Thursday, June 26, 2008

Barack Obama Turns Right: Say it Ain’t So

Having eliminated his rivals for the Democratic Party’s presidential nomination, Senator Barack Obama is now in a two man race for the White House against Senator John McCain. And he’s done what Democrats normally do when they secure their party’s nomination---he’s turning to the right, or to the centre as his handlers would describe it.

Here are three issues on which the Senator from Illinois has refitted his sails for a tack to the right:

Obama has decided to opt out of the public financing system for the general election, the first major party candidate to do this since the system was created in 1976. A presidential candidate is entitled to receive funding from the federal government provided he limits his own spending to the level of the matching federal grant which is $84.1 million for the 2008 election. Earlier in the campaign, Obama said he would try to work out an agreement with the Republicans so he could remain within the public financing system. McCain, who has raised less than half as much money as Obama so far, will accept public financing. (It is, of course, ludicrous that in the U.S. that are no limits to the amount a candidate can spend. If he or she chooses to, a candidate can spend any amount by simply opting out of the public system.) Obama justified his decision by charging that: “The public financing of presidential elections as it exists today is broken, and we face opponents who’ve become masters at gaming this broken system. John McCain’s campaign and the Republican National Committee are fueled by contributions from Washington lobbyists and special interest PACs. And we’ve already seen that he’s not going to stop the smears and attacks from his allies running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations.” While Obama’s criticisms are valid, the step he is now taking will put the last nail in the coffin of the public system that does exist. In the United States, democracy is under threat from plutocracy, a political system in which huge sums of money are the key to the achievement of high office.
The Senator from Illinois supported a deal with the Bush administration on the wiretapping of residents of the United States in the interest of national security. This so-called “compromise” bill will allow the U.S. government to make use of evidence that was previously obtained by wiretapping without a warrant, even should courts later rule that the spying was not legal. Liberal and civil liberties activists are shocked at Obama’s decision to support the bill., for instance, has called on its two million members to demand that Obama stick to his former opposition to the use of evidence derived from illegal wiretaps: “Can you call Senator Obama today and tell him you’re counting on him to keep his word? Ask him to block any compromise that includes immunity for phone companies that helped Bush break the law.”
Although he has been a critic of the way capital punishment has been used in the U.S., Barack Obama declared that he opposed this week’s decision of the U.S. Supreme Court that bars the execution of child rapists in cases where they do not kill their victims. By a five to four decision, the less staunchly right-wing members of the court struck down a 1995 Louisiana law that permitted the use of the death penalty to punish someone convicted of raping a child under the age of 12. For the past thirty years, executions in the United States have been limited to those who commit capital crimes. The decision of the Supreme Court did not narrow the use of capital punishment in any way. It simply prevented a widening of the resort to capital punishment to include a category of non-capital crimes. No one doubts the heinousness of the rape of children. For those who oppose the death penalty in all circumstances, however, which is the position of Canada and the member states of the European Union, alternative punishments exist---in Canada, for instance, criminals deemed to be “dangerous offenders” can be confined to prison for life with no possibility of parole. It is deeply disappointing to see Barack Obama joining Justices Samuel Alito, Antonin Scalia, Clarence Thomas and Chief Justice John Roberts in a bid to widen the application of capital punishment in the United States.

Barack Obama’s sheen as the candidate who would transform America is losing some of its lustre. Yes, we can?

Tuesday, June 24, 2008

The Fight For Auto Jobs in Canada

(This post ran on the oped page of the Toronto Star this morning.)

The struggle of workers at General Motors to maintain jobs in Oshawa, Ontario is a matter of direct concern to every Canadian who doesn’t want this country to be pushed back into its historic role as a hewer of wood and a drawer of water.

Many people appear to have concluded wrongly that General Motors had no real choice in announcing it will shut down its plant in Oshawa because it produces pick-up trucks whose sales are plunging as gasoline prices skyrocket.

It’s obvious that we are living through a period in which a vast shift in the kinds of vehicles we will use is underway. The question is where will these vehicles be manufactured---what new vehicles could be built in the Oshawa plant, among others---and will Canadian workers get a decent share of the jobs to manufacture them.

Canadians have been fighting to create and keep jobs in this vital sector for the past one hundred years. The production of automobiles in Canada has gone through four phases. A fifth one is now underway, a phase with vital implications for the future of manufacturing in this country.

During the first phase, Canadian carriage makers such as Sam McLaughlin in Oshawa produced automobiles for the Canadian market. By 1904, McLaughlin had figured out that he couldn’t compete with Detroit in the production of auto engines and he began importing Buick engines to be installed in his vehicles. In 1915, he made the same arrangement with Chevrolet.

Phase two came at the end of World War One when McLaughlin sold his two companies to General Motors and General Motors of Canada came into being. With Ford and Chrysler also operating subsidiaries on this side of the border, Canada entered the golden age of branch plant auto production during the 1920s. On the eve of the Great Depression, plants in Canada were producing over 250,000 cars a year, with over one hundred thousand of them being exported, mainly to other countries in the British Empire.

Then came the collapse of the industry during the Great Depression, the shift to the production of military vehicles during the Second World War and the emergence of the industry in a toughly competitive environment in the 1950s and 1960s.

Phase three began with the signing of the Canada-U.S. Auto Pact in 1965. Under the Auto Pact, auto plants in Canada and the United States could ship their vehicles and parts produced for new vehicles across the border duty free. To compensate for the fact that the Big Three auto manufacturers were U.S. owned, safeguards were included in the Pact to guarantee production of cars and trucks in Canada. As the market for cars and trucks grew in Canada, this had to be matched in the case of cars with at least sixty per cent additional production, and in the case of trucks fifty per cent.

Under the Auto Pact, Canada’s export of autos to the U.S. soared. Problems lay ahead, however. The Canada-U.S. Free Trade Agreement, followed by NAFTA and by rulings of the World Trade Organization killed the Canadian production guarantees that existed under the Auto Pact. What kept Canada’s auto industry healthy in the fourth phase during the 1990s and the early years of this decade were the low value of the Canadian dollar, medicare and cheap oil. The low dollar against the U.S. greenback and the fact that medicare spared auto makers from having to pay out vast sums in health plans to workers as was the case in the U.S. made Canada a very profitable place to manufacture autos.

Now that the Canadian dollar and gasoline prices have soared, two of the three supports are gone as we enter the fifth phase in the history of the auto industry in this country.

The critical question is where the new investments will go to manufacture more fuel efficient cars and trucks, as well as hybrid, hydrogen-powered and electric vehicles, and vehicles with lower carbon emissions.

It’s the old Canadian story with a 21st century set of problems. How do Canadians persuade a largely foreign owned industry that does most of its research and development and product innovation outside Canada, to give us a fair share of the jobs? In the past we’ve used British Empire preferences, safeguards under the Auto Pact, and a cheap dollar to stay in the business.

Now we are going to have to do some serious planning. We won’t be able to rely on foreign owned companies that do their product development elsewhere to dole out assembly jobs to us. We need to produce environmentally friendly, fuel efficient vehicles in a context in which cities are being transformed by the rising price of energy. That planning has to involve the foreign and domestically owned companies in the auto sector, the CAW, and all three levels of government.

The way ahead needs to be through a combination of carrots and sticks. In conjunction with the provinces, Canada should establish hard targets to dramatically improve the gas mileage of the vehicle fleet in Canada. Included in the targets should be the required shift of growing percentages of the fleet to hybrid cars and trucks and zero emission vehicles (ZEVs). ZEVs include electric and hydrogen powered vehicles. (As an energy carrier, not an energy source, hydrogen relies ultimately on other forms of power generation which also need to be environmentally friendly.) For decades, California has established its own rules on these issues so there’s no reason under NAFTA that Canada can’t.

In partnership with the auto assemblers and auto parts companies, governments should be prepared to pump large amounts of capital into the launch of this new vehicle fleet in Canada and into the production of the machinery used to manufacture it. This would be in return for commitments that research and development will be done in this country and that the production jobs will be located here for the long term.

Without such a leap, we will go the way of the dodo.

The market simplicities of the Harper government and its man on the ground in Oshawa, Finance Minister Jim Flaherty, just won’t work.

Friday, June 06, 2008

The Etiquette of Empire: Which Foes Should the President Talk To

(This post ran earlier this week as an oped piece in the Toronto Star.)

Under what conditions should the President of the United States meet with the leaders of nations that are the foes of Washington? That vexed question is now at the centre of the struggle for the presidency in this year’s elections.

The Republican Party’s game plan for victory is already plain: contrast Senator John McCain’s reputed solidity on foreign policy and national security with Senator Barack Obama’s supposed inexperience and naivety.

The Republican trump card is Obama’s statement at a presidential candidates’ debate last summer that he would meet with the leaders of Iran, Syria, North Korea, Venezuela and Cuba without preconditions. Since then Barack Obama has clarified his position, saying that while he will meet without preconditions “that does not mean I will meet without preparation.”

While there is an important distinction between preconditions, where the leaders meet only after the deals have been made, and preparation, where only an agenda is drawn up, it doesn’t cut to the heart of the matter.

The Americans have always had debates about whether it is, or is not, moral to meet with foreign foes. When President Richard Nixon announced that he would travel to China to meet with that country’s revolutionary leader Mao Zedong, the heir to Marx and Lenin, the editor of the Union Leader, in Manchester, New Hampshire, a long-time Nixon supporter, denounced the journey as “immoral, indecent, insane and fraught with danger.”

More than morality has gone into the question of with whom presidents should meet, however. At the centre of a very real, although unacknowledged empire, the United States has developed a pecking order about which foes presidents should meet and those they should shun.

The etiquette is as follows: truly powerful foes are too important not to talk to, while smaller foes should be treated as rogues and should not be accorded respect.

The United States did not establish diplomatic relations with the Soviet Union until 1933, sixteen years after the Russian Revolution. Ironically in light of current politics, the first meeting between a U.S. president and the leader of the Soviet Union took place in November 1943 in Teheran, the capital of Iran, where Franklin D. Roosevelt met with Joseph Stalin, and Winston Churchill to plan the next stage in the war against Nazi Germany. Needless to say, no Iranians were invited to the sessions of the Big Three.

After Teheran, American presidents continued meeting with Soviet leaders, although there was a long hiatus during the worst years of the Cold War. Both Eisenhower and Kennedy met with Soviet leader Nikita Khrushchev, even though the latter had notoriously poor manners, as revealed when he declared to the West “We will bury you” and on another occasion took his shoe off during a debate at the United Nations in New York and banged it on the table.

Similarly, after Nixon’s journey to China in 1972, U.S. Presidents continued to meet with China’s top leaders, using the closer ties between Washington and Beijing as a way to challenge the global power of the Soviet Union.

It has been another matter entirely when it comes to meetings with the leaders of smaller nations that are foes of the United States, the nations that are now known contemptuously as “rogue states”, or even more contemptuously as members of the “axis of evil”.

In April 1959, only three months after the triumph of his revolution in Cuba, Fidel Castro traveled to the United States where he was accorded a hero’s welcome. Although Castro had not yet become an open Communist foe of the United States, President Eisenhower refused to meet with the new leader, shunting the task off to his Vice President, Richard Nixon.

The unwritten rule is that U.S. Presidents do not bestow on their small fry foes the honour of a meeting with the top man. After the West welcomed Libya’s leader Muammar Gaddafi back into the fold of respectable nations, it was left to British Prime Minister Tony Blair and later to French President Nicolas Sarkozy to shake hands with the former outcast. Colonel Gaddafi did not get face time with President George W. Bush.

During his presidency, President Richard Nixon visited Rumania and Yugoslavia, but that was to tweak the noses of the Soviets about their lack of complete control in their own backyard.

It’s alright for the President to meet with Palestinian leaders who have eschewed terrorism, for the moment at least, in an effort to broker a peace deal in the Middle East. And prior to the presidency of George W. Bush, it was regarded as acceptable for U.S. presidents to meet with the leader of Syria in the pursuit of peace in the region, as Nixon, Carter and Clinton all did.

Barack Obama’s real error is that he has violated the etiquette of empire. It’s bad form for the President of the United States to meet face to face with the leaders of small nations that are involved in deadly squabbles with the Americans. But Obama is young and he learns quickly.

Tuesday, June 03, 2008

Auto Industry Disaster: The Harper Government's Betrayal of Ontario

From its first day in office in February 2006, the Harper government's top priority has been to promote the rapid expansion of the export of Alberta oil to the United States.

The negative consequences of this thoughtless policy have been myriad. Vast quantities of clean natural gas and precious water have been used to produce synthetic crude oil at the cost of reducing a huge stretch of northern Alberta to a fetid dump, unfit for wildlife or human habitation. The Harperites have enriched their pals in Calgary's oil patch with record profits and they have poured huge sums into the pockets of the owners of the foreign owned oil giants.

The prime minister likes to brag that under his watch Canada has become a global energy power. So what if one consequence has been to render Canada incapable of halting the increase in its greenhouse gas emissions.

Another consequence has been to cut Ontario's manufacturing sector to the bone. The rapid rise in the value of the Canadian dollar in relation to the U.S. dollar has delivered a blow to manufacturing from which it may never recover. And the rise of the Canadian dollar has been directly tied to petroleum exports.

The Harper government has received repeated warnings over the past two years to moderate the pace of petroleum exports so that other sectors of the economy from tourism to book publishing to manufacturing can have the time they need to adapt to a rising dollar.

Today, the disaster came home to us with the announcement by General Motors that it will close its Oshawa truck plant next year throwing 2600 workers out of a job. GM CEO Rick Wagoner said it was unlikely the plant would ever reopen.

Appropriately CAW President Buzz Hargrove took aim at the General Motors management for signing a deal with the union a couple of weeks ago whose essence was to keep jobs in Canadian plants in return for huge monetary concessions from the workers. The CAW will fight the battle against the pusillanimous bad faith bargaining of the company.

The rest of us need to focus on the calamity the Harper government has created in our most important manufacturing industry. If the dollar had not been so high against the U.S. greenback, it is highly likely that GM would have planned for much more future investment and economic activity in its Canadian plants to produce the new hybrid vehicles, electric cars, smaller cars and crossover vehicles on which its future depends.

Instead, we've been shafted by the Harper government and by the GM management.

Not least to blame is Finance Minister Jim Flaherty, the MP for Whitby-Oshawa, who has been openly saying he can see little reason why companies should invest in Ontario. Thanks Jim. I'm sure a lot of families in your constituency are singing your praises over dinner tonight.

Flaherty has been bone headed in his insistence that only corporate tax cuts can save jobs in Ontario. You would have thought that a minister from Oshawa would have seen the growing menace of the rising dollar and would have pushed for a shift in economic policy to slow the pace of petroleum exports, protect the environment, and give the manufacturing sector some much needed breathing room.

Given the economic restructuring that is now going on, Canadians cannot afford to have a federal government that is fixated on profits in the oil patch as the source of a rising TSX, no matter what that means for working Canadians and the well being of most of the regions of Canada.