Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Monday, March 24, 2014

Meet Joe Oliver, frontman for a file run by the PMO

During his eight years running the nation’s finances, Jim Flaherty got some big things right. And he got some big things wrong.

Of course, in the glow of long service rendered, it’s tempting to glorify a politician’s tenure (think of how quick the chattering classes are to hand out ‘greatest-prime-minister-we-never-had’ trophies; I can recall at least three recipients). And what the hell, why not be gracious as an old warrior limps from the arena?

But there’s at least one person who cannot await the slow verdict of history in evaluating Flaherty’s legacy. New Finance Minister Joe Oliver will soon have decisions to make and choices to prepare. Even if he’s merely a caretaker exchequer — installed to midwife an election-eve budget that will be fathered in the Prime Minister’s Office — he will benefit from an unvarnished examination of where his successor bloomed and bombed.

Flaherty’s biography will surely begin with the response he fashioned to the economic crisis in 2008, an unexpected dose of Keynesianism that created a record-high $60-billion deficit but likely saved us from catastrophe.

It is sometimes argued that Flaherty had no real choice but to douse the economy with fire-buckets filled with stimulus. But that’s not true. Of course he had a choice. For a short while in November 2008 he even took it. That choice was to try and pretend the problem away and to imagine that the economy could survive without a king’s ransom-worth of lubricating credit. He could have stuck with that ideologically rigid approach.

Instead, Flaherty bent in order to keep Canada’s economy from breaking. He deserves substantial praise for that flexibility. Just as he deserves credit for his impressive effort to rein back the country’s finances in the years after. As he walks out the door, the federal books are, for all intents and purposes, already rebalanced. Some scar tissue has been left. But the job got done.

He did other good things also. Managing a heated housing environment with true delicacy. Appointing Mark Carney as Governor of the Bank of Canada. And using the tax system to materially improve life for those with disabilities.

It is, however, the big things that Flaherty got wrong that should most interest his successor.

The decision to reduce the GST by two percentage points makes no more sense today than it did when it was implemented. It remains a dreadful piece of tax policy that starved the federal purse beyond what it could afford to surrender — as evidenced by the quick return to deficit the moment global conditions weakened. Worse, it’s a less effective tax break than a broad-based reduction to income tax rates, which would go further and help more people. But the policy was a signature feature of the campaign that got Harper elected and it had to be done.

The same goes for the dog’s breakfast of tax credits created for every voter who the government hoped to induce into supporting the Conservatives. Indefensibly awful — and not even a proven political winner.

But the true train wreck of Flaherty’s career came with his initial reaction to the 2008 global financial crisis. In those early days, he presented a Fiscal Update that rejected the likelihood of recession, maintained a (risible) balanced budget projection and included no fiscal stimulus to goose growth.

Worse, he surrendered his pen to the PMO and allowed his mini-budget to be transformed into a vehicle to strip public financing for political parties. It provoked the opposition into a rare coalition, nearly sent Harper to the political graveyard and triggered a constitutional crisis that echoed throughout the Commonwealth. As mistakes go, it was truly spectacular. All because the finance minister didn’t tell the prime minister and his office one simple word: No.

In truth, governments benefit from a bit of controlled tension between the PMO and Finance. Provided it doesn’t escalate into the open hostility that characterized the Chrétien-Martin or Blair-Brown relationships, such friction is quite beneficial. (Although both of those conflicts had moments of pure dramatic greatness.)

Properly harnessed, this dynamic is disciplining and healthy. Finance has an obligation to press for policies that are guided by interests other than the purely political. And the PMO, in turn, has a responsibility to remind Finance that there is a bigger picture, including the need to occasionally secure re-election.

Paul Martin always believed that his finance officials did their best work when they were at war with PCO. Until he became prime minister when he, unsurprisingly, adopted the exact opposite attitude.

For Oliver, Flaherty’s greatest failure is no academic consideration. The finance minister must worry that, with an election pending, the PMO plans to walk right past his desk in designing next year’s budget. He must also worry that he’ll have even less ability, less clout, than Flaherty to resist.

Everything about the way this week was handled would reinforce that fear. Despite Oliver’s obvious competence and deep experience, he was kept conspicuously muted. There was no invitation to Rideau Hall to witness the swearing-in. No scrum with the Parliamentary press gallery. No rush to have the new finance minister declare his unhalted commitment to the government’s economic program. The substitution was done largely in darkness. Swift and silent, like a casino heist executed by Danny Ocean and his 10 sidekicks.

The intention of the PMO was unmistakable. It was to signal that Jim Flaherty’s loss was not a matter for concern. Because there is no finance minister. Not really. Certainly not now. There is only the prime minister. And he is the only one who matters.

Not great news for Joe Oliver. But in time, it may not prove to be great news for Stephen Harper, either. The more the prime minister deprives himself of a counterweight and challenge, the more insulated his decision-making becomes, the more eggs he piles into his own political basket, the more likely he’ll walk headlong into another mistake of the sort he made in 2008.

For this reason, Oliver should pay careful attention to Flaherty’s actual example. And his first priority should be to champion the renewal of constructive tensions between Finance and the PMO. In making life just a little bit harder on his boss, he would actually be doing Harper and this government a great service.

Original Article
Source: canada.com/
Author: SCOTT REID

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