Friday, June 25, 2010

The Liberal Party in Decline/ Part Two: the Chrétien Era

There can be little doubt that Jean Chrétien is and was one of the most naturally gifted politicians in Canadian history. However, he alienated French Quebec in the early nineties during the constitutional wars and the party remains weak there to this day. In addition his string of victories in the nineties rested to a degree that remains unrecognized on a run of unbelievably good luck. Let’s go through it all in order:
First came the fracturing of Mulroney’s coalition. It was always a tenuous alliance at best. Free trade united PC MPs from Quebec and the rural west. When the question shifted to Quebec’s place in the federation during the debate on Meech Lake, the Progressive Conservative Party split into three: the original party, the new western-based Reform Party and Lucien Bouchard’s Bloc Québecois. It is easier to win an election when your opponents are so thoroughly divided.
Our national media from time to time gets the national political scene spectacularly wrong. Perhaps its low point came in the early nineties when, despite the obvious collapse and fracturing of the Mulroney coalition then underway, all they could see was that somehow Kim Campbell would rescue the sinking PC ship. At the time it meant completely disregarding and underestimating both Reform and the Bloc. So they wrote stories about how Jean Chrétien was yesterday’s man.
But there was a second key element of Liberal good luck: the party also benefited from developments on the left. The NDP took control of Ontario in 1990 and B.C. in 1991 at the provincial level, and promptly started to drive down the popularity of the NDP brand provincially and federally. That came on top of the NDP selecting the inexperienced and unqualified Audrey McLaughlin as its federal leader in 1989. Given that second choice for the majority of NDP voters is the Liberals, that meant the NDP electorate defected en masse to the Liberals in 1993. The NDP brand in Ontario in particular was deeply hurt by the early nineties recession. At the same time this meant the Ontario Liberal Party, being out of power provincially, could not do any damage to the federal Liberal brand during the early nineties downturn. Had David Peterson won in 1990 the story would have been quite different.
Third, the split on the right had a clear regional character that helped the Liberals in Ontario. West of the Ontario-Quebec border only one PC was elected between 1993 and 2000 whereas east of the Ontario-Quebec border there were no Reform or Alliance MPs during the same period. In Ontario the two parties split the right almost perfectly down the middle. Combined with NDP weakness, this gave the Liberal party a near sweep of seats in Ontario for three elections in a row. But Ontario politics had never before displayed such uniformity. It couldn’t last and didn’t. The Liberals’ apparent invincibility in Ontario ended in 2004 when the unified Conservatives won twenty-four seats, and the NDP, newly reinvigourated by Toronto-based leader Jack Layton, took 7 seats (the NDP now has 17). Those 31 seats were the difference between Paul Martin winning a minority and a majority that would have somewhat resembled the Chrétien victory in 1997.
Overall, Chrétien faced weak leaders such as McLauglin and Stockwell Day on the opposition benches. The political stage was set for the three consecutive majorities. Economic developments would prove to be equally favourable.

The Political Economy of Liberal Majority
The new government, elected in November 1993, inherited a large deficit. However, the slump of the early nineties ended in 1994 setting the stage for a decade of strong growth, an essential ingredient for political strength and critical to any deficit reduction strategy.
Whether the deficit was ever the economic burden that it was made out to be is debatable. Regardless, falling interest rates, the end of a credit crunch, lower oil prices, and increasing productivity from the tech boom, helped fuel a decade of rapid growth in the U.S. economy during the decade Joseph Stiglitz called the “roaring nineties”. Growth in the U.S. fueled demand for Canadian goods and services. A bonus was that Canada gained a competitive advantage via a weak the Canadian dollar, (which did not reach bottom until January 2002 when it traded at about 62 cents U.S.) Thus the 1995 deficit fighting budget was certain to be successful despite all the gloomy editorials and op-eds in the media that suggested otherwise. Within three years the Liberal government could take credit for cleaning up what had appeared to be an intractable financial mess.
By 1998 the Chrétien government could start both spending money and cutting taxes. Indeed they could have launched Paul Martin’s child care program much sooner, making it far less vulnerable to cancellation by the Harperites. Despite the good economic news, Liberal weakness continued in Quebec. During the nineties the Liberals did regain strength in western cities such as Winnipeg and Vancouver compared to the Trudeau era, but currently the party holds just 7 of 92 seats west of the Manitoba-Ontario border.

Next... The NDP Revives