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.

Turning Gold Into Bronze

The Prime Minister has long been acknowledged as a political wizard capable of transmuting the political elements, and he still is. He has now performed the feat of turning gold into bronze. Only he could put some backbone into a caucus as timid and enervated as the Liberals, only he could unite the three motley opposition parties in an enterprise requiring initiative, cooperation and trust. What is still inexplicable to me is how an entire government could commit hara-kiri, sitting back contentedly listening to a speech guaranteed to lead to its humiliation and defeat

Within 30 minutes of hearing the economic update I had been able to figure out its likely consequences. The removal of funding would force the opposition parties to do whatever they could to prevent it. Even a timid animal will fight when cornered, and the opposition parties were faced with losing two-thirds of their income. If your boss told you that your salary was being cut by two-thirds starting in the new year, and you had some way to get him fired before he could implement it, wouldn't you take it? So the opposition parties would have to unite to defeat this, no matter what else was contained in the same legislative package. And since they would be expressing non-confidence by defeating this measure, why not go the whole way and toss the Tories out of power? The majority opinion of constitutional experts would be (the Opposition parties would calculate) that the Governor General would refuse any request by the Prime Minister for a dissolution so soon after the next election; she would call on the leader of the second largest party and ask him whether he could form a government that would have the confidence of the House. That is a window of opportunity that eventually would close. After the government had been in power for a year or so the G-G would assent to a dissolution request — so the time to act had to be now. As Liberal strategist Scott Reid has explained so eloquently , once the Opposition attacks the King they must kill him. There is no public support for subsidies to political parties, so the Opposition needed a pretext to oppose the Government so strenuously, and one is readily available, in the failure of the Government to proceed immediately with a massive economic stimulus. Once the parties overcame their initial ingrained resistance to working together and defeating the government so early, the movement toward a coalition would take on a life of its own. Even if the Government recanted the funding threat, it would be too late to stop the coup. The Opposition parties could hardly back down because their funding was restored, because it would discredit their story that the whole thing isn't about funding in the first place.

If I could figure all this out immediately, where were Guy Giorno, Jim Flaherty, and Stephen Harper?

So where do we go now? The public campaign to arouse the public against this move will be a damp squib. Conservatives making their case are going to receive rough questioning from the media, and understandably so because they have been forced by their leaders to assert things that are, at a minimum, obviously disingenuous. As I type this, Heather Hiscox of CBC Newsworld is interrogating Pierre Poilievre in a voice dripping with contempt. And Poilievre asked for it, with ludicrous assertions such as that the GST cut enacted last year was a fiscal stimulus that would help the current situation. The opposition parties have concocted a plan to take power. So what? That's what political parties do — seek power.

The rumoured prologue of the Commons would seem to be the right idea. If there is a defeat it must come on the budget, not a non-confidence motion. And the budget must be a spectacular one, since it's the last one the Conservatives may be introducing for a long time. I suppose the crucial question must be whether to include a major fiscal stimulus or not. I have argued before that the Government had to go with a big stimulus, whether it's sound economically or not, to avoid being put in the position of looking uncaring about people's economic anxieties, of Harper's becoming an R. B. Bennett or Herbert Hoover, consigning the Tories to obscurity for two or three decades. Those who reject this as contrary to conservative principles will make their case too.

When the G-G refuses the Prime Minister an election, the Tories will try to make this a new King-Byng affair and foment public outrage. I don't think this will work. In any case the new government will be a stable one, and after two-and-a- half years the next election will be about the new government's record, not the niceties of constitutional conventions.

The sad thing is that the Tories may be down to one out. It is that the economy takes a disastrous turn after the new government takes over, and it, and Michael Ignatieff, end up getting the blame.

When the dust settles, I imagine Stephen Harper will be able to stay on. My fingers are pointing at Flaherty and Giorno. There was much good in the Harris governments in Ontario, but there was in it a thuggish, brutish element, and just as bad, its people usually had a political tin ear. People who fit that description need to be kept out of important positions.