Sunday, 20 March 2011

What Is An Economic Action Plan?

One of the dumbest things the opposition ever did in their ongoing bid to snatch the credibility baton from the “Harper government” was lampooning the government's (at the time) refusal to “take action”, meaning, spending oodles of money it didn't have with little oversight, following the stock market crash of September 2008.

The opposition thought they could score cool points by exhorting the government to practice orthodox Keynesian-ism. The British economist John Maynard Keynes's philosophy, which claimed that during periods of the economy faltering, governments have a moral responsibility to step in and provide artificial demand and employment, even if it means going further into debt (for no western democracy has been debt free, even within seconds of its inception), until things “picked up again”, has received much attention since that fateful crash. There is no substitute for real needs and organic demand, however, and this has only added to Canada and Western nations' death spiral of debts, the unravelling of which we are just at the beginning of.

So how did the Great Canadian Keynesian Experiment of '08 see the light of day? The popular historical narrative posits that the usually stonewalling and stubborn Conservatives acquiesced to opposition demands for stimulus because the nation wanted them to govern, following the unprecedented parliamentary crisis that the Conservatives themselves had just created, and popular support for stimulus was high. This is bullshit. The conservatives don't do anything because of opposition demands or complaining from special interest groups. That would be the job of the Ontario Liberals or the Obama democrats. No, the “Economic Action Plan” was created because the conservatives saw a golden opportunity to turn this “confrontation” which they “lost” and “backed down” from into the biggest taxpayer-funded, pro-government, propaganda orgy in Canadian history, of which they would be the sole, legitimate, and rightful beneficiaries.

Below are some examples that I pulled directly off the “Economic Action Plan” website, of dividends that propaganda campaign paid, in the form of hot air getting injected into Smirk Harper's already massive, overinflated ego.

“[Budget 2009 is] a clever package and hopefully it will win the support of the House. I am confident this will work.”
—  Glen Hodgson, The Conference Board of Canada
“A clear strategy should help to restore consumer and investor confidence over the medium term. We believe it is an important step forward.”
—  Canadian Chamber of Commerce
“…I would like to underscore the importance of the Home Renovation Tax Credit to the Canadian home improvement industry, to contractors, and to the many Canadian consumers who, with the help of the federal tax credit, are investing their own dollars to help spur the economy.”
— Michael Rowe, Vice President, Finance, The Home Depot Canada, November 3, 2009

If you look closer at the statements of these influential and savvy individuals, you will see that this “plan” was actually a “band-aid solution” to grant a reprieve. A stop gap measure to maintain the defunct status quo. The government would like you to believe that by subsidizing the home building, banking, and auto sectors with our future tax dollars, they have prudently prepared our country for tomorrow, when in fact what they have done is squandered billions on the unsustainable and redundant enterprises of yesterday. The whole premise of the economy is of course based on confidence, which we see now was in short supply in the fall of '08, and the government was gracious enough, in the chamber of commerce's view, to step up and provide it. The thing I have to reluctantly offer the government, because I do hate to disrupt their eternal hand job party, about confidence, is that it is a feeling, so it cannot be borrowed or manufactured. So that “restored” confidence will only be so until the ugliness of reality re-emerges, which is only a matter of time.
When you go on THE PLAN website (herein I will only refer to it as such, since that is what they have baptized it), you can get lost in the smash and grab dazzle whatever PR firm they hired on our dime unleashes on your mind. To hear them tell it, THE PLAN has propelled us straight into an ultra rich, ultra abundant future, the Jetsons meets Dubai Skyline powered by worker bee dudes in hard hats sipping Starbucks Lattes. It is a powerful and seductive sensory experience, something I didn't know the government in Canada was in the business of providing, until I remembered how hard they lean on propaganda. But I prefer to experience those types of experiences on my own time and my own dime, not from the state and filtered through their weird pseudo-hero lens. Let us ask, then, a very simple question, to step back from mental massaging: What is an economic action plan?

An economic action plan would be a list of several steps, or actions, progressing and converging in a fashion where they achieve a specific goal – related to the economy. The specific goal would imply that the economy is going to somehow be evolved or in a more advantageous position compared to its state at the time of crisis.

What happened with this economic action plan? Are we in $60 billion (that we've borrowed and have to pay back, just in case you thought the government dug deep in a benevolent pocket of money you've never seen, but is yours for the taking) better off?

Probably not. But we must discriminate; the amount was not a monolithic whole. Aside from the subsidies and bailouts already mentioned, which were about as valuable to the collective as a massive compound interest bill for a non-existent asset, there is the tranche devoted to those “projects” demarcated by those signs you see ABSOLUTELY EVERYWHERE. So did those at least give some relief to folks who were in tough feeling the pinch? Hmmm. I'm going to go with not likely. As the mockery of the Obama stimulus's $3 million to create one job statistic demonstrated, these gargantuan sums of money hardly equate jobs. Parliamentary Budget Office Kevin Page's own stimulus dollar to job match up exercise also revealed incredibly terrible bang for the buck. The mandate for THE PLAN, however, was not to create jobs, despite what all those pictures of blowtorches and cranes and photocopiers on its site might lead you to believe. It was something probably more modest, like this:
Almost every province and municipality, to service its expanding population and changing demographics, had some kind of construction, renovation or maintenance project underway at the time THE PLAN was announced. These projects had for the most part all been approved and were already underway past the preliminary. Materials were purchased, workers were hired, contracts were granted. Then the government said, here, you can apply for funding for this under “THE PLAN”.

Great. It's not like municipalities or provinces have any extra money (In fact, when you add their debts to the federal's our country is the most indebted on earth, so forget “Lowest debt to GDP ratio in the G7” crap you see in Conservative ads). So they duly submitted simple, 1 page applications for extra federal money for these projects. These were almost all rubber stamped with nary a follow up question or an audit, so the provinces and municipalities had some of the costs relative to their projects alleviated. The government kicked in non-existent money into existing projects. They did not create enormous work sites of smiling tradesman working on the great Canadian mega buildings of tomorrow as their website would have you believe.

Did this stimulate the economy? Its possible. Maybe a little bit. Did the government misrepresent the plan in its goals and scope? Absolutely. Was this such a bad thing they did, to subsidize all these projects? Other than being a huge sprinkling of patronage pork, I guess its okay. Is this an earth shattering scandal? Not really, if you like being advertised to in a misleading way with your own tax dollars about what your own tax dollars are paying for on a constant bases. Now just hold the phone a second about those applications. If you follow this government, you know that some things are just too innocent to be true.

Remember what I was just telling you about those breezy, simple, joke of a one page application forms that had to be filled out to apply for funding from THE PLAN? It sounded like the government didn't really care about what it was funding, right? That is correct; they didn't. What they cared about was that the massive signs and posts that were being imminently overnight couriered to you were put up in prominent places and photographs were taken of said signs in said prominent locations and sent back by courier within 48 hours. That is the honest to gods truth; I am not making that up. This requirement had to be filled or else the deposit of stimulus funds was simply not made, and I know this thanks to the excellent work of Le Devoir journalist and parliamentary press gallery president Hélène Buzzetti, in an article she published some time ago.

We talk a lot about bureaucratic inefficiency and red tape. Yet we can see quite clearly from this example, which is a marvel of the modern efficiencies of just-in-time shipping, what the slow, lumbering archaic government can accomplish when it sets it mind to something. And what it set its mind to here was the constant, sustained, perfectly placed exposure it could obtain through its dubious PLAN, and it wasted no time and pulled no punches in making every little pet project that made itself known to it a vehicle for that exposure.

Why do I mention this today? Well, it seems that we are a full twenty days – that's almost three weeks, into March 2011, the first post-PLAN month of the calendar since it started two years ago. All funds for THE PLAN are supposed to have dried up by now. And yet those signs stay up. They do not come down. Not at the side of Highway 8 in Kitchener, Ontario, the section that has been in the process of being expanded since before the PLAN and has quite a bit of work still left on it. Not at the Tax Centre or Federal Building in downtown Kitchener, Ontario where I've yet to see a contractor's pickup truck, machinery, construction, scaffolding, or any visible signs of work in 2+ years. Idem for the big government building at Yonge and Sheppard Streets in Toronto. The Community Centre in the tiny village of McKellar, Ontario, has a huge sign up in front of it. Nothing has happened to this building the entire time. But its okay, because the sign says “Investing in Community Centres”. And these signs sit there, screwed into their posts, nailed into the ground. I would risk that an outside impartial observer might mistake them for permanent fixtures.

If the government is serious about reducing the deficit and spending our tax dollars wisely, then perhaps they can apply the same technocratic rigour they applied to the signage at the start of the program to it at the end of the program. These signs should have been all down by March 3rd if that standard was being applied. Yet I will cut the government some slack here and I will say that since Tuesday is budget day and THE PLAN technically spanned two budget years, they can keep the signs up until midnight Thursday night. But I know that date will come and go and those signs pointing you to work that is not getting because it never existed in the first place will stay up. Because this was never about an “Economic Action Plan”. It was about putting a sign up that says “Thank you most wise and benevolent Harper government, for having your hand so firmly on the gears of Canada's economy” at as many locations in Canada as possible. And given that I just read today in some pre-budget commentary in the Globe that the PLAN is indeed done but parts of it are staying alive though a “Communities Fund” or some equally dubious bullshit, I think we can expect gratuitous, irrelevant and taxpayer funded propaganda splashed across many of our public spaces for some time to come.

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