Sunday, November 30, 2008

Bringing Down the Harper Government: Not for the Faint of Heart

"There is a tide in the affairs of men.Which, taken at the flood, leads on to fortune;Omitted, all the voyage of their life Is bound in shallows and in miseries.On such a full sea are we now afloat, And we must take the current when it serves,Or lose our ventures."

The Liberals ought to heed these words as they move forward to topple the Harper government. If, instead, they hesitate and give in to their fears, they will hand Stephen Harper an enormous political victory.
Having committed a grave political blunder last week with its Economic Statement, the Harper government is desperately regrouping to try to regain control of the situation. Apparently they are in full retreat, but no one should be fooled. The concessions being offered---backing away from slashing campaign funding for political parties, dropping the assault on the right of civil servants to strike, and moving forward the date of the budget---are all designed to convince faint hearted Liberals that they should abandon the idea of defeating the government and installing a new ministry in which they will hold the key positions.
If the Conservatives manage to salvage their hold on government, the retribution they will inflict on each of the opposition parties will be a terrible one. Stephen Harper does not deal well with what he interprets as public humiliation. Here’s a guy who can’t even attend the annual Press Gallery dinner in Ottawa because he’d have to lampoon himself and people might laugh at him. Lacking a sense of humour, which means a sense of proportion, he is not well-suited to political life in a democracy where give and take is of the essence.
The only thing this man understands is conquest, which is why even the members of his own party don’t really like him.
If the Liberals decide to let Harper wriggle out of this one, they will have exchanged the substance of victory for a Pyrrhic victory.
Making a coalition work will not be easy for either the Liberals or the NDP. What will unite them though is that they are on the same side of the fence when it comes to the need for a serious stimulus package to cope with the economic crisis. Oddly enough, keeping the Bloc onboard may prove to be not so challenging. The Bloc will claim credit for the portion of the stimulus package that goes to Quebec, and they will be rid of Harper’s noxious agenda on culture, crime, and gun control, an agenda that Quebeckers hate with a passion.
The Liberals, NDP and the Bloc can either hang together or they will hang separately.
They cannot play this game again. If they were to unite to topple the Conservatives further into the mandate of this parliament, Harper would have a much better chance of talking the Governor General into granting him a dissolution and a new election. This is it guys.
If the opposition fails to defeat the government and install a new one, Harper will exercise complete control for the next couple of years. The opposition parties will be stuck with Flaherty’s budget at the end of January, which is virtually certain to fall short of what the country needs in terms of economic stimulus. Do they really want to place the fate of Canadians in the hands of a man whose first plan for coping with the economic crisis included selling the CN Tower?
This may not have been the way the Liberals wanted to return to government. But it’s a good way. If they perform effectively in office for the next two years, the Liberals, the NDP and the Bloc will be well positioned for the next election. And, it will be the Conservatives who will fall prey to infighting. If the Conservative government falls, the campaigns to replace Harper as leader will be well underway by Christmas.
The united power of the opposition parties has been demonstrated to great effect over the past few days. They occupy the high ground and the only thing that stands in their way is their own self-doubt.

P.S. I know the speech at the top of this post was delivered by Brutus, who came to a bad end. Shakespeare had a way of having even his doomed characters give voice to enduring truths.

Saturday, November 29, 2008

Harper’s Economic Mismanagement: The Essential Reason to Defeat His Government

Stephen Harper is making the case that while his government has been dealing with the economic crisis, the opposition parties have been scheming to seize power.

Quite the reverse is the case: while the Harper government should have been mapping out a plan to cope with the onset of recession, its members have been busy sticking pins in the opposition parties as well as in that perennial object of right-wing fury, the civil service.

In truth, the members of the Harper government are economic incompetents.

During their first term in office, they put all their eggs in the basket of making Canada an energy superpower. As the price of oil soared, the Conservative policy was full speed ahead with the development of oil sands projects. The consequences were that under Harper, Canada was fast becoming the leading per capita polluter in the world. The Conservatives paid no attention to the flagrant use of natural gas and water to produce dirty fuel. And in their rush to dedicate oil sands synthetic crude to the U.S. market, they gave not a thought to the long-term energy security needs of Canadians.

The overemphasis on the oil sands drove up the value of the Canadian dollar at such a pace that the consequences were ruinous for the manufacturing sector, which was given no chance to adapt to a changed environment in which Canadian labour costs were suddenly much higher. Retailers and book publishers also suffered for the same reasons.

The Harperites failed to learn the lessons of the rapid run up of global petroleum prices in the 1970s. The price soared and ultimately became one of the main causes of the sharp economic recession of the early 1980s. Then the price of oil fell, Alberta’s oil patch suffered hard times, and Canada had little to show for the excesses of the earlier oil boom.

The global financial crisis that has now burst on the world had a number of causes, one of which was the rapid rise of petroleum prices. When the financial crisis struck and the global economy lurched into recession, demand for petroleum fell and so did the price. Down came the value of the Canadian dollar, something that would have been very helpful to manufacturers earlier, but in the present environment is not of much use.

The Harperites are now claiming that their GST cuts provided stimulus to the economy a year before the British decided to do the same thing. The GST cuts were one part of the Conservative assault on taxes, genuflection to pay homage to their anti-government ideology. As for stimulus, the main effect of the GST cuts was to generate increased imports of consumer products manufactured elsewhere in the world. It did almost nothing to shore up the Canadian domestic economy.

What is really needed now is a massive infrastructure program in Canada, a program that will improve productivity and allow us to move toward greater energy efficiency. This requires direct government spending on a very large scale, something the Harperites are loath to do because it contradicts their most sacred ideological doctrine, that government is the problem never the solution.

Barack Obama will make infrastructure spending a centerpiece of his first hundred days. The Europeans are launching similar stimulus programs.

While Harper and Flaherty dither, the Canadian economy is shedding jobs at a rapid rate. That’s why they should be turned out of office.

A new Liberal-NDP coalition government is needed precisely to cope with the economic crisis.

Unlike the Conservative government which does not enjoy the confidence of the House of Commons, the new government will. Our system is called Responsible Government. The Conservatives should learn about it.

Friday, November 28, 2008

Opposition Parties: Too Late to Turn Back Now

The Liberals, NDP and the Bloc have seized on the capital error committed by the Conservatives in their Economic Statement. Now, the three opposition parties have no real option but to see it through and install a new government.

In their Economic Statement, Finance Minister Jim Flaherty and his boss, Stephen Harper, exposed themselves as unreconstructed followers of the Herbert Hoover school of economic policy making. Their approach to the economic crisis, unlike that of any other government in the West, is to hunker down, slash government spending, sell crown assets (at what would be fire sale prices) and try to squeak through with little or no deficit.

They don’t get it.

Along with the rest of the world, Canada needs a massive program to stimulate the economy, not in the form of further tax cuts, but in the form of infrastructure spending. For the past thirty years, during the neo-liberal age (call it the neo-conservative age if you prefer), the emphasis has been on holding down government spending, deregulation and letting the private sector enjoy the fruits of the cheap labour of the third world. Infrastructure has been allowed to deteriorate in many countries, not least Canada. In this country, where bridges fall down, many highways are a shambles, city streets are more noteworthy for potholes than pavement, hospitals and schools are in disrepair, and public transit falls ever further behind, tens of billions of dollars need to be invested.

As it turns out, Canadian governments will get the biggest bang for their stimulus dollars through infrastructure spending. The labour that is hired is local and most of the materials are purchased from inside Canada so there is much less leakage outside the country in the form of increased demand for imports as a result of the stimulus than would be the case with tax cuts.

Economic stimulus will preserve and establish jobs. Intelligent infrastructure programs are an investment in a more productive and greener future.

The Conservatives have over-played their hand. By putting themselves so much on the wrong side of history, they have forced the three opposition parties together. The government, having discovered the extent of their miscalculation, may now try to buy off the Liberals, NDP and the Bloc with compromise wording in the economic statement and the removal of the measures on campaign finance from the package.

It’s too late for that.

If the opposition parties were to settle for a few new phrases in the Economic Statement, they would be opting to allow Harper to push them and more importantly the Canadian people around during several years of government austerity that would deepen the economic crisis.

As it now appears, we could be heading for a Liberal-NDP coalition government with the Bloc providing support in Parliament. These three parties hold the majority of seats in the House and they won the majority of votes in the recent election. In forming a new government, they will be acting in the best interest of Canadians and will be taking a crucial step in the revitalization of democracy in this country.

Thursday, November 27, 2008

Opposition Parties: Out of the Sandbox and Into Real Politics

Since the global financial crisis burst onto the world stage so that even obtuse people like the members of the Bush administration had to notice it, Canadian politicians and the Canadian media have been noteworthy for their head-in-the sand responses to what is happening.

While a large majority of Canadians voted against the Conservatives, the outcome of the election confirmed the surface impression that Canadians had opted for the status quo. Since election day, the mealy-mouthed Canadian media has continued its business-as-usual approach to politics and the economy. On the CBC, Don Newman’s Politics, where the spin never stops, groans on just as before the financial crisis. The At Issue Panel, made up of people who subscribe to the economic and political paradigm that has gone down in flames, continues as in a time warp.

Just beneath the surface of federal politics and the maundering media, however, everything is as different in Canada as elsewhere. The economic crisis is spreading apace and an increasing number of people are its victims. More will be with every passing week.

That the Conservatives are back to their old game of turning secondary issues into confidence matters has become apparent with the government’s decision to slash outlays to political parties. Instead of planning a massive program to rebuild our infrastructure, which ought to be the order of the day, the Harper government is demonstrating that it is utterly bankrupt.

The time has come for the three opposition parties to get out of the political sandbox in which they have been living and to offer the citizenry a real alternative.

During the election campaign, the three opposition parties took plenty of pot shots at each other on a host of issues. By the end of the campaign, the reality of the financial crisis had made the platforms of all three parties look dated and rather ridiculous. The Liberals and the NDP each asserted, for instance, that the government would not run a deficit with them at the helm, a proposition that was perfectly idiotic by election day.

To keep its programs intact, and to mount an infrastructure program to repair the damage of years of neglect, and to create and protect jobs, the federal government needs to run a deficit.

The essential difference between the Conservatives on the one hand and the Liberals, NDP and the Bloc on the other, is not their positions on particular issues. It is that the opposition parties are open to the need for a fundamental shift to face up to what is happening. Unlike the Conservatives, who are waiting for an Obama bailout to reignite the Canadian economy, the opposition parties are alive to the need to take sweeping action.

The moment has come for the leaders of the three parties, along with their advisors, to spend serious time together to work out the program for an alternative government, committed to protecting jobs and investing in the future.

Having agreed, they should make their case to the Canadian people, defeat the Harper government in the House, go to the Governor General and present themselves as able to form a government that can command majority support in the House. That government can be a coalition, with all three parties formally a part of it, with two of them in it, or with only the Liberals forming the new ministry. What matters is the commitment of all three parties to support the program they have drawn up. Let’s get on with it.

Tuesday, November 25, 2008

Ending Harper's Parliamentary Dictatorship

Having won 38 per cent of the popular vote and 142 seats in the House of Commons in the recent federal election, Stephen Harper is acting as though he has a mandate to lead Canadians through the financial crisis that is at hand.

His tactic, which he deployed repeatedly during the year prior to the calling of the election, was to declare not merely the budget, but a long list of other items, matters of confidence for his government. If the Liberals, New Democrats and the Bloc who held, and still hold, the majority of seats refused to bow to his will on virtually everything, that would precipitate an election. Then when he saw his chance, the prime minister violated his own legislation that had fixed the date of the next election and plunged the country into a trip to the polls most citizens did not want.

On election day, Canadians refrained from giving Harper an exclusive mandate. The essence of minority government is that the Conservatives share a mandate with the three opposition parties, the parties that won the majority of seats, as well as the majority of votes cast. Those three parties now have the power to force the prime minister to adopt a cooperative approach to governing or they can defeat him and form a government with a program they all agree in advance to support.

There are compelling reasons for the three opposition parties to forge a common strategy. These parties have positions on social programs, the environment, gun control and crime that are much closer to those of one another than to those of the Conservatives. More important still, they share views on how to deal with the economic and financial crisis that are fundamentally at odds with those of the Harper government.

The global financial meltdown involves much more than a typical economic slowdown. The collapse signals the demise of the paradigm that underlay government economic policy making in the West for the past thirty years----unbridled free enterprise, with a minimum of regulation.

It is that discredited ideology that has been and remains the raison d'etre of the Harper Conservatives. As head of the National Citizens Coalition, leader of the Conservative Party and the Canadian Alliance before that, Stephen Harper has devoted his entire career to the cause of reducing government and shredding regulation.

Recently he has taken to proclaiming that what has made Canadian banks the envy of the world has been the solid regulatory system in which they are embedded. In truth, if the Conservatives had had a majority in the last parliament, they would certainly have deregulated Canada's financial institutions so that taxpayers would now be bailing them out on the same scale as is occurring south of the border.

At the meeting of G 20 countries in Washington last week, Stephen Harper sided with George W. Bush, the Herbert Hoover of our time, in advocating a minimum of regulation in the global financial system. This leopard has not changed his spots.

The Harper government's idea of how to get close to the incoming Obama administration is to negotiate an energy deal that would be bad for the environment and that would virtually cede sovereignty over the Alberta oil sands to the United States. Here's how it would work: in return for a Canada-U.S. pollution reduction deal that falls far short of the targets set under the Kyoto Accord, Canada would guarantee to the United States long-term secure access to the synthetic crude of the oil sands.

On the central matter of reviving the economy, saving the manufacturing sector and promoting a bold new agenda for rebuilding our cities and infrastructure, the Harper government has no appetite for the scale of action that is needed. Harper sometimes sounds like a Keynesian who might come up with a bold plan to stimulate the economy. And then, his finance minister, Jim Flaherty---the man who mused about selling the CN Tower---says that any stimulus plan will have to wait months for his next budget.

In the leaders' debates during the recent election campaign, Stephane Dion, Jack Layton and Gilles Duceppe showed that they shared a good deal in common in their approaches to economic management, or at least to the idea that there ought to be government intervention in the economy.

Could the three parties work out a platform to govern for the next two or three years?

If so, they could defeat the Conservatives in the House and form a coalition government. Alternatively, the NDP and the Bloc could commit to support a Liberal government in enacting the agenda on which all three parties were agreed.

The opposition parties ought to do this for the good of the citizenry, but there are a number of self-interested reasons that could also impel them in this direction.

Following two successive electoral defeats, and having embarked on a leadership race in which the two front runners are re-treads from the last race, the Liberal brand would benefit immensely from a demonstration of leadership during a time of deep crisis. To make this work, Stephane Dion would have to step aside in favour of an interim leader until the new party leader is chosen next May.

Despite Jack Layton's best efforts during the election campaign to present himself as ready to be prime minister, the NDP remains mired in fourth place in parliament, its long-term strategy to surpass the Liberals in tatters. Participation in governing the country could give the party the traction it needs to end its days as a perennial bridesmaid.

The long shot is the Bloc, a party whose reason for existence is to make Quebec a sovereign country. Or is it? In the current financial climate, the Parti Quebecois is doing little to promote the cause of Quebec sovereignty during the provincial election campaign that is now underway. While the party has not backed away from the ultimate goal of sovereignty, its platform insists that the PQ would not be obligated to hold another referendum on the issue should it win the election. The PQ and the BQ are both well aware that the last thing Quebecers want to hear about right now is another referendum.

That leaves Duceppe's party as the permanent odd man out in Ottawa, a party that holds a majority of Quebec's seats but cannot participate in governing.

The Bloc would not have to join a new governing coalition in Ottawa, but it could agree to support it on the basis of a much more interventionist approach to managing the economy than it will ever get from the Harper Conservatives. Bringing the Bloc into responsibility for governing can open the door to a political era in Quebec in which the choices are no longer restricted to sovereignists versus federalists.

The place to start is with a dialog among the three opposition parties to map out areas of mutual agreement. Next, they need to put the Harper government on notice that unless its members are willing to cooperate in mapping out the new agenda that is needed, they will defeat it and establish a new government in its place. Either way, the days of Harper's parliamentary dictatorship would be ended.

Saturday, November 22, 2008

Harper Government: Out of Touch with the Scale of the Crisis

Much like the Bush administration which is floundering as the economic crisis intensifies, the Harper government seems to have no idea what is going on.

Not only is the United States and the world as a whole undergoing the worst stock market crash since the Great Depression, the so-called “read economy” is about to be hit by a potent mix of falling purchasing, declining prices, business bankruptcies on a vast scale, and the loss of jobs at a pace we haven’t seen in our lifetimes.

Meanwhile, on both sides of the border, policy makers are dithering as the very real threat of the collapse of the Big Three automakers grows greater every day. When Lehman Brothers expired what seems like a millennium ago, we were reassured that Ben Bernanke, the Chairman of the U.S. Federal Reserve Board , was a student of the Great Depression and knew what to do.

Think of those grainy news reels from 1929 and the early 1930s. We used to feel smug about them. How dumb those policy makers were not to understand that you had to pump sufficient liquidity back into the system to keep the economy from collapsing? (We were taught that in Economics 101---oh, I forgot, when I took Economics 101 Keynesianism was still in vogue. Now in Economics 101, students learn the idiocies of Friedmanism and its successor doctrines, a perfect brew for cooking up a depression.)

If the Big Three, or any one of them, go into bankruptcy protection, the storm that will follow will be enormously more intense than what we have experienced so far. It will be felt in every community in Ontario and Quebec. The auto parts, steel, rubber, glass, and other feeder sectors, along with the service sectors in the dozens of communities tied to the auto sector will be devastated. From there it will spread to every community in the country, including those that nowhere near an auto plant.

In the U.S., the Bush administration, in its last chaotic hours, is just hoping the bad movie will go away. In Ottawa, Stephen Harper and Jim Flaherty (whose first instinct was to sell the CN Tower) are praying that Canada’s oil patch will save them (haven’t they noticed that the U.S. economic crash has already hit Fort McMurray between the eyes.) They want to play the old game of competitive deflation in which Canada lowers labour costs and government spending in the expectation that we can still export enough to the U.S. to keep our economy humming.

The Harperites don’t realize that this downturn is not like the others. It is, at bottom, the outcome of the shrinking role of the United States in the global economy. This time the U.S. market is not going to save us. The Americans are awash in red ink that is spreading in all directions----governmental, corporate and personal.

Canada needs its own large scale and coordinated governmental strategy for staving off collapse. Time is of the essence.

Friday, November 07, 2008

Following Tuesday’s High in Grant Park

Barack Obama’s victory party in Grant Park was the perfect ending for a Hollywood movie. The good guys won and lived happily ever after.

But this was real and the world did change, although not necessarily in the ways most people think.

The American revolutionary heritage, dating back to 1776, demonstrated its continuing potency. From the Declaration of Independence, the Gettysburg Address and Martin Luther King’s “I have a Dream” oration, to Barack Obama’s victory celebration in Grant Park, the quest to fulfill the promise that all are created equal has persisted, through retreats that lasted decades, to triumphs, to this week’s vast achievement. Once again, the world’s complex relationship to America has altered. For the United States itself, a great legacy of Obama’s victory will be the new voting alliance he has constructed. It includes much of the traditional working class and professional base of the Democratic Party, and adds to this vast new numbers of African Americans, Latinos, and young people.

The coalition is so broad----a definite problem for the future----that it embraces not only millions of Americans who want permanent jobs that pay a living wage, post-secondary education for their children, secure home ownership, and safe and rebuilt cities, but a large segment of the capitalist class. While business executives desire some of the things millions of wage and salary earners want, they have not abandoned their appetite for cheap labour, if not available at home, then abroad. And they want low taxes for themselves.

Obama’s coalition can be called the “coalition of the sane.” It embraces the broad forces of American democracy. Meanwhile, the Republican Party has become the party of unreason. It is a party in which it is respectable to believe that humans once traveled on saddled dinosaurs, that the American imperium can safely ignore both the economic and military limits to expansion, that Americans don’t really have to pay taxes, and that the exponential expansion of production and consumption poses no threat to the planet. The Christian right continues to grow in the United States, and even though its members were less enthused than usual about the Republicans this time, they will endure. They pose a signal threat to American democracy. If the economic crisis persists for years to come, as is likely, they will knock loudly on the door next time.

As was the case in 1933 when Franklin Roosevelt was sworn into office in the depths of the Great Depression, Barack Obama will take office at a time when the prevailing nostrums about how to run the economy have been shown to be barren. It will fall to him to save American capitalism, not only materially, but from its own savagely self-destructive appetites and superstitions. FDR achieved this with a great assist from the Second World War.

He had one immense advantage that Obama does not possess. FDR presided over America when its empire was rising. Obama presides over an empire in decline. To save the United States from utter bankruptcy, the new president will have to end the wars in Iraq and Afghanistan as quickly as possible. He will have to slash military spending. He will need to rely on “soft” power, the power of persuasion to get his way in the wider world. At the moment, he has plenty of soft power, in the form of the immense good will of most of humanity, but soft power has a way of dissolving in the face of stubborn realities.

Barack Obama has shown an immense capacity to confront challenges with equanimity. He’ll need this as he moves from the Hollywood set to the making of the documentary film of the next four years, a different sort of saga.