Monday, December 31, 2012

Perspectives for 2013, Part One: Some Under-Reported, Inconvenient and Impolitic Truths

The purpose of this web log  is to put some perspectives forward that I feel are neglected or under-developed in the public square.  For convenience, I'll divide them into Local/Provincial, National, and International categories:

I.  Neglected Provincial  Truths

a) ALBERTA:  Conservatives' Disdain for Peter Lougheed (and, by extension, Alison Redford) 

           People outside of Alberta are generally unaware of the depth of the schism that has long divided "conservatives" in this province, a division obscured by what until recently was virtually a one-party state.  What has become apparent to me over the past five years is that Reform Party and its successors federally(the Alliance and the Conservative Party)  and its provincial progeny, the Wildrose Alliance, are as much a reaction against Peter Lougheed  as against Mulroney or Trudeau. Lougheed's sensible advice to Alberta's citizens--"think like an owner" of the natural resources; replenish the Heritage trust fund and rely less upon oil revenue to subsidize current consumption; adopt a balanced and measured approach to oil sands and pipeline development--these are all anathema to the Ezra Levants, Danielle Smiths, Tom Flanagans, Stephen Harpers and Preston Mannings of this world. In the recent provincial election, Smith explicitly referred to Preston's father, Ernest Manning , as Alberta's greatest premier, and frequently referred to the wisdom of Ralph Klein--anything to minimize the legacy and accomplishments of Lougheed.  (Alison Redford, who is in outlook, professional training  and background clearly closer to Lougheed than any other of his other successors,  echoed his approach, and received his explicit endorsement, during last spring's campaign. Meanwhile, Thomas Flanagan  felt strongly enough about who the true conservatives are to have been Smith's Wildrose general campaign manager!)  If they could barely stand Lougheed's  well-heeled background and  his blue-ribbon education, his moderate "progressive" conservatism and its concomitant tolerance for at least some liberal and social democratic policies was beyond the pale.

While Rex Murphy eloquently eulogized Peter Lougheed as quite simply "the greatest premier this country has ever seen",  the province's right-wing media bit its collective tongue. Conspicuous in this respect during the days following Lougheed's passing was popular right-wing Sun columnist Lorne Gunter, who was forced to break his silence a week later:

 I've been slow to comment on the passing of Peter Lougheed because ever since his death last week I have wrestled with my largely negative impression of Alberta's 10th premier. And it's my belief that on a person's death, criticism is unseemly. So as the old movie line goes, if you can't say anything nice, don't say anything at all. But it has been churlish of me not to give Lougheed his due. For all the things he did with which I disagreed, he was more responsible than anyone for the modern status of Alberta, the Alberta I love and he did, too.
{But] there is one image of Lougheed that is forever seared in my memory and that will forever colour my recollection of him and his legacy. It's a photograph taken in 1981 of the Alberta leader clinking champagne glasses with then-prime minister Pierre Trudeau to toast a federal-provincial energy deal that I and many other Albertans viewed as a capitulation to Trudeau's disastrous National Energy Program.
Churlish, indeed. Look at how much pressure had to be applied in order to extract even this small drip of grudging admiration. But what can you expect from somebody who regards Alison Redford's protection of health and education and her criticism of  previous Klein infrastructure deficits as the rantings of a "nanny state" liberal?

If anybody doubts just how right wing these people are, examine closely their attitude toward Peter Lougheed and their distance from his policies.

b) BRITISH COLUMBIA:  The Downsides of Adrian Dix.

A seldom commented fact about political leaders in British Columbia is that, as of January 2013,  Christy Clark has only spent about one-half as much time in the premier's Office as  Adrian Dix has. That is,  she has been there about 1/1/2 years since being sworn in in early 2011, while Dix as Glen Clark's principal secretary was there from June 1996 until being blown out in disgrace in 1999. This longer tenure during the most formative stage of Dix's career turns out to be very significant. It largely explains both his capabilities and his liabilities. For, unlike Dave Barrett in 1972 or Mike Harcourt in 1991, his is an insider's perspective.

In all the discussion eagerly anticipating the change of government due in May, another thing has gone almost entirely without comment: that for the first time ever, the NDP will come to power after more than a decade in Opposition and that fact will not  be accompanied by a great leap forward of the transparency and accountability agenda.  Such advances are best served by outsiders, with oppositionist perspectives, heady idealism, and a touch of naivete. Even journalists have neglected this truth, perhaps because they assume that our institutions are now mature enough not to require another Question Period, another Auditor General, another Freedom of Information Act, or another Lobbyists Registration Act.  If so, I think they are wrong. Not only do I think that these institutions need to be much better funded, they also need to be re-tooled for the internet age and designed for a more pro-active citizenry.  And, since not putting things in writing and delaying FOI requests are favourite evasive tactics that Dix helped to pioneer in the 1990s, how about requiring that some things be put in writing, that there be a log of participants for all formal meetings, and a requirement for quicker turnaround on FOI requests? This is not a very high priority for Dix, whose perspective was built up over many years as a political insider, and in its most crucial and formative phase, as Glen Clark's closest advisor. He knows what he can get away with,  and he wants to keep it that way.

A good example, admittedly semi-hypothetical. illustrates this point perfectly. Imagine if a top-flight lawyer who had success in a career outside of politics, like David Vickers or Tom Berger, were Leader of the Opposition. Like Dix,  they too would likely have done a great job of smoking out the government on the Children and Families file. (Remember how Bob Plecas and Joy McPhail gushed about what a great job Dix was doing, as he analysed and anticipated the government's every evasive manouevre?)  The problem is, Berger or Vickers would have carried with that critique every expectation and every ability to transform government business into a more transparent and accountable legal regime upon taking office. With Dix--whose ability to anticipate and criticize the government's games came directly from having played those same games himself--all we can expect him to do after getting back into the Premier's Office is to trade his new white hat in for his old black one.

In 'promising less and delivering more' Dix is honestly expressing a sensible and mature approach to governing that builds on these past experiences. This also suits his cohort of spin doctors and professional pols who came to Victoria with him in 1991,who don't have the same patience that they once had for leaders, like Carole James, who are relative novices, and who could blow it. But there is an unspoken third rail of government strategy as well : Control and Spin More.  Add to this structural changes in the NDP's base of support: on the one hand the shrinking of the private sector union base in favour of the public sector and the Dix-led boring from within,  and on the other hand the aging of the baby-boom retirees and soon-to-be-retirees who will look more kindly on social spending as more of it goes to them.  The net result is that the NDP may well have a longer tenure in power than ever before.

In sum, the  next NDP government will benefit from its leader's experience and knowledge, but that will prove to be a double-edged sword for the public. He may well turn out to be the Stephen Harper of the Left.

II. Neglected National  Truths-- {to be added shortly}

The 2003 Bush Tax Cuts--Is this Any Place to Draw A Sacred Line in the Sand?

 2013 will mark a decade since the Bush administration enacted the Jobs and Growth Tax Relief Reconciliation Act of 2003.  Given the growth of the economy between 2001 and 2005, and the imminent costs of the Iraq War and Bush drug plan (not to mention the planned missions to the Moon and to Mars!) were the second round  of  tax cuts in 2003 wise?   Economists, including Bush's own  Treasury Secretary at the time, Paul O'Neill, and 450 economists, including ten Nobel prize laureates, who contacted Bush in 2003, opposed the 2003 tax cuts on the grounds that they would fail as a growth stimulus, increase inequality and worsen the budget outlook considerably.  

To be sure, a smaller group of conservative economists, including Martin Feldstein and Gregory Mankiw at Harvard,  thought that the tax cuts were a good idea.  But it is less clear to me that they were taking the government's spending plans fully into account in making that assessment.  In addition, a significant driver of economic growth during the Bush administration was home equity extraction, in essence borrowing against the value of the home to finance personal consumption. And we all know how well that turned out.

Furthermore,  the public debt as a percentage of GDP rose from 1.4% in 2001 to 6.8% in 2007;  that was before the Financial Crisis even happened. . Most of this debt was accumulated as a result of tax cuts and increased national security spending.  

Now that the Fiscal Cliff Negotiations appear to be faltering because of tea party adoption of the Bush tax levels as the sacred line in the sand--"Washington has a spending problem not a revenue problem" in Boehner's words-- it is worth asking whether recent history validates such a point of view. Of course, President Bush's coupling of tax cuts with military adventure and reckless spending programs also lends credence to the view that it is spending that is the primary culprit. But I think that the verdict of history  must be that  the 450 economists and ten Nobel laureates who opposed the Bush tax cuts have been vindicated.

Their statement reads as follows:[4]

Economic growth, though positive, has not been sufficient to generate jobs and prevent unemployment from rising. In fact, there are now more than two million fewer private sector jobs than at the start of the current recession. Overcapacity, corporate scandals, and uncertainty have and will continue to weigh down the economy.
The tax cut plan proposed by President Bush is not the answer to these problems. Regardless of how one views the specifics of the Bush plan, there is wide agreement that its purpose is a permanent change in the tax structure and not the creation of jobs and growth in the near-term. The permanent dividend tax cut, in particular, is not credible as a short-term stimulus. As tax reform, the dividend tax cut is misdirected in that it targets individuals rather than corporations, is overly complex, and could be, but is not, part of a revenue-neutral tax reform effort.
Passing these tax cuts will worsen the long-term budget outlook, adding to the nation’s projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further inequalities in after-tax income.
To be effective, a stimulus plan should rely on immediate but temporary spending and tax measures to expand demand, and it should also rely on immediate but temporary incentives for investment. Such a stimulus plan would spur growth and jobs in the short term without exacerbating the long-term budget outlook.

Thursday, December 20, 2012

What Can America Teach Canada About Health Care Reform?

{The following post was written as a column for the  January 2013 edition of  the Anahim - Nimpo Lake Messenger. --MC}

Last month,  I commented  that  in the future we in Canada may be able to  learn a lot  from American  health care reforms.   You may wonder how that could be possible , given that the United States has by far the most expensive system in the world, and has failed to provide basic health insurance coverage to over 45 million of its citizens. 

The reason is that President Obama’s Affordable Care Act, if successfully implemented, will strengthen that nation’s primary care foundation.  (By “primary care” I just mean basic, preventative, and other non-specialty services provided by nurses,  and family physicians.) And that is something we in Canada need to do, too.

Although Canada  will continue to have much better  coverage and cost-containment than the U.S. for the forseeable future, due to our universal single payer system of public insurance, it  shares many  of America’s  failings on the delivery side:  over-reliance on doctors and hospitals, which are the most expensive health care providers;  relative under-funding of public health  as compared to acute care; slow adoption of electronic health information technology;  a fee –for –service system that simply rewards the number of patients seen rather than the number of patients cured;  and a crisis in long-term care for the elderly.

Canada’s single-payer system gives us the greatest institutional capacity  of any country for meeting our health care challenges  in an equitable  and cost-effective fashion,  but  that potential is stymied by our lack of a strong primary care foundation.  We should be world leaders in payment reform, health care technology assessment, and electronic health records, but we aren’t.  Because our sacred Canada Health Act  was only designed to fund hospital use, it has been economically rational to treat many long-term patients (mostly elderly) in a hospital setting, despite its higher costs.  (Physicians have also been reluctant to discharge many patients who would have trouble paying for privately-owned long-term care facilities.) The result is that hospital beds are utilized by many who do not need acute care, which makes shortages in  hospital wards and emergency departments worse.

In the United States, the Affordable Care Act will provide financial bonuses  for primary care physicians, nurse practitioners, and physician assistants that provide 60% of their services in primary care, or who provide these services in areas where there is a shortage of health professionals.   The Act also encourages and funds the widespread adoption of Patient-Centred Medical Homes  to provide coordinated patient care by teams of health care providers,  and “health homes” for  Medicaid (senior) patients with chronic conditions.  The most expensive hospitals and physicians will no longer be the front line of care, but the last resort.   Providers will be compensated using bundled payments for health care outcomes, not fees for listed treatments.  Special provisions of the Act  are made for application of these principles to less healthy minority populations through the creation of community-based collaborative care networks.

How could such an aggressive program of primary care reform be applied to a place like the Cariboo-Chilcotin?  We already have health stations on six Indian Reserves and in Alexis Creek, including a largeFederal-funded nursing station at Anahim Lake, and a provincially-funded IHA facility with a local physician in Tatla Lake, along with a hospital in Bella Coola. Several nurses and doctors visit  the smaller stations rotationally on a weekly basis; and a medical van shuttles patients in and out of Williams Lake.  The First Nations Health Council and First Nations Health Association have plans to support First Nations communities to develop their own strategies.  

Now imagine how effective those strategies could be if  health care providers were all paid for preventive care as much as for treatment; and if communities could share in all the savings that prevention by least-cost providers  can generate.  Each case of fetal alcohol syndrome costs  society a million dollars over the life of the patient; its reduced incidence can be measured and rewarded in a very few years. The same is true of obesity and diabetes, where the costs and potential savings are enormous. 
We should follow pilot projects being undertaken in the U.S.  under the auspices of the Indian Health Service and the Affordable Care Act for more good ideas about how to achieve these and other worthwhile health care goals.

Mark Crawford is an Assistant Professor at Athabasca University. He can be reached at .

Monday, December 17, 2012

In the U.S.A. Employer Health Insurance Premiums Rose 62%, Deductibles More Than Doubled Across States from 2003 to 2011

In the next federal election, Stephen Harper, Jim Flaherty , and Conservative candidates across the country will be crowing about how their tax cuts and tax subsidies have helped to draw new investment and (desirable) immigration into Canada.  But the Truth is that most of the tax advantage Canadian companies enjoy vis a vis the United States is thanks to Tommy Douglas, not to Stephen Harper.

That's because most of the differential in corporate tax rates and payroll  costs is due to the presence of progressive income taxes and public universal medicare in Canada and the absence of those two things in the United States.

It's true. One of the most basic facts of our existence in North America is that conservatism in the United States has made business taxes relatively higher---because populist conservative ideology coupled with constant Congressional electioneering has meant that tax burdens and health care costs are shifted onto employers---and socialism in Canada, which tolerates a more progressive income tax, which in turn underwrites a larger pool of  public universal health care that doesn't constitute a payroll tax upon business.

Of course, Conservatives can't go around thanking Tommy Douglas, so they exaggerate the relative importance of their own modest contribution to this state of affairs. But the danger is that if they delude themselves and enough of us sufficiently, they will pursue policies--like further tax cuts and the non-enforcement of the Canada Health Act--that could jeopardize the very foundation that they are now capitalizing upon politically.

When that starts happening, we will lose far more than we will gain.

Friday, December 07, 2012

Stephen Harper's Awkward Announcement --and a Worrying Pattern

Late on  a Friday evening on December 7, the prime minister announces that the Chinese state-owned oil company CNOOC will be allowed to take over Nexen for $15 billion, but that in the future other state-oil companies won't be. Regulations concerning foreign takeovers that had been wiped out had to be "clarified",  but only after the government had been aggressively marketing the oilsands to investors for years. If the government had said "no" this time,  it might have offended the Chinese by appearing to say one thing to other countries, and another to China. But if this is a good decision, why would a similar decision in the future not be a good decision?  "In the future, state-owned companies will only be allowed on an exceptional basis." But could not "private" firms from China  also be a proxy for state interests?  What about the Potash Debacle--that was a private company, no?  Surely the lesson is that we can't rely on ideology to rationalize rushed decision-making. Surely the lesson is that we need more wide-ranging consultative decision-making.

It is not entirely a coincidence that the Official Opposition is calling for Peter Mckay's resignation, either. The government routinely ignored opposition and journalist allegations of high cost overrruns and maintenance costs for the F-35. The auditor general blasted the government for forging ahead without properly considering options--sound familiar? they F-35'd foreign investment, F-35'd the Onsite Clinic and now they're F-35ing the gateway pipeline and the Canada -China investment treaty as well.

I would support a party that had a wide-ranging consultation of both public and experts on all possible pipeline routes. I would also try to use the $1 trillion worth of oil wealth locked up in the oil sands to leverage  actual, working carbon sequestration in the tar sands area and to expedite the negotiation of all First nations treaties along the proposed pipeline routes.

I know, they think that would take too long.  But when you consider that the ramming through of Gateway is actually a non-starter because of the way it has antagonized British Columbians generally and First Nations in particular, oil might actually get to market sooner using a more gradual, scrupulous and genuinely consultative process that considers all possible pipeline routes.

This is a government that owes the health of the Canadian economy, and its own political survival, to the fact that we did not rush into financial deregulation and bank mergers. But still, they rush in where better angels fear to tread.

You would think that they would have learned their lesson by now.