Wednesday, April 27, 2011

Connecting the Dots Between Ambrose, Baird, Prentice,Kent..and Carson

The blindness of the Harper Conservatives with respect to the Rule of Law and Parliamentary tradition has already received some attention in the media.There is one other comment about the Conservative record that has been insufficiently stressed, however: their attitude toward the Environment portfolio.  Do they see climate change as a real, substantive issue that Canada must take the lead on? Or do they just see the peoples' flawed beliefs about climate change as a problem to be managed? 

When the Government came into power in 2006 Rona Ambrose was the envy of every ambitious young politician in the Western world when she was assigned the job of tackling global warming.  Only this was a Conservative government , so  Ambrose's main function was to tell that incredulous world that , since the Liberals had dragged their feet on Kyoto implementation, the Conservatives would have no choice but to do the same thing.  But when Harper found that the public wasn't buying, he switched to Baird, followed by Prentice, Baird again, and now Peter Kent. 

The common thread that runs through all of these appointments is that they are not seen primarily as policy jobs at all,  but as different communications strategies.

 Rona Ambrose was the "youthful, telegenic" approach;
John Baird was the "combative and aggressive" approach;
Jim Prentice was the "soporific" approach ( and probably the most successful of the three);

When Prentice left  the job was delegated to Peter Kent, who as a professional journalist would be better able to manage the media.

And finally, there is Bruce Carson. Who else would put this  dis-barred  backroom 'old pro' in charge of the Canada School of Energy and Environment and in charge of  water contracts for First Nations reserves?  Something tells me he wouldn't be David Suzuki's first choice.
What all of these appointments show is that Harper sees the environment in general and climate change in particular  purely as  public relations problems to be "managed" by communications strategies, not as the most serious substantive policy issues of our time. I am confident that no other major  party in this country would behave in that fashion, not even the Chretien Liberals at their most cynical.

Sunday, April 24, 2011

Jack Layton as PM? I doubt it....but

The election of a Conservative majority of government next week will not only usher in a new period of "stability"; it will also mean that the government will have been  richly rewarded for  being the first to intentionally cultivate and manipulate ignorance about how parliamentary government works--for intentionally sowing misinformation about  who actually 'wins' elections in a parliamentary system. Furthermore, the proposed coalition back in 2008 is repeatedly said to include the Bloc Quebecois (it never did). And don't forget the innovation of between-election personal attack ads, which apparently worked.

As someone who teaches government and politics for a living, I find these to be disturbing developments, ones that teach politicians and citizens alike the wrong lessons.

Of course, it is possible that the same NDP surge that is helping the Conservatives in most parts of English Canada will actually hurt them in British Columbia, where there are more ridings with dynamics like Edmonton Strathcona (where an NDP surge will  push a New Democrat to victory and encourage some Liberal supporters to vote strategically for the NDP) than Edmonton Centre (where an NDP surge will discourage strategic voting for Liberals and ensure a Tory victory).

This could ensure a minority. But could the lIberals then combine with the NDP to topple the government? It is hard to believe that the Liberals would want to crown the NDP after an election in which the NDP has helped to remove them from any chance of power.  I think that the LIberals under Ignatieff or LeBlanc would be inclined to prop up the Tories. But if Bob Rae gained the leadership.......

Wednesday, April 20, 2011


While the memo may have been unique in some respects (indeed Dix rarely wrote memos, in order to avoid Freedom of Information requests), it was nonetheless part of a larger pattern of obsession with information control and indifference to procedural values that was the hallmark of the Clark government, and which Dix has exemplified on practically a daily basis right down to the present day.

Consider the passage in the Auditor General's Report that mentions Clark's Ministerial Assistant's (i.e. Dix's) role in lining up ferry contractors in a manner calculated to present accountability bodies with a fait accompli. NOBODY EXEMPLIFIED THE MOTTO OF "PROCESS IS FOR CHEESE" MORE THAN DIX DID.

For me, the most telling aspect of his leadership campaign was the way he played possum in December, saying he was mulling a leadership bid, all the while having an invisible busload of ethnic voters lined up to materialize on the day of deadline for new memberships--before the competition could even respond. Once again, Dix showed his preference for secrecy and surprise over transparency or the enlightenment of dialogue. It wasn't the first time, and it certainly won't be the last.

After all, it has made him what he is today!

 P.S.  Have the New Democrats thought through the REAL significance of the memo? The purpose of the memo was to make it look like the premier (Glen Clark) was more recused, or recused earlier, from the casino application than he really was.

The nature of the BC Rail scandal is that the government allegedly acted in such a way as to make the bidding for BCR look more competitive than it really was.

More dollars were at stake in the BCR case, but the general nature of the ethical issue is virtually the same. Unfortunately, the accuser needs clean hands to be persuasive. Is this really the right man to be nailing the Liberals for this kind of  unethical behaviour? "I resigned, you didn't" might have been an answer to Gordon Campbell, but not to Christy Clark. "It was 12 years ago"  isn't very compelling either--the BC Rail prevarication was 9-10 years ago. Ethically speaking, is there really a big difference?

And Mike Farnworth, John Horgan, or Leonard Krog would be much better-positioned to do the finger-wagging.

Monday, April 18, 2011

Allan Blakeney, R.I.P.; Dix Ex Machina

I remember the first thing that my mother said when I told her that I had won a Rhodes Scholarship to Oxford back in the mid-1980s. "Allan Blakeney was one of those."  She was proud that her son  had graduated into an elite circle of scholars and  citizens that Blakeney  had typified.  I always had liked him-- as a thoughtful, substantial person who was never more of a politician than he needed to be. My biggest regret for British Columbia is that it never had its  own Allan Blakeney as premier.
For me, the coincidence of Blakeney's passing with Adrian Dix's ascension to the B.C. NDP leadership is highly symbolic.    I knew from the moment that  (NDP Caucus Chair) Jenny Kwan announced the need for a new leader late nlast year that Dix would win.. The absence of anyone with the stature of  an Allan Blakeney in the NDP leadership race was one of the factors that ensured his victory.

THese events constitute another missed opportunity for British Columbia.   W.A.C. Bennett's early election call in 1969 pre-empted Tom Berger's bid to be premier back in 1969; in 1984 it was the NDP's own fault when it failed to choose David Vickers over Bob Skelly.

Still, Dix has evolved as a person and is fairly bright and articulate.  He might even speak French well enough to play a constructive cameo role in the next installment of the National unity debate. Like Gordon Campbell, he will have the benefit of a very long learning curve and could  surprise his critics. 

But there is good reason to be skeptical.  B.C. needs to pick up where Mike Harcourt left off, and to accomplish what he couldn't; not to pick up where Glen Clark left off and accomplish what he couldn't. Dix's  success is built upon a political operative's lifelong and well-honed instincts for information control and spin, as well as the careful cultivation of  allies and economic interests, especially those of the trade unions that had benefitted from Glen Clark's policies. A Dix government could not help but be highly disicplined and centralized, subordinating policy to communications and skewing economic logic whenever it conflicts with the logic of interest group politics.

Could Adrian Dix morph into another Allan Blakeney, a provincial statesman? Equally strange things have happened, but I doubt it.  To repeat:  Blakeney was a thoughtful, substantial person who was never more of a politician than he needed to be.  Adrian Dix, like Christy Clark, represents the complete triumph of politics--overdetermination and overkill. No one could be more of a politician than either of them.

Thursday, April 07, 2011

A Negative Sum Game

If the United States has a corporate tax rate of up to 30%, and the average of G-20 trading partners is about 20%, is it really an urgent priority for Canada to reduce its  top rate from 16.5% to 15%?   My own limited  economics training leads me to an analysis something like the following: in a simple closed economic system, one might simply choose to integrate corporate and personal income taxes altogther, since the burden of such taxes would fall upon citizens anyway and by just folding them into the personal income tax system, we can tax every individual according to the politically determined canons of vertical (progressive or flat?) and horizontal (equals treated equally?) equity. At the opposite extreme of a completely open and perfectly competitive world system, corporate tax rates might also tend toward zero, since we would be caught in a "race to the bottom" for capital as well as labour.

But in the real world, we know that  many corporations can take income and resources out of the country, without paying for all of the physical and human infrastructure that have made their businesses profitable. We also know that it is difficult to apply the normal canons of of horizontal and vertical equity to foreign investors.  We also know that any big gains we achieve in terms of investment are likely to be competed away in the long-term--the more successful we are, the more pressure on our trading partners to do the same. This leads to another problem: if we get into a race to the bottom, Canada will be hard pressed to succeed, because it already has personal income taxes that are higher than the U.S. and  a  health care system the costs of which are growing twice as fast as the rest of the economy. In other words, we can't win a race to the bottom.

Here is an intersting discussion about corporate income taxes in this morning's Globe and Mail:

“Although modelling strategies and data sets vary from study to study, the consensus from the peer-reviewed academic literature is clear: lower CIT (corporate income tax) rates are associated with investment levels that are higher than what they would have otherwise been.”

So, let’s skin this cat another way.

Jeffrey Sachs is the director of The Earth Institute, Quetelet Professor of Sustainable Development, and Professor of Health Policy and Management at Columbia University. (He’s also committed to fighting poverty and hunger, but he’s still a real live professor.) Here’s what he told the BBC only yesterday:

“Of course, all of our countries are caught in what you could call a kind of tax arms race or what could be called a race to the bottom in fact, which is that each country is trying to get the tax rate lower than the neighbours or the competitors. The result is that everybody is cutting corporate tax rates around the board.

“It is only causing fiscal crisis everywhere and it's a kind of negative sum game, meaning that when both sides do it, neither gains the advantage relative to the other. In fact both lose by adding to the fiscal pressures and the need to then cut the education spending or the social expenditures that are crucial for making sure that the poor half of our societies can also participate and be productive members of our economies in the future.”

He pointed as an example to Ireland, the one-time Celtic Tiger that’s now a pussycat on life support and was once the envy of Europe because of its low-tax regime.

“So you sure can make a little bubble in the short term, but it's not really building the long-term platform for prosperity. Second, I wouldn't say it to Ireland alone, I would say to the European Union, the United States, Japan, other high income countries, indeed in the G20 as a whole. Let's stop this horrendous process where we are being gamed by global companies that are playing off our governments, one against the other and ending up by depriving ourselves of the productive base of our societies which after all are our skilled and educated work forces.”

And then there’s Peter Fisher, Professor Emeritus of Urban and Regional Planning at the University of Iowa and Research Director of the Iowa Policy Project in Iowa City. He’s got a PhD in economics, and has written a few books, one published by the Economic Policy Institute.

He studied corporate taxes and the impact on state economic growth. To make a long study short, here’s what he found, and he cited 23 references:

“Proponents of business tax breaks claim that taxes are a significant factor in the location choices of businesses, and that a state can tax-cut its way to economic growth and generate tax revenue in the process. As we will see, there are good reasons to be skeptical of such a claim, and several decades of research on the relation between state taxes and growth confirm that such claims are vastly overblown and sometimes completely misleading. Business tax breaks turn out to be an expensive and inefficient way to attempt to stimulate a state economy.

“Some have pushed the argument even further, proposing elimination of corporate income taxes altogether. There is a strong case, however, for state taxation of corporations. Corporations doing business in a state benefit from the investments that state government has made in education, infrastructure and public safety services. Government is responsible for educating workers and the children of those workers, and for building, maintaining and policing the roads that businesses rely upon.”

To once again paraphrase Clemenceau: "Economics is too Important to be Left to the Economists."

Sunday, April 03, 2011

Liberal Program Opens Door to $100 million Olympic Bursary Proposal for BC Students

Whenever I have spoken about the need for a $200 million bursary program to bring the cost of higher education in BC down to below  the national average, I have always been aware of  the obvious Achilles heel of my proposal: no BC government in the forseeable future is going to have $200 million to spend on such a program. I have always known that what I was really advocating was a kind of Federal Provincial shared cost program.   Not the kind of 50-cent dollar offers that effectively promoted inflationary spending, skewed provincial priorities and infringed provincial autonomy, but some kind of program in which both levels of government would pitch in.
That is what is exciting about the Liberal "Passport to Education" announced recently in the federal election campaign.  In effect, it would supply the federal half of the funding (roughly $1000 per annum for eligible students) --making the idea of a provincial plan big enough that typical student debt loads would be brought down below $20,000 --where they belong.

I have argued that a bursary (voucher) scheme is more intelligent than either (1)a tuition freeze or (2)simply giving bigger grants to universities.  That is because unlike the tuition freeze it would not starve universities of revenue, and unlike the larger university grant it would in effect empower students , not just by directly reducing their debt, but by giving them demand-side funding to influence university spending priorities. Having half of the money in RESPs  and half in the form of  "Olympic Bursary" vouchers (applicable to either university tuition or outstanding student loans) would give students a great deal of flexibility. 

Of course, the province could just add more money to the Liberal scheme, which would be administratively simpler.

Or  the provincial government could bring back tuition freezes, but only for a temporary one-year period while the new programs are put in place. A one-time supplemental grant to universities to make up for the tution freeze could also be employed.

The main point is: IT CAN BE DONE.