By Mike Archer. The conservative revival and take over of western governments, which began in the 1980’s and came to a cataclysmic end with the economic collapse of 2008, is endangering attempts to move beyond the wider societal collapse it caused as misguided political leaders do everything they can to cling to power despite the clear and unmistakable evidence of the bankruptcy of their ideological underpinnings.
From its beginnings conservatism was an ideology dedicated to opposing new ideas.
The economic conservatism of Thatcher, Reagan, Friedman, and Greenspan lead directly and inevitably to the economic collapse of 2008. The countries whose domestic economies have escaped relatively unscathed from the 2008 collapse have all been liberal democracies which rejected the worst of the conservative those economic theories of and continued investing in healthcare, education, and the social welfare of their populations.
Even as famous a hero of conservatives as Henry Ford understood that if he paid his workers enough they would buy his cars. That sort of common sense gets wiped up when ideology becomes belief.
On a more practical level, the removal of oversight and controls on the banking system through deregulation, a central tenet of modern conservatism, allowed bankers to create a mountain of phony, non-existent and purely fictional money/debt which caused the entire international banking system to fail wiping out trillions of dollars in assets which ordinary people thought they had.
The effects are not only still being felt today but many experts say they will be with us for generations.
Canada’s far right wing fanatics, under the leadership of Stephen Harper, had begun the process of removing the controls on our banks which saved us from the worst of the 2008 collapse just prior to the collapse itself.
Then, like a frightened child, Harper abandoned all of his economic beliefs and spent government money on every liberal idea he could find.
From rewarding failure in the auto industry to bailing out banks to building unnecessary bridges and roads – all of them ideas he would have riled against if he was in opposition – Harper spent as recklessly as he possibly could, abandoning every conservative ideological principle he ever espoused.
“The world has not yet begun to deleverage its crisis-linked borrowing. Global debt-to-GDP is breaking new highs in ways that hinder recovery in mature economies and threaten new crisis in emerging nations – especially China. The latest Geneva Report on the World Economy argues that the policy path to less volatile debt dynamics is a narrow one, and it is already clear that developed economies must expect prolonged low growth or another crisis along the way.” – Luigi Buttiglione, Philip Lane, Lucrezia Reichlin, Vincent Reinhart 29 September 2014, Geneva Report
Perhaps it was in order to appear to be doing something, anything, to protect us from a crisis which, thanks to years of careful and studious savings and economic restructuring by successive Liberal governments, did not affect us. He single-handedly spent us from surplus back into deficit with nothing to show for it other than a landscape filled with taxpayer-funded billboards advertising his ‘Economic Action Plan.’
For, other than the fact we could no longer sell our manufactured goods to economies like the US or the European Union (EU), and thanks to the regulations Harper wanted to get rid of, like most of the liberal democracies we were spared the worst of immediate results of the collapse.
What has happened since?
Due to dramatically increasing food prices and devastating droughts, food has become a luxury which is out of reach of an increasing number of people around the world. As a direct result, failed states and collapsed countries which have devolved into anarchy have set the Middle East on fire.
Due to the failed policies of conservative thinkers, and their continued presence in the halls of power in most of the leading western economies, the conservative antidote to the economic crisis – austerity and reduction in government spending – has made things worse.
The countries which were fooled by European and American banks into increasing their debts and moving them off their books in order to qualify for membership in the European Union, have been forced, by those same banks and the EU, to adopt drastic austerity measures which are killing their economies in order to protect the phony debt of the European and US banks which caused the crisis in the first place.
The Scottish drive for independence and the Catalan push for a referendum on independence are examples of a reaction to the dismantling of the welfare state which conservatives hate so much.
In an important New York Times book review, economic journalist Martin Wolf’s book, ‘The Shifts and the Shocks,’ is plumbed for some sort of evidence of a plan to deal with the growing threat of another economic collapse followed by, what he sees as an inevitable series of further collapses.
“Unless we start implementing extreme measures today, we will be running headlong into catastrophe,” argues Wolf.
Wolf calls for central bankers to abandon their almost religious fervour for fighting inflation and, among other proposals, suggests they allow inflation to rise to healthier and more normal historical levels of three to four percent.
Ironically, such advice is certain to fall on deaf ears in Canada, where Harper is determined to get re-elected in 2015. The typical short term effects of allowing inflation to rise to three or four percent – an increase in interest rates – would risk Harper’s re-election chances by increasing the number of average Canadians who lose their homes, slide into bankruptcy and stop spending money.
With food price increases now hitting the pocketbooks of average families in Canada, Harper would be likely view following Wolf’s advice as political suicide. We are therefore, I would argue, unlikely to see any of Wolf’s prescient views adopted here.
Wolf argues that the 2008 crisis, “was no ordinary economic event”: “To pretend that one can return to the intellectual and policy-making status quo ante is profoundly mistaken.”
“On the sixth anniversary of the S&P 500’s biggest one-day drop in history – a 106-point plunge on Sept. 29, 2008, that marked the beginning of one of the worst market collapses of all time – the respected annual Geneva Report on the World Economy is raising concerns about a “poisonous combination” of record and still-rising global debts and chronically slow growth. It warned that this leaves the world exposed to a heightened risk of further economic stagnation and even another potential financial crisis.” – David Parkinson, Globe and Mail.
In the face of the worldwide failure of economic conservatism we have witnessed, in Canada, a revival of a Alberta’s social conservatism.
The Canadian Supreme Court has struck down Harper’s most egregious attempts at reshaping Canadian society as illegal and unconstitutional but he shows no inclination of being prepared to follow either academic research, legal advice or the constitution in his drive to convert Ontario and Quebec over to the warped American school of thought which has emanated from the University of Calgary since Tom Flanagan was brought in to defend American interests in the oil patch.
Unfortunately it seems that the pseudo-Machiavellian political strategy emanating from the Fraser Valley transplants in the Prime Minister’s Office (PMO) – the boys in short pants who run Parliament for Harper – will trump any open-minded, fact-based, economic theory in Ottawa for the next 15 months and we are likely to continue to suffer the economic consequences on the alter of the political ambitions of another in a long line of right-wing ideologues from Alberta.
After six full months of steady increases, Canada’s gross domestic product growth was flat in July, Statistics Canada announced.
Douglas Porter, chief economist and managing director for BMO, called this a “clear disappointment” and that Canada’s economy “stubbed its toe,” saying the consensus was that an increase of 0.2% was expected. – Emma Crawford, Business in Vancouver.
Ultimately, for a true political ideologue like Harper, it is political power which justifies and explains every failure of the ideology or deviation from its truths. Pragmatism which increases or retains personal power is much more seductive to a guy like Harper than the pragmatism which would lead to good public policy.
Its a shame because he has shown a tremendous willingness to abandon ideology when it suits him. He just seems unable to align his personal interests with the majority of those in the country.