McDonald’s in Milan, Italy, Spring 2012.

Two articles I stumbled across this morning, ostensibly on the Spanish banking bailout, have brought two other articles from the somewhat more distant past into mind.

The first (in the first group) is “Europe’s Fail-Out: 4 Reasons Why Spain’s Bailout Is Doomed Already,” from the Business section of the Atlantic website. The second is “Fitch downgrades 18 Spanish banks, bond yield hits euro-era high,” from the Toronto Star.

In the Atlantic article Matthew O’Brien looks at the very rapidly fizzling bond and other market reactions to the Spanish banking bailout, initially more buoyantly viewed by both markets and the likes of the Governor of the Bank of Canada.

At the entrance of Notre Dame de la Garde, Marseille, France, Spring 2012.

Mr. O’Brien asks: “Why did markets turn so quickly from gloom to doom?” And he gives his own (and many others’) “short answer: Investors are worried the Spanish bank bailout might make things worse … The devil is in the details, and the Europeans have been embarrassingly short on those.”

This may be the latest received wisdom in the international financial community, that the rest of us are supposed to accept without question. But financial markets have played a modest role in my own financial survival over the past 40-odd years. And I wonder.

Then I look up the two other articles from the somewhat more distant past, that have suddenly come back into mind. The first is an item from Business Week more than 17 years ago, on the California “value investor” Charles H. Brandes. He has very influentially (in my book at least) explained that: “The markets are very inefficient and manic-depressive. And wrong a lot.”

Brandes is far from the only observer of  “manic-depressive” markets. Just over a month ago the Traders Day Trading website posted : “Elliott Wave International: The Manic-Depressive Stock Market … The Efficient Market Hypothesis (EMH) and its variants in academic financial modeling … rely at least implicitly but usually quite explicitly upon the bedrock ideas of exogenous cause and rational reaction. Stunningly … no evidence supports these premises …”

Ancient tree in city park, Valencia, Spain, Spring 2012.

Stunningly indeed. Ie, don’t believe everything you read in the newspapers, or even in your broker’s newsletter, etc, etc. And do not base your personal strategies for mental health on anything you might observe in the behaviour of the manic-depressive markets.

Thinking only a little more deeply about these propositions raises yet another recent posting on the Atlantic website. Here the Harvard political philosopher Michael J. Sandel argues that, over the past several decades, in many parts of what used to be called the Western World, “without quite realizing it—without ever deciding to do so—we drifted from having a market economy to being a market society …”

Prof. Sandel goes on: “The difference is this: A market economy is a tool—a valuable and effective tool—for organizing productive activity. A market society is a way of life in which market values seep into every aspect of human endeavor. It’s a place where social relations are made over in the image of the market … The great missing debate in contemporary politics is about the role and reach of markets. Do we want a market economy, or a market society?”

The free and democratic society in Canada and Quebec … Rick Salutin, Michael Sandel, Frank Cunningham, and Karl Polanyi

25th of April Bridge in Lisbon, Portugal, Spring 2012.

I do not have any trouble answering this question myself. In my country (Canada), the Constitution Act 1982  clearly (albeit somewhat indirectly: it is Canada after all) prescribes “a free and democratic society.”

I do think that, as Prof. Sandel suggests, a “market economy is …  a valuable and effective tool … for organizing productive activity” in a free and democratic society. Yet as far as I’m concerned a free and democratic society writ large is certainly not “a place where social relations are made over in the image of the market.”

One reason we do not want to inadvertently fall into a market society, eg, is that the markets we have in the market economy are already so manic-depressive. To ask the same frantic nervous energy that guides the manic-depressive markets to guide all our society would invite even more social confusion and instability than we already have.

This brings to mind another recent Canadian newspaper article, from the Toronto Star — “Canadians owe a debt to Quebec’s student strikers,” by Rick Salutin.

Tourists in Vigo, Spain, in the region of Galicia, Spring 2012.

Here I should preface my ultimate thoughts by acknowledging that some of my best friends — outside Quebec where I live — feel that the Quebec students, who are protesting quite modest hikes in the lowest university tuition fees in Canada (where university tuition is already considerably lower than in the neighbouring USA), are altogether beyond belief.

I have a hard time myself, reconciling the extent and passion of the Quebec student protests with  a prospective few hundred dollar increase in the lowest university tuition fees in the country. I have read about how Quebec is more plugged into Western Europe, where the comparative picture is different. And there does seem some degree in which the Quebec student protests have sometimes been hijacked by other demonstrators with broader agendas. But these explanations still don’t cover the waterfront for me.

If what Rick Salutin says the Quebec students are up to is even half true, on the other hand, they are making more sense.  As he puts it: “We owe them for taking a shot at saving our national honour in the eyes of the world. We’ve lost brownie points on the environment, our even-handedness in areas like the Mideast, our commitment to peacekeeping — but their campaign for equal, publicly funded access to higher education hits a note closer to that other, previous Canada. I should add I don’t begrudge the Harper government its shifts; it’s what they said they’d do. But they don’t reflect the attitudes still held by more than 60 per cent of the population — at least according to how they vote … We owe them [the Quebec students] for striking a blow on behalf of public discourse. I’m thinking here of the term entitlements, which has replaced rights in the discussion. When did health, housing, a dignified retirement, etc., stop being human rights and turn into shabby, whiny entitlements? It didn’t just happen. There’s a linguistic war on, and it isn’t French versus English; it’s over politically loaded terms.”

Canada Court on Guernsey — one home to Canadian banks in the Channel Islands, Spring 2012.

These are also examples of what it means, it seems to me, to talk about not letting the valuable market economy push us all the way into a much less valuable market society. And here again Prof. Sandel is not the only who one has been trying to ring these bells in the more recent past. Consider, eg, these comments from one Frank Cunningham, some seven years ago, in an article on “Market Economies and Market Societies … This topic is often framed in language first employed by Karl Polanyi. He described a progression in the development of market mechanisms from the Industrial Revolution: ‘This institutional gadget, which became the dominant force in the economy—now justly described as a market economy—then gave rise to yet another, even more extreme development, namely as a whole society embedded in the mechanism of its own economy—a market society.’1 … The question is whether market economies must engender market societies … Evidence that welfarist and social-democratic constraint on capitalism is possible is that it has been approximated in various times and places, for instance, Northern Europe, Canada, and Japan … [1 Karl Polanyi, The Livelihood of Man (New York: Academic Press, 1977, posthumously published from essays written between 1954 and 1964), 9.]

Coda : What’s really going on in Europe, and do we in North America really care?

On the High Street in Harwich, UK, Spring 2012.

In at least some respects I think Michael Sandel is at least half-wrong when he says that : “The great missing debate in contemporary politics is about the role and reach of markets. Do we want a market economy, or a market society?”

In effect, if not as a matter of open rhetoric, this is, arguably enlough, exactly the fundamental issue in the 2012 US presidential election. It is the fundamental issue that pits the current Harper government in Canada against its opponents.

It is the issue that elected Francois Hollande president of France, and the issue that is causing Angela Merkel so much fresh trouble in Germany. (Though as a far from rabid right-wing German citizen recently explained, in response to my question about just how good or bad Ms. Merkel is, “who else is there?”)

Prof. Mandel, on the other hand, is certainly right, in the very important sense that the debate over this fundamental issue is still being conducted in some strange code, that obscures so much that is important — and even tries to blur the distinction between market economy and market society. And here, just to round things out for now, are eight (more or less) recent cases in point:

McDonald’s at the train station, Kiel, Germany, Spring 2012.

(1) The Austerity Agenda … By PAUL KRUGMAN …  So what happens if everyone simultaneously slashes spending in an attempt to pay down debt? The answer is that everyone’s income falls — my income falls because you’re spending less, and your income falls because I’m spending less. And, as our incomes plunge, our debt problem gets worse, not better … This isn’t a new insight. The great American economist Irving Fisher explained it all the way back in 1933, summarizing what he called “debt deflation” with the pithy slogan “the more the debtors pay, the more they owe.” Recent events, above all the austerity death spiral in Europe, have dramatically illustrated the truth of Fisher’s insight … As I said, this isn’t a new insight. So why have so many politicians insisted on pursuing austerity in slump? And why won’t they change course even as experience confirms the lessons of theory and history? … Well, that’s where it gets interesting. For when you push “austerians” on the badness of their metaphor, they almost always retreat to assertions along the lines of: “But it’s essential that we shrink the size of the state.”

(2)  A look at the 4 eurozone countries with bailouts aimed at preventing them from collapsing … While the figure Spain is allotted seems large, it pales in comparison to the size of Spain’s economy — which is bigger than those of Greece, Ireland and Portugal combined and is the eurozone’s fourth largest. The loans are also destined only for the banks — not to prop up the country’s own finances, as the previous bailouts were for the other nations.

(3) Peter Popham: Amid the bailouts, a United States of Europe takes shape … Never mind details of rescue funds, Eurobonds and the like, moves towards a federated Continent are now unstoppable, says veteran Independent on Sunday correspondent.

Efficient conductress on train to Hamburg, Germany, Spring 2012.

(4)  JOHN IBBITSON … Harper prepares Canadians for possibility of another recession … Stephen Harper’s warnings that Europe needs to get its house in order, and not look to Canada for help, was mostly intended for folks back home … The Prime Minister is preparing Canadians for the possibility of another recession, while insisting that it’s the Europeans, not his government, who will be to blame.

(5) The Euro Crisis … After Spain, Is Italy the Next Domino to Fall? [Why are practitioners of the manic-depressive public policy arts so addicted to domino metaphors? There are virtually no examples in the real history of the world of neurotically linked domino cascades!]

(6) ROBERT KUTTNER … Which Road for Europe? … Hollande’s working legislative majority, Rajoy’s display of nerve, the criticism by ECB President Mario Draghi of the politicians’ dithering, and Merkel’s increasing isolation among European leaders should increase the chances that the austerity mongers may yet relent. But Merkel, thus far, shows no sign of moderating her stance … .

At the Max-Weber-Platz subway station, Munich, Germany, Spring 2012.

(7) The close: Dow, TSX cruise higher despite euro zone tremors.

(8) Kirk Douglas … We Are Spartacus … After 95 years on this planet, I have come to the conclusion that the human spirit can never be crushed, no matter how cruel the oppressor or fanatic the belief. If we remember that simple truth — and act on it every day in small ways and sometimes in large movements — then freedom will ultimately win … And then we are all Spartacus.

Justin and Sophie on Tout le monde en parle, Sunday, March 4, 2012.

[UPDATED MARCH 31: CONGRATS M. TRUDEAU BOXEUR ; SEPTEMBER 28 : RUN JUSTIN RUN ; APRIL 15, 2013 : WON JUSTIN WON ... scroll to bottom of page]. Back on September 25, 2005 — some six and a half years ago, believe it or not (we have trouble ourselves) — we posted something called “The quiet evolution of Sophie Gregoire (aka Mme Justin Trudeau).”  Since last night it has suddenly been attracting a lot of new readers.

The only reason we can see is hinted at by a headline in the francophone edition of MÉTRO news in Montreal: “La femme de Justin Trudeau vole le show à Tout le monde en parle.”

Last night, that is to say, Sunday, March 4, 2012, Justin Trudeau and his wife Sophie Gregoire (Trudeau) appeared on “one of the most-watched Canadian television programs, in either language.” (Although in this case the language is French. There is alas nothing quite like “Tout le monde en parle” in English-speaking Canada nowadays.)

At the Toronto International Film Festival 2008.

The (mainstream but not universal?) reaction in la belle province — already hinted at by “La femme de Justin Trudeau vole le show à Tout le monde en parle” —  is also suggested by a posting today on the Quebec website, “Voila mon opinion.”  It goes: “Ce qui aurait pu être une partie de bras de fer idéologique fut plutôt une entrevue décontractée, joviale et sommes toutes agréable à regarder. Qu’on soit en accord ou non avec les idéologies politiques de Trudeau, force est d’admettre que le personnage nous ayant été présenté hier attirait la sympathie.”

If you don’t quite read French (like many of us), and are too lazy to have all this translated by Google into the robotically fractured English it specializes in, the MÉTRO headline means (more or less) “Justin Trudeau’s wife steals the show on All the world is talking.”

In English the reaction from the Here’s my opinion site in Quebec more or less gives you: “What might have been an ideological showdown was actually a  relaxed and jovial interview that was fun to watch. Whatever you feel about Trudeau’s political ideology, you have to admit that he presented a sympathetic persona last night.”

All this may be some kind of answer as well to a question subtly implied by Lysiane Gagnon, in her Globe and Mail report from the high society of francophone Montreal last week. According to her often but not always shrewd assessment: “the infatuation of so many anglophone Liberals with Justin Trudeau has always been incomprehensible on this side of the Ottawa River … as if, in a weird nostalgia for monarchy, the Liberals longed for a Trudeau dynasty.”

From left, Sophie Grégoire-Trudeau, Justin Trudeau, Whistler Mayor Nancy Wilhelm-Morden, and Whistler Sport Legacies' Keith Bennett.

Who knows? The appearance of Justin and Sophie on “Tout le monde en parle” last night may have finally begun to change all this?

Maybe even (at least part of?) Quebec at large is starting to grasp the message urged in an early autumn 2005 Globe and Mail article by journalist Sarah Hampson, quoted from so generously in our own ancient “quiet evolution of Sophie Gregoire” reflections: “Drink this young woman up, Canada. Poised, self-possessed, funny and spirited, she has a lot in front of her.”

(And one way or another, maybe her husband still has too — perhaps even because he is, as Ms. Gagnon urges, his BC mother’s and not his Quebec father’s son, who nonetheless loves French — and French Canada in Quebec — as much as his father! And maybe you don’t have to become a hereditary leader to help lead your party out of the vast northern wilderness it occupies now.)

* * * *

Here are just a few further resources, for those who want to delve into the potential (non-leadership?) political future of Justin Trudeau and his poised, self-possessed, funny and spirited wife — inside and outside Quebec:

(1) The “Émission du dimanche 4 mars 2012” is on the Radio-Canada.ca site for Tout le monde en parle as we write. But who knows how long it will stay there?

Happily it has also been posted on You Tube as “Tout le monde en parle-Justin Trudeau et Sophie Grégoire-Trudeau Partie 1” and “Tout le monde en parle-Justin Trudeau et Sophie Grégoire-Trudeau Partie 2.”

For a written record, see also “Tout le monde en parle: notre résumé de l’émission du 4 mars.”

All this is in French, of course, and there is no simultaneous translation as in the federal Parliament at Ottawa. But for those of us whose French is weak at best, watching French language television from Radio-Canada is one way of trying to improve things, a little.

(2) Lysianne Gagnon’s “Justin Trudeau’s silly but telling tirade” of last Monday, February 27, 2012, urged that “after the recent outburst of Trudeau fils — who essentially told the CBC that he’d rather embrace Quebec separatism than live in a Canada dominated by the ‘Harperites’ — the Liberals have probably come down to Earth and realize that this young man is more of a liability than a future leader.”

For a parallel rant from Ezra Levant from a few weeks before, when the “Trudeau separatist” story first hit the news, see “Trudeau says he’ll help Quebec separate if Harper gets his way.”

There is a somewhat more sophisticated but still, we would argue ourselves, rather blinkered reaction in “Andrew Coyne: In Justin’s world, separation is just another option.”

It seems to us that Chantal Hebert catches the underlyingl motivation of “Trudeau fils” — and the regional/national strategy that saw another element moving into place on Radio-Canada TV last night — in “Hebert: Harper’s alienation of Quebec just what the Liberals need … In Quebec federalist quarters, including the provincial government, the Conservative monarchist rebranding of the country is seen as an ill-advised return to Canada’s colonial past …  Liberal MP Justin Trudeau’s statement that he would support an independent Quebec rather than live in a Canada where equality rights no longer had their place was only the latest manifestation of that malaise … (As an aside: Those who presume that his father Pierre Trudeau would have disagreed have forgotten that he devoted his career to turning Canada into a Charter society.) … In a subsequent interview, an unrepentant Trudeau went a step further. ‘The separatist option is not the bogeyman it used to be. You ask me what the bogeyman is? It’s the one sitting in our prime minister’s chair right now,’ Trudeau told the CBC.”

(3) For some further intriguing relevant background see “Languages Commissioner Graham Fraser: French and English still matter in Canada” in the National Post on February 15. Eg: “There are remarkable signs of the vitality of the French language and culture in Canada today. Philippe Falardeau’s extraordinary film Monsieur Lazhar has been nominated for a foreign-language Academy Award, just as Denis Villeneuve’s film Incendies was a year ago. One of the most-watched Canadian television programs, in either language, is Tout le monde en parle, but you need to tune in to Radio-Canada on Sunday night to know it exists.”

(4) As a kind of follow-up on Lysiane Gagnon’s “Those who are remotely familiar with the Trudeau family have always known that Justin Trudeau takes more after his mother than his father,” see our May 2007 post “Margaret and Sophie in Ethiopia.” For a more recent report on the oldest Trudeau fils see Susan Delacourt’s December 2011 piece in the Toronto Star, “Trudeau fighting fit as he hits his 40s.”

UPDATE MARCH 31: Congrats to Justin for his surprise win in tonight’s charity boxing match with Conservative Senator Patrick Brazeau.

See …  Photos: MP Justin Trudeau pummels Senator Patrick Brazeau … literally … In a stunning upset, Liberal MP Justin Trudeau brawled his way to a …  TKO victory over Conservative Senator Patrick Brazeau. The referee stopped the fight in the third and final round ; Combat caritatif: Justin Trudeau bat Patrick Brazeau par arrêt de l’arbitre ; Just watch him: Trudeau victorious in charity boxing bout with Tory senator ; Underdog Justin Trudeau beats Patrick Brazeau in Thrilla on the Hilla ; Trudeau beats Brazeau in charity boxing match ; and Trudeau pulls off stunning upset victory. (And note this last link includes some video footage of the fight!)

UPDATE SEPTEMBER 28 : It now seems likely that Justin Trudeau will be announcing his intention to enter the race for Leader of the Liberal Party of Canada next week. See our  “The unbearable lightness of being Justin Trudeau .. just what Canada after Stephen Harper wants?”

UPDATE APRIL 15/16, 2013: Justin Trudeau is now the leader of the Liberal Party of Canada (surprise, surprise). See Randall White on “Is Jean Chretien right — ‘today marks the beginning of the end of this Conservative government’?.”

A few weeks ago, Barbara Yaffe noted in the Vancouver Sun that none of the NDP leadership candidates from Canada’s Pacific Province stand much of a serious chance. As her headline editor put it: “Credibility in Quebec is the key ingredient for next NDP chief and good news for front-runners Longueuil-born Topp, Outremont MP Mulcair.”

Mr. Cullen , however, has just come out with a proposal that, in our view at any rate, makes him an especially interesting candidate. He has said that a federal NDP under his leadership “would try to defeat Stephen Harper by proposing to Liberals and Greens that the three parties hold joint nomination meetings and run a single candidate in ridings currently held by Conservatives …  ‘Today I am asking New Democrats for a mandate as leader to co-operate with other progressive Canadians,’” he told reporters this past Tuesday.

Mr. Cullen’s scheme has some similarities with the progressive “cease-fire” proposal advanced a few years ago by BC academic and former federal NDP candidate Michael Byers — and touted on various earlier occasions on this particular website. And as Thomas Walkom urged in yesterday’s Toronto Star: “unlike more pie-in-the sky notions of a formal merger between the Liberals and NDP, Cullen’s idea might just work.” For this reason alone, whatever else may happen to Nathan Cullen’s candidacy, in our book he deserves at least two hearty cheers. He has given the federal New Democrat leadership race a deeper interest even for progressive Canadians who are not necessarily partisan NDP supporters — now or ever!

UPDATE : Readers of this piece may also be interested in a related somewhat later contribution from Randall White —  “More cheers for Nathan Cullen’s NDP leadership bid .. the new republic in Canada may be closer than we think? “.

At the bottom of these prognostications were “a ‘mild contraction’ in Canada in the second quarter and slower growth in the US and the economies that form the eurozone.” And while “the risks to global recovery have intensified as both the US and European economies show signs of slowing,” there was also some agreement “that Europe has increasingly become a worry … There’s been growing speculation that Greece will default on its debt, something that threatens to create a European banking crisis … ‘We’ve seen a very slow-moving train wreck in Europe.’”

The Eurozone 2011, in blue.

As the week wore on, the Globe and Mail in particular offered assorted further news and reflections on the increasing worries about Europe. Early Wednesday evening the estimable Eric Reguly in Rome posted a provocative piece: “Euro zone crisis? It’s more like Armageddon … The euro zone is not in crisis. It is far worse than that … This is a slow-motion suicide made gorier by feckless political leadership. It is now morphing into a banking crisis, one with the potential to plunge the European and global economies into a full-blown recession or worse.”

The next day there were two more reports. To start with we heard that “Euro zone economy will grind to halt by year-end, EU warns … The EU Commission warned Thursday that economic growth in the euro zone will come to a near standstill by the end of the year due to the European debt crisis and the turmoil in financial markets.” Then early Thursday afternoon there was a piece that started out well enough, but ended on another sobering note: “Major central banks come to Europe’s aid … The European Central Bank and a posse of other big official lenders are attempting to chase fear out of global financial markets, pledging to ensure Europe’s stressed banks have access to dollars.” In the end, however, this “‘latest dollar funding scheme addresses the symptoms, not the illness,’ Win Thin, an economist at New York-based Brown Brothers Harriman told clients in a note. ‘The illness is that Greece is insolvent, and one of the symptoms is that banks are afraid to lend to each other and are instead hoarding cash.’”

All this finally took me back to what had seemed an especially enlightening article in the September 8 issue of the London Review of Books, by an eminently readable UK journalist (and sometime novelist and food critic), entitled “The Non-Scenic Route to the Place We’re Going Anyway … John Lanchester on the global economy.”

Of course, you might say, who is John Lanchester, and why should any one pay any attention to him? If you have 25 minutes to spare, you can see him on You Tube, explaining his entertaining short book of 2010: Whoops! Why Everyone Owes Everyone and No One Can Pay (aka I.O.U.: Why Everyone Owes Everyone and No One Can Pay in North America). It is also worth noting that while Lanchester himself is something of a literary bohemian, “his father was an old-fashioned banker for the Hong Kong and Shanghai Bank, a conservative institution flecked with the legacy of empire, but which these days — like the rest of finance —  has been taken over by the maths geniuses.” And “The Non-Scenic Route to the Place We’re Going Anyway … John Lanchester on the global economy,” in the September 8, 2011 issue of the London Review of Books, has been described by assorted eminent bloggers on this side of the pond as “Europe-focused, but …  the best single article I’ve read on the current phase of the economic crisis.”

* * * *

John Lanchester as a very young man, with his mother Julie. He was born in 1962 in Hamburg, Germany, brought up in Hong Kong where his father worked in a bank, and educated in England, at Gresham's School, Holt and St John's College, Oxford.

The best advice I can offer about John Lanchester’s  “The Non-Scenic Route to the Place We’re Going Anyway” is just read it for yourself. But it does weigh in at over 3,000 words. And if that seems like absolutely too much space-time for you right now, here are a few of what strike me as the most striking passages:

* “The [US] dollar is the de facto global ‘reserve currency’ … The fact that the US can print as much of this global reserve currency as it likes … gives it more or less unlimited power to borrow money in times of trouble … This is …  a very easy …  power to abuse by accumulating huge debts, but what caused the [recent] downgrade [in the US credit rating, by Standard and Poor] … was the Congressional Republicans’ brinkmanship over what should have been the routine raising of the ceiling on the total amount of US debt …  The disturbing thing about the whole process [was] … that the Tea Partiers were … consciously pursuing a course of action which made no economic sense, as part of a worldview which is essentially theological … ‘Sane Republican’ is not an oxymoron, not yet —  but we’re heading that way.”

John Lanchester is also apparently a cook of some accomplishment, and sometimes writes about food as well as the current global economic crisis.

* “If economies aren’t growing, they’re going to have trouble repaying their debts — debts which, to a large extent, they took over from the global banking system, to keep it solvent … this is a huge problem for the eurozone in particular … The European Central Bank figures tell the story: in a single week, they provided €22 billion in emergency funding … ECB lending on that scale can’t be kept up, but numbers that big are necessary because other banks had stopped lending to the endangered banks … Everybody and his cat knows that the eurobond is the only way out of the crisis for the eurozone in the medium term; as for the necessary size of the short-term bailout facility, Gordon Brown’s guesstimate was €2 trillion. That ‘could have convinced the markets that Europe meant business’. Huge, sustained … government intervention on that scale is the only thing which will cause the speculators and hedge-funders and ‘hot money’ types to back off. Instead, nothing. The markets expressed their opinion the only way they know, and on 17 August, the ECB had to lend another €9-10 billion to the endangered banks.” [And this process has carried on into September, as above in “Major central banks come to Europe’s aid ... pledging to ensure Europe’s stressed banks have access to dollars.”]

* “It is this failure of political will both in the EU and US which is starting to make the contemporary economic scene resemble that of the 1930s. The discipline of macro-economics was born out of the study of the Great Depression, in an attempt to … avoid a repetition. That’s why it’s so depressing to see the developed world not just sleepwalking towards another recession, but actively embracing policies which make it more likely. Governments can’t all simultaneously cut spending while also continuing to grow their economies …The problem is in large part to do with the application of an incorrect metaphor, the easy-to-understand idea that a household has to live within its income. But governments are not households, and the idea of cutting your way to prosperity … and the refusal to embrace stimulus spending, are causing economic slowdowns all over the world that are triggering the current anxiety in the markets, which is in turn causing the predicament of governments to intensify, as confidence sinks and the self-fulfilling expectations of a second downturn take hold.”

John Lanchester in his most familiar surroundings?

* “It’s starting to look as if the best-case scenario for the aftermath of the [2008] crash is already dead. In that version, governments muddled through to economic growth, cutting public spending in the process, enjoying the … rebound which tends to follow recessions … This prospective version of events had a big hole at the centre, about the way the financial sector should be reformed … The next scenario — the one we are on course for at the moment — is not so much the next-best as the next-least-worst. It is modelled on what happened to other parts of the world over recent decades, from Latin America to Russia to South-East Asia, as they underwent debt crises and consequent economic collapse. In all cases, the relevant economies recovered, after about a decade of hard times and widely shared economic pain. In this model, the debts are gradually paid down, the economy is slowly and miserably rebalanced, and eventually things grow back to where they were when the bubble burst.”

* “There is a general sense of baffled incomprehension in the West at the idea that this should be happening to Us, instead of to Them … But that is what we look to be on course for at the moment … Would that matter? It would be a fairly important chapter in the Decline of the West, to be sure … but in the very broadest economic and historical perspective, it might only be an acceleration of trends which are already in place. We are on course for relative decline, compared to China and India and the developing world; indeed, we are already living through it … A decade-long slowdown would accelerate this shift in global wealth and power and would be a grim thing to live through, but from a world-historical perspective it might not be a game-changer: it might just be the non-scenic route to the place we’re going anyway.”

The Gilbert Scott restaurant in London — a place John Lanchester especially likes, and a refuge for at least some perhaps during the “ten-year slog” that he suspects probably lies ahead of all the old “developed” economies, in Europe, North America, and Japan?

* “What makes the process so frustrating is that the measures which might be taken to avoid the years of stagnation seem fairly obvious. The first of them is to embark on a medium-term plan of stimulus and spending to help growth; to postpone the cuts and austerity and rebalancing of spending until that growth is established; and to embark on a global plan to reform the financial system. This plan would have to be co-ordinated and international, and it might well involve a shift towards what is being called the ‘utility model’ of banking … Many of the casino-like activities in which banks currently engage … will be banned … There is, just, time for this change of course to happen, before it’s all too late. But I fear that the grip of anti-spending ideology is so strong throughout the West, and the politicians’ fear of the banks is so entrenched, that the ten-year slog looks more likely …”

Here in North America, no doubt, the prospect of Lanchester’s “global plan to reform the financial system … co-ordinated and international,” and involving “a shift towards what is being called the ‘utility model’ of banking,” in which many “of the casino-like activities in which banks currently engage … will be banned,” seems even more unlikely than it does in what some Canadians apparently still regard as the old imperial metropolis of London, England. And until further developments credibly suggest something different, I’m doing everything I can to prepare  myself and what modest resources I can muster for “the ten-year slog.”

President Reagan with (l to r) David Stockman, Don Regan, Murray Weidenbaum, and Martin Anderson discuss the US economy in the Oval Office in 1981.

According to Martin Regg Cohn, in “Ontario’s political air war — the battle of the campaign ads … launched during the final game of the hockey season” last night, the Tim Hudak Conservatives’ mindless “anti-tax commercial” (part of  “a wave of new commercials blasting [Ontario Premier Dalton] McGuinty as ‘The Tax Man’”) won first prize.

This strikes us as just yet another increasingly sad sign of our increasingly twisted times. And that’s not just because we agree with Mr. Cohn’s colleague Bob Hepburn, that “Dalton McGuinty is arguably the best Ontario premier in more than a quarter of a century.” (If you do the math here, btw, the argument is that the last Ontario premier as good as Mr. McGuinty was the authentic Progressive Conservative William Grenville Davis, 1971–1985.)

It is also because we agree with our own mysterious L. Frank Bunting, who back in February 2010 was quoting Ronald Reagan’s former budget director David Stockman with approval: “the lesson of the last 25 years is that it doesn’t work …  Taxes are going to have to be raised. … The Republicans think their mission in life is to cut taxes. Sorry … game over. We’re now in the tax-raising business. And we’re going to be in the tax-raising business for the next decade”?

Thomas Courchene at the 2007 CAN>WIN business summit.

Mr. Stockman’s advice of course has as yet been falling on too many deaf ears — especially among his fellow Republicans in his own country. But it has been recently reiterated by the Canadian economist Thomas Courchene, in his 2011 essay “Rekindling the American Dream: A Northern Perspective.” Courchene writes: “It is hard to avoid the conclusion that the most important deficit currently facing the US is a revenue deficit. Overall government revenues in the US are about 27 percent of GDP, compared with 32 percent in Canada, 39 percent in the UK, 41 percent in Germany and 45 percent in France … The appropriate way to address this revenue deficit is with a tax on consumption.” (Hello … HST?)

Against the wisdom of such seasoned economic policy analysts, Mr. Hudak in Ontario, like Mr. Harper federally, and oh-so-many other politicians in oh-so-many regions of the global village today, continues to tell voters that we can continue to reduce taxes without compromising government services or, indeed, our broader public financial health. Yet as Mr. Stockman so plainly says, “the lesson of the last 25 years is that it doesn’t work.”

David Stockman and his wife Jennifer at the New York Junior League 58th Annual Winter Ball, 2010.

For all too many reasons that are all too easy to understand, the continuing electoral appeal of this palpably failed and discredited tax-cut rhetoric is such that even the likes of Premier McGuinty himself (or Premier Clark in BC, to say nothing of the provincial New Democrats in both provinces) feel unable or unwilling to speak up for the common sense truth. And it seems clear enough that no one (including President Obama in the USA today) has as yet figured out workable political solutions to the increasingly serious economic problems that lie at the bottom of this conundrum. But responsible journalism might at least occasionally point to what responsible public policy specialists like David Stockman and Thomas Courchene are saying. As Stockman has had the courage to so succinctly explain: “Sorry … game over. We’re now in the tax-raising business. And we’re going to be in the tax-raising business for the next decade.”

Jack Layton and friends on the steps of Quebec City Hall.

The 41st Parliament of Canada has not even held its first meeting quite yet. But already Jack Layton’s new Quebec-majority NDP official opposition is showing just how different it is from anything the federal New Democrats have ever known before.

Former Ontario NDP leader Stephen Lewis, son of former federal leader David Lewis (silent partner of Pierre Trudeau’s 1972–1974 “Liberal-NDP” minority government), has declared: “My father used to say to me, ‘Victory won’t happen in my time’ …  “And I used to say to my children, ‘It won’t happen in my time.’ But now I think it’s possible. I’m 73, but I hope I can hang on, because I think Jack can win.”

This may or may not prove correct. But if it does, Jack’s ability to serve as gifted midwife in the rebirth of a fresh and more realistic mainstream Quebec federalism for the 21st century will have played a big role. And if Mr. Layton is going to demonstrate such ability, he will have to show a lot more of two key qualities than he has so far. (Granting that it is still far too early to rush to any definitive judgments, of course.)

The first is just raw courage, of a sort typically in short supply among Canadian politicians. The second is some well-thought-out concept of what a fresh and more realistic mainstream Quebec federalism for the 21st century will have to be — to both strengthen the Canadian future, and sell inside and outside Quebec!

New Democratic Party leader Jack Layton raises a glass of beer during a campaign stop at a sports bar in Montreal, April 14, 2011. (REUTERS/Shaun Best).

Take two issues that have already popped up. The first is “whether the NDP Leader believes the support of 50 per cent plus one in a referendum on sovereignty would be enough for Quebec to separate from Canada.” The second is the question of Quebec’s representation in a slightly reformed Canadian House of Commons, designed to bring the representation of the three most rapidly growing provinces of BC, Alberta, and Ontario more into line with the ancient democratic principle of representation by population.

It may be that Jack Layton has already displayed  a little unusual courage on both issues. But he has also shown how neither he nor his party as yet have any even plausible ideas of fresh beginnings on the road ahead, in either case. All the “Jack of Hearts” has done so far is underline just how tough his new job is going to be.

1. “50 % + 1: Layton rajuste le tir” …

NDP Leader Jack Layton clarifies his party's position on conditions for the separation of Quebec from Canada at the NDP Quebec Section General Council at Montreal May 28, 2011.

If anything, the Quebec contingent of the Parliamentary Press Gallery in Ottawa seems to have even less idea than Jack Layton himself about how to deal with the new reality of the NDP’s now 59 Quebec seats (more than 78% of Quebec’s total of 75 federal seats). Last week’s quite artificial controversy over whether the support of 50% + 1 in a referendum on sovereignty would be enough for Quebec to separate from Canada is a case in point.

The Globe and Mail described how it all got started in a report first posted very late on the evening of  Tuesday, May 24: “Comments from some of the new Quebec MPs suggest they may still be open to … an independent Quebec. Managing this political land mine will be an ongoing issue …  Journalists reporting for Quebec … make up a large chunk of the Parliamentary Press Gallery. Their questions on Tuesday were almost singularly focused on whether the NDP Leader believes the support of 50 per cent plus one in a referendum on sovereignty would be enough for Quebec to separate from Canada. A 2005 NDP policy paper called the Sherbrooke Declaration states that the party would recognize such a result. Asked … to repeat that, Mr. Layton would say only that it remains party policy but that the Supreme Court’s position on the issue — which does not give a minimum number —  is a better guide.”

The apparent ambiguity of this initial answer was not well received by either Quebec provincial politicians or a number of Jack Layton’s freshly minted federal New Democrat MPs from Quebec. As reported by the CBC: “All three Quebec [provincial] political parties were quick to denounce the comments Wednesday, declaring in a uniform voice that Quebec has the right to set its own conditions for a referendum.”

Jack Layton and some of his younger new Quebec New Democrat MPs.

Still more importantly (no doubt), as reported by Le Devoir on Wednesday: “Selon Guy Caron (Rimouski-Neigette), la déclaration adoptée par le NPD à Sherbrooke en 2005 entérinant la règle du 50 % +1 n’est pas compatible avec la Loi de clarification, dite la loi sur la clarté référendaire, de Stéphane Dion adoptée par le gouvernement libéral en 2000 [taking the Supreme Court’s position a little further still]. «Pour nous, c’est deux choses différentes. Ce qu’on a comme position pour le parti, c’est la déclaration de Sherbrooke et c’est ce qu’on va mettre de l’avant.»”

By Thursday Mr. Layton himself had qualified his initial ambiguity and come down more squarely on the side of M. Caron and other Quebec New Democrats. The Globe and Mail was reporting: “It’s official: Layton backs 50%-plus-one rule for Quebec secession.” And according to Le Devoir: “50 % + 1: Layton rajuste le tir … «Ce qui constitue une majorité, c’est 50 % + 1», a déclaré M. Layton en conférence de presse hier, alors qu’il présentait son cabinet fantôme. «C’est clair comme de l’eau de roche que c’est la politique de notre parti depuis cinq ans.»”

The federal NDP leader looked like he was having some trouble here — because he was. Neither he nor his party have had to think seriously about these kinds of issues in the past. It will take a while for them to catch up.  At the same time, it is also arguable, we think, that little harm has been done to the larger cause of the Canadian future. More than 40 years and two referendums (on ambiguous questions) have now elapsed since René Lévesque established the Parti Québécois. For growing numbers of us in the rest of Canada outside Quebec at any rate, a few things are much clearer than they used to be. And we think Jack Layton himself is showing some promise when he “says attitudes have changed a lot in the past three decades and people are tired of old debates that pit Quebec against Canada.”

New Democratic Party leader Jack Layton and wife Olivia Chow celebrate their victories at NDP headquarters in Toronto, Ont., Monday, May 2, 2011. (Darren Calabrese / THE CANADIAN PRESS).

Of course, “Quebec has the right to set its own conditions for a referendum” on the future of Quebec. But neither in principle nor practice can it determine how the rest of the country would react to any serious attempt by Quebec to actually “separate from Canada.” Having followed this issue closely for more than 40 years (whether we wanted to or not), it is now very clear to us that Canada without Quebec is simply impossible — geographically just for starters. If Quebec ever really were to “separate” from Canada, Canada would be destroyed..

From this standpoint, the question of whether 50% + 1 or some more demanding formula would be required for Quebec to “separate” from Canada is academic at best. If things ever do get this bad, under whatever formula, it will be game over for everyone who lives in Canada now. We will all have to find new homes.

Outside Quebec anger and apathy will be the main emotions in the air.  There will be no wise and gentle negotiations about anything — and it is sheer political fantasy to imagine there could be. Quebec will not be able to negotiate with Canada, because Canada will no longer exist.

Campaigning in Quebec City, with the everyday French he learned on the streets of Montreal (and/or Hudson, Quebec), April 2011.

We will leave this argument here for the moment. Though we note as well in closing our colleague Randall White’s counterweights article of just over a year ago now: “Who’s afraid of Pauline Marois : or why does Québec still have more people who call themselves Canadian than any other province in Canada?”

We also feel that Alexandre Blanchet’s most welcome comment of qualification on this article from this past March is very interesting, But we don’t find it quite convincing in the end. Our exact reasons we will put off for another time as well. (While just noting quickly that the 59 Quebec seats in the Canadian House of Commons won by Jack Layton’s New Democrats this past May 2 arguably lend some vague support to Dr. White’s original argument, as such things look in the rest of Canada outside Quebec, at any rate!)

What M. Blanchet’s comment does show without doubt, we think — like the views of Guy Caron and other new Quebec New Democrat MPs whose comments “suggest they may still be open to … an independent Quebec” —  is that we all still have some distance to go before we can altogether escape what Jack Layton calls the “old debates that pit Quebec against Canada,” inside and outside Quebec. Mr. Layton’s job on this front is really not going to be easy.

2. Protecting Quebec’s status in the Parliament of Canada : yes of course, but the Senate is the logical place to do it

Should Quebec get more seats in the Canadian House of Commons? The Jack of Hearts seems to be saying yes.

The question of Jack Layton’s approach to Quebec’s representation in a slightly reformed Canadian House of Commons, designed to bring the representation of the three most rapidly growing provinces of BC, Alberta, and Ontario more into line with the ancient democratic principle of representation by population, arose this past weekend. And we just want to make one as-quick-as-we-can-manage comment — or plea for clearer thinking.

As the background has been explained by the Toronto Star: “NDP Leader Jack Layton says he won’t let down his new supporters in Quebec and will propose practical measures defending the language and culture of Quebecers … He says the NDP will start by fighting to keep Quebec from losing influence in the House of Commons … Prime Minister Stephen Harper’s government is looking to increase the number of MPs in other provinces where the population has grown quickly … That would reduce the percentage of seats Quebec currently holds, something that has enraged provincial politicians.”

As elaborated on by the CBC website: “The Conservatives proposed in April that Canada’s three fastest-growing provinces should get more seats in the House of Commons by 2014, with Ontario gaining 18 seats, British Columbia gaining seven and Alberta five … Under the proposed legislation, all other provinces, whose populations are not growing as quickly, would be guaranteed to keep the number of seats they have. Quebec currently holds 75 out of 308 seats, 24.4 per cent of seats, despite having 23.2 per cent of Canada’s population.”

Le chef du NPD, Jack Layton, s'est entretenu avec le maire de Québec, Régis Labeaume, en matinée, lundi 18 avril 2011. LE SOLEIL, JEAN-MARIE VILLENEUVE.

What Mr. Layton is proposing , it seems for the moment at any rate, is some formula that ensures Quebec retains its current percentage of seats in the Canadian House of Commons, by being granted new seats along with BC, Alberta, and Ontario — even though its population has not increased so as to warrant any new seats of this sort. And : “When asked whether Canadians would accept Quebec getting more seats despite already being over-represented in terms of population, Layton said a balance must be struck … ‘We have to represent and recognize in this delicate dance of statecraft some of the other principles that were on the minds of our founders when they set down and laid things out, that striking that balance and having Canadians accept that there need to be some kind of compromise,’ he said.”

We agree with Jack Layton altogether, when he urges that we the Canadian people of the early 21st century “have to represent and recognize in this delicate dance of statecraft some of the other principles that were on the minds of our founders” — especially when it comes to ensuring some form of entrenched long-term recognition of the founding Canadian commitment to the survival and vigor of the French-speaking majority in Quebec. But we also think it is altogether illogical to try to express this recognition in the Canadian House of Commons, which, as we understand the founding principles, is supposed to express the modern democratic principle of representation by population (one person one vote, and all that, etc, etc, etc).

The logical place in which to entrench legislative or parliamentary expression of the founding Canadian commitment to the survival and vigour of the French-speaking majority in Quebec is a reformed Senate of Canada — the institution that the  founders did intend to protect various regional interests, as opposed to the interests of the popular electorate from coast to coast to coast. And here again we also note in closing another more recent counterweights article by our colleague Randall White: “NDP (and Liberals) could support Harper’s Bill S-8 on Senate elections, in exchange for provincial representation concept that makes sense for Quebec.”

NDP Leader Jack Layton responds to reporters questions at a news conference in Quebec City, Monday, April 18, 2011. (Jacques Boissinot / THE CANADIAN PRESS).

It is all too painfully clear of course that, as logical and potentially creative as using Senate reform as a mechanism to help express Quebec’s particular role in the confederation of the 21st century may be, there are huge roadblocks in the way, flowing from unexamined and increasingly tired old assumptions about the Canadian future, in various strategic quarters.

Dr. White, to take just one very minor case in point, broached the concept of special Quebec representation in a reformed Senate on the Globe and Mail website half a dozen years ago, in response to an argument of the day for just abolishing the Senate from the excellent John Ibbitson. And in a Globe and Mail article on Mr. Harper’s current “step by step” plans for starting Senate reform, at last, just this past Sunday (or Monday, today, if you still crave the printed page), Mr. Ibbitson quite aptly notes that “Many provinces balk at electing senators, who could compete with provincial governments as voices representing regional interests. Quebec especially opposes Senate reform … The NDP wishes to see the Senate abolished.”

(An article in the Toronto Star by the often very astute and compelling Bob Hepburn, just this past Wednesday, also demonstrated the continuing hostile resistance to any kind of creative Senate reform — as opposed to outright abolition — that still haunts many important regions of contemporary Canadian informed opinion.)

NDP Leader Jack Layton gives the thumbs-up to the largest crowd ever at a rally in the province of Quebec, Saturday, April 23, 2011 in Montreal. (Jacques Boissinot/Canadian Press).

Again, all this just seems to us to underline the extent of the difficulties that face any Jack Layton who seriously aspires to serve as gifted midwife in the rebirth of a fresh and more realistic mainstream Quebec federalism for the 21st century.

To finally come up with something sensible that just might actually work, he must not only change the minds of many others — friend and foe alike. He must also change his own mind, along with at least some sticky traditional views of the party he leads. It is of course no slight on him and the already quite surprising things  he has managed to achieve in his political career, to wonder if anyone among us (we the Canadian people) would be equal to such a task?

To end on some positive note, the good news between the lines may nonetheless be that it is still not clear the answer is no one at all. The jack of hearts may yet show that he has a head and a stomach as well. And as recently as two months ago who would have taken at all seriously the prediction that Jack Layton’s New Democrats would win 59 of 75 seats in Quebec!

Lamp posts are almost completely submerged in the overflowing Assiniboine River in Brandon, Man., on Wednesday, May 11. The water is the highest it's been since 1882. DAVID LIPNOWSKI/THE CANADIAN PRESS.

Several years ago I was at a conference on Canadian disaster management, where provincial representatives agreed that flooding was a recurrent problem shared by everyone — and quite arguably the first priority for any joint cross-Canada disaster mitigation policy.

It never makes business sense to offer insurance against something almost bound to happen. And in Canada and the United States private flood insurance is very hard to come by. In the USA this  has inspired the government-backed National Flood Insurance Program — a rare case where the land of the free has been more “socialistic” than its northern neighbour. (As a recent report has explained: “Canada is the only G8 country where flood insurance is not available to homeowners.”)

Yet even with all this history in mind, flooding at the moment, and in the more recent past, seems to have become an even bigger problem than usual. As I write, the Government of Manitoba is contemplating breaking a dike on the Assiniboine River and actually inducing allegedly moderate flooding in the area around the hamlet of Newton, to prevent more catastrophic flooding in other parts of the province. And: “As Manitoba prepares to open a floodgate in the midst of the Assiniboine River’s worst deluge in centuries, the province is turning for help to a forecasting veteran who thought he’d analyzed his last flood when he retired last year.”

This past Tuesday it was reported that: “As the flood waters of the Richelieu River [in Quebec] continued their slow retreat on Monday, questions surfaced about why people are allowed to build homes in regions where rivers regularly overflow their banks and the taxpayer is expected to pick up the cost of property damages as well as military and other government emergency services … Private insurers refuse to cover any area that is at risk of flooding, Jack Chardirdjian, of the Insurance Bureau of Canada, says.”

County crews head out on a boat on Wednesday, past a partially submerged building, as they prepare to sandbag areas on the levee to slow down floodwaters from the swollen Mississippi River in Vicksburg, Miss. (Sean Gardner/Reuters).

(So we don’t have a government-supported flood insurance program in Canada, as in the USA,  but governments typically pick up the tab in the end anyway — which, like so much else these days, doesn’t make a lot of sense!)

Meanwhile: “A swell of water is moving down the Mississippi River, threatening a catastrophe not seen since the Great Mississippi Flood of 1927 …  That event still ranks as one of the worst natural disasters in American history. In part, that flood catalyzed the mass migration of millions of African-Americans to northern cities, propelled Herbert Hoover to the presidency and set the stage for the Great Depression … For many, this flood will be worse … And in a nightmare scenario, it could damage significant sectors of the US economy, affecting investors everywhere in addition to those with homes and businesses in the South and Southeast.”

* * * *

All this raises an obvious question. Is there something in particular behind this wave of even more flooding than usual — in Canada and the United States and elsewhere?  (Remember the Queensland floods in Australia, eg, just this past December and January? And then what about “the horrendous 2010 Pakistani floods [24 million homeless] and … the Brazil floods [500 dead, thousands homeless], Sri Lanka floods [23 dead, 1 million homeless] and Philippines floods [42 dead, 400,000 displaced]”?)

Mark Pesce, left, Karyne Roy and Mark Dolan, right, carry drinking water through the flooded streets along the Richelieu River in Saint-Blaise, Quebec, Friday, May 6, 2011. (Ryan Remiorz / THE CANADIAN PRESS).

Well, Dick Cheney may not agree. (Or the new Harper majority government in Ottawa?) But there is some increasing agreement elsewhere that “extreme precipitation events” are in the first instance behind recent hyper-flooding trends.  And: “increased greenhouse gas (GHG) pollution leads successively to global warming, increased sea temperature, increased evaporation and thence to increased precipitation …  Accordingly one cannot exclude the likelihood of a contribution of man-made global warming to extreme precipitation events.”

This past February George Monibot was more exactly reporting, in the Guardian across the sea in the United Kingdom, that: “Two new papers, published by Nature, should make us sit up, as they suggest for the first time a clear link between global warming and extreme precipitation (precipitation means water falling out of the sky in any form: rain, hail or snow).”

And then just yesterday Andrew Freedman was asking, on the “onearth” website, “High Waters: A Climate Connection to the Mississippi River Floods?” He writes: “Climate change cannot be blamed for causing the flooding.” That is more directly a result of “the heavy rain that fell during April in the Ohio Valley, where six states — Illinois, Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia —  recorded their wettest April since instrument records began 117 years ago. Nine states recorded their wettest February through April period on record … In addition, snowmelt from the Midwest added more water to the Mississippi River and its tributaries.”

At the same time, Freedman goes on: “scientists have detected large-scale trends indicating that extreme precipitation events are becoming more likely as temperatures warm in response to increasing amounts of greenhouse gases in the air. This means that heavy rainfall events are more frequent than they used to be, in part because a warmer atmosphere holds more moisture that can be wrung out by storm systems.”

Flooding on the White River required closing of Interstate 40 near DeValls Bluff, Arkansas. (SOURCE: U.S. Geological Services).

None of this is to suggest that the enthusiasm for some of the more controversial global warming mitigation policies — which has eroded over the past few years in the face of assorted ostensibly economic and other pressures — needs to be revived. But in both Canada and the United States we have lately abandoned many of the environmental concerns that seemed to be reaching new heights only a few years ago. It may be that various real-world extreme weather events over the next few years will force some further sober second thoughts about environmental policy, of one sort or another. At the moment even Fox News is reporting that “Flooding of Southern Farms Poised to Wreak Havoc on Economy.”  (Oh and btw: “Gas Refiners Nervous Over Mississippi Flooding,” and Louisiana Governor Bobby Jindal is warning that, as a result of Mississippi flooding, “operations at two major refineries could be at risk affecting at least 75% of the refining rates at those two refineries.” And there’s another explanation for the rising costs of keeping your car on the road, with who knows just what broader implications for much-needed North American economic growth?)

Thanks to Macleans for this self-explanatory illustration, and Getty Images, Reuters, Scott Feschuk, and Taylor Shute.

[UPDATED MARCH 30, APRIL 5, 8, 11, 13, 22, MAY 1, 3]. There now appears no escape from the spring election “skillfully brought on by Mr. Harper” (despite his seven-year-old protests otherwise). For the tedious technical details, see, eg: “Harper government set to fall Friday, setting stage for vote in early May” and “Harper government likely to fall after Friday vote.”

Meanwhile, on the local radio yesterday (or was it TV?) someone who ought to know was saying that the next 36+ days in the true north strong and free are “going to be a lot of fun for those who like politics.”  Of course, there are others who do not like politics and have already started to complain that “Election to cost taxpayers plenty.” More exactly: “Figures obtained from Elections Canada show the estimated cost of the last election as $288.2 million.”

I have to confess that I like politics myself. And I am looking forward to the coming Canadian federal election of 2011 — even if it does not finally install a government in Ottawa that I agree with (which, according to almost all the opinion polls and most professional analysts is most likely what will happen in the end).

It seems to me as well that elections are probably the most effective way most of we the diverse Canadian people have of leaving our marks on what our Constitution Act 1982 calls the “free and democratic society” that is ultimately accountable to us.  And when I hear that hosting the G8 and G20 summits for a few days in Toronto late last June cost we the Canadian taxpayers “nearly $858 million,” the just over a third of that sum the Canadian federal election of 2011 will cost us, coast to coast to coast, strikes me as a much better value.

Democracy, economics, and elections …

People in other parts of the world are giving their lives for the right to vote in elections. Why is it that we take this right so much for granted that so many of us do not even bother to exercise this right, or complain about how often we must take the time and trouble?

The fearmongering argument that holding a federal election in the spring of 2011 poses some threat to the recovering Canadian economy also strikes me as altogether beneath contempt.

To start with, it implies that democracy is unimportant — in a democratic country where, even in the midst of the latest great recession, the overwhelming majority of us are considerably better off economically than the overwhelming majority in the rest of the world.

Similarly, courageous people in other parts of the world today are giving their lives to win some kind of democracy for themselves. We have just sent a few airplanes to help some of them.

If we are going to ask our volunteer soldiers to risk their lives to secure the democratic rights of people in faraway places, we ought to be willing to spend a month or so every few years exercising our own democratic rights at home. (For one thing, history shows that if you don’t exercise your rights — just like anything else — you will eventually lose them.)

On a related front, the Harper minority government that is about to fall has lasted two years and 140 days — considerably longer than the median minority government life of one year and 133 days in the history of the present Canadian confederation since 1867.

Put another way, the opposition majority in the 40th Parliament of Canada has quite a strong track record in supporting the economic recovery measures of a frequently irascible minority government. As Chantal Hébert has just urged, eg: “In the winter and spring of 2009, the Liberal official opposition relinquished its main role as chief government critic to sign off on the Conservative recession budget. That helped set the stage for a smooth federal-provincial effort to deal with the recession … Half a year later it was the NDP that stepped into the breach to keep the government and some of its unemployment relief measures alive.”

Economic benefits of democratic elections …

Canadian senior citizens and friends (on vacation somewhere?). All federalist parties in the 2011 federal election, it is said, are chasing after the senior citizen vote — because seniors are more likely to show up on election day than any other demographic segment of the Canadian people. (Maybe because their years have taught them to especially value the “free and democratic society”we are all so lucky to be a part of today.)

Quite apart from high-minded arguments about democracy and opposition patriotism in minority parliaments during great economic recessions, it seems to me that there are some more down-on-the-ground arguments about the economic benefits of democratic elections as well. And I say this as someone who, in an earlier incarnation, spent several years employed in the promotion of economic development in a Canadian province.

For one thing, the coming federal election will be providing at least short-term part-time jobs — which will no doubt improve the economic circumstances of some among us who could use such improvement at the present juncture. Elections Canada, eg, hires  returning officers and other election officers for each of the current 308 federal electoral districts, from coast to coast to coast.

According to the current “Federal Elections Fees Tariff,” a “returning officer shall be paid, for services performed by the officer during an election … if a poll is held, a base fee of  $21,845.42.” And, again just as examples, among the support staff who work for the returning officer, an office co-ordinator makes $13.46 an hour, an office clerk $11.21, a receptionist $11.73, an inventory shipping clerk $11.21, a community relations officer $14.57, a recruitment officer $15.84, and a financial officer $21.64.

Beyond these direct part-time employment opportunities, the money spent by political parties and their candidates on a wide range of goods and services supplied by the private sector of the economy — from lawn signs to radio spots to assorted short-term real property leases — will act as a kind of mini economic stimulus program in its own right.

So far as I know, no one has yet tried to estimate the economic benefits of a democratic election like this — as is often enough done with such things as convention, sports, and tourism events. But there can be little doubt that the five-week federal campaign which now looms ahead in Canada will be stimulating various modest but not insignificant forms of private sector economic growth, at the same time as it eats up taxpayer dollars in the public sector.

Over the next five weeks too, the Harper Government will no doubt be indulging in recurrent ritual expressions of grief about how the “unnecessary” spring 2011 election has delayed progress on what it has called the next phase of its initial 2009 “economic action plan” (which stole more than a few pages from an old Liberal playbook).

Some senior citizens are especially well rewarded for taking their democratic voting responsibilities seriously — as suggested by this recently newly wedded couple in Niagara Falls, Ontario.

Yet between the lines of this past Tuesday’s budget document — “THE NEXT PHASE OF CANADA’S ECONOMIC ACTION PLAN : A LOW-TAX PLAN FOR JOBS AND GROWTH” — it is clear enough that the crux of the “next phase” is to walk away from the economic stimulus program that dominated the first phase. (And see also, eg, another recent newspaper article: “Budget’s hidden math adds up to big cuts down the road.”)

In fact, you do not have to be all that much of a cynic to believe that, in the increasingly wild and crazy universe of the Harperland version of Canadian federal politics, the only real surviving element of the first phase of Canada’s economic action plan is actually the spring election that Mr. Harper has so skillfully brought on himself (despite his poker-face protests otherwise).

UPDATE MAY 3: Well it’s all over today! See the counterweights editors on “A historic unnecessary election .. probably .. and now there’s only one party responsible for the next four years” …

UPDATE MAY 1: See the counterweights editors on “Nothing dead certain about end of surprising and unsettling Canadian federal election campaign of 2011.”

UPDATE APRIL 22: At last, with just over a week before voting day on May 2, 2011, there is a glimmer of progressive light at the end of the tunnel. See Randall White on “Canadian election 2011 .. now it seems things are starting to get interesting .. maybe (would you believe PM Jack?).” And for a half-prescient counterweights editors’ post from almost 11 months ago, try “More news on coalition blues .. a PM Layton could win (with Quebec spin)?”

UPDATE APRIL 13, 11:15 PM ET: There may or may not be a few further straws in the wind today — the real extent of which may or may not be clearer by the weekend? On our site here see Randall White’s  “First debate may mean Harper majority is closer .. but what if Iggy turns out like Joe Clark in 1979?” Two intriguing items from more technical polling sites are:  “April 13th: New Ekos poll — Best scenario for the Liberals so far” at Too Close To Call ; and “So I heard some polls came out today” at ThreeHundredEight.com. For what may or may not be signs of increasingly restless distant drums try “Scatological attack on Stephen Harper’s record goes viral” in the Globe and Mail. There also seems some broad agreement that Ignatieff did better in tonight’s French debate than in last night’s English debate — and Harper did worse. But does this count?

UPDATE APRIL 11: There has been a fresh flutter of excitement today, on the eve of the English language leaders’ debate on TV tomorrow. See “Will AG’s not-so-secret G8 spending report be the straw that at least breaks the Harper Conservative lead a little?”

UPDATE APRIL 8: Still no big surprises at the end of the second week of the Canadian federal election of 2011 campaign. But with three weeks still to go there may be a few straws in the wind, maybe? See our “One side of Mountie culture does look pro ‘Harper Government’ .. and other noise along the campaign trail.”

UPDATE APRIL 5: We’re well into the action now. See: “Canadian federal election of 2011 : That was the first week that was — don’t jump to any conclusions yet!” and “Fear and hatred on the campaign trail in Canada .. is this Unknown Country about to become still more unknown?”

UPDATE MARCH 30: The way things look right now, one big question about the Canadian federal election of 2011 is will the Harper Conservatives win a majority of seats in the elected branch of Parliament at last? And what would happen if they did? See Citizen X on “Would Harper majority government in Canada be like Cameron-Clegg coalition government in UK?”

Press release poster for Francesca Woodman exhibition at the Victoria Miro Gallery in the Islington neighbourhood of London, 16 November 2010 — 22 January 2011. Ms. Woodman was born in Denver, Colorado in 1958 to artistic parents. She spent parts of her childhood in Florence, Italy, and her late teens in Rome. She began taking her remarkable photographs when she was 13. She committed suicide in New York in 1981 — the Sylvia Plath of photography.

In 1933 the incomparable Percy Robinson published his still too-neglected minor classic, Toronto during the French Regime, 1615–1793. In the book’s last chapter he noted how, in the 1930s, the capital city of Ontario (then still only the second-largest city in Canada, behind Montreal) was “the citadel of British sentiment in America.”

Over the subsequent three-quarters of a century things have changed — and not just because wave after wave of global migrants from an increasingly vast diversity of non-British origins have moved to the Toronto region. Many long-established residents whose parents and grandparents and great grandparents were of British and other origins have come to think of themselves as Canadians, first, second, and last.

“Last week I went to an exhibition of photographs by Francesca Woodman ... I'm really glad I did because the work is wonderful.”

In the early 21st century city region the proposal for a London Stock Exchange merger with (or some would stress, takeover of) the Toronto Stock Exchange, suddenly made public in the wake of last Friday’s Canada-US “Beyond the Border Working Group” announcement in Washington, is bound to have a kind of old neo-colonial ring in many local and even regional ears.

So “Ontario Finance Minister Dwight Duncan [from faraway Windsor, just across the river from the old French Canadian fort at Detroit] expressed major concerns about the transaction, saying London would end up controlling the merged entity and that the deal raises many unanswered questions … ‘This is a significant development that affects our capital markets, that affects our country, that affects our place in the world.’”

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Many other things in the global village have also changed over the past three-quarters of a century of course. In fact the merger/takeover proposal involves the London Stock Exchange (LSE) and something known as TMX Group, which “owns and operates …  the Toronto Stock Exchange, and the TSX Venture Exchange … the Montreal Exchange, the Natural Gas Exchange and the Boston Options Exchange.”  And the TSX Venture Exchange alluded to here “is headquartered in Calgary … and has offices in Toronto, Vancouver, and Montreal. It was previously known as the Canadian Venture Exchange … created by the merger of the Vancouver Stock Exchange … and the Alberta Stock Exchange.”

Francesca Woodman, Giuseppe Gallo. Rome 1978.

The current CEO of TMX Group, Thomas A. Kloet, is an American, who “graduated … from the University of Iowa in 1980,” and among many other things was previously CEO of “Singapore Exchange Ltd.” (which has more recently merged with the Australian stock exchange). The current CEO of the London Stock Exchange (LSE — also short for London School of Economics, but forget about that) is Xavier Rolet, a native of  Aix-les-Bains, France, and graduate of Columbia Business School in New York, whose previous employers include Goldman Sachs, Credit Suisse First Boston,  Dresden Kleinwort Benson, and  Lehman Brothers in France.  And for added international glitter here, the Borsa Italiana, based in Milan and “Italy’s main stock exchange … was acquired by the London Stock Exchange in 2007.”

In Canada alone the proposed LSE-TMX deal must be approved (it already seems clear enough) by “regulatory gnomes in Toronto, Montreal and Ottawa.” And: “While LSE and TMX executives stressed repeatedly that the union was a ‘true merger of equals,’ it is clear that the LSE will have the upper hand … In addition to taking the CEO’s seat, LSE shareholders will own 55 per cent of the new group, with TMX shareholders owning the rest. The new company will have 15 directors, eight from the LSE and seven from the TMX, meaning LSE appointees will have control of the boardroom.”

Will that finally be good for Canada? As in the case of the new Canada-US Beyond the Border Working Group, 2011 is shaping up as a year of profound naval gazing about the Canadian future — which maybe even ought to take place in the context of yet another federal election campaign?

Frances and friend. Hardly pornography, but ... what? Angelic, some suggest? Powerful darkness others say?

Some immediate reaction from across the pond also suggests that certain questions are already being raised in the old imperial metropolis too. Nils Pratley at guardian.co.uk, has just written: “On Wednesday morning the London Stock Exchange thought it had secured a deal to join the top division of global exchanges: a ‘merger of equals’ with TMX of Canada to create a combo ranked fourth by revenues. At teatime came news that Deutsche Börse and NYSE Euronext, numbers two and three by size, are in merger talks … their move has thrown a large spanner in the works for the LSE and TMX. Shareholders in both companies will rethink. Rather than merging, would it be better to wait until the tide of consolidation produces a takeover bid at a (hopefully) fat premium? … For now, Xavier Rolet, chief executive of the LSE, probably has to plough on with the merger talks with TMX. Completion is not due until October, which leaves time to explore alternatives. Rolet clearly has to find a deal of some sort —  but it’s not obvious that Canada is still the best place to look.”

Mmmm … stay tuned of course. It seems likely enough that there will be more than a few further cases of “the plot thickens” on this file.

There is a discussion of the Victoria Miro Francesca Woodman photographs that accompany this article, by Brian Dillon, in the 20 January 2011 issue of the London Review of Books.

As deep background here, the always vaguely dodgy notion that smart “Tory planning” has somehow enabled the Canadian economy to escape the worst downturn since the Great Depression of the 1930s has been wearing a little thinner than usual lately.

A recent report from “economist Jim Stanford of the Canadian Auto Workers paints a far different picture … from what politicians, and indeed some private sector economists, have been telling Canadians for most of the past year.”  During the second and third quarters of 2010 (April to September) the Canadian economy  grew more slowly than any other of the old G7 advanced economies except Italy. According to Stanford: “We should stop patting ourselves in the back … Yes we’ve had a couple of decent quarters, at the end of 2009 and in the beginning of 2010, but now we’re running below capacity.”

For further evidence on this front, consult such other recent headlines as “Canada’s economy seen losing some luster in 2011” ; “Canadian economy to slow, economists say” ; “Canadians guarded on economy”; and “It’s the economy, Scott Brison says, and the Tories are stupid.”

There still seems to be some good news. Or you can at least be excused if you’re confused by such continuing headlines as: “Why are we so down when economy is looking up?” ; “Economists say Canadians too gloomy about prospects” ; “Positive signs amid the gloom” ; or even “Canada PM applauds job creation, defends oil sands.” It is also true enough that “Canada’s economy added more jobs than expected in December.” And the Canada-wide unemployment rate last month was 7.6%, compared to 9.4% across the USA.

Then there is the recent history of the Canadian dollar — which is trading at just under $1.01 US as I write. As Canadian exporters will tell you (to say nothing of people in the movie business in Vancouver or Toronto), this is not an unmixed blessing. But if you can remember back just nine years ago to January 21, 2002 when the Canadian dollar hit its all-time low of 61.79¢ US, it’s hard not to feel somewhat good about its current level (assuming of course that you hold most of whatever financial assets you are lucky enough to have in Canadian dollars).

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As alluded to, one big trouble with our current high dollar is that it also makes our exports more expensive and thus less competitive — which is not good for a country that exports as much as Canada (even or especially if most of our exports just go to the United States next door). And another troubling recent trend in the Canadian economy has been a decline in Canadian exports.

This trend is not quite so recent as the GDP slowdown in the second and third quarters of 2010 stressed by Jim Stanford. To quote a CBCNews story from last year: “Canada imported more than it exported in 2009, the first time the country has posted an annual trade deficit since 1975” (another year of general economic malaise). The latest data available suggest that we have imported more than we have exported again in 2010, even though “Canada’s trade deficit with the world narrowed to $1.7 billion in October [2010] from $2.3 billion in September.”

“On the other hand,” on the other hand, remains a key Canadian locution. Some will point to one silver lining in the cloudy export statistics of the past several years. Our near-abject dependence on the US market as an export destination has declined — a little. In 2004 the US absorbed  81.7% of total Canadian merchandise trade exports. By 2009 the figure had fallen to 73.4%. The latest statistics available suggest the trend is continuing. The US absorbed  72.8% of all Canadian exports in October 2009, but only 70.0% in October 2010.

On the other hand yet again, even the latest October 2010 export numbers to the United States clearly enough show the continuing extent to which the Canadian economy is just another regional economy in North America (smaller than California, eg, but still bigger than Texas — and geographically at least, slightly larger than all of the USA). And we shouldn’t let the notion that, for perhaps some brief transitional moment, we are actually doing slightly better economically than our friendly giant neighbour go to our heads.

In November 2010 — the last date for which such data is currently available — the median unemployment rate among the 13 states of the union that, in one respect or degree or another, directly touch the Canadian border, was 7.6%. And this was exactly the same as the Canada-wide unemployment rate for the same month.

We may come out of the current round of broader international economic difficulty somewhat less dependent on the US market. And we may not really need the kind of mysterious Canada-US perimeter security deal apparently now being discussed by some government officials on both sides of the border. But it is certainly naive to imagine that we have somehow altogether escaped the assorted economic diseases from which the United States of America has only begun to recover. And we do need to keep working on our own treatments — and keep keeping a close eye on all those who claim to be developing our action plans and other economic policies in 2011.