The Parallel Parliament

by Glen Pearson

Tag: economics

Budget 2016: A First Step


IN ONE OF THE FUNNIER EPISODES OF THIS MANIC BUDGET WEEK, host Ellen DeGeneres aired a segment showing Canada’s response to the threat of Americans moving up here to escape Donald Trump, titled, “We’re nice, but we’re not that nice.” You can view it here.

The reality is that we might be even nicer at the moment. During an American election season revealing far deeper divisions in the electorate than many realized, this week’s federal budget couldn’t set a more different tone. It was breathtaking in its own way, covering everything from deep investment in Indigenous Peoples to seasonal Employment Insurance programs, from tackling nagging infrastructure shortfalls to invigorating benefits for children and seniors, from beginning to make right the abiding gaps in veteran’s care to opening a new front on fighting climate change. Yes, it has its detractors, but even they were energized by its comprehensiveness.

It’s scope was made possible by the government’s willingness to go into deficit by almost $30 billion to pay for it (almost three times more than the Liberals campaigned on). Many voiced alarm at such a significant dip into the red, but, as this graph points out, we have been in worse situations before. CeMDjJGUYAA3AdK

Following a decade of austerity, many Canadians are hoping for more investment in our social way of life. While both the Conservatives and NDP ran on balanced budget platforms in the last election, Trudeau’s Liberals put it out there that they believed the time had come for some deficit spending in significant proportions. Those who didn’t take to that outlook nevertheless had to come to terms with a Liberal win, empowered by over two million more voters who agreed with the approach.

Just as our neighbours to the south flirted with a less tolerant future, Canada was banking on more inclusiveness. It’s not the first time we showed a certain economic defiance. When in the 1950s we refused to link our currency with the U.S. dollar, as other nations were doing, alarms bells sounded across the nation as we permitted our currency to float independently. We not only survived; we thrived. And when the great rush to deregulate banks helped to drive forward the global austerity agenda, Canada refused and was able to escape the worst of the Great Recession as a consequence.

Whatever opinion one might have of this budget, there is no question that it represents a clear departure from the same old, same old economic policies of recent years – policies that implied we couldn’t afford to strive for our greatest ideals. It was a rationale used by both previous Liberal and Conservative governments to rationalize some of our greatest social and economic ills like lackadaisical environmental reforms, growing poverty, high unemployment, and deep infrastructure decline. Trudeau didn’t just reason that Canadians were tired of underperforming; he ran on that hunch in his election platform, receiving a clear mandate in the process. Rather ironically, it was the very kind of investment plan that even the once draconian International Monetary Fund (IMF) has been supporting.

In many ways were are staking a claim, investing in ourselves and some of our deeper instincts of fairness and equity. The government believed we were ready for it and presented a budget largely to match.

There is just one problem. The budget is one country’s attempt to somewhat swim against the current of a greatly dysfunctional global financial system. All that was wrong with global inequities still remains in place both before and after the Canada’s recent budget. Trudeau is banking on growth to eventually pay back our deficits, but it will take more – much more. Canada must assist the rest of the world, not by mere example, but by articulate and dynamic financial leadership to reverse decades of elitism and the kind of globalization the placed the free market system and not democratic citizenry at the helm of human advancement.

A number of years ago, then Senator Joe Biden made a revealing observation: “Don’t tell me what you value; show me your budget and I’ll tell you what you value.” This week the Trudeau government did exactly that. But it’s only the beginning. Changing the very nature of our global economies is now the next great step.

Living Research

MDG : Data revolution


OCCASIONALLY COMMUNITIES HAVE TROUBLE telling their own stories.  It often happens during times of transition, when change moves faster than a city’s ability to understand it.

This is what happened in London when it came to a growing poverty problem.  While places like the London Food Bank were reporting that their clientele had climbed 40% in the last five years, London struggled to determine what was happening and what were the causes.

The answers were never fully clear because the data required to get a good grasp on the problem was just not available.  Much of the data presently in use has come from Statistics Canada but was regionally based and couldn’t drill down to isolate what was really happening in our city.  The killing off of the long-form census only compounded the problem.  Numerous agencies had gathered data for the operation of their own organizations, but these often remained in isolation, not gathered or collated into a grander study.  And much of the poverty research for London was accomplished by academic institutions – data that ended up in academic journals or eventually consigned to library bookshelves

Even a decade ago there had been an increasing voice in London searching for some kind of central place for data capture, but then came the great financial fallout beginning in 2008 – a period where every community was preoccupied with attempting to just survive the significant economic fallout locally, nationally, and globally.

The need for better research in poverty in London remained and two groups came together to discuss the possibility of providing a centre solely dedicated to understanding poverty in London through the accumulation and promotion of accurate research.  The Sisters of St. Joseph and the London Food Bank decided to work together towards the possibility of establishing a dedicated research centre to study poverty in our city.  Resources were channeled from both organizations to begin the process, but it became quickly apparent that more funding would be required.

Application was made by a joint proposal from both organizations to the London Community Foundation’s Vitality Grant program – a process that eventually resulted in a grant of $250,355 dedicated specifically to the founding and establishment of the London Poverty Research Centre.

Larger community consultations took place with key partners to instigate data sharing agreements, collaboration, and an agreement to work together to harmonize stories about poverty in London and how it might be beaten

A task force had been established, charged with steering the new organization into the future.  It selected three key areas for research in the Centre’s first few years – 1) precarious work; 2) food security; 3) mental health and housing.  The focus will be on “Living Research” – the inclusion of those living in poverty to tell their stories in real-time and to help shape the effectiveness of the forthcoming research.

From its inception, the London Poverty Research Centre determined that along with the importance of research, there also had to be a strong public component centered on education, the importance of media (traditional and social), the need to inform politicians and policy makers, and the ultimate need to draw Londoners themselves into the dialogue about growing poverty and how to tackle it.

Productive talks have been underway between the Poverty Research Centre and King’s University College to partner together to bring relevant data for public consumption and for policy discussion.

The London Poverty Research Centre was launched yesterday – four months following the initial grant from the London Community Foundation.  With its proposed partnership with King’s University College, the research centre now has in place solid academic support and an exciting mandate to take any findings “public,” to inform debate and tackle poverty at its root causes.

There were a few complaints when the centre was announced yesterday, saying, “Hasn’t enough research been accumulated already?  Isn’t it time to take action?”  The answer to such well-intentioned queries is yes and no.  Not enough research has been done from the standpoint of those living in direct poverty that permits them to build their personal stories directly into the data itself.  And, yes, much research has been done.  But for it to be actionable, it must be brought together into a compelling voice that can gain traction in the public space.  Maybe then politicians and citizens alike will work together for community equity.

London has been through years of difficult transition, but the key to finding a new future lies in our knowledge of what our direct challenges are.  With the presence of the London Poverty Research Centre, our community will be provided with the relevant data to face and change the future of poverty in London through knowledge of both the statistics and direct stories of those struggling in poverty.  The future begins with the gathering of that knowledge and its direct placement in the hands of leaders and citizens alike to build the community they want.

The poor have become lost in all the data about them.  It is time to put those struggling in poverty into the narrative itself and provide them opportunity to shape their own future, just as we wish do with ours.  It can be a compelling story, but first it must be a collective and a collected voice.

The Left. The Right. The Insanity.

spy-vs-spy1Sometime around three decades ago, the modernized and industrialized Western nations permitted a new political construct to leak into their language – the “Left” versus the “Right”.  Nothing has been the same since.  With two sides now clearly defined, people moved fairly quickly to one or the other.  There were two real problems with this.

The first is that it never effectively reflected the complexity of Canada itself.  We were a pragmatic people whose official political landscape wasn’t about one side or the other but how to coalesce around the middle as a means of benefitting the majority of the population.

The second problem with Left versus Right is that there was no real sustainability built into the terms.  By their very nature they were opposites and battles were the inevitable result.  It was no longer about compromise, but winning.  That being the case, most Canadians showed little interest in such a construct and just went on about their business, leaving the battlefield to the political professionals who showed little interest in the public space.

And now there is the third great problem: neither side is relevant anymore.  Consider this.  A recent report that has received all kinds of attention purports that in the U.S. the rich have gained $5.6 trillion in the financial recovery, while the remainder lost $669 billion.  The richest 8 million families saw their wealth rise, on average, from $1.7 million to $2.5 million each.  Meanwhile the 111 million families that constituted the bottom 93% suffered a decline of $6,000 each.

None of us are surprised at these numbers because we’ve believed the game has been rigged for some time.  In 2012, on Wall Street, the top hedge fund manager earned in one hour as much as the average American family in 21 years.  Surprised?  One would have thought the huge lending institutions, including the banks, that brought on the economic downfall would have had to foot some of the bill for the recovery.  Instead, Wall Street leaders pressed governments at all levels to cut public expenditures, slash public employment, and use public funds to bail out the big guys.

We aren’t shocked by such developments anymore, but what is interesting is that in the U.S. both governments from the Left and the Right basically enabled the same outcome.

And then we play the game of observing that these are American numbers, not Canadian.  The influences are the same, however – groups lamenting that corporate taxes are too high, governments are too big, regulations are too numerous, and Canadians are just too distracted to care.  Unemployment not only remains stubbornly high, the majority of the jobs recovered from the recent economic downturn now make less than $15 an hour.  Yes, new jobs have appeared, but you might need two or three of them to support the standard of living you enjoyed two decades ago.

Well-known Canadian entrepreneur and former under Secretary General of the United Nations, Maurice Strong, witnessed the birth of the Left-Right divide and worried that it might place economic matters above all else on the global agenda.  “Most of the valid needs as yet unsatisfied are of a non-material nature.”  He was right then, and he’s right now.  And neither the Left nor the Right have any answer to this.  Canadians instinctively know this and thus turn away from the political order as a subtle means of protest.  The professional political soldiers keep duking it out, but the front has already moved someplace else.

American political observer Jim Wallis observed these developments at the same time as Strong.  His conclusion was fundamental to how we need to move on in our political and social language:

It is time for both the left and the right to admit that they have run out of imagination, that the categories of liberal and conservative are dysfunctional, and that was is needed is a radicalism beyond both the right and the left, which is neither liberal nor conservative but fully compassionate and just.”

The premise of a “society”, especially a democratic one, is that its participants are in general agreement and are willing to work together for solutions.  But when its political system is one of perpetual combat and “take no prisoners”, it is hard to understand how a good society can keep from becoming a dysfunctional one.

A Few Good People

UnknownHaving spoken to some of the municipal politicians and staff returning from the Federation of Canadian Municipalities conference in Vancouver, I heard the recurring theme of how there just isn’t enough money.  In fact, they wondered if there will ever be enough to recapture the innovation and prosperity not only of communities, but of the country as well.  Our options are growing more limited.

I have also been in correspondence with some economists and professors of economics and a theme is emerging from that sector as well.  In a phrase, economics has become somewhat bi-polar, even multi-polar.  There is a general acknowledgement that the “economies of people” and the “economies of systems” have become increasingly de-linked in the rapidly expanding technological age in which we find ourselves.

Israeli-American economist, Daniel Kahneman, won a Nobel Memorial Prize in economics in 2002 for his work on how the psychology of judgment and decision-making in the field of economics has resulted in what he calls, the “fast” and “slow” paces in how we live our lives.  Applying economic fundamentals to an increasingly accelerated world has become far more perplexing.

While Kahneman grapples with why we make the financial decisions we do, others in the field have to contend with the how we have ended up with such a disconnect between the great wealth being generated and the decreasing list of options left to governments and their citizens.  If Canadians get accused of painting politicians or economists with too broad a brush, what else are citizens to do?  Somehow in the course of a generation, wealth is incrementally being lost to them and appearing in some of the most opulent places on earth and in the hands of an increasingly few elite individuals and financial firms.

As the New York Times recently noted, economists, including the academic kind, are in “generally ill repute”.  It’s not hard to understand why.  LIke politicians, economists argue effusively in venues in a manner that erodes the confidence of readers and watchers. 

But there’s a bigger reason.  Just like those in the political order who spout solutions to our economic malaise, economists, for all their models and research, haven’t as yet developed a successful formula for reconnecting wealth to people.  Noah Smith, in the Atlantic this week, cuts economists a bit of slack when he observes,

Economists don’t really have enough good data to understand how the economy works, either.  With chemistry or biology, you can put things in a lab and test them out with controlled experiments … But with macroeconomics – the study of the economy as a whole – you can’t put countries and entire economies in a lab.”

That perspective assists us in understanding the complexity economists face.  Yet this movement of wealth ever higher has been going on for at least two decades and we appear no closer to the solutions we require to make the creation of wealth “pedestrian” again, moving in and through our economies and citizenship in a way that elevates all society.  Sadly, political parties apply their particular ideologies to the aspect of economics that suits them – a practice which produces ever-greater disillusionment and surely doesn’t assist the economists creating progress in their respective fields.

Adding to the problem is the penchant of economists to become very good, “at pointing out each other’s logical errors,” to quote Noah Smith again.  He goes on to state that, “Like everyone else, they (economists) are liable to overstate their confidence and rely too much on their own unproven theories.”  Fair enough; we get it that economics is a tough and complex field.  Why, then, are policy makers making economic decisions by selecting out of all that soup models that opt almost exclusively for austerity or global financial deregulation?  If we actually aren’t sure of the best way forward, then it’s time we began pressing politicians and bureaucrats to start looking and experimenting with other options.

The underlying problem isn’t that there isn’t enough money; we hear repeatedly about how much is being acquired in the financial order.  The key issue is whether any society, especially those democratic in nature, has a right and responsibility to access generated wealth to benefit all of society, not just those who can capitalize on their profits? 

We are not in an impossible situation, no matter how much it feels like it.  Austerity is not the only option on the table, no matter how many experts tell us it is.  Yet these channels aren’t going to change unless we as citizens call for other options.

Economist John Kay is one who is respected in his field.  In a report he is about to deliver he says that the world is a “ticking time bomb” and that the fuse is already lit.  He observes, “A few good people are also trying to instill the banking profession with a better moral conscience.  But ultimately we’ll need to fundamentally re-envision our concept of a national and world economy.”  Let’s be one of those “few good people” until enough of us bring about some sober second thought about how we’re getting to where we’re headed.  If our economic laws aren’t firm, then the old “laws” of caring for others, providing for our families, the dignity of work, and planning for a better future still apply.  Let’s press for what we know before we start accepting blindly what we don’t know.

Bring On the Lunatics

limitationsToday we start a new series concerning the end of growth and how to learn to live with the new normal.  Really it’s about stasis – ancient Greek term meaning “to stand still”.  Most of us have been sensing this for some time as our communities, economy, citizenship, environmental sustainability and democracy appear mired in inadequacy in a fashion we haven’t seen in our lifetimes.  None of our present institutions has come forward with sufficient solutions to lift all of these dimensions from their doldrums.

It’s time we started telling the truth to one another, especially as it refers to how we plan our economies.  A raft of new books and studies have appeared in recent years that point to our ineffectiveness – the end of growth, a post-democratic era, days of decline, etc.  It’s not the first time the developed world has leveled off, or even declined in such a fashion, but our present predicament in unique in the sheer amount of wealth flowing around the globe.  Canada has never seen so much money moving through its financial sectors and yet a diminishing portion of it filters down to our communities and institutions.  The middle-class is increasingly squeezed every year.  Solutions to poverty now appear farther off than ever before and our country runs the risk of tolerating a permanent society of classes.  A rising number of fellow citizens are working far longer hours for less.  Also rising is the number of unemployed.  Governments are running out of funds at all levels and years of attrition appear to lie ahead.

I think we all sense this but remain reticent to speak honestly with one another lest by even introducing the subject we hasten our days of diminishing returns.  Worse still, our leaders at all levels don’t dare utter such warnings for fear it might undercut and undermine their own validation as elites.  Politicians, public officials, educators, media spokespersons, writers, artists, researchers, even advocates, fear to break with the conventional wisdom of unending growth because they lack any kind of robust solutions to our daunting challenges.  And so they carry on, tinkering around the edges of the status quo because to tell the truth would reveal their own ineptitude.

In their own way, citizens are no different.  Having increasingly dumped on institutions for the better part of two decades, they nevertheless show little inclination to pull themselves together in ways that compensate for the dysfunction of the political order.  At both ends of the democratic spectrum – governors and governed – the ability to speak truth to power has lost any salience because no one is really sure what the truth is anymore – we are only aware of the consequences of not possessing it.

The greatest danger of all is that, knowingly or unknowingly, we are in the process of slowly training our guns on one another.  As we hearken to our leaders telling us we have less and less financial resources with which to face the future, we begin to witness workers turn on the unemployed or unionized employees, citizens dealing more aggressively with their aboriginal people and vice-versa, the middle-class fighting the marginalized for fewer resources, politicians ignoring their citizens, voters disposing of their ballots, Canadian west and east duking it out, political parties seeking to obliterate rather than cooperate, and Canadians maintaining actions clearly hostile to the environment.

The devastating recession we recently endured supposedly ended almost two years ago and yet little is changing.  We know it and we witness the devastating effects on our fellow citizens unable to get ahead of the downward economic pull.

We are instructed repeatedly that we are in precarious times of transition but as long as we get the fundamentals right that we’ll be okay.  When is that going to happen?  This hasn’t been a two-year phenomenon but a decades-old financial and economic model that is leaving more and more on the margins.  And as long as we continue to accept such platitudes and assurances, we will participate in our own decline and disenfranchisement.

We are Western democracies.  That means we can control the levers of government to turn it in favour of the critical mass of citizens.  Well, we used to believe that anyway.  Now we’re informed that globalization has placed true and fundamental reform out of our reach as democracies – markets and their inexorable laws rule.  Then what’s the good of a democracy if we can’t truly alter our fate?

I just finished reading a lengthy book on the life of Theodore Roosevelt.  One of his observations has stayed with me: “Every reform movement has a lunatic fringe.”  If that’s the case, then bring on the lunacy because our perceived sanity is not longer effective or even real.  Lunacy is relative.  Diefenbaker felt Pearson was “crazy” for introducing a new flag.  Tommy Douglas was viewed as a Western Canada fanatic for his belief in healthcare.  Let’s have more crazy people just like them because we now live in days of confusion and decline and a little reform might just be the ticket.

But we’re not going to fight for that – at least not yet.  The time will come when economic oppression will cause us to clamour for change and vote accordingly.  But until that moment, let’s spend some time considering the new normal and what it means for us.

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