celebrate. Yet, with each Canada Day, my thoughts return to one place. It's not Parliament Hill, although I always try to watch the ceremonies there. It is not to the Montreal of my youth. It is not to our home on the shores of Lake Ontario. My thoughts return to Peyto Lake, in the Canadian Rockies.

At Trent University's recent Convocation, Sandra Laronde reminded her audience that the way to survive a journey is not to look at your feet and count the steps. The strength to endure, she said, comes from always keeping your eyes on the horizon. For me, Peyto Lake represents the horizon. For others, the horizon will be somewhere else.

Today is a day not to count our steps, but to look outwards and to appreciate the beauty which is before us.