Democracy needs better not fewer ‘populists’ (part 1)

As democracy in Western Europe and North America ages before our eyes, the hunt for youth, élan, and forceful government grows. Other countries allegedly are doing the brave, optimistic things we used to do: reforming taxes, restructuring economies, and asking for sacrifice. And they are making spectacular progress without governments like ours.

Increasingly, analysts blame the model of democracy we try to practice. "Government of the people, by the people, for the people" sounds, to many, as dangerous and as quaint as the divine right of kings. Now "popular" democracy is being relabeled "populist" democracy, a political culture in which mostly shallow opinions hold sway.

In Canada, even liberal nationalists will say good government is preferred to the common man’s heady "pursuit of happiness." After all, "limited authoritarianism" sounds robust and more adult. It’s driving Asia’s progress, isn’t it? 

In his review of The Fourth Revolution: The Global Race to Reinvent the State by John Micklethwait and Adrian Wooldridge, National Post columnist Jonathan Kay brutally described Ontario as a near perfect example of how our proud democratic machinery is paralyzed by an incumbent’s obsessive need for peace and popular acceptance. Innumerable fixes and blue-ribbon missions to find "evidence-based" consensus have replaced choosing one side or one answer over another.

Kay accepts that we wouldn’t tolerate the arbitrary and corrupt features of the “Asian alternative,” yet he concludes:

“But as the example of Ontario shows, we have gone too far in the other direction: Populist democracy and its attendant addled economic policies are destroying our ability to create the basic building blocks of a functional society. A generation ago, the choice between Ontario and China as a model for developing countries would have been an obvious one. In 2014, like the Ontario election itself, it looks more like a dead heat.”

Justin Trudeau couldn’t put it any better.

Okay, Ontario is poorly led. However, it is Ontario’s elites, not its "childish" masses that need a shaking.

The only time I worked full time for an insurgent democratic politician — a "prairie populist" — was in 1967. Alvin Hamilton was running for national leader of the Progressive Conservative Party. He had too many ideas, talked too long to delegates, disliked Toronto’s "blue machine" and was called a red Tory well before the label learned to nestle alongside an Order of Canada pin.

"Populists" were on the outs then. And, after a career on the inside, I can attest that they’re not on the inside now. Most important, there is no serious evidence, in polls or in election results, that voters in this relatively jumpy civilization are any harder to lead now than they ever were.

It’s not the hoi polloi that thinks strictly in four-year bites, polls constantly, is up in arms about paying for needed services, hates pipelines, airplanes, iPhones, air conditioning, and power steering — or has decided that the '50s were the best.

Even for a pessimist, it feels silly to worry that Ontarians today are too spoiled, too embittered, too fearful, or too touchy to be governed responsibly. And it is.

Ontarians are well known across Canada for wanting to leave things pretty much the way they are. But they’re not less accommodating today than they ever were. They fear change and they fear falling behind; they hope their leaders will strike the right balance.

The blame for the potentially fatal mediocrity of our decision-making rests in government, not in the governed.

And the failure to fix its machinery — an enfeebling maze of lucrative little deals, obsequious consultations, and retractable choices — calls for more persuasive democratic leaders: competent populists, neither well-traveled snobs nor compulsive listeners.

Conservative Tim Hudak’s Winston Churchill Moment

There’s a virus sleeping in the heads of most recognizable politicians on this continent. It makes them try to get away, if only once, with what I’ve dubbed: A Winston Churchill Moment. They want to show courage and conspicuous intellectual integrity.

Stephane Dion in Canada and Paul Ryan in the US Congress are ideal examples. They broke the strict rules of our bland politics to stand apart — from their peers and from their own unappealing images. They were convinced that "bold" fiscal and environment policies would enhance their stature — and fill gaps in their formal education.

Rather than stand with Churchill in history, they joined the swelling crowd around that literary invention: Don Quixote. And, certainly, the WCM virus is dangerously active in the Ontario election’s temporary front-runner, Conservative Tim Hudak.

Before elaborating, please accept that I’m out to protect us, not discourage policy-driven campaigns. The failure of “chivalrous” gestures does not reflect poorly on our maturity. Not being easily led near a cliff is nothing to be embarrassed about. History’s folly is fueled by the bad ideas we buy, not the ones we reject.  

Tim Hudak expressed his Winston Churchill Moment in the carefully chiseled and widely quoted cornerstone policy:

“If I have to trade off 100,000 jobs in the bureaucracy for one million new jobs in the private sector creating wealth, that’s a tradeoff I would do any second,” he told a town hall meeting in Barrie. “It’s not easy, I take no joy in this, but it has to be done if we want job creators to put more people on the payroll in our province.”

The best that has been said about this statement is that it’s “radical.” Nevertheless, it distorts both conservative economics and any common-sense conservative way to appeal for votes.

In placing his cuts right up against a million new jobs, it’s entirely reasonable to presume that he’s asking voters to endorse the layoff of 100,000 Ontario workers. Also, in placing his payroll savings against eliminating the provincial deficit in the next two fiscal years, he’s left little room for unfilled vacancies, retirements, and the private sector contracting out to significantly reduce the number of actual layoffs.

The hurried nature of his bloody prophesy certainly separates Hudak from his smarmy Keynesian pump-priming opponents. However, as stated starkly above, it also separates him from the economics of the only Conservative prime minister since the Great Depression that is better trusted in managing the economy than Liberals.

Harper’s federal deficit-reduction targets respect provincial spending cost pressures, aren’t leading to provincial job cuts, and are being absorbed by a Canada-wide economic recovery that is in far better shape than Ontario’s.

Harper isn’t terribly popular and it’s forgivable not to drop his name gratuitously. Still, on managing the economy back to sustainable growth, he still beats the competition — and did nothing in the last two restraint budgets to panic Liberals and New Democrats into uniting to defeat him at the polls.

Asking for a mandate to fire tens of thousands of people is as stupid for a conservative as asking for a mandate to raise middle class taxes by the left.

Voters rightfully suspect it’s not in their interest to help their leaders do the nasty things they must do sparingly.

These "courageous" gestures are common currency amongst retired public administrators and tenured academics. Only when struck by the WCM virus should a sane politician be excused for taking one up.

Friday wrap-up: no Hail Mary pass, no collapse

In this week’s Ontario election leaders' debate, Premier Dalton McGuinty shouted out an old, usually wrong, idea about economic leadership. McGuinty said, “One of the responsibilities of leadership is to find an opening and run through it.” Other governments have generally resisted this approach over the last three dangerous years.

McGuinty introduced this entrepreneurial vision when trying to explain why he’s committed Ontario to a multi-billion dollar renewable energy contract that reflects his point of view about the future and no existing market signals.

This style of governance is also captured in the phase: “Every crisis is an opportunity.”

Opportunistic leadership, however, has effectively been replaced by conservative leadership since the departure of George Bush. Obama, with Canada, saved GM and Chrysler because he couldn’t be sure what would happen to the economy if he didn’t. Obama, defying his court liberals, didn’t take over any Wall Street banks because he didn’t know what that might do to fragile financial markets and America’s competitive position internationally.

This determination to not gamble, to not unleash new forces and to just watch what happens has generated little interesting rhetoric and fewer headlines than the alternative. Consequently, the alternative—the high-strung adventurer—is already being missed by idealists and biographers on the right as well as the left. We are asked to imagine how much better we’d feel if Ronald Reagan or Bill Clinton were making the decisions and bashing heads.

These presidents are remembered not so much for their individual accomplishments but as masterful politicians. They would not have submitted for long to a “balanced” approach. Nevertheless, the approach of the moment, with its crowded table of interests, fears, and unrealized opportunities, should be judged against actual economic conditions—not simply against a spectrum of political styles.

Every week, bits of data are headlined to suggest that the US economy is heading into another recession or that the value of money (as well as gold) may collapse. Nevertheless, by the end of this week, it is clear that the US is not going back into recession.

Inadequate economic growth does justify further stimulus and underlying public deficits justify reform of taxes and entitlements. However, that is nothing more than the normal business of moderate politics.

Mainstream leaders may have been negligent or sidelined over the last decade, but they should stay in the mainstream now that they’re back at work.   

The center is not of a place of passionate intensity, but is seems to be holding. Yesterday, Germany voted to expand funding for measures to increase the Eurozone Rescue Fund despite widespread reluctance by Germans to bail out Northern European banks and Southern European citizens.  

Click on: www.ft.com/cms/s/0/f3515a54-eabc-11e0-ac18-00144feab49a.html#ixzz1ZRFbFcNe

Tea Party politicians and economic model-builders are as up in arms in Europe as they are in America. Everyone is said to be angry and ready to throw out the “failed” schemes of the past. Nevertheless, in the crunch, the two most fortunate economic federations in the world continue to take one measured step after another to not find out what would happen if we threw the existing order out the window.

Ontario politician caught thinking about a carbon tax

The brilliant American political columnist Michael Kinsley offered a precious tip to young reporters and alert citizens: “A gaffe is when a politician tells the truth.”

Last week, Dave Levac parliamentary assistant to the Minister of Energy blurted out “there is a possibility that a carbon tax is on the table to evaluate.” Within hours, he discovered that he’d “misspoke.” The same day, Premier McGuinty insisted the story was a “distraction.”

Click on: www.nationalpost.com/McGuinty+rules+provincial+carbon/5439236/story.html

A “distraction” is as flat a denial as you can get in today’s hyper-programmed politics and by the weekend the press were gently summing up the incident saying that the Premier’s smooth campaign had been “tripped up” when one of his “own candidates wrongly suggested the Liberals were considering a carbon tax.”

Click on: www.theglobeandmail.com/news/politics/ontario-election/mcguinty-positions-himself-as-strong-voice-for-a-squeezed-province/article2178805/

And so, according to Premier McGuinty, there is no point talking about a carbon tax to fight climate change and stimulate energy conservation and innovation—an idea that for years has been carefully developed by dozens of government officials in Ontario, Ottawa and Washington.

The best we can hope for, for now, is that all three Ontario party leaders not further restrict future policy development by competing to disparage a powerful idea.

Dalton McGuinty is easily convinced of his own sincerity and there’s no reason to question his present opposition. He was against the Harmonized Sales Tax (GST) for years before Stephen Harper made him an offer he couldn’t refuse. And, unfortunately, there’s little likelihood that Harper will reverse his own opposition to a carbon tax. (Unlike Dalton McGuinty, he has never pretended to be a leader on clean energy or climate change.)

Nevertheless, Dave Levac’s gaffe offers a small glimpse at a great story.

The diligent young PA probably was briefed on the concept of carbon tax as an effective alternative to cap-and-trade schemes and the maze of subsidies now being undertaken in Ontario to get us off fossil fuels. It is also conceivable that he left the briefing impressed with the idea.

The idea is only dead for now for political reasons—for reasons that may not stand up over time or reflect well on Ontario’s current crop of political leaders.

The carbon tax’s virtues are political vices: it is a tax you can see and governments can’t hide; it’s transparent but leaves little room for side-deals and lobbying; it treats consumers as polluters as well the firms that sell them dirty goods; it doesn’t need a big bureaucracy, but it doesn’t give Premier’s ribbons to cut at factory openings and job targets to tick off.

It got off to a bad start in Canada. Its early adopters—Stephane Dion and Michael Ignatieff—weren’t persuasive on economics generally, let alone taxes and economic incentives. Nevertheless, in Canada as in the US, the more the alternatives (business subsidies and regulations systems) are discredited, the more important it will be to keep the idea alive.

Of course, a carbon tax isn’t sexy. However, fighting climate change isn’t sexy either—it’s an expensive obligation that deserves to be addressed intelligently.

Ontario’s election: who do you fear most?

Ontario’s October 6th election will reinforce—or undermine—the impact of the spring Federal election on the future of Canadian politics. Canada’s largest province will confirm whether the Conservatives will hold the upper hand, whether the left will unite, or whether the Liberals will survive  as a viable centrist alternative in English-Speaking Canada.

The stakes are high though the election is boring, even by Ontario standards. 

(It may not be fair that Ontarians have so much political power and can’t talk politics with either the passion or clarity of Quebecers or British Columbians. Nevertheless, big change in Canada doesn’t happen without Ontario’s permission.)

The circumstances are different this fall, but only slightly so. The incumbent Dalton McGuinty is a Liberal. However, from day one, the polls put the Conservative leader Tim Hudak ahead, with New Democrat leader Andrea Horvath in a strong third position. The Ontario economy is every bit as vulnerable to events in the US and Europe and fear of a second recession is widespread. Ontarians voted consciously for a “strong stable” government this spring and are being urged to do so with equal urgency by Dalton McGuinty this fall.

 The economic platforms of all three parties are ridiculously optimistic, but fear is the dominant force behind both front runners. McGuinty insists he can reduce the deficit without hurting anyone. Hudak claims he alone won’t raise taxes. Horvath, the ingénue, is the only serious gambler in the race: she’s unafraid to promise generous tax relief to voters, tax increases for business, and numerous new spending and subsidy programs for health, education and social services, and Ontario job-creation.

Horvath is growing in the polls and could become the election issue. She’s not Jack Layton. Indeed, in Ontario, she could be more successful. There’s something unqualified, homespun, and constructive about her message.

She may be an economic illiterate. However, her opponents haven’t demonstrated over their careers, in their platforms, or in their rhetoric abiding respect for economics or fiscal probity. Nothing in the NDP platform is more extravagant than McGuinty’s green energy subsidies. And her biggest difference with Hudak on tax policy is that she proposes to raise new taxes to help pay for her cuts.

As her polling numbers improve, Tim Hudak will have to make a fateful decision: does he take Stephen Harper’s “strong stable” message away from Dalton McGuinty and talk about the dangers of another Liberal-NDP coalition? Does he set aside his palpable fear of appearing too conservative and make a serious conservative case against both McGuinty and Horvath?

Certainly, if the NDP gains the balance of power there is no likelihood that Ontario will regain control of its finances or be able to back further measures by the federal government to stimulate private investment and restrain public spending.

By the way, on Monday, The Globe and Mail reported that if Ontario was an independent country its accumulated public sector debt-to-GDP ratio would be over 80%, slightly higher than Spain’s and slightly less than Portugal’s.

Click on: www.theglobeandmail.com/globe-investor/investment-ideas/features/at-the-bell/three-charts-to-start-your-week/article2170968/

Friday wrap-up: Liberal Party’s stake in Ontario

Jack Layton’s state funeral honored a gentleman and, as likely, excited in New Democrats and Liberals a fresh interest in trench politics—in beating one another in order to secure a better position in the race for political power.

To defeat the Harper Conservatives in the next federal election, either the Liberal Party or the New Democratic Party must collapse or the two must merge. The second option will not come into play until after they’ve tried to destroy one another. The recovery of the center-left in Canada, therefore, will first be dominated by internal strife. Don’t expect to hear anything very new or telling about the Conservatives. Expect to hear a lot of fresh nasty things about socialist illusions and liberal hubris.

For the next six weeks, Question Period in Ottawa, Bob Rae’s wit, and Thomas Mulcair’s temperament will count for nothing. Rather, the Ontario provincial election on October 6th could be fatal to the national Liberal Party.

If Dalton McGuinty’s Liberal Government survives, Liberals in Ottawa will be able to put their humiliating national defeat in May behind them. They were done in, they will insist, by a perfect storm, a freakish occurrence. “We can come back as we are: after all, Ontario is our political home, McGuinty’s balanced style is ours as well, and, besides, they NDP didn’t move out of third place.” That message could get the Liberals through all the way to another federal election.

However, the Liberals will be in a terrible place nationally if the Conservatives led by Tim Hudak win and, as likely, if the New Democrat’s leader Andrea Horvath increases their popular vote. The Ontario Government is the Liberal Party’s last real claim to power in the one region they must dominate in order to beat the Conservatives nationally. Being out of office in Ontario and with far fewer seats than the NDP in the other key battlegrounds—British Columbia and Quebec—would leave them looking like spoilers; amateurs who can’t face facts.

Natural governing parties, like the Liberal Party of Canada, are not naturally optimistic.

Imagine Bob Rae going around the country for the next year and a half talking up Liberal prospects without a power base in Ontario. (Of course, that possibility will stir the hearts of every New Democrat with any free time to campaign in Ontario over the next six weeks.)

Dalton McGuinty and the federal Liberals will campaign with a passion to save Ontario from having too many Conservative governments. However, New Democrats will be content to settle for just one less Liberal one for now.