Canada’s dying pipeline industry and its genteel lobbyists

Can you imagine the noise, the rhetoric, the picket lines, the emergency meetings, the petitions and the op-eds if the governments of Canada or Quebec ended the dairy industry’s monopsony or called in their loans to Bombardier Inc.?

Either of these hoary burdens to consumers and taxpayers alike would raise righteous hell, would have under Prime Minister Stephen Harper and will, as surely, under Prime Minister Justin Trudeau.

So, isn’t it strange that Barack Obama and Canada’s new Prime Minister can kill two regulator-approved, multibillion-dollar oil pipeline projects, blocking recession-racked Alberta’s most economic new pathways to continental and global oil markets, and, consequently, harm profoundly the economic credibility of the only reliable growth region of Canada—and then move on, smilingly, hand in hand, to address other business?

Obama reasons that TransCanada Inc.’s Keystone XL project doesn’t fit with his green, global vision of himself. After seven years of painful gestation, his "legacy" logic spreads gently like you-know-what on troubled waters. While Trudeau, his Cabinet and chief office networker Gerald Butts rush to assure Obama’s White House that their country can take a punch and that he’s already as green as the President.

Trudeau doesn’t openly use his predecessor’s National Energy Board's legislation to disallow the Enbridge Inc.’s Gateway pipeline to the Pacific. He only insists that the oil that gets there by flowing it won’t be able to use the Pacific Ocean to go any farther.

The actions of both politicians fit the logic of their electoral politics.

Powerless Canadians would be embarrassed by a sore loser Prime Minister. Furthermore, they still very much like Obama, personally. While British Columbia’s asset-rich beach-dwellers long ago decided that "their" rain-socked, essentially inhabitable, north Pacific coast belongs to the gods of leave-things-alone.

The only weird part of this smooth economic catastrophe has been the tone and seeming intent of the responses of the immediate victims.

Enbridge’s pipeline spokesman whispers, for example: “We are confident the Government of Canada will be embarking on the required consultations with First Nations and Métis in the region, given the potential economic impact a crude oil tanker ban would have on those communities and Western Canada as a whole.” Also, they’d love to have one of those "re-set" chats with Trudeau.

These are the true sentiments of a company that is laying off skilled employees, that has already wasted tens, if not hundreds of millions, on law firms, negotiators, anthropologists, environmental planners, engineers, media commercials, and, needless to say, in-house and retained, multi-party government relations specialists.

Are they truly confident that the Trudeau government—answering to an absolute majority of green Liberal MPs who have no direct skin in the fate of Alberta’s oil industry—will reverse itself? That Justin Trudeau will exclaim: “Oh my, Enbridge has convinced half a dozen coastal First Nation bands to take a bit more of their money to stop guarding their pristine coast.”

Such fake, Pollyanna, convoluted, supine optimism reminds me of a proposition that ought to be on every boardroom wall in the fossil fuel business:

“When the Fox hears the Rabbit scream he comes a-runnin', but not to help.”

― Thomas Harris, The Silence of the Lambs

Crony Capitalism—as if

There’s probably an angry slogan lurking out there that will capture the rage against the economic order of the last three decades. It will have to be very good—and new. Globalization, free trade, deregulation, and the resurgence of traditional laissez faire values have fundamentally changed both the have and have-not worlds. Furthermore, the changes can be reversed.

“Crony capitalism,” however, doesn’t work. Indeed, it’s wildly off the mark.

It’s not surprising that this accusation has popped up on cardboard signs at OWS parks, especially near major financial centers. It’s been used to damn bailouts and egregious corporate bonuses. Also, the term goes nicely with an excellent slogan used in 1972 by one of Canada’s last socialists David Lewis—“corporate welfare bums.”

As an ideological concept, “crony capitalism” expresses the dark side of economic nationalism, the military-industrial complex, and the industrial strategizing that, we were told, would push Japan Inc, Germany Inc, and, now, China Inc. to the forefront. The dark side includes those hidden taxes we pay to support powerful entrenched relationships—higher prices and fewer opportunities for innovators and outsiders generally.

The reaction that changed the world wasn’t Cleaner Cronyism, but Neo-liberalisms.

Starting with Jimmy Carter, not Ronald Reagan, in the late 1970s, US and soon Western European policy consciously favored breaking down barriers for traders, investors, and individuals as the best way to create and share the wealth—and diminish the influence of crony relations.

Neo-liberalism was successful enough to more than double world trade and free half a trillion from severe poverty. It has made it easier for Americans to buy high-quality inexpensive goods and travel around the world. It has made it easier for American businesses, universities, and laboratories to attract talent globally and to drive down the costs of doing business. It has made it easier for young people without connections to break into and make money in American business. It has pushed us closer to a meritocracy that lavishes the winners and leaves the middle class on a treadmill.

Neo-liberalism has been around long enough to experience its first great crash.

Nevertheless, the scramble to stabilize the world economy in the winter of 2008 represented not the logic of the new order but a surrender to the past—a past of state-business crisis management on the right and state-business economic planning on the left.

Bailing out Wall Street and two auto companies should be seen as emergency measures to halt a recession—and keep alive the financial mechanisms that have facilitated globalization and intensification of capitalist development.

These measures were not designed to undo the gales of competition. There was nothing more “crony” about what happened than what happens when a fire crew puts out fire before finding out who is to blame.

Of course, a measure of good cronyism within a competitive mixed economy—of business and government people collaborating with one another to accomplish together what they can’t accomplish alone—should be welcome.

However, we’re a long way from the days of the gentlemen barons from Boston or New York telling Washington officials what to do. Cronyism doesn’t need 17,000 registered lobbyists in Washington.

Indeed, the term “panic capitalism” would best describe the erratic and shortsighted involvement of billionaires and CEOs in the recent legislative and political dramas in Washington and in their biggest booster, the Republican Party.