Politics: Lack of Vision in North America

TORONTO, ONTARIO - There is a general consensus about what is needed right now in both the United States and the Canadian economies. A stimulus package by the government is recommended that immediately injects money into the economy, stabilizes it, and allows individual consumers to start spending money again. While there is debate on what constitutes the most effective kind of stimulus, there is little question that "shovel-ready" is everyone's favorite term. So why is there an incredible lack of vision in the responses to the crisis on both sides of the border?

In the United States, where the crisis is most acute, the Republicans in the House of Representatives uniformly voted against the latest $825 billion stimulus package. Why? Sure, they wanted to see more tax cuts, but I suspect that they would have looked the other way if the spending in the package had been on things that were clearly stimulative in nature. Instead, the Congressional Budget Office estimates that only about 30% of the money in the package will be spent by the end of 2009--which would be one reasonable definition of short-term stimulation. The remaining about two-thirds of the bill could be mistaken for pork-barrel projects. What were the authors thinking?

It would appear the House Democrats--much like Republicans following the 11-September-2001 attacks--are trying to use the current crisis as an excuse to do what they've been wanting to do anyway. In the process of (for example) including money for education--a good idea, but not particularly stimulatory in the way that infrastructure projects or unemployment extensions would be--they are undermining President Obama's attempts to create bi-partisanship. Yet, Obama's administration seems to be backing the bill as-is and they are not shirking ownership, so effectively the entire Democratic Party including Obama is to blame to producing a bill that likely won't cause much harm (contrary to what some Republicans claim), but just doesn't do what it is supposed to do--stimulate the economy--with much efficiency.

Furthermore, besides not directly addressing the problem at hand, it doesn't really do anything else coherently, either. There's no grand vision for the future embedded in the longer-term provisions of the bill. Instead, it reads like a hodge-podge of Democratic Party pet projects. That may be the biggest lost opportunity here. Not only may the bill prove less effective than it should have been, but its lack of coherence doesn't move the country in a clear direction. It looks like old politics, when Obama was supposed to be about new politics. The Democrats seem to be squandering the opportunity to prove they are now about pragmatic solutions, and instead are opening themselves to the old criticism that they are just about bigger government. Read a conservative blog and it will be clear that the 2010 campaign has already started on this theme.

Meanwhile, up here in Canada where the economy is in recession but not in nearly the crisis of that in the United States, the "new" parliament has come back after prorogation and Prime Minister Harper has presented his new budget. It bears a strange resemblance to the Obama budget--not in its goals or underlying ideology, of course, but in its lack of coherence. Rather than taking bold steps on unemployment insurance or even on taxes, the proposed Conservative budget instead has a hodge-podge of various spending and tax measures that seems to have been designed to have something in it for just about everyone, and add up to be just big enough to be an adequate stimulus that the Liberal Party can't argue with, at least in terms of size. Indeed, with a simple Liberal amendment passed today to have regular progress reports on the stimulus with a confidence vote, the budget is expected to be passed tomorrow with Conservative and Liberal votes.

The shocking thing here is that Conservative Party has proposed a budget that looks like something the Liberal Party would have proposed, perhaps maybe even a bit less coherent. Clearly, the Conservatives wanted to avoid an immediate election and stay in power, even if it meant they wouldn't be able to do what they had previously planned to do in the budget. Like the stimulus package in the United States, the budget is unlikely to do harm, but again the Conservatives have lost an opportunity to present a coherent vision of how they could manage a stimulus. Old politics--winning a confidence vote--has won out in Canada, too.

The lost opportunities won't be felt much by the Democrats or the Conservatives in the short term. At some point, though, the lack of vision will catch up with them in future campaigns. The Democrats, by seeming to meet their old stereotype, likely will see more repercussions if they don't follow up with alternative actions than the Conservatives, who have mostly alienated their base. Still, can you imagine how things would be different had there been a laser-beam focus on clear stimulus spending (and tax changes) articulated in terms of a future vision? Both parties would be looking a lot better right now had they managed to pull that off, and each could have done it.