01 December 2008

Children, Children, Children

Reading the title of this post, you would be forgiven for thinking that it was going to have something to do with children; maybe some family law, or Church teachings on family. Well, it doesn't. It has everything to do with the childish antics coming out of Ottawa over the last few days. Last Wednesday, when the trash talk started, I laughed it off, and thought it was just more parliamentary BS; or a trial balloon that, once floated, would quickly be shot down. Apparently I was wrong. I am no longer laughing; instead I dread checking any one of my news sources, and everything I read sends a sharp chill down my spine.

For those who aren't aware, or who haven't managed to follow the convoluted stuff coming from Ottawa, here is a brief rundown, followed by my opinion on it all.


Prime Minister Harper (duly elected on Oct 14, 2008) announced he was considering cutting taxpayer money to political parties because of the economic crisis. (In 2003, then PM Jean Chretien announced each party would get $1.95 for every vote they received.) This cut was to be a largely symbolic gesture of belt tightening. Essentially, if PM Harper was going to ask Canadians to tighten their belts because of the economic crisis, he felt the politicians in Ottawa should do no less. (It's the whole leading by example thing that we all seem to have become unfamiliar with- sorry, I will try to stop editorializing in the recitation of the facts).

The leaders of the other 3 political parties quickly announced this was a partisan policy by PM Harper and was only being suggested because it would hurt them far more than it could hurt the Conservatives. (The Conservatives stand to lose about $10 million, the Liberals about $7.7 million, the NDP and the BQ about $3.3 million and the Greens about $1.7 million- not exact numbers.) However, in terms of money fundraised by each party, that would be about 2/3 of the other parties financial support.

On Thursday, Finance Minister Jim Flaherty delivered his economic update. In it, he proposed to cut the funding to political parties, prevent civil servants from striking for 1 year, and several other matters, all ostensibly geared to help keep Canada's economy afloat in the current world economic turmoil.

Even before Minister Flaherty had finished his economic update, the opposition parties were talking about a coalition government if they voted down the economic update. Their reason is that they have lost confidence in PM Harper to govern as the country needs during this economic crisis. Currently, PM Harper's Conservatives are 12 seats shy of having a majority in Parliament. That means that if the Libs, NDP and BQ get together, they can vote down any measure Harper proposes. As of a few minutes ago, Stephane Dion sent word to the Governor General that the three parties were prepared to govern if the Conservative government falls. The only other option is to have another federal election, 6 weeks after the last, at a cost of about $300 million.


That is a very short rendition of the facts, and leaves out a lot of details, but that's because I want to do what I do best- offer my opinion on it all.

The Economy

Ostensibly this whole constitutional crisis is about the current economic climate. (I don't believe that for a second, but, let's assume that's true.) There is no denying that economies all over the world are in trouble- you only have to look at the stock markets and the price of oil. Before I go any further, I want to make it clear that I am not an economist, nor have I ever taken a post secondary class on economics. But, correct me if I'm wrong, this whole crisis started because people were spending more than they had. People were living off of credit- buying homes they couldn't afford to make payments on, using the equity in their homes to purchase cars and RV's they couldn't afford, borrowing against lines of credit and racking up credit card debt like there was no tomorrow. Well, tomorrow has arrived, and the post-easy credit hangover has set in.

And yet, what is the approach of the Coalition of 3? Well, to spend more of course. Huh?

That's right, spend more money- stimulate the economy.

What? I'm sorry, but if I personally am living beyond my means, how is getting into more debt going to solve the problem? Isn't that what caused the problem in the first place? And, I know that we are talking about a whole economy here, not just one person, but I think the same principle still makes sense here. Are there going to be people who lose their homes and jobs? Yes, that's what happens in an economic downturn. Does it suck for those people? Yes, it does. I would really appreciate it if someone could explain to me how pouring billions into the Big 3 automakers will solve that problem. Sure, it will let those people retain their jobs for awhile, and allow them to continue paying their mortgages for awhile, but it doesn't fix the problem- it's a band aid solution. Unless the automakers (or whatever industry we are talking about) determines why people are no longer buying their products and makes the appropriate changes, they will continue to lose money. At the end of the day, pouring money in without huge restructuring and changes to business plans won't do anything, except delay the inevitable for a few more years, when the industry will again come hat in hand asking for more money, because, shocking! The last handout is gone and nothing has changed.

The right approach, in my view is to not give any money to a business that is failing. I don't approve of handouts. And I think that's where the Conservative government is coming from. We don't solve problems by spending more, we solve problems by tightening our belts and giving up cable and the annual Caribbean vacation until the crisis is over. Unfortunately, that policy isn't going to gain them any votes in a country that has decided that handouts are just business as usual.

Politics as Usual

But like I said, I don't think anything actually going on in Ottawa right now has anything to do with the economy. I think all 4 (yes all 4) political parties are trying to use the economy as an excuse to further their own agenda. That agenda, as always, is to get more votes. For the Liberals and the Conservatives, it's about getting a majority government. Interestingly, it is the NDP and BQ who are best poised to further their agenda's right now- both major parties lack a majority, so they have to make deals with the other parties to accomplish anything. Essentially, the NDP and BQ are in a position to blackmail- i.e. we won't support you unless you do x.

When Chretien brought in the $1.95/vote in 2003, I didn't like it. I think that if you want to be a political party, you should have to support yourself- if people like your ideas, they will help you to fund your political ambitions; if they don't like them, then there is no reason that you should exist. And I think that if the government is going to ask us all to tighten our belts, they should do the same, so cutting the subsidies doesn't bother me in the least. (Although if they really want to show themselves willing to tighten up, they should all accept a pay cut, but we all know that will never happen.)

It also offends me that the other parties would even attempt to form a coalition government, or threaten to bring down the house in the middle of an economic crisis. On Oct 14, Canadians elected a minority government. That means the will of the people is that everyone gets along for the good of the country. The problem with that is there is a fundamental disagreement about what the good of the country is. The Liberals, NDP and to some extent the BQ think that we need to spend our way out of an economic crisis. The conservatives think that belt tightening and tax cuts are the way to ride it out. So, the problem is that they will never agree, and I don't think that they will be able to govern effectively- every money bill is going to be a confidence motion and as long as we have a minority government, we are going to talk about an election constantly. I don't want another election- I think it will return the same results.

But I also don't want a coalition government- that offends democracy. The people of Canada voted the parliamentary make up that we have right now, and that needs to be respected by those in power. If the BQ, NDP and Libs form a coalition, they are ignoring the will of Canadians- in essence they are denying democracy. And yes, I know the constitution allows for this, but only if the coalition can provide stable governance. If we look at the Italian example, it should be clear that coalitions almost never work, and never last more than a year.

Assuming this coalition doesn't go anywhere (and I don't think it will) for the next 2 years, we are going to play an elaborate game of chicken every time PM Harper wants to do something. And, if the Libs don't blink first, we will go to the polls. Tactically, I think if the Liberals were smart, they'd go along with what Harper wants- phrase it in terms of trying to work for the best interests of the country, so they can deny they agreed with his policies when the time comes- for about 2 years. At that point they will have a new leader (likely Ignatieff) and money back in the party coffers to fight an election. Also, this is not going to be a short economic downturn, so 2 years from now, no matter what Harper does, we will likely be in a worse economic situation then we are now. The Libs can say they let Harper try to do it his way, but his way doesn't work, and I think that platform would win them a majority (unfortunately). But they don't seem to want to do that.

So that's my long winded opinion on what I think of the mess in Ottawa. Bottom line is that given the makeup of the constitution, the composition of Parliament and the ideological underpinnings of the parties in Ottawa, we can't expect anything different. And Canadians will suffer for it- either we will spend $300 million on an election every 6 months for the next few years (like Italy does) or we will spend billions on bailouts that don't work and will just artificially pro-long the crisis. (I recommend you read some of the new articles being written on the Great Depression- academics on both sides of the spectrum say that FDR's new deal actually prolonged the depression.

Honestly, I would like to see Harper given a chance- he is an economist by trade- something none of the other parties can boast of, and I think if we give him 4 or 5 years, he can turn this around before it becomes a major depression (remember the stock markets didn't return to 1929 levels until 1954), but I don't think that will happen. Instead of doing what is best for Canadians, the politico's in Ottawa will do what is best for them.

At the end of the day, Canadians will lose, and will lose big.

God help us all.

UPDATE: (5:33 pm Monday) Apparently we can blame the antics in Ottawa for today's Toronto Stock Market loss, and the continuing slide of the loonie. Investors don't see a country that is preparing for bloodless coup d'etat as a good investment option. If that doesn't prove that the Ottawa politoco's don't care about anything but their own self advancement, I don't know what does. Don't say you are trying to save the economy when you are actually forcing it to drop faster! Argh!

UPDATE: (10:14 pm Monday) A rally across Canada for democracy has been scheduled for this Saturday. Most major centers have a rally planned. If you have the time, please plan on attending it. We need to show the coalition of 3 that Canadians won't stand for this outrage. Details can be found at RallyforCanada.com. If you are on Facebook, an event has been set up here. Everyone needs to contact their MP to express their opinion, and don't hesitate to contact Mr. Harper, Mr. Dion, Mr. Layton, Mr. Duceppe and the Governor General. All to often Canadians are silent. We need to speak now.

1 comment:

Armin Arend said...

Sandy, you say you did not take a postsecondary economics course, but you have proven superb insight in this blog. I am a B. Comm. and have worked in supposedly free enterprise and I am deeply troubled how little most people in big corporations and government, politics, media etc. know about the matter. They do not have the common sense it seems you have and most people have in this country been raised and educated not to question the elites. It is always devastating to me when I see people rather trusting some big mouth than the brain and heart and sould they have been given by the creator to use wisely. That the common people can be trusted to make wise decisions that at first sight do not serve their own interest is not a myth, the people of Switzerland prove it every 3 month at the polls when they cast their vote and shape the future of their country in a show case of direct democracy.

On the economical aspect, it is sad to have to admit that Mr. Harper was the only one in the Western world that wanted to be frugal, instead of selling the future of his people by spending his way out of an economic down turn. Few people would have had the guts to swim against the tide. Mr Harper failed the test of time, but who would not have. May I nominate you for Prime Minister? Too bad, we do not have a presidential form of direct democracy.