Chrystia Freeland, you can come home and still say “we”

Chrystia Freeland should be a fabulous catch for the upcoming federal by-election in Toronto. This time, Canada’s Liberal Party—the shoppers' party—has landed a young, public intellectual with a growing reputation in Washington, New York, and London. Why would a cosmopolitan problem-solver, at the height of her career, want to represent old Rosedale as a member of the oldest Liberal machine in the Western World? To my mind, that’s the question.  

To pundits, however, and, apparently, to Freeland this morning, the question now is whether she can talk enthusiastically as a proud Canadian.

Blogging in Maclean’s Magazine, Paul Wells spots trouble in this paragraph Freeland penned just last week in reviewing Obama’s speech on the economy:

“Obama pointed to some of the familiar political drivers of this shift — weaker unions and tax cuts at the top. But, to his credit, he also noted the structural factors — in particular, technological change and globalization — that have helped hollow out the middle class. These are the heart of the problem, because they are both largely positive and hard to change. We can’t stop them, and most of us don’t want to — but we surely do want to reverse their devastating consequences for the middle class.”

The problem, clearly, isn’t partisan. Indeed, at its heart are good things worth preserving: technology and globalization. Is Freeland too realistic, too capitalistic, and too committed to the liberal economic values of the past? No. Of course not.

Rather, Freeland used: “we” and “us” when referring to the economic challenge of our time. How many times has she done this before? Will this issue carry along on hundreds of little small legs?

Michael Ignatieff, the last failed Liberal import, got in trouble using the term “we” when he was addressing Americans for unique and arguable reasons.

He’d made a living as a writer singing the virtues of Canadian nationalism and Canada’s separateness from the US. Most important, he used “we” to promote American jingoism and war in Iraq. There was no way to pretend that he was trying to or even thinking about Canadians when he waved the flag of aggressive American Exceptionalism.

Conversely, there was nothing in what Freeland expressed that was exclusively American. Surely, a majority of voters in Rosedale would agree that what she said applies to Canada’s high wage economy as well. Furthermore, Canadians increasingly accept that they also have a huge stake in a balanced US economic recovery.

It’s disappointing, therefore, to read Freeland’s newborn nationalism in her op-ed piece The path leading to middle-class Prosperity in this morning’s Globe and Mail:

“At a time when the rest of the world is struggling to live with one of the human consequences of globalization – mass immigration – Canada is a model for how to make a multicultural, multilingual community really work. We can do the same when it comes to ensuring middle class prosperity in the 21st century. Indeed, we are much better at this than the United States, where income inequality has become an economically and socially devastating chasm. We can’t let that happen to us.”

There’s a smugness and simplicity in that statement, and it belies the energy, passion, and optimism that she has displayed in the past about the US and the West’s ability to restore shared prosperity.

Freeland doesn’t have to pander to anti-Americans to be a successful Canadian politician in a renewed North American economy.

Is the “American Dream” moving on?

You don’t have be mean-spirited or a conservative to accept that the “American Dream”—the belief that our choices are more important than our inheritance, that hard work will secure rising incomes, up-to-date amenities, and greater freedom to experiment and be yourself—doesn’t have the punch it had in our grandfathers' day. The fate of the world’s most powerful liberal one-liner, naturally, concerns liberals even more.

In the National Journal, Amy Sullivan claims the dream has shrunk and is not delivering the same financial and spiritual benefits it did when America was younger. Her essay “The American Dream, Downsized” documents the recent absence of middle-class income growth and explores how the Great Recession has affected expectations and, as important, how winning politicians have learned to trim their appeals for votes.

The subtitle of Sullivan’s essay bemoans: “The middle class now worries more about holding on for dear life than climbing the ladder to riches.” She notes that the Pew Institute found that 85% of Americans prefer “financial stability to moving up the income ladder.” She argues, in fact, that they were consciously invited to make that choice in the last presidential election, with Romney talking wistfully of an “opportunity society” and Obama arguing that collective security was as important.

In American popular culture, however, has anything big actually happened?

The “American Dream,” in fact, was neither as American nor as dreamy as we imagine it was in the past. Nevertheless, what’s left is imposing and is still making history. The question now isn’t whether it’s failing but whether it will remain American or not.

The material elements of the “American Dream”—making one’s way in a more egalitarian society, affording a solid house for a young family, and not having to hide away in poverty in old age—were most widely realized in America in the 20th century. But the dream was not even an American invention.

Every one of its elements was chased—and secured—by millions of healthy white European males who could speak perfect English in England and perfect German in Germany, for instance, and who also attended good Protestant churches—even as thousands and, then, tens of thousands living on the outskirts of those unofficial national dreams were scheming to get to America.

If European dreams had not so often turned into European nightmares there wouldn’t have been much flavor in the American Melting Pot or any special American vision of the future.

Today, the aspirations—if not the exact architecture—of the “American Dream” are being asserted globally. The OECD and other expert observers are telling us that this could be the middle class’s biggest century, expanding from 1.8 billion in 2009 to 3.2 billion by as soon as 2020.

Ironically, the biggest challenge now for America’s middle class may be contending with the potency of the “American Dream” internationally. Barack Obama starkly captured this prospect last week in a graduation address. His audience was black but the message was clearly and accurately aimed at all young Americans who have learned how to make excuses:

“We’ve got no time for excuses – not because the bitter legacies of slavery and segregation have vanished entirely; they haven’t,” he said. “It’s not because racism and discrimination no longer exist; that’s still out there. It’s just that in today’s hyperconnected, hypercompetitive world, with a billion young people from China and India and Brazil entering the global workforce alongside you, nobody is going to give you anything you haven’t earned.”

The “American Dream” of endlessly rising incomes wherever immigrant families first landed was a caricature. Intelligent Americans of every generation worry about the future—theirs, their kids', and their country’s—as well as want to get ahead.

American risk-takers were invariably careful calculators.

They listened to and recruited scientists, engineers, and the best-trained technicians. They hired on merit because it worked, not because it served an applicant’s dreams.

In tricky times, in politics and at work, Americans tend to favor smart over nice.

Rather than thinking up a smaller dreams, Americans are simply being urged to re-assert the more hard-edged and grounded features of their success. They’re prideful dreams are off-putting. Their intolerance for failure, however, should be better appreciated.

2013: Fewer firefighters and more architects?

Last month, during a London School of Economics symposium on the European Union a student asked whether we need fewer firefighters and more architects in positions of power. The question sounded slightly rhetorical. The audience applauded.

Four Decembers ago, on either side of the Atlantic, such an audience of political scientists would have laughed.

Whether elected as visionaries or as technocrats, leaders in Europe and North America were not required to envision, but to act. It didn’t matter then whether they were democrats or bullies, outgoing or shy, elected to office or one step removed and running central banks. They didn’t have to define the problem; they just had to fix it.

Thanks to four years of successful firefighting, it shouldn’t be surprising that the public is less awed today by can-do executive resumes and talk of imminent collapse. (Otherwise, in the US, Rick Santorum or Mitt Romney would be President-elect, and Donald Trump would be recognized as a builder and not as an arsonist.)

As people get used to breathing more easily, they’re less easily impressed and are more open to new worries--new problems that can’t be addressed by the emergency power leaders have been relying on through the Great Recession.

Centrists in Washington probably have enough votes to stabilize the public debt’s share of US GNP. North Americans should also be able to stabilize and eventually reduce CO2 emissions, in absolute terms. A Canadian-style immigration policy should eventually be adopted by the US.

Nevertheless, North American and European leaders do not know how to stay ahead of China and the other BRIC’s economically while meeting the frustrated expectations of their own middle classes. Whatever they do domestically, they don’t know how to inspire collective global action on the environment without being in charge anymore.

Firefighters have little to offer. Technocrats may agree broadly that more continental integration and less parochialism on both continents would offer the scale--and the architecture--for greater success. However, big policy, on paper, is cheap. 

The leadership task now won’t be solved literally by replacing today’s leaders with architects. However, the ones we have need to master politics’ toughest job. They need to be able to be persuasive, to convince us that we ought to try something new rather than simply replace the smoke detectors. 

Brain Candy (not) for Liberal renewal:

“Mr. Graves points out that the middle class is not a natural phenomenon; it's a product of state policy – of progressive taxation, redistribution of wealth, laws that allow for union organization, substantial support of education, health care and housing.

“As state supports diminish and taxation advantages are increasingly skewed to the wealthy, the middle class shrinks and inequality increases.”

Click on: www.theglobeandmail.com/news/politics/is-a-liberal-comeback-mission-impossible/article2250088/page3/

– Frank Graves, president of Ottawa based pollster Ekos Research Associates, in The Globe and Mail, November 25, 2011.

Obviously, the Liberal Party better go after the middle classes if it’s going to survive. However, Graves’s message is historically inaccurate and over-wrought—beguiling, but wrong. Primarily, economic circumstances not big government have turned away from the lucky middle class of our memories.  

The breadth and affluence of Canada’s and America’s middle classes were not created by Henry Ford’s beneficence or by government spending — and, unfortunately, will not simply be restored by penitent One-Percenters and longer lists of public projects.

In fighting the last World War and mass unemployment, the public sector’s appetite for goods and human resources exploded and, for a while, government ran the economy. However, after building the atomic bomb, governments didn’t then decide to invent the most prosperous middle class in economic history.

That middle class—with its wonderful deep pockets—was already taking shape. Certainly, it was receptive to liberal and European ideas about how to use government to expand social benefits and secure its future. It was optimistic—after all, democratic governments had successfully performed extraordinary tasks for nearly a decade.

North American politics in the 50s and the 60s did generate new domestic policy ideas and promises. But above all, increasing middle-class wages and salaries enriched government revenues and made it easy for governments to spend. Indeed, in the 70s, governments were so sure that the money would keep coming in that they started capping income tax increases caused by inflating wages and salaries, and also enriched social entitlements like unemployment insurance, universal healthcare, and access to post-secondary education.

Republicans in the United States are being overheard telling each other that the next time they’re in charge they’ll dismantle much of the social safety net financed by Washington. (And Obama is effectively calling them for it.) However, the squeeze on the middle class today was not engineered by conservative governments or fainthearted liberals in the 1990s.

Governments in Western Europe and North America are struggling to keep up with rising inequality. The OECD reports that the redistributive impact of Canadian government tax policy on Canada’s wage gap offsets less that 40 per cent of the rise in inequality since the mid-1990s.

Click on: www.theglobeandmail.com/report-on-business/economy/canadas-wage-gap-at-record-high-oecd/article2259657/

Of course, that 40 per cent can be raised somewhat by adjusting how government taxes and spends. Being frank about more fairly taxing individuals and more effectively targeting benefits to people would give Liberals fresh attention. That approach, however, might credibly address the increasing inequality—but not the underlying problem.

Democratic governments never before have succeeded in significantly redistributing incomes in a flat economy. Liberals, as well as conservatives, need to start considering new ways for government to facilitate, not frustrate, private sector economic growth.

The changes going on in society and in the economy today are far more profound than the squirming that is going on in the state.

Can writers inspire in a stagnant economy?

Writer Leah McLaren is intrigued by an assertion about creativity by Jeanette Winterson in her updated introduction to Oranges Are Not the Only Fruit:

"Dinginess is death to the writer,” she explains. “Filth, discomfort, hunger, cold, trauma and drama don’t matter a bit. I have had plenty of each but they have only encouraged me, but dinginess, the damp small confines of the mediocre and the gradual corrosion of beauty and light, the compromising and the settling; these things make good work impossible.”

Click on: www.theglobeandmail.com/news/arts/leah-mclaren/in-an-age-of-downward-mobility-can-the-upbeat-novel-survive/article2258231/

With surrendering to the idea, McLaren nevertheless wonders: what will happen to inspiring, heroic literature in a new age of austerity?

“How do we tell stories about the triumph of the human spirit when social mobility has stagnated, when everything is not necessarily going to get better and better and better still?”

This is a great question; it begs no sure answer.

Our civilization has no rituals or traditions to teach us how to think in a long flat time. We do, however, have considerable experience with adversity as well as good fortune. Consequently, we needn’t expect literature to flatten out with the business cycle.

Writers are creatures of their times but they aren’t as reliable as other creatures, like investment bankers and rank and file politicians.

First, writers mine the past. Indeed, their memories of foul times and tragedy are often positively inspiring. The post-war politics and boom economies of the 20‘s and of the 50‘s were philistine, but bitter memories demanded attention. The literature was magnificent, in part, because the ease of the moment deeply grated.

Second, the odds are that most promising writers today loathe their place on the pecking order, haven’t yet experienced much success, or ever lived within what felt like a highly lubricated social order. They carry on today because they can‘t stand being stuck where they are already.

Third, as Jonathan Franzen observed, in quiet houses on every street—either still with success or exhaustion—there are crazy families and fantastic schemers. Whatever happens to national economic and social aggregates, so long as the West’s great cities remain open to the world and regional upstarts there will be plenty of neighborhoods of young, ambitious, violent, sexy and foolish malcontents to stir writers and their readers.

Fourth, let‘s assume that economics calls the shots: so, great writing in the developed world collapses like an obsolete sports dome. Conversely, creative writing in the developed world soars. It’s only logical. Alongside predictions of stagnation for us, there is this prediction by the World Bank about the world: the global middle class—the pool of most book buyers and most creators—is likely to grow from 430 million in 2000 to 1.15 billion in 2030.

Click on: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2011

Finally, by the time the fainthearted are stupefied by stagnation and the status quo has been polished to perfection, something will come along to make matters much worse or considerably better. Either way, writers will be awash with new material.

Has American capitalism abandoned the middle class?

Sometimes a factoid or two illuminates.

Chrystia Freeland, writer at large for Reuters, brought a few to bear on the seeming lethargy of the political system toward high unemployment and the seeming preoccupation of the voices of business for cutting deficits rather than pursuing domestic economic growth. Don’t they know they need the middle class?

In the new global economy, Freeland reports, big business may, in fact, be able to thrive without mass affluence in America: 

“Perhaps U.S. business is learning to get by just fine, thank you, without middle-class U.S. consumers. And while that may be good news for chief executives and shareholders, it could be the beginning of a new and socially wrenching political logic that leaves the great American middle behind.

Wall Street, which is paid for smarts, not sentiment, has this figured out. In a newspaper interview earlier this month, Robert C. Doll, chief equity strategist at BlackRock, the largest money manager in the world, pointed out that the fortunes of U.S. companies and the fortunes of the country as a whole were diverging: ‘The U.S. stock market and the U.S. economy are increasingly different animals.’”

Click on: http://blogs.reuters.com/chrystia-freeland/2011/06/10/is-u-s-business-abandoning-the-middle-class

The factoids: since the Great Recession, leading newspapers have published more than three times more stories on the federal budget than on unemployment; the Dow is up 85%; and, according to investment strategist Robert Doll, 70% of the future incremental earnings of S&P 500 companies will come from outside the United States.

Are economic policy and public attitudes being distorted by these hard men and their hard Wall Street facts? Is American national policy tied to the Fortune 500 and now being towed off shore? Old Tories and socialists have long worried about multinational capitalism and its cosmopolitan (rather than mainstream American) loyalties. Freeland adds fuel to their concerns. However, no one should wait for a change of heart in Manhattan or a radical turning away from big business to solve today’s dangerous economic malaise.

Neither capitalists nor busy city editors are very good at complex economic issues. Once the recession bottomed out and high unemployment became chronic, their eyes turned to the next big thing on the move—souring deficits and debt. It may be shameful and short-sighted, but news about broken families and high school dropouts can’t compete with warnings about state and national bankruptcy.

It wouldn’t hurt if Robert Doll temporized his macho vision of booming US multinationals partying off the shore of a stagnant American middle-class America. The notion that global capitalism will thrive, with or without a prosperous outward-looking America (upholding the rules of open trade and its currency, protecting sea lanes, and helping keep the peace) is both parasitical and naive.

In any event, there are lots of other reasons to be optimistic or pessimistic about the competence of American governing institutions. Business leaders can have some influence in bolstering sound thinking and warning people away from the extremes. However, historically these leaders have hardly been essential; some wise and very foolish things by Democrats and Republicans have been undertaken largely without their help.