So How Much Political Advantage Does $34 Billion Buy, Anyway?

The world moves fast nowadays. What with all these pre-budget announcements, it's now possible to feel buyer's remorse before the transaction has been completed. I've been saying that the Tories had no option but to accept the Keynesian stimulus argument and produce a budget designed to rope in Liberal support. And I stand by that — as I've been saying the Conservative Party of Canada simply afford to hand over power to the Liberals, be stigmatized as the "party that doesn't do anything for the ordinary guy" in hard times, and run the risk of being out of power for 20 years as a result.

It's understandable that a government would act the way that this one has, as successful politicians have a strong survival interest. The Government slashed it's own throat with the economic statement last fall. The instinctive response is to staunch the blood, wipe up the mess, stitch up the wound and apply bandages to the wounds. Today's budget is the result. But is reasonable to ask how much political capital $34 billion buys. Well, it's not really $34 billion; just the natural effects of the downturn are estimated to produce a $12 billion deficit anyway. So what does $22 billion in stimulus/infrastructure/assistance to the unemployed buy, politically?

This package of outcomes isn't all good. There's some discontent within the party; just peruse my fellow Blogging Tories to sense the signs of mutiny in the ranks. Unambiguously Ambidextrous has managed to get these views a place on the front page of the National Post website. I'm disturbed and sad at the total rejection of the party which some conservatives seem to be contemplating. There's a danger of saying of these discontented, "So what. Where are they going to go?" The Conservative Left used to think that regularly, and say that occasionally, wearing a triumphant smirk, and one of the results was the Reform Party of Canada. Conservative activists are principled and often ornery sorts, so organizing them in support of a necessary political compromise is like herding cats. Stephen Harper is going to spend some of the political capital he has accumulated with the conservative base on this. At the same time it can't let it's policies be dictated by people who don't understand that it's necessary to win power to enact any part of the conservative agenda, so it's self-destructive to demand that a government enact all of it.

The arguments from supposed conservative principle aren't definitive here; there's nothing wrong with running deficits in bad times so long as they are paid for with surpluses in the good. That's something we have to insist that government does, when the time comes. And when that time comes it would be nice if we had a conservative government to try to hold accountable, rather than a Liberal one.

There are better arguments against these tactics. They are, like the arguments for this approach, based on politics. The case would be that this $22 billion just doesn't buy any political advantage nearly worth the expenditure. What has this $22 billion plan bought? 6 to 9 months. Things are going to get worse economically this year, maybe a lot worse. Michael Ignatieff can take 6 months, 9 months, more if he thinks it better, to organize himself, to replenish Grit coffers, and then defeat the Government when he thinks the economy is at its lowest point, with every chance of beating the Conservatives. There better be an awful lot of good things done by the Government during the next 6 or 9 months for this Keynesian adventure to be worth it. One might go further and argue that in the current circumstances, no one can know whether it is, in the long term, the better position for the Conservatives to be, next week, in Government, in Opposition, or in the midst of an election campaign. The best political outcome for the Conservatives might be if the Government was defeated, the Governor General refused a dissolution, and the Leader of the Opposition was invited to form a government. Then the anger of Conservative voters at this "undemocratic" activity might energize the base all the way to the next election, whenever it is.

But I think this argument misses a few things. If the Government had publicly renounced Keynesian stimulus theory, and brought in a $12 billion deficit budget, or worse, a budget cutting services and/or raising taxes to produce a balanced budget, make no mistake, it would have been defeated in an election campaign. It would have the wind behind it at the start, being able to denounce the Opposition for forcing an unnecessary election in a time of crisis, delaying any action to resolve it. It could take some advantage of the distaste with which English Canadians regard the entering into a coalition containing the separatists as a key component. But it would face sensationalized MSM coverage of the job losses that are now occurring every day. It would face the public preference for parties promising to do something in midst of a crisis to those proposing nothing. The conservative economists who oppose Keynesian stimulus would be overwhelmed by the MSM coverage of the plurality of economists who support it in some form. It would face the spillover effects of Obamamania in the States, which has created an appetite for change that Michael Ignatieff could take advantage of. Worst of all, it would face an Opposition that would be led by the inexorable logic of its public positions to effectively band together, promising that another Harper minority government would be defeated on the Speech for the Throne and replaced with a government that would introduce a stimulus program, an infrastructure program, and additional aid for the unemployed. And if Stephen Harper couldn't win a majority against Stephane Dion, he can't win a majority government, at least right now, against Michael Ignatieff.

The recession fighting weapons authorized in the budget won't really be worth the $22 billion they cost, marked as they are with all the inefficiencies attached to government endeavours. But they buy the time necessary to stay alive and to craft a strategy that will prevent a Liberal takeover of power that could last for generations. The difference between their actual value to the public and their real value is thus well worth the cost, even if we have to borrow to pay for them.

Bennett New Deal -- Take Two

For some reason I found myself looking at the paraphernalia surrounding the ceremonies associated with the Speech from the Throne very differently than I usually do. Ordinarily, by default, I revere the elaborate playacting, the odd rituals performed by sinecure holders with archaic titles, the recitation of formulas dating from century-old conflicts between Commons and the monarch. But not today. Just for a day I experienced the anarchistic stirrings that must be felt by people I usually disdain as just being ignorant of our national heritage because they consider this mummery and mumbo-jumbo as a waste of time. Why? I think it's because I think that we're entering a period like the '30s, where economic dislocation and downward social mobility will lead to middle class discontent with the existing order that will find political expression in wild and unpredictable ways.

Why? The Conservative Party of Canada is facing what may be a critical juncture in its history. The Tories have just enjoyed the rare experience of surviving an apparent economic meltdown occurring right in the midst of an election campaign and living to tell about it. The contours of politics for decades could be shaped by the conventional-wisdom answer to this question: who was responsible for our second Great Depression, and who did something about it? Now this could go either way. If the government is perceived as having bungled its way into a modern readaptation of the Great Depression, Stephen Harper could end up being remembered as a new R. B. Bennett, a cold-hearted miser fixated with adjusting his green eyeshades while the life and hopes of the "ordinary Canadian" life swirl down the drain and we could go through another period in which the Conservatives get to form the government once every half-century or so. If the government is perceived as fighting for the ordinary Jean the Plumber and trying something, however pathetic, to alleviate his plight, it could be rewarded by a grateful electorate like F.D.R. was, no matter that the New Deal not only did not end the Depression but may have lengthened it. Maybe the present situation is too uncertain and fluid to know right now what the government can actually do to look like it's dealing with the crisis with the right mixture of competence, innovation and empathy, but we can't wait too long either.

As for the speech itself, it was pure vanilla all the way. The bland bureaucratese of the language emphasized the sham formality atmosphere of the occasion, a non-event closer to a pre-season exhibition game than a season opener. It would help that when they did come up with a decent metaphor ("As one of our greatest hockey legends has observed, we need "to skate to where the puck is going to be, not to where it has been." ), the G-G didn't botch the delivery.

The government is getting off to the right start by throwing the balanced budget under the bus. The booster shot of a deficit, whether actually being helpful or not, is what the mediacracy, the information classes, expect, and it would be prudent to give it to them.

Was the emphasis on northern development an attempt at channelling John Diefenbaker, reprising his "Northern Vision" of 1958? I guess it's better to copy the Chief than R. B. Bennett.

Regarding empathy and concern for the ordinary Canadian, the words were there:

"Many working-age Canadians are faced with the dual pressure of holding down a job and caring for their family. Increasing numbers of Canadians are taking care of elderly parents while also raising young children. Our Government is committed to supporting working families and helping make ends meet."
But we have yet to hear the music.

Mad Jack Layton is blasting the speech as "timid". That's a charge that could stick, not yet, but eventually....Mansbridge is painting this as presenting a very bleak picture of the future, something that did not really come through as I listened. That's the right approach, though, so long as it's combined with action and optimism. The phrase to be expunged from the glossary is "the fundamentals are strong"....Dion is acceding to the inevitable and will not oppose the speech.

Next act is the economic statement next week. That's when the bell will ring and the prizefight will really begin.