Thursday, 23 September 2010

It's the Stupid Economy

If you reverse the first two letters of this posting's title, you have the slogan of Bill Clinton's very successful 1992 Presidential Campaign. It is an approach that floundering defenders of the status quo in North American politics are trying to mimic now, in an attempt to repeat their past electoral successes. But unless they figure out away to start their nations or provinces from economic scratch all over again, I suspect it will not work. For this time around, they have not had an ingenious epiphany to remind them to stop talking big ideas and re-focus on the economy, but rather are suffering from a staggering myopic tendency to be unable to produce any ideas of substance or policies of value or talk about anything else. They are being left scratching their heads figuring out why a so-called "free-market" economy doesn't respond to their meddling in it and manipulation of it, and have their fingers crossed behind their backs in proverbial hail marys hoping some imaginary massive wave of economic growth will fool people into thinking that they have this under control in time for their next electoral calendar obligation. Let's explore the rationale behind this approach, and have a look at the dynamic in action in governments across North America and elsewhere.

The premise that helped Clinton and that governments hope will help them now is that people are as genuinely short sighted and self interested as corporations and shareholders. What they want from you as a politician is ways you will improve their bottom line. Less taxes, low inflation, low unemployment rates, purchasing power. People are made aware of these phenomena at work both from their own personal situations and data and commentary distilled through the mainstream media and fed to them, and the party that wins elections in 2010 is the one that is seen as the most "competent" (even though the functioning of the system has very little to do with what happens in legislatures) to manage the status quo to make everyone "richer" and optimize "growth". Even if there are members of the electorate who deplore your pandering, lack of long term vision, or appeals to people's selfishness, the people you are after outnumber them, and the vast amount of voters who have opted out because of disillusion or ignorance ensure that you win in the outmoted system that dates from when only white property owning males could vote.

However, if there is one thing I can guarantee, and that a self respecting columnist or two can attest to, it is that neither richness or growth will be happening much anymore to people who haven't experienced them already. Lets take an example. The Ontario Liberal Party has racked up a record deficit and promises to bring it in line within 7 years. But, they have expanded entitlements. In fact, spending has increased a whole 50% under their reign, from 70 billion to 116 billion annually. I could probably live with this if we had something to show for it, but instead we have a stake in General Motors and twice as many lanes of traffic. And, they have made this promise assuming health care spending doesn't balloon, which it will, because when has it ever not?

This head in the sand approach is one thing. But blackballing ones rivals and accusing them of being irresponsible for even suggesting that an alternative to the current government exists is quite another. And that is what we are witnessing from the federal conservatives in Canada. Since the stock market crash, they have qualified all attempts by the opposition to express their political ambitions (which, in a democracy, we assume an opposition would have) as heresy and shot them down with childish screaming fits about how their election would equal guaranteed overnight third world status. I'm not suggesting that the opposition has really spelled out any credible/original/interesting policies of their own, but the current government sure as hell doesn't have anything to take credit for. Unless you consider taking 2 billion a year out of the public treasury with a useless GST cut, who knows how much out of the public treasury with corporate tax cuts (the exact figures of which are never disclosed to the public), and giving future Canadians a 47 billion deficit to deal with that mainly consists of an advertising program for the conservative party, highway expansion and various pork barrel projects in conservative ridings "sound economic management".

These examples of flagrant bad economic policy making are of course matters of public record, but I also have noticed lately that governments have taken the rhetoric a step further, claiming things like the HST creates 600,000 jobs in Ontatio, the opposition coalition in power would result in the loss of 400,000 jobs in Canada, and the opposition responding the increasing of EI premiums would result in the loss of 175,000 jobs. Throwing dubious claims like these into the mix of a government's poor (or an opposition's non-existant) track record and the absurd (but alas, true, if you listen to the mainstream media) premise of the whole election being fought over "economic management" adds an extra layer of silliness to an already throroughly farcical discourse.

Because the North American economy is highly diversified into several "tertiary" sectors which provide "jobs" (call centres, financials, transportation, construction, manufacturing) but not actual "work" towards anything useful or productive, since they further dig the twin environmental and economic debt and deficit ditches more and more people are noticing us languishing in, the government is able to get away with this. They can be more coy about the resource-extraction backbone on which it all relies (and which Western Canada likes to take credit for, acting as though its economic contribution to the country is somehow based on merit and not resources that it happens to be sitting on). The government does not have to admit that if you take petroleum and Canadian resources out of the equation, you literally take away the reserves that they draw their credibility on the matter from. For if we look at two other "developing countries" we see that petroleum is literally a bank account that the government uses to finance and float the economy, as well as a source of stolen slush, but I shouldn't even really have to mention that, with which the nations' fortunes are already linked to a point that they will rise and fall (and eventually, of course, fall) with. The difference between these places and here is that the citizens of these states already know it and acknowledge it, and the leaders are up front with the population about it because it is clear as day.

The two countries are Russia and Mexico, who both experienced chaotic twentieth centuries with intermittent periods of high political instability. Today, Mexico is becoming more and more fractious as the maquilodoro factories near the U.S. border that provide one third of employment to Mexicans feel America's slowdown, and the ground that marijuana and cocaine from down south pass through on their way to America is being fought over bloodily and mercilessly by the drug cartels. Seven million teenage boys are without work or education; guess what sector will absorb them? Amidst this, the Mexican state has only its deepwater petrol reserves to rely on, nationalized since 1936. But the reserves are in deeper and deeper water and running out. Can anyone see whatever peace existed until now was bought with and how this time bomb is ticking over Mexico? The right wing NAFTA stooge president is of course contemplating selling off the reserves to private companies to raise money, which will never wash with the population, and his army's war with the cartels has only strengthened them and intensified violence. This is a country that, unlike ours, doesn't have anything to hide the fact that it lives off a petroleum bank account behind and has no solutions or fixes for the future (other than tourism, also petroleum intensive, and also declining due to the beating the country's image is taking with rampant drug war-corruption bullshit going on).

Russia, meanwhile, has been run for a decade by the CEO of Gazprom, Vladimir Putin. The country that went through a fire sale of its most precious assets in the early 1990s to become the kleptocracy that it is today is in the hands of the Putinator so firmly due to his ability to distribute the windfall from the gas into some citizens' pockets, and push around its former colonies that the now smaller country no doubt feels bitter towards, especially when they try to become all Western and pro-American. He may have had a few good years and made himself and his cronies enormously rich in the process, but again: how powerful is the man when we pull his natural gas plug?

As the sun sets on petroleum, governments around the world stand to be turfed, scrapped, and ignored as illegimitate by their citizens. For it will no longer be a matter of governments saying "it's the economy, stupid" to their citizens but their citizens saying to them "why did you f--- us over with this stupid economy?"

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