Thursday, April 21, 2011

Steve the P(i)M(p)

You have a fiancé named Steve. Well, he SAYS he’s your fiancé, but some people call him your pimp. (And, if you are a straight male or a lesbian reading this, so much the better, because that will help you experience the feeling of a deeply ill-advised connection.) Steve was a little brutal and callous in his younger days, but you hope that he has calmed down a little since then. Certainly he seems strong and decisive, but there are moments in which you worry that he may be a little too controlling for your comfort. There were, for example, those kids that he and his friends beat up last summer, when they were making some noise out in the street. But you’ve decided for the moment to wait and see how things work out, because Steve clearly wants to move on to the next level of a more serious connection.

You are out in the car which was purchased with your money. In fact, everything is done with your money, and while you don't exactly begrudge spending it, there are times when you wish Steve would appreciate a little more the fact that it IS your money. Steve is driving, as he always does, and for the time being you are content to let him do so (although you are a little bothered by the presumption with which he has personalized the licence plates to read “HRPRS RIDE”). There are plans to run several errands, some of which are important. But he is often also stopping to give money ⎯ your money ⎯ to his sleazy friends, and you really aren’t sure why. And in one case, he stops at a gun store and brings out some enormous and expensive-looking weapons which he has purchased on your credit card. “Wow,” you say, “how much did THAT cost?” “Look, shut-up,” he tells you, “we can afford it, okay?” Similar things happen at several other stops and suddenly the prospect of all this money going out makes you begin to feel ill and to want to go home immediately. You tell him just that, saying “Steve, please, let’s not make any more stops or spend any more money, okay?” Without looking at you, he mutters “Uh-huh.” You press him for a more explicit answer, and he says “Yes, yes, alright! No more today.” But just a little bit later, he is pulling into the driveway of yet another friend’s house and you see him at the door writing a cheque on your account. When he gets back into the car, you say “Steve, I thought you told me that there would be no more?” And he turns to you with his cold grey eyes, a trace of a smirk on his lips and he says: “Well, it’s no more than I PLANNED.”

So, the question is: do you marry the guy?

That scenario came to me during the federal leaders debate, when Stephen Harper (or Steve, as he was back in his Reform Party days) said flatly that there were no more corporate tax cuts in his budget. And yet, as many sources will confirm, the Conservative plan has the corporate tax cut going from 18 per cent last year to 16.5 per cent this year to 15 per cent the year after. So what he meant was that there would be no more than he had already PLANNED. This kind of casual deceit, showing so much contempt for citizens, is absolutely typical of Harper. It is exactly what brought him into the situation in which his became the only government---not only in the history of Canada, but in the history of the entire commonwealth---to be found guilty of contempt of Parliament. Harper would have you believe that it was a “partisan” parliamentary manouevre, but the fact is that it depended on the decision of the very non-partisan Speaker of the House that the Government had indeed been guilty of Contempt of Parliament. And in case you believe that the Conservatives wouldn’t agree that Milliken was a non-partisan judge in this case, here is House Leader, John Baird (known to some as “Harper’s pit-bull”) on Milliken at his retirement: “Speakers from all around the Commonwealth look to you as their leader and their inspiration as someone who has conducted himself very professionally.” That doesn’t sound like the description of a man who has used his office for dishonourable partisan ends, does it?

Okay, so let’s suppose for the sake of argument that we all agree that Harper has shown arrogance toward clearly answering the people of Canada through their elected Parliament (keeping in mind that a clear majority of Canadians did, after all, vote for a party other than his). That’s a fault, certainly; but if he is really working for the good of Canada, we could consider it a “benevolent dictatorship,” couldn’t we?

However, the effects of this dictatorship are NOT benevolent, and nowhere is this more apparent than in the mismanagement of the economy, which is going to reap serious consequences as we are forced to spend a greater and greater portion of the federal budget on the servicing of the debt. This is no small deal: the debt now stands at over half a trillion dollars ($519 billion) and given Conservative policies is projected, by the Parliamentary Budget Office, to increase to $652 billion by 2015-16.

How did we rack up so much debt? Well, of course, by running deficits.

By now, every Canadian knows, or ought to know, so frequently has it been mentioned in the media, that after several years of running surpluses and reducing our overall debt under the governance of the Chretien-Martin Liberals, the Government of Canada is currently running a $56 billion deficit. However, there is a widespread view, one maintained even amongst some of Stephen Harper’s most ardent detractors, that the deficit that the Conservatives have racked up during their five years in office is due entirely to the global economic crisis that took hold in October 2008, and that no government could have avoided it, so that Harper and his finance minister, Jim Flaherty, are not to be blamed for mismanagement. While there is no doubt that the crisis would have caused some trouble, it is edifying to go back to the report of Kevin Page, head of the Parliamentary Budget Office to see what he had to say in November 2008 of the deficit the government was already running:
“The weak fiscal performance to date is largely attributable to previous policy decisions as opposed to weakened economic conditions, since nominal GDP is higher than expected in Budget 2008. Tax revenues are down $353 million year to date compared to a year earlier, due in large part to recent policy measures, such as the second one-percentage point reduction in the Goods and Services Tax and reductions in corporate income taxes.” Library of Parliament: Parliamentary Budget Office, "Economic and Fiscal Assessment" – November 2008 page 16

In February 2011, in his Opening Statement to the House of Commons Standing Committee on Finance, Kevin Page basically reiterated this analysis, saying that when, as expected, the economy reaches its full potential by the end of 2016, there will still be a deficit of $10 billion because of policy decisions. In other words, the federal deficit is not temporary and circumstantial, but structural, because Conservative policy has the government spending more money than it can possibly take in even under ideal circumstances. (February 15, 2011, page 2, available on same webpage)

So, the point is that, in an effort to win voter support, Harper reduced the Goods and Services Tax by two points, which, while a somewhat popular gesture, is almost meaningless to the vast majority of Canadians. (Honestly, can you say that a 2 per cent sale would ever induce you to buy an item that you would otherwise consider too expensive?) But while meaningless to individual Canadians, that gesture deprived the Federal Government of billions of dollars of revenue. And the corporate tax cuts, while they ensure the continued financial support of the Conservative Party from those who run the corporations, likewise have generated no discernible benefit to the Canadian economy, as I will allow this economist to explain. (You might want to click through on the title to watch it on YouTube, because otherwise the framing of the video may be off.)

(Of course, it's true that economists can have differing views, and that Harper cites U of Calgary economist Jack Mintz as saying that corporate taxes would reduce jobs. But it's worth remembering that this is the same Jack Mintz that Harper attacked as incompetent when he supported a carbon tax in the Financial Post in 2008, so apparently Mintz is brilliant when he agrees with Harper and a dolt when he doesn't. Which is typical of Harper's attitude.)

Meanwhile, as the debt increases, we are becoming ever more vulnerable to the international economic troubles that have created havoc in one country after another.

So, my point is, if we are expected to be content being treated by our Prime Minister as a nasty pimp treats his hookers, shouldn’t we expect some actual protection in return?


Paul said...

Somehow so-called conservative governments always leave a large defecit (Brian Mulroney, Mike Harris), although this one takes the cake. I see it as strategic, creating the conditions you want for policy you want. Spend ridiculous amounts on prisons and prisoners and corporate tax cuts, then there's not money for social programs. Woops! Sorry Canada, we just can't afford it (it being anything, except probably more corporate tax cuts). We have no choice but to radically reduce the size of government in order to deal with the debt.

Craig said...

That's a pretty astute analysis, Paul. Although it's unlikely any Conservative would ever publicly admit that's what was intended, it seems irrefutable that it will be the effect of what they are doing.