Author: Michal Rozworski

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Austerity Canada Welfare state

This election, let’s really talk about the economy

The word ‘austerity’ is finally in the mix, but all parties stuck in the right-wing’s frame

Austerity is on the agenda of the Canadian election, as the word was finally uttered — by Justin Trudeau. Bizarrely, this came the same day as the Liberal leader rolled out his economic agenda flanked by Paul Martin, the former finance minister and prime minister who engineered deep austerity measures in the 1990s.

The way austerity has finally made it into the discussion highlights the absurdly limited nature of the economic debate so far. It’s time for a grown-up conversation about the economy in this campaign.

Right-wing frame

Politicians have been falling over each other to make economic promises they cannot keep, all the while firmly stuck in the muck of a right-wing frame. The debate has mostly been limited to whether there will be a deficit and how big, rather than the real questions of who the economy works for and why.

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Canada Minimum wage Workers

The case for a $15 minimum wage the NDP should make

Of all of the NDP’s campaign promises so far, one of the simplest has gotten the most press: the $15 minimum wage for workers in federally regulated sectors. This campaign plank should be an easy sell for the NDP, yet Conservative and Liberal attacks have managed to undermine it. The way it’s been presented has left it open to attack, but this needn’t be so.

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Political Eh-conomy Radio UK USA Welfare state

The challenge of Sanders and Corbyn to the extreme centre

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Over the past year, unlikely challengers have emerged to the dominant politics of the center-left in both the US and the UK. Jeremy Corbyn is looking increasingly poised to win the leadership of the UK Labour Party next month. Meanwhile, on this side of the Atlantic, Bernie Sanders keeps rising in the polls, drawing large crowds and making Hillary Clinton’s coronation as Democratic presidential candidate a bit uncertain. Both Sanders and Corbyn are silver-haired, decades-long parliamentarians identified with a marginalized left and would have been at home in pre-1970s social democracy. After years of rightward drift from both Labour and the Democrats towards the “extreme centre”, social democracy is making one more stand. Both Sanders and Corbyn have set their sights on economic inequality and economic stagnation for the majority as defining issues. Sanders, in particular, has also made talked widely about reclaiming the political system from under the influence of big money.

This week’s guests joined me to talk about what the Sanders and Corbyn campaigns: where they’re coming from, what they mean and what we an expect from them. First, I speak with Bhaskar Sunkara about Bernie Sanders and his qualified support for Bernie’s campaign. Bhaskar is the editor of the excellent Jacobin Magazine from the New York, which has quickly become an important venue on the US left. My second guest is James Meadway, an economist and activist from the UK. James recently signed a letter in support of Corbyn and has been following his campaign closely.

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Canada Housing

Harper’s hopeless housing promises

Over the past ten days, Stephen Harper has introduced three new housing policy promises. However, they won’t help the crisis of affordability. The pattern is familiar: make things worse and prepare to blame others.

  1. First, there’s the promise to allow first-time home buyers with RRSPs to take an extra $10,000 out of their retirement savings for a down-payment. This will likely have only a small effect, but whatever effect it does have will further heat up the housing market by increasing demand here and there. This makes the housing crisis worse. (Bonus negative effect: it eats into retirement savings.)
  2. Second, Harper promised to bring back a home renovation tax credit: people who own homes and spend $1000 to $5000 on renovations will be eligible to get 15% back at tax time. Again this isn’t much (and it’s poor tax policy too), but ultimately it helps drive up property values. This too makes the housing crisis worse.
  3. Finally, Harper says he would gather data on foreign real estate buyers. While there is certainly lots of capital sloshing around the world and some of it is landing in places like Vancouver and Toronto housing, it’s unclear how much of our bubble is due to foreign money and how much of these fears are a xenophobic blame-game. Data will be good, but given how Harper has been blaming all of Canada’s economic woes on external factors, this looks more like an exercise in something similar.

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It’s certain that we are in the midst of a housing unaffordability crisis—that much Harper gets right. His proposed solutions, however, continue in the pattern of the past few decades, a pattern that has created bubbling housing markets that have left many shut out and scrambling.

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Canada Extraction Ideology

Linda McQuaig is right, but there’s more to it

Since her common-sense quip that most of Canada’s tar sands reserves will have to stay in the ground, Linda McQuaig has been vilified by much of the political establishment and (rightfully) defended by a minority of voices in the media. That the facts of climate science vindicate her has made little difference to the debate. Is this because McQuaig’s comments have inadvertently scratched at a nerve that goes far deeper?

In what would be a world very different from our own, we can imagine a fairly straight line going something like this

Climate science → Climate regulations → Fiscal policy → Just transition

First, climate scientists tell us that 85% of tar sands reserves (given how high-cost they are) will most likely have to be left in the ground if globally we are to limit warming to two degrees. In response, the Canadian federal and provincial governments slowly stop subsidizing oil development, stop funding oil-related infrastructure and prepare for industry phase out (by for example, increasing royalties as extraction nears a limit). Next comes a big push for developing green projects, whether funded through direct spending or incentives. As the oil jobs and industries wither, new green jobs, new green industries and compensating income transfers take their place. Voila: just transition level unlocked!

Have a laugh first, then ask, where is the major stumbling block between this make-believe world and our own? For now politicians are acting and being berated for differing at the first step: brushing off the problem and effectively denying the climate science. Yet beyond Petroleum Correctness is a set of increasingly onerous political and economic constraints.

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Media Political Eh-conomy Radio Workers

A labor journalism resurgence?

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As unions and workers suffered defeats over the past few decades, so has labor journalism dwindled from a mainstay of major media outlets across Canada and the US to a relatively niche reporting interest. The past few years, however, have seen a still small but noticeable resurgence of labor reporting. Large media outlets, both print and online, have once again started to hire journalists looking at workers’ issues and reporting from the perspective of workers. At the same time, independent media have continued to do the same and some have gained in readership and size. The staff at some new media outlets, most recently Gawker and Salon, have even unionized themselves. This week’s podcast looks at the state of labor journalism, trying to get a sense of the current rekindling.

It’s a big podcast, too, with four guests. First up, I talk to Sarah Jaffe, prolific freelancer who covers labor issues from a grassroots perspective. Sarah writes for The Nation, the Guardian, In These Times and many other venues; she is also co-host, with Michelle Chen, of the excellent Belaboured podcast. Next, I speak with Lydia de Pillis, labor reporter at the Washington Post, one of the crop of reporters rebooting the labor beat at major media. My third guest from the US is Mike Elk, labor reporter for the online magazine Politico. Mike is a former organizer and has long roots in the labor movement. My final conversation is with Sam Ponting, one of the editors of RankAndFile.ca, Canada’s new independent source for labor news and commentary. Sam provides some perspective on the situation of labor media in Canada and how worker-focused media can make a difference in labour campaigns.

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Categories
Austerity Canada

Where is Canada’s mild Keynesian alternative?

You know something is up when the social democrats are trailing the centrist pundits on the economy. The space for a just a mild Keynesian alternative in Canada is wide open. Such an alternative, however, needs a political rather than merely a technocratic push.

Here is a fragment of a piece that just appeared in Canadian Business magazine and is typical of recent centrist commentary:

No one would counsel a return to unchecked spending. But the magical thinking around balanced budgets should stop. Canada’s debt is a sunk cost, not an anchor. The IMF now advises that countries with enough fiscal room to manoeuvre should think twice about reducing debt for the sake of it. If debt is manageable, economic growth should be the priority. An expanding economy will reduce the debt burden organically.

After establishing centrist credentials via the bogeyman of “unchecked spending”, the author quickly offers an argument to the left of all three major political parties, including the NDP. Debt reduction for its own sake is contrasted with restarting economic growth and there’s even an appearance of the now-common progressive appeal to the IMF as the voice of technocratic reason.

The left counterpart to this centrist line is the “Varoufakiste” argument of trying “to save capitalism from itself…to minimise the unnecessary human toll from crisis.” This argument concedes that today even the meager gains from growth that would go to the many are better than redistributive austerity that encourages stagnation amidst the “creative destruction” of social protections. It is a modest Keynesianism fit for neoliberal times.

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Austerity Crisis Greece

“Can ‘people over profits’ become a reality in Greece?”

This is the full transcript of my podcast interview with John Milios; it appeared earlier this week in Jacobin. John is a prominent figure within Syriza; he was the party’s chief economic advisor until earlier this year and is also a member of the party’s central committee, one of the 109 who signed a letter last week opposing the new memorandum.

Here, he discusses Greek Prime Minister Alexis Tsipras’s decision to hold the July 5 referendum, the anti-austerity course not taken by Syriza, and how the slogan “people over profits” can become a concrete reality in Greece.

Michal Rozworski: What is the situation one week after the memorandum was agreed to and two weeks after the referendum?

John Milios: When the referendum was proclaimed, we saw an election campaign that had class and social characteristics. There were two “Greeces” fighting each other. On one side, you had roughly the poor, wage-earners, the unemployed, and the small entrepreneurs, while on the other you had the capitalists, the managerial class, the higher ranks of the state, and so on agitating for Yes.

Ultimately, a broad coalition of the social majority saw the referendum as a chance to express their commitment not to continue with austerity and neoliberalism. All this happened in a situation of fear and terror arising due to the European Central Bank’s choice to not extend Emergency Liquidity Assistance (ELA) to the Greek banks. A lot of people saw this as a scare tactic and started withdrawing money. Ultimately, it led to a bank holiday.

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Austerity Greece Political Eh-conomy Radio

Syriza’s John Milios on continuing the fight against austerity

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Greece continues to be in flux. Two weeks ago, the Greek people voted over 60% No in a referendum on further austerity. One week ago, the Greek government agreed to a new Memorandum in principle after an all-night negotiation, described at times as “mental water-boarding”. Finally, last Wednesday, the first pieces of enabling legislation were passed by the Greek Parliament with a large rebellion of Syriza MPs voting against the laws.

Since then debate has raged in and outside Greece about the future of the Eurozone, the political strategy chosen by the Syriza leadership and the future of this first government of the left in post-crisis Europe. This interview with John Milios is an important intervention into this debate.

John Milios is a long-time activist and prominent figure within Syriza. Until early this year, he was the party’s chief economic advisor. He is also a member of Syriza’s central committee and was one of the 109 out of 201 members of the central committee who signed a letter published last week opposing the new Memorandum. He is a professor of political economy and the history of economic thought at the National Technical University of Athens.

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Categories
Canada Government

Canada’s new recession and the push for alternatives

The Bank of Canada today cut its benchmark interest rate today to nearly record lows, now just 0.5%. In the face of an oil shock and other weakness, monetary policy is expected to do the heavy lifting of beating an economic funk. Today’s move reflects a poverty of economic policy from the ruling Conservatives and much of the political class.

Harper has been adamant that Canada’s downturn—now very likely a recession, about which his own Finance Minister  remains in denial—is the result of global forces. There’s nothing that can be done to counteract a host of external problems but to button down. The best a government can hope for is to maintain a fabled fiscal discipline.

However, there’s a disjoint between saying that policy couldn’t have been used to avert downturns like this one and screaming bloody murder anytime someone raises the prospect of even mildly activist, redistributive, old-school social democratic economic policy. If current policy is that ineffective, then perhaps it’s high time to try something else? “There’s nothing we could have done” is just a fatalistic cover for political choices.

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