Wednesday, August 31, 2011

Post-Layton Poll

The new Harris-Decima poll illustrates that the wave of national mourning that accompanied Jack Layton's passing has produced a strong political impact. While the effect is probably going to be temporary, the NDP and Conservatives were tied in this poll at 33% each while the Liberals came in at 21%.

My forecast model suggests it would produce a House of Commons of 131 Conservatives, 118 New Democrats, 58 Liberals 4 Bloc and 1 Green.

Perhaps this is the first sign of real weakness in the Harper majority.

Tuesday, August 30, 2011

Obama's Economic Dilemma

I think Jon Chait gets Obama's problem with jobs and Congress exactly right:
...if Obama potentially had the votes in Congress to pass another stimulus, it would be worth taking an unpopular vote in order to rescue the economy. Since Obama does not and will not have those votes, he needs to conceive of his plan as a political message. There is no point in holding a message vote when the message is unpopular. 
This seems to be a reality liberals have trouble acknowledging. There are a lot of issues where the public agrees with the left. Economic stimulus does not appear to be one of them. Now, public opinion is fairly hazy and ill-informed about this, and certain elements of economic stimulus can command majorities. But the passage of the first stimulus, at the height of Obama's popularity, shows pretty clearly that people instinctively think that, when the economy is terrible, having the government spend a lot of new money is not going to help. That they're wrong doesn't really matter for the purposes of this question.
The administration floated the idea of using a mortgage refinance plan that would not need Congressional approval and might provide some stimulus, but would still need acceptance by a regulator who is not answerable to the Obama administration. He needs several more ideas like this.

This is the nub of the problem. Obama needs to find some way now to rectify the problem that arises from the inadequacy of stimulus plans two years ago, and he is likely going to have to do it without Congress. One way or the other he needs a great deal of luck in restarting growth, or he will face an enormous obstacle to re-election (he could still get re-elected if the Republicans move too far to the right).

An addendum: a few weeks back Brad Delong summed up the mistakes and missed opportunities of Obama's first year or two in office and what he should do now. It is worth reading.

Overall, it is clear that Obama faces immense obstacles to restarting economic growth. It is not all clear how he gets the U.S. economy moving again, especially given the loony political opposition he faces from Republicans.

Sunday, August 21, 2011

Ontario headed for minority government

Two polls out this month (Ipsos and Nanos) strongly suggest that the next Ontario election will produce a minority government. Spring polls suggested a PC majority so it is the Liberals who have momentum. It looks like negative ads like these are taking their toll on Mr. Hudak.

My seat estimates suggest the current polls would produce an exceptionally close result. It is not clear which party would be in first place.

Tuesday, August 16, 2011

More on Turmel

It is unfortunate that Chantal Hébert was on vacation when the Turmel story broke.  Her column today is a gem:
The reality is that those who ran for the NDP in the last campaign and the vast majority of those who voted for them did so not to revisit the debates of the past but because they wanted to move on.

Many wanted to resume contributing more directly to Canada’s federal life to help craft a progressive alternative to the Conservatives.

A survey commissioned by the now-defunct Canadian Unity Information Office a few years ago revealed that a majority of Quebecers refused to identify themselves as federalists or sovereigntists.

Large numbers of them want out of that particular box....

To all intents and purposes, those who leaked details of interim leader Nycole Turmel’s past links with the Bloc are playing a longer game than that of embarrassing the NDP at a time of relative fragility.

For the moribund Bloc, the best hope for revival lies with a successful demonstration that there is no room within Canada’s national parties for nationalist Quebecers — or at least not unless they are willing to atone for the way they exercised their voting franchise in the past.

It looks like sovereigntist strategists can count on outside help to achieve their purpose.

Alone of all members of Parliament, Quebec’s New Democrats are being asked to account for their past political leanings.

Some self-appointed high priests of federalism have gone as far as suggesting that a public recanting of anything that smacks of a sovereigntist belief is also in order.
The editors of the Globe and Mail, Liberal leader Bob Rae and Stéphan Dion fit the definition of "high priests" as far as TC is concerned. They should be ashamed of themselves.

Another op-ed on the subject worth reading is this one published earlier in the Toronto Star by University of Ottawa academic Claude Denis. An excerpt:
What political planet do English-speaking Canadians live on?

The majority of francophone Quebecers have voted for the Bloc Québécois for the past 20 years. A strong majority of Quebec francophones voted “yes” to sovereignty in 1995. Most of the Quebec left has been sovereignist for a good four decades. So if you’re a francophone Quebecer and you’re on the left, chances are you are or have been a supporter of at least one sovereignist party.

None of this is news or surprising. Is there something not clear? Nycole Turmel is a left-wing, francophone Quebecer. She has been socially and politically active for 30 years. Of course she has had ties to the sovereignist movement.

Friday, August 12, 2011

Britain's riots - Thatcher's grandchildren

This column on Bloomberg news by Pankaj Mishra is the best thing I have read on the British riots. An excerpt:
Britain, of course, is the original home of the free market. As the first country to industrialize, and to have an enormous comparative advantage, it inevitably adopted laissez- faire policies in the mid-19th century. The harsh effect this had on the working classes and the poor was gradually softened by such Victorian institutions as compulsory education, trade unions and social-service societies. The political and economic catastrophes of the first half of the 20th century buried the idea of the self-regulating market; and a new national consensus was built around the welfare state after World War II.
This all changed starting in the 1980s as successive British governments, Labour as well as Conservative, struggled with high inflation, falling industrial productivity and conflict. The illusion that the nation could be saved only through immersion in a self-stabilizing market economy hardened into a revolutionary ideology, embraced by both major parties, that has shaped today’s Britain.
In that sense, if Tony Blair and David Cameron are “sons of Thatcher,” as the journalist Simon Jenkins puts it, the rioters of today are the grandchildren.

Sunday, August 07, 2011

A little realism on the right

David Frum has been something of an apostate on the right for some time now, but imagine the teeth gnashing this quote about the post-2008 financial and economic crisis must have engendered:
When people tell me that I’ve changed my mind too much about too many things over the past four years, I can only point to the devastation wrought by this crisis and wonder: How closed must your thinking be if it isn’t affected by a disaster of such magnitude? And in fact, almost all of our thinking has been somehow affected: hence the drift of so many conservatives away from what used to be the mainstream market-oriented Washington Consensus toward Austrian economics and Ron Paul style hard-money libertarianism. The ground they and I used to occupy stands increasingly empty.

If I can’t follow where most of my friends have gone, it is because I keep hearing Susan Sontag’s question in my ears. Or rather, a revised and updated version of that question:

Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?
To see what the Susan Sontag question was and for the rest of the item, read the blogpost, Were Our Enemies Right? here.

Saturday, August 06, 2011

U.S. debt downgrade

Paul Krugman gets it right on the U.S. debt downgrade:
....It’s a strange situation.
On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency.
On the other hand, it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?
Just to make it perfect, it turns out that S&P got the math wrong by $2 trillion, and after much discussion conceded the point — then went ahead with the downgrade.
More than that, everything I’ve heard about S&P’s demands suggests that it’s talking nonsense about the US fiscal situation....
In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right.
It is critically important to remember, as Krugman notes, the scandalous role of the ratings agencies in the subprime mortgage mess, which is all well-documented in Michael Lewis's marvelous book The Big Short.

I passed my copy on and don't have it to quote from but read this excerpt from an interview with Michael Lewis by Terence McNally (the TM in the excerpt below):
ML: The sub-prime mortgage bonds were rated triple A by Moody's and Standard and Poor's. Why? Well, they could give you an argument, but in retrospect, it looks like a very foolish argument.
TM: It looks worse than foolish to me, it looks corrupt.
ML: When you think about corruption, there's the simple kind where I give you $1000 to interview me on the radio so it will promote my book. That's corrupt and we both know it. But there's a different sort of corruption where we're all part of a system that is rewarding us very well to pay attention to certain things and not pay attention to others. We're paid to have blind spots. There's an awful lot of that kind of corruption in the financial system because people's incentives are all screwed up.
Ratings agencies were paid by the people who issued the bonds to put the triple A rating on them. Their incentive is to please the people who are issuing the securities. They can't at the same time independently judge the securities.
TM: Arthur Andersen went out of business for doing basically the same thing with Enron. How could someone not see that they were recreating something which had already failed in a huge way?
ML: Some people did see...The people I find most riveting are the people who saw the magnitude of the coming disaster. They were sane men in an insane world. They would call Standard and Poor's and Moody's and say, "How are you rating these things? Our models show that if house prices even go flat, all these bonds will be worthless." To the question of what happens to these bonds if house prices go down, Standard and Poor's would say, "We actually don't know because there's no place in our model to put a negative number."
TM: Obama, Geithner and the administration are putting out plans for new regulations. This isn't in there?
ML: No. It should be illegal for issuers to pay raters for ratings. It's a bribe. Instead the administration says they're going to give the regulators more authority to evaluate ratings agencies. That doesn't do anything; they already had that authority.

Friday, August 05, 2011

The Turmel Tempest

It is a classic example of a huge fuss being generated in the media over an issue that adds up to nothing.

The fuss has been fed by political opponents who should know better but apparently don't.  For example, Bob Rae was reported to have said today:
What kind of federalism is it that leads someone to join two other parties, both of which are committed to the independence of Quebec, the sovereignty of Quebec and in the case of Quebec Solidaire a socialist Quebec?
Globe blogger and long-time NDP activist Gerald Caplan points out:
...Quebec is different from the rest of Canada in ways we often ignore. Ms. Turmel is one symbol of this difference. For Ms. Turmel -- Québécoise, Canadian, federalist, trade union leader, New Democrat -- to carry a Bloc card for a few years was no big deal.
Some thought that lesson was learned election night. The reason so many Québécois could move en masse from the Bloc to the NDP was not just because Mr. Layton was a great guy to have a beer with. He also shared and represented their values. Mr. Layton was progressive, a social democrat, committed to social justice. So were many Bloc voters who didn’t want Quebec to separate. Those were the social values that the two parties shared and that allowed the massive voting switch once it was clear that the Bloc was an exhausted force.
Maclean's writer Martin Patriquin provides some useful insights. “… it’s amazing how few people have clued into this headsmackingly obvious point, but Turmel willingly ripped up her Bloc Québécois membership card to run for a dyed-in-orange federalist party [emphasis in original]. That alone should be evidence enough that her sovereigntist credentials weren’t quite Parizeau-calibre. If anything, Turmel’s (temporary) ascension to the head of the party, like the NDP’s overwhelming victory in May, is proof positive that detaching the left from the sovereigntist movement isn’t as impossible as it once was. How far we’ve come.”
One should add that not only did Turmel spurn the Bloc, she did so to run for a party that historically had never had much electoral success in Quebec. So she supported a federalist party in a circumstance where she might have reasonably expected that to be a political liability.

The fact that many in Quebec such as Turmel spurned the pro-independence party for a federalist party should be celebrated not mocked. Turmel is a long-time NDP member and supporter, her true allegiance. Her opponents in any case include many with previous sovereignist backgrounds: Liberal Jean Lapierre, who served in Martin's cabinet, was a co-founder of the Bloc, and Maxime Bernier, who is now back in Harper's cabinet, worked for PQ Premier Bernard Landry, a very serious supporter of Quebec independence.

Turmel represents exactly what we want to see Quebecers do about federalism, Mr. Rae, embrace it.