Drummond and his plan are human too

There is no shelter for skeptics.

We want to believe that if a decision is going to hurt, there is no sane alternative. Nevertheless, we have no right to assume that the author of unpleasant advice is automatically smarter, more objective, and has more integrity than others.

The massive restraint program proposed by Donald Drummond offers an obvious duty to the print media, the guardians of calm discussion. One institution that shouldn’t be stampeded is the centrist Globe and Mail.

Profiling the author of such a grand-sounding document as “Public Services for Ontarians: A Path to Sustainability and Excellence” makes journalistic sense. However, it’s hard to think critically about someone who is perfect!

Jeremy Torobin, Drummond’s Globe biographer, didn’t quite create a god, but he certainly made me feel small.

Here’s the profile’s headline: “Parsimony, with a side of courage”

Here’s the lede: “. . . the former Toronto-Dominion Bank chief economist strolls into a restaurant looking every bit a monument to the austere financial discipline he preaches.”

Here’s Drummond’s first passion: “Getting to the bottom of vexing public-policy issues.”

Click on: http://investdb4.theglobeandmail.com/servlet/story/GAM.20120218.RBLUNCHDRUMMONDATL/GIStory/

Drummond is provided an entire page to tell us who he thinks he is and about the challenge he’s had fixing the second-biggest government in Canada:

           “No government in the world has ever done this before," he says.

"I'm calling for a revolutionizing, a radicalization, of virtually everything a government does, to make it focus on efficiency, not just in one area at a time, but simultaneously in virtually everything they do. It'll take unbelievable courage and unbelievable intelligence, and it'll take an unbelievable capacity at both the political level, and the bureaucratic level."

Click on: www.globeinvestor.com/servlet/ArticleNews/story/GAM/20120218/RBLUNCHDRUMMONDATL

These words weren’t whispered in his ear by an obsequious flack from Premier McGuinty’s Office.

He acknowledges no compromises in his weighty report or any concern over the complexity of his 100-day assignment—essentially, doing to dozens of public organizations what Mitt Romney and his management consultants used to do for profit. He volunteers that even if Ontario revenues were high he’d still do 350 of his recommendations.

Only once does Drummond, the non-partisan analyst from Jean Chretien’s Camelot, patronize the locals. Referring to the problem of keeping up quality services, he asserts:

“. . . during the Mike Harris and Ernie Eves eras, Ontario's public service was rarely 'asked to flex its analytical muscles,' causing them to atrophy.

“As an aside, he warns a similar phenomenon is occurring in Stephen Harper's Ottawa and says the federal Conservatives would be wise to study Ontario's experience.

"The process of re-building that capacity is under way, but it is a long haul," he says.

Canada’s greatest political economist John Kenneth Galbraith once suggested that “no human being” can survive a career in banking. Drummond finally shatters that theory. After 10 years in banking and 23 years in the Department of Finance, with a public pension and a bank pension, Don Drummond is still boyish about Don Drummond.  

A boyish ego, however, doesn’t guarantee fresh thinking or the ability to stand outside the professionally cool opinions of the moment. Drummond’s report will make many losers angry. You may see courage in that. However, if you read it carefully you’ll also discover that it will make many powerful interests happy.

The sections on electricity services, for instance, suggest that 80 small municipal distributors be rationalized, presumably to save money. At the same time, Drummond concludes that the provincially owned electricity assets and agencies—85% of the electricity sector and the main drivers of future price increases—need, after years of presumably mediocre governance, a period of reflection.

“A degree of normalcy may very well be helpful for the sector to take stock and reflect on the status quo. Consequently, the Commission has a series of recommendations that are meant to balance the need for stability in the sector with the need to curb costs.”

Click on: www.fin.gov.on.ca/en/reformcommission/chapters/ch12.html#ch12-c

Torobin reports that Drummond didn’t sound like someone “eager to ride off into the sunset.” More likely, he’ll be a welcome and frequent presence as Ontario’s insiders manage this difficult decade.

Ontario’s restraint program: bulking up for cuts

Shafts of light are breaking through the gloom that has descended over Ontario in the wake of Don Drummond’s release of 362 proposals to cut government spending. Drummond and his client are avid students of modern management and, so, even the exercise of unwinding dreams must be creative.

What can’t go on cannot simply stop. No movement in modern government is free. What’s left to spend must be better “co-ordinated” and better “aligned with priorities” and, of course, able to soothe the stakeholders who used and often helped hatch the programs that have to go.

The tedium and complexity of all this is balanced by a promise: Mr. Premier, you can survive this. (This is the same kind of promise, it seems, that has released the federal public service to expand by 13% over the last five years—or twice as fast as the growth of Canada’s population—to help Stephen Harper be a competent conservative.)

Making a positive exercise out of restraint in Ontario too will require additional and expensive human capital. Drummond and the government have both rejected “crude” across-the-board-cuts in favor of making hundreds of individual decisions around the Cabinet table. Earlier this week, Adam Radwanski reported in the Globe and Mail that the government will need help:

“The barrier, as much as lack of will, is absence of infrastructure. There are very smart senior political staff and bureaucrats. But those familiar with the inner workings of government suggest there just aren’t enough willing or able bodies to drive dozens of reforms at once, let alone 400 of them.”

Click on: www.theglobeandmail.com/news/politics/adam-radwanski/figuring-out-how-to-march-to-drummonds-beat-the-hard-part-for-mcguinty/article2335022/

You can be sure a vast army of management consultants, communication strategists, and transformation wordsmiths are gearing up to help.

Ontario’s long-term deficit and helter-skelter leadership

Canada’s biggest and arguably most American province has many of America’s biggest problems as well—slipping competitiveness, a stagnant middle class tax base, growing entitlement obligations, a chronic public deficit, and a generation of politicians who rose to prominence and got elected promising to be creative and constructive in an ever-growing Ontario.   

The great recession of 2008-09 exposed these problems; the recovery isn’t solving them.

It has been long understood within the government, across political parties, and amongst the government’s stakeholders that Ontario’s budget (now approximately $16b in deficit) cannot return to balance without painful changes. Nevertheless, over the last year, Ontario’s political parties, campaign strategists, platform writers, special interests, and senior public servants have carried on publicly as if new promises were viable and as if their deficit reduction plans were real.

One year of denial isn’t a crime in politics.

The politicians didn’t laugh at each other’s economic forecasts. When Premier McGuinty was questioned to be more specific about how he’d address the deficit, he’d say: “I’ve appointed Don Drummond, a distinguished former federal public servant and bank economist, to study the situation and review our programs in detail.”

Yesterday, Drummond delivered his report: its 125-page executive summary includes 362 recommendations to cut costs and raise some revenues. He forecasts a $30b deficit in 2018 if his plan isn’t implemented. He proposes an annual spending seven-year cap of only 0.8% in total program spending—healthcare would be limited to 2.5%, post-secondary to 1.5%, and social assistance to 0.5%. Everything else in government, except interest payments, would shrink by 2.4% a year.

To make these targets real to policy wonks—and much less so to politicians—he offers dozens of eye-popping ideas: make students pay more to go to university or college, have everyone pay more for electricity, have affluent seniors purchase their prescription drugs, and, for instance, have teachers teach in larger classrooms and retire later.

Premier McGuinty’s response to the Drummond report, predictably, is shameless and uncertain.

Most of the recommendations and analyses in the report represent an exhaustive excavation of advice, ideas, and warnings that the Premier and his ministers have received verbally and in writing from loyal public servants over the past seven years. The major observations about the big choices and the dimensions of the problem were well known and could have informed this year’s provincial election.

Rather than the most extensive study of its kind “since Confederation,” as the Premier boasted, you could say that Drummond has documented one of the most wide-ranging cover-ups in modern Canadian politics.

Substantively, the government’s first concrete response may fundamentally sabotage the enterprise.

Ontario Finance Minister Dwight Duncan neither endorsed the fairness or soundness of the overall report. He didn’t worry whether they had time to make complex structural changes that would be required or whether it was fair and tolerable to limit growth in social assistance support to only 0.5 annually—a third of the growth rate for education. No. He simply reiterated that the Premier’s new idea, a $billion full-day universal kindergarten program will go ahead.

Click on: www.nationalpost.com/thing+nothing+Minister/6160595/story.html

With that decided, every stakeholder of every existing social, economic, and educational “investment” in Ontario is free to seek exception—arbitrarily or otherwise.

Barack Obama may be a procrastinator too. But, in receiving the Bowles-Simpson recommendations on the US federal deficit, he didn’t say that tax deductions for home mortgages, defense, or medicare expenditures were off the table.