Jason Kenney has long been one of Stephen Harper’s trusted lieutenants and after yesterday’s cabinet reshuffle, he is now Minister of National Defence. In Harperland, this is a decisive promotion: from the “ugh, why are we still doing this?” of Employment and Social Development to the prestigious, patriotic defence portfolio. While the Conservatives promote an image of sound economic and fiscal management, it is clear that they will attempt to frame the upcoming election in large part in terms of security and terrorism — and Jason Kenney will now be instrumental in their fear-mongering campaign.
For Kenney this is a move to a more prestigious post, one likely to be even more visible as election campaigning heats up. Yet, Kenney is perhaps best known as a dedicated believer in small government — a belief that brought him the leadership of the Canadian Taxpayers Federation before he became an MP. Yesterday, in becoming Minister of National Defense, he has inherited a portfolio where more spending is encouraged by the Conservatives.
How to characterize the mainstream media reaction to the unfolding debt negotiations between Greece and Europe (not the financial press mind you, which knows what it’s about though sides largely with the creditors)? For those looking for the simplest angle, it is merely a stand-off without context: a horse race or Wild West shoot-out. Here, the problem is not so much a particular internalized economic doctrine, though that’s there too, but an additional utter lack of context.
A significant chunk of reporting, however, tries to give at least some context. Often, it starts with the “fundamental fact” of the debt: hark! there’s a huge pile of debt. Even this choice of starting point is already open to significant unacknowledged assumptions. One such natural assumption is “oh it’s probably the result of profligacy” or some variation on this theme. Debt is moralized from the outset rather than a search begun for potential structural causes. (Krugman is actually quite good on critiquing this.)
A second theme often almost immediately follows, “well, clearly belt-tightening is in order” — austerity is the natural remedy to the crisis. This is the household budget view of government finances that has little basis in economic theory, but is a central plank of excuses given for the politics of austerity: you’re in debt so save your way out, pinch pennies even if starts to cause immense suffering. The suffering is acknowledged but in similar terms as collateral damage is in so much mainstream war reporting.
Yet while the focus is often the sum of debt and how it can be repaid, both are in many ways meaningless if the debt is truly unsustainable. Greece, with the Troika and the other European states, is involved in an argument partly over symbols, albeit symbols with very real effects. If Greece is insolvent, then further repayment on harsh terms brought about via financial lifelines to enable this repayment is also disciplining device, one that conveniently also sends a message to other EU states. The tool is the austerity program, which produces real suffering, dislocation, enormous unemployment and massive shrinkage of the social sphere.
All this is too often left out. The amount of debt figures large in reports, the billions and debt/GDP ratios frightening and pushing the austerity narrative. Sometimes, the fact that 25 percent of Greeks are unemployed sneaks in, or 50 percent of youth. But how often is it mentioned that the Greek government needs to be able to redirect spending towards its social programme, which at a basic calculation provided by Syriza before the election actually amounts to a modest 11 billion Euros? Similarly, the question of how the state can even collect revenues to pay for anything — measures to end the tax strike by the oligarchs and clientelist state-business relations — is a side issue at best.
This interplay between media assumptions and reality was in rather full effect in the recent interview with Yanis Varoufakis on BBC Newsnight. Take the phrase “structural reforms” — clearly the presenter and the interviewee meant very different things but assumptions obscured this away. The other elements were there: the Wild West metaphor, surface level yes/no questions, the eschwing of ambiguity in favour of a horserace. Entertaining if demoralizing to watch:
[This is an extended version of a short commentary I was asked to provide for Al-Jazeera’s Listening Post on the mainstream media’s handling of the Greek debt talks.]
What would anti-austerity in Canada look like? There are really two types of questions here. There are those of analysis: what has Canada’s austerity looked like, what makes it distinctive and how does it appear in people’s everyday experience? The others are those of political strategy. These are questions that will have to wait for a social, political force ready to meaningfully take up the cause of anti-austerity. With none on the immediate horizon, I don’t intend to pontificate on what Syriza can teach Canada; best look first at what we can learn of our own situation.
When I interviewed him last week, Yanis Varousfakis, now the Finance Minister of Greece, laid out three very general planks of Syriza’s anti-austerity program. Of course, Greece is the unenviable victim of the cruelest austerity experiment in the North, but simplified to their most basic form the three planks articulated by Yanis have broad applicability. To paraphrase, they are
Over at Ricochet, I’ve transcribed my podcast interview with Yanis Varoufakis, economist and Syriza candidate in tomorrow’s Greek elections. With Syriza looking to get the most votes and possibly an outright parliamentary majority, I asked Yanis about the Greek economy, Syriza’s economic plans, his views on what these mean for Europe and how we can expect Greece to take its place in Europe come Monday. Here is the interview in full.
Michal Rozworski: I know this is an enormous topic but what is the current economic situation on the eve of the elections in Greece? Can you give a kind of snapshot?
Yanis Varoufakis: In brief, everyone owes to everyone, and no one can pay. The banks are bankrupt; they owe money to the state, to each other, to foreign banks. Citizens owe money to the banks and owe money to the state. The state owes money to everyone. So we have a triple insolvency: bankrupt banks, a bankrupt state and a bankrupt private sector. There are of course pockets, like everywhere, within society of people who are really well off. They have money in banks in Switzerland, in the city of London, on Wall Street, in Frankfurt, and even some money in the Greek banks.
But the overall situation is that — even though in the last year or so there’s been a small rebound, not in terms of income but in terms of expenditure — the economy is quite clearly still in a downward spiral that is filling everyone’s soul with negative expectations.
It’s interesting you mention that slight rebound. What I found interesting is that there seems to be a bit of a reversal of 2012. So, on the one hand, now some of the economic indicators have improved in minimum ways, if we can even use that word, but on the other hand, the population seems to be more immune to the fear-mongering on behalf of Greek and European elites against the left. What’s changed? What’s led to Syriza actually having a chance of gaining a majority in parliament?
Well, two things mainly. Firstly, Syriza has matured over the last two years; there is no doubt about that. So it has inspired more confidence in the electorate. Secondly, and perhaps even more significantly, now it is abundantly clear that the whole narrative of a “Greek-covery” — if you remember a year ago or so — was just utterly bogus. It was a piece of propaganda, a bubble that burst and Greeks are sick and tired.…
Look, I was in a taxi this morning. The taxi driver said to me — he recognized me as a candidate — “Look, Greeks fall into two categories. There are those who are really scared of losing what little they have left. The rest don’t give a damn; they just want to vote in a way that states it in a way for everyone outside of Greece to see that we’re not interested in this vicious cycle anymore.”
I’ve been visiting family in Poland for the past few weeks so, fittingly, this week’s podcast deals with the situation of the left at two opposite ends of the European periphery: Greece and Poland. My first guest is Yanis Varoufakis, professor of economics at the University of Athens and candidate for SYRIZA in this Sunday’s parliamentary elections. Syriza is the main Greek left party and is poised to take the most votes, potentially even form a parliamentary majority, on Sunday. Yanis spoke with me about Greece’s economy on the eve of the elections and Syriza’s economic program.
My second guest is Jakub Dymek, Polish academic, journalist and editor. Jakub is, among other things, the Polish correspondent for Dissent Magazine and a member of the editorial collective of Krytyka Polityczna (Political Critique), the major journal of Poland’s “New Left”. Unlike its Greek counterpart, Poland’s electoral left is currently at its lowest point since the post-Communist transition. I spoke with Jakub to get a sense of this electoral decline, the situation of left social movements and the future prospects of Poland’s left.
Very briefly, I say that Greece and Poland are at the opposite ends of the European periphery for two reasons. First, Greece has undergone years of recession and brutal austerity in response to the global crisis of 2007/8; Poland, on the other hand, has managed to grow through the crisis, at least according to the major economic measures. Greece and Poland are also opposed when it comes to the fortunes of the electoral left. It is in Greece that the left has may well take government this Sunday or at least become the largest force in parliament, whereas in Poland the electoral left is currently virtually non-existent. Looking at these two lefts and the political economic conditions that led to their different fortunes makes for a fruitful juxtaposition.
Just a quick note to say that I’m dealing with a death in my partner’s immediate family and will be posting far less frequently, if at all, for the immediate future. Unfortunately, this likely means I’ll miss a podcast or two. I’ll be back soon but right now need to put most of my time to other use.
So many of the debates on the contemporary left come back to the legacy of social democracy. The Swedish experience came closest to fulfilling social democratic ideals in the post-war era and so speaks to these debates in a unique way. Earlier this year, I talked to Petter Nilsson of Sweden’s Left Party about the legacy of social democracy in his country and its broader meaning. This was one of my favourite interviews of the year and one that stuck with me for a long time. I’ve transcribed it here for it to be shared more widely. It’s been edited for length and clarity.
Michal Rozworski: Sweden is still seen by many around the world as a model for the welfare state but it has changed dramatically over the past couple decades. Can you give a quick summary of what it means to look at Sweden, as you’ve put it, “without illusions”?
Petter Nilsson: There’s this joke on the Swedish left that everyone would want the Swedish model and the Swedes would want it perhaps more than anyone. What’s considered to be the Swedish model peaked in maybe the late 70s, early 80s and has since gone through quite the same developments as the rest of Europe with the neoliberal wave. Because Sweden started at a high level of wage compression and equality terms of gender, it is still very equal compared to other European countries. Yet, at the same time, we have the fastest growth in class differences within the OECD.
When the Social Democrats turned rightwards in 1986 or so, a lot of the developments that had taken place in other European countries came to Sweden in a few swift blows. In just a few years we had huge increases in class differences and this affected our universal welfare system. This system was always based on the high wage compression, which included the middle class in same welfare system as the rest. Its members felt that since the quality of welfare programs was so high, they were prepared to pay taxes to finance them. But as soon as financing for the welfare sector is cut, then quality drops and the middle class opts out for private solutions.
Here’s a piece I wrote for Ricochet after getting riled up by *some* of the arguments against Site C. The full piece is here.
As the movement against pipelines rapidly grows, more and more often you can hear the question, “We know what you’re against. What are you for?” The debate over the future of power generation in British Columbia offers some lessons for how to answer this question and not fall victim to a privatized green vision.
Tuesday the B.C. government decided to give the long-delayed Site C dam the green light. The dam would be the third on the Peace River in northeastern B.C. It will produce enough electricity to power nearly half a million homes (or one or two liquefied natural gas plants), flood around 50 square kilometres of land and cost almost $9 billion.
The decision has reinforced the polarized tenor of debate over Site C in B.C. On one side are local groups, First Nations, and environmentalists; the governing B.C. Liberals and business organizations stand opposite.
At first glance, Site C is what the left has been going on about for a while: major, green, public infrastructure. Not only does Site C fit this billing, but it could power further green initiatives like a mass electrification of transportation. It would also be very efficient: relatively little land would be flooded given the power generated, because the Peace River is already twice dammed.
Of course, the picture is not so simple. First, the proposed dam has not seen a transparent and independent review process; in fact, it has been exempted from the standard BC Utilities Commission review process. Second, the territory to be impacted is First Nations treaty land and hosts farming communities. Not only would construction of Site C inhibit farming, hunting, fishing and other uses of the land, but Canadian courts have recently confirmed the necessity of respecting and accommodating Aboriginal title. Finally, Site C has been so beloved by the Liberals and the business community because it could eventually supply cheap power to planned liquefied natural gas and mining industries — clean power for dirty industry.
Of these three, the liquefied natural gas industry looks to be on increasingly shaky ground. Critics point to concerns about what will be done with the power generated by Site C given much lower demand outlooks without LNG. Yet while mass electrification of transportation is not on the horizon, projects like Site C are built for decades. The major issue is lack of First Nations accommodation and due process. Without a transparent and democratic process, it is small wonder that the proposed dam has been a flashpoint of anger and protest.
Taking a wider view, Site C is emblematic of something much broader that has relevance across Canada: how do we support genuine green alternatives? This question is about much more than how we generate electricity; it’s about the narrowing of choices and a necessary response that reaffirms the public sphere.
I’ve been meaning to post something on a chart from a Fraser Institute report for a while but slept on it. The chart comes from Fraser’s annual Consumer Tax Report and is supposed to show the different paths taken by how much households pay in taxes and how much they spend on basic goods like food and housing.
In one way, this chart represents a good news story for the right. Capitalism is fulfilling one of its major promises: the cost of the basic goods is decreasing relative to household budgets – in the aggregate, which given an increasingly unequal distribution of income means that many budgets feel this very differently. Not only that, but the welfare state is slowly shrinking. Looking closely at the chart (showing the Fraser Institute’s version of the data), we see that the relative tax take is falling since about the turn of the millennium. Of course, the chart is riddled with errors (in short, the Fraser Institute either uses too many taxes or too little income in its measures) but better OECD data shows roughly the same trend, at least for taxes.
Ironically, while a story about lower spending on necessities could be a success story (capitalism works!), of course, that’s not the point of the exercise. Instead, the chart is intended to incite anger about taxes. The big caveat being to ignore the services these taxes actually pay for: the much-lower tax bill from 50 or 60 years ago is before universal healthcare, the Canada Pension Plan and other major elements of Canada’s welfare state. Yet in its ideological fervour, the Institute might be on the right track, because what the chart shows is in fact not just a success story but the changing nature of consumption. It illustrates how what economists once called the “subsistence wage” – where subsistence is not like a fixed number of calories, square feet and so on but culturally-relative and so varies according to time and place – has changed: most strikingly, what part of consumption is privately-provided and what part is socialized and provided by the state.
Today’s episode is the last of 2014 as I’ll be away spending the holidays with family. For a bit of a year-end summary of Canada’s economy, my one guest is Jim Stanford who joins me for an extended conversation. Jim is the chief economist at Unifor, Canada’s largest private-sector union, and author of the popular economics book Economics for Everyone. Our chat touches on everything from the consequences of the falling oil price to the new batch of free trade agreements to Canada ‘s economic standing stands six years out from the global meltdown all the way to popular economic education and its lessons for today. My conversation with Jim Stanford.
