Broken promise of social spending

In addition to delving into the issues myself – to my very limited abilities – I’ll be arguing here that the way the mainstream media covers this election campaign is detrimental to democracy.

I’ll talk about the perfidy of predictions, polls, the discussion of strategy, and more. I owe a lot of my thinking on the subject to a brilliant book by an excellent American journalist, James Fallows. The book is called Breaking the News – click on the title for its link on Amazon. Or better yet, order it at an independent book store or take it out of the library. My first target will be the cult of predictions, which are ubiquitous during election coverage, and completely useless to potential voters.

I should point out that CBC has explicitly claimed it wouldn’t cover this campaign like a horse race, and so far it’s done an alright job. On CBC Sunday News, last night, Neil MacDonald filed a pretty tough story about Paul Martin’s boasts to have kept his promise to reduce debt, lopping off $60 billion. Problem is, as MacDonald pointed out, Martin never promised to do such a thing.

His basic promises, contained in the 1993 Liberal Red Book, were about breaking with Conservative policies and investing in social programs (or, as Neil MacDonald put it, his promises were more 'liberal' -- he didn't say if he meant small- or big-L).

In fact, Martin did the opposite, systematically under-estimating surpluses and laying aside contingency funds to boost year-end extra surpluses. Thanks to a law the Liberals passed that all unexpected surplus money had to go to debt reduction, Paul Martin was able to legislate debt reduction at an absurd pace in a circuitous but extremely successful manner.

MacDonald also showed that Martin had broken his promise (made in the 1997 and 2000 campaigns) to allocate surplus money 50-50 to social spending on the one hand, and tax and debt reduction on the other. He said that Martin had spent only about a third of extra money on social spending. Coming at the close of an uncharacteristically critical story, this seems like a stinging indictment. But in fact, it may have been far off the mark.

Jim Stanford, an economist with the Canadian Auto Workers union, showed in a short study that's worth reading that in their second term, the Liberals actually spent only about 2% of surpluses on social spending and the rest on debt reduction and tax cuts (personal and corporate). The Liberals' spending patterns have not differed much since then; it's key to remember that almost all the recent spending promises won't have a substantial effect until the last years of this decade -- at which point only people like Stanford and their blogging readers will even remember who said what when.

Meanwhile, Stanford has an important column in the Globe today that exposes how Martin's supposedly stellar economic management only stands up if you look at a fraction of the numbers. (To get the column if you don't get Globe Insider edition, search "we look prosperous but the voters know better" at news.google.ca and follow the link). His hits the nail on the head with his closing remark that:

There's an indirect way, however, in which the productivity debate nicely sums up the strangely joyless state of Canada's supposedly prosperous economy. Canadians work harder and longer than they ever have. They have more skills, and a stronger work ethic, than ever. Yet their incomes are stagnant, and their jobs are at risk. All that's a recipe for a populist backlash. And who knows, one might even show up.

I'm not sure that a populist backlash is coming. A major reason is that the commonly accepted view of the Canadian economy is a myth, perpetuated without serious challenge by most of the mainstream media, most of the time. I do think most working Canadians, burdened by record levels of personal debt, feel a striking disconnect between a message of prosperity and their different reality.

But one of the most vicious aspects of inequality, as testified by this detailed Guardian piece, is that it increases the pressure on everyone else to spend more just to feel as if they're keeping up. Never mind the natural feeling one has of being isolated in one's despair: most Americans believe that class mobility in the US is far higher than it really is, in part, probably, because it's emotionally unbearable to be as pessimistic about the future as the empirical evidence demands.

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PS, I said my next post would be about Ignatieff's views on war and imperialism. Clearly, I was lying. A story I wrote about him for this month's issue of the New Internationalist isn't due to go online until January at the earliest, but strings have been pulled and I hope it'll be up in the next couple days. I figured I'd wait until I could link to the story.