While Parliament took a week off, politics changed, perhaps forever. All it took was vaporizing vast Canadian private wealth and negligent U.S. public spending.
A new political reality is emerging from the record $252 billion Canadian families lost in the last quarter alone and American rage at AIG’s bonehead decision to pay executive bonuses out of a bailout. Panicky rescues are running headlong into the pressing need for prudence. If politicians value their necks, “due diligence” will be on their lips.
That isn’t what they were saying before wandering away for March break. Then the two largest parties were tripping over each other to rush tax dollars out the door.
Liberals waved past a deficit budget even while lamely protesting its faults, including a gratuitous assault on pay equity. Conservatives insisted the situation is so grave the prime minister needs a $3-billion slush fund to spend behind closed doors and that the country can’t afford to delay infrastructure projects with current environmental safeguards.
Only reckless leaders will ignore the mood change. It has taken seven months and a $50-trillion global loss, but investors and taxpayers are finally getting mad as hell.
It doesn’t matter that the AIG tipping point was in the U.S. This is a crisis without borders and its lessons are universal. Greed and self-interest aren’t just boundless; they have no regard for the safety of politicians riding to corporate rescue.
There’s no mystery about what that means. Come the next election, those now in power will be judged on more than their willingness to throw open national treasuries to private enterprise. They will also be held accountable for how effectively that money is spent and whose pocket it ultimately fills.
Barack Obama’s AIG embarrassment offers Stephen Harper a timely warning. Public handouts to private firms are as politically dangerous here as there, despite cross-border differences. One is that the U.S. has already committed trillions while Canada is mostly mulling options. Another is Obama has nearly four years to repair political damage; Harper almost certainly faces an election before the next budget.
That makes the margin for Conservative error as small as the risks are large. Along with tilting toward pouring some $10 billion into potentially bottomless GM and Chrysler, Harper is considering helping others, including troubled media companies.
All are problematic. Chrysler, for example, is controlled by a private equity firm almost as reluctant to share information as ask its investors to take the same risk as taxpayers.
Canwest, one of the needy TV and newspaper groups, is widely considered sympathetic to Conservatives, adding the problem of appearances to an already complex policy decision.
Harper is limiting public pronouncements to boosting optimism and making fringe policy announcements. His most revealing economic and political comments were made privately and are available – and well worth reading – at thestar.com/harperspeech. But sooner rather than later he must tell the country what this government will do for ailing industries and their workers. Then, like Obama and AIG, he will have to live with any unforeseen consequences.
Just days ago the crisis provided cover for Conservative efforts to increase the prime minister’s executive control over public spending while advancing parts of his agenda. Now the political pitfalls are starkly obvious and self-preservation suggests a more wary and transparent course.
Jim Travers writes for The Toronto Star Syndicate.