Why Are There Any Other Issues?

With the resumption of the Mike Duffy trial this week, Canadians are being deluged with behind the scenes information from the Prime Minister’s Office as they tried to manage the growing Senate scandal through various means. From the evidence presented, it looks like several senior staff members in the PMO had a hand in trying to keep things under wraps, whitewashing a Senate report on the matter, and even meeting with auditors from Deloitte in order to influence the findings of their investigation of Duffy’s expense reports and Nigel Wright’s infamous $90,000 cheque, or bribe, depending on how charitable you happen to feel. Since Mr. Duffy is currently being tried for Bribery among the many other charges against him, it seems like “bribe” would be the correct term to use as far as the Crown and RCMP are concerned, though it does seem odd that only the person on the receiving end of the alleged bribe is facing criminal charges.

The official story we’re being given is that Mr. Harper had no idea any of this was going on, and that several members of his senior staff, including his then chief of staff Mr. Wright, were only keeping him informed of the situation in the “broad strokes”, with no details whatsoever about the payoff or subsequent cover-up and attempts to keep the matter from being referred to the RCMP. If we take this version of events at face value and accept the notion that Mr. Harper honestly had no knowledge of the payoff or subsequent cover-up, does that actually make things better or worse?

Have Canadians really got such short memories that we’ve all forgotten the Liberals’ Sponsorship Scandal from 10 years ago that more or less brought down Paul Martin’s government and cast Jean Chretien as a crook? (I mean, there were plenty of things going into that image, but this was a big one.) Back then, the Gormery Commission came to the conclusion that while Chretien initiated the sponsorship program, and his PMO was heavily involved in the mishandling of funds in that affair, he was not personally guilty of any wrong-doing. As well, while Mr. Martin was Finance Minister and senior member from Quebec under Mr. Chretien, and was responsible for creating the framework under which Chretien’s PMO inappropriately dispersed funds, again the Gormery Commission found no evidence Mr. Martin had a direct hand in any wrong-doing. Thing is, when all of this was coming out, I don’t remember a whole lot of Canadians accepting the idea that Chretien and Martin were the innocent angels they presented themselves as, and the whole affair played a large part in Mr. Martin’s defeat at the polls in 2006. The choice I remember being presented with as I went to the polls was that either Mr. Martin was complicit or incompetent, neither one a ringing endorsement of his job as PM.

Now it seems like history is repeating itself with another PMO deeply involved in scandalous and even illegal activity, another Prime Minister making claims to “plausible deniability”, and another chance for Canadians to give some serious thought to the ever-expanding powers of the PMO. Going back to the question of whether the idea of Mr. Harper not knowing about a fairly involved criminal conspiracy to bribe a sitting Senator and to cover up said bribe makes things better or worse, what does the party line on this matter really say if we take a good hard look at it?

Sticking with the charitable side of things, we can take Mr. Harper’s word at face value and accept the idea that he really had no idea his Chief of Staff and a number of other senior members of the PMO and Conservative Party of Canada were working out a scheme to bribe a Senator, cover it up, attempt to pressure Senate officials into keeping a lid on it, and meeting for weeks with auditors from Deloitte with a view to influencing the results of their investigation of the Duffy matter. What does it say about Mr. Harper if we accept this claim that he was completely in the dark about several senior members of his staff and the CPC taking part in a conspiracy and trying to keep it away from RCMP investigation? If he can’t even manage his own office or party, what does that say about his ability to oversee the federal government? How many other shady deals could be going on right under his nose without him ever sniffing them out? How much corruption could potentially be working its way through the Conservative Party entirely out of Mr. Harper’s control if he can’t even spot some pretty serious wrong-doing going on in his own office? Is he fit to lead anything if he’s that oblivious to people blatantly abusing the considerable powers of his office for that long? Even when things started coming to light, the only person to leave the PMO was Mr. Wright (won’t even try to speculate on whether he quit or was asked to resign), while other key members of the behind-the-scenes dealings were promoted, including the PMO’s current chief of staff, Ray Novak.

The picture coming out of the email exchanges between Wright, Novak, and others is not a flattering one for the PMO at all. Bribing a senator is just the tip of the iceberg, it seems that officials from the PMO were wielding enormous power, even over the Senate, and completely unchecked by the Prime Minister if we’re to believe his official version of events. Senior officials in the CPC knew in advance about Duffy’s inappropriate expense claims, and were initially prepared to put up $30,000 to cover them until they found out the full amount and refused to pay it. Again, we’re being asked to accept that all of this happened without the leader of the party knowing anything whatsoever about it, aside from what we’re told are “broad terms” about Duffy paying back inappropriately claimed expenses. If the CPC and PMO really were keeping the PM in the dark to this extent, and for this long, doesn’t that say something really unflattering about how out of the loop Mr. Harper was with regard to his own party and office?

It seems that Canadian voters have to make a decision on this matter about what they believe, either that Mr. Harper was completely out of the loop in what appears to be an extensive conspiracy within the PMO and among senior leadership in the CPC. or he’s just lying to Canadians about his knowledge and involvement in the matter in order to hold on to power, and has talked people into committing perjury in order to cover for him.

Is either option really a strong recommendation for someone to continue to hold the highest office in the country? Maybe he’s not Machiavelli, but is Mr. Magoo really a better choice for Prime Minister?


Why are Conservatives so Bad at the One Thing They Say They’re the Best At?

Over the last four decades, there’s been a growing trend among conservative parties in Western democracies toward ever increasing radicalization and a drive toward an almost fanatical ideological purity. We’re seeing this play out almost farcically in the current Republican primary process, and up here in Canada, we’ve seen it on a smaller scale in the way the “red tories” have become all but extinct in the Conservative Party. This drive to ideological purity is strange on its own, but what I’d like to talk about is the way one particular article of faith among conservatives in general has been working out in the world’s economies.

The article of faith is that the best people to run a country’s economy are the people who are the best at running companies; basically, that being personally wealthy means you will be the best person for the job of managing and growing a healthy economy. On the surface, this seems like a reasonable assumption to make; being successful at making money seems like a pretty good bona fide for the position of finance minister, at least on paper. However, following this particular article of faith and taking the advice of the wealthiest people in our society when they tell us the best thing for everybody is to slash top tax rates, deregulate markets and financial institutions, and constantly push the idea of global free trade, has not led to the results we’ve been promised. Not only has this country been hemorrhaging manufacturing jobs constantly since our biggest companies shipped production overseas to countries with much lower wages and little or no protections for workers, but the jobs we’ve been getting back in return haven’t been the high-paying, high-skill jobs we were promised would flow out of the free trade agreements we were locked into, rather they have been mostly in retail and service industries.

While on paper the unemployment numbers don’t look like a total catastrophe, when you dig past the question of simply how many people are working and ask what jobs they’re working at compared to the job market of 20-30 years ago, the conservative plan doesn’t seem to be working out all that well for anyone earning a wage in this part of the world. While the stock market has been hitting all kinds of record highs and big corporations have been taking in record profits, not a lot of people on the ground are seeing record-setting pay raises, or any at all for that matter, while household debt is the only record high most middle class families are setting these days.

So why is this happening? What’s the fatal flaw with the idea that rich people know best how to manage a country’s finances? To put it in philosophical terms, the problem is that conservatives are making what is known as a category error; they believe that companies’ accounts and countries’ economies run on roughly the same principles, when the reality is that they are two very different things indeed. While the purpose of a company is to make money through increasing efficiencies where it can, cutting costs wherever possible, and taking a pretty hard-nosed approach to the world in general, the purpose of an economy has a completely separate focus. Where a company is focused on maximizing profits for stockholders, a country’s economy has to be concerned with maximizing the returns for all stakeholders, not just the managers and owners, and not just in terms that can be written down on a balance sheet.

A company’s executives are responsible to its board and shareholders, it is concerned with its own supply chain, its own productivity, its own profitability, and anything not on a balance sheet is considered an externality. In the context of running a business, this is a perfectly sound way to run things, it’s how businesses succeed in their world. The problem is, the kind of person who excels in the world of business is uniquely unsuited for the world of macroeconomics on the scale of a national economy precisely because of the kind of mindset it takes to do really well in the world of microeconomics. Yes, Donald Trump can make a hell of a property deal, but would you really want him being the guy . . . god, doing anything, ever?

The people in charge of a national economy have to be concerned with not just maximizing profits, but with seeing to it that society as a whole is served in a way that meets the needs of people living in it. Efficiency does matter, but is not of primary concern if a particular inefficiency means a net gain is made overall in the well-being of the general population. The job of government is not to see to it that widgets are made in the most cost-effective manner possible, it is to facilitate the overall flourishing of society in the nation they serve. That means being a patron of the arts, providing funding for massive infrastructure projects that do not turn a direct profit, but enable people to do more as a society. Governments are not supposed to turn a profit, they’re supposed to help people build happier, more secure lives. When people are staring down the barrel of crippling debts and stagnating wages, what kind of happiness and security is our government building for us?

Taking a totally optimistic view of the type of person advocating this conservative article of faith, they may sincerely believe that in just the way they would pay their employees more and hire more people if their profits were to go up, so would everyone who benefitted from a huge cut in their taxes, kicking off a virtuous circle of profit and wealth sharing, but the problem is that this just doesn’t track in the broader scope. It very well might be the case that if we gave Joe Factory Owner a break on his taxes, he’d be able to afford more staff at higher wages, but it could just as easily be the case that he happily pockets all of those tax savings and either tucks them away in his mattress or spends it on an extra week’s vacation, benefiting nobody but his investment broker and some bartenders in Cancun. Or it could even be the case that the increased profits to his company just can’t translate to any extra jobs because his factory is already making all the widgets the market needs right now, so extra workers would lead to wasted overproduction. He might want to hire more people, but the fact is it would be an act of charity on his part, not sound business management.

The virtuous circle fails to come together because reality and ideology don’t match up, and we’ve seen the results of this disconnect in this country in the way Conservative governments have consistently racked up our largest public debts and strung together records of deficit spending, even turning private business losses into public liability in the form of corporate bail-outs in the wake of the 2008 financial meltdown.

What’s going on is analogous to someone who is an excellent driver with a spotless record believing that’s all the credentials he needs to become a successful city planner. You might be the best driver in the world, but that doesn’t mean you know anything whatsoever about how best to lay out an infrastructure system that best facilitates people getting from one place to another. For that matter, the best city planner in the world might not even have a driver’s license at all, because physically getting in a car and driving around town has that little to do with the job of city planning. Thinking someone can manage an economy because they can manage a company is the same kind of category error as thinking the best driver is going to know the best way to lay out a new subdivision, and the traffic jam our economy has become is the result.