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“A Tonic For Progressive Economics”: Why Trudeau Matters More Than Gowdy

Which major event last week should have an important impact on the 2016 presidential election?

No, it’s not Hillary Clinton’s nine hours of testimony before the House Select Committee on Benghazi. She walked away with a smile, and for good reason.

Republicans on the committee, led by Rep. Trey Gowdy (R-S.C.), succeeded brilliantly in confirming House Majority Leader Kevin McCarthy’s (Calif.) burst of honesty: that the whole exercise always had bringing down Clinton’s poll numbers as one of its central purposes. Only right-wingers already convinced of her perfidy thought otherwise. She emerged stronger than she started by staying calm, cool and confident in the face of repeated provocations.

The consequential event occurred three days earlier. The Liberal Party landslide and the triumph of Justin Trudeau in Canada’s election last Monday was a tonic for progressive economics and a cautionary tale for parties on the center-left lacking the courage of their convictions. Trudeau proved that voters understand the difference between profligacy and necessary public investment.

The outcome also carried a warning for conservative politicians in diverse societies who court a backlash against religious and ethnic minorities. Conservative Prime Minister Stephen Harper played this card (around the issue of whether Muslim women could wear the niqab veil at their swearing-in as citizens), and it backfired badly.

Trudeau is the rare politician who came right out and promised to run deficits. They will be relatively modest — about 10 billion Canadian dollars (about $7.6 billion) annually over three years — with the goal of rebuilding Canada’s infrastructure. The Liberals popularized the term “infrastructure deficit,” and voters — particularly in rapidly growing urban areas — agreed that a time of low interest rates was exactly the moment to invest in the future. The hefty swing the Liberals’ way in Canada’s metropolitan areas helped power their sweep.

Already, conservatives in the United States are making the case that Trudeau will regret abandoning the fiscally cautious policies of the earlier Liberal governments headed by Jean Chrétien and then by Paul Martin. The Chretien-Martin Liberals were a middle-of-the-road lot who dominated Canadian politics from 1993 until 2006. Their budgetary prudence gave Canada nine straight surpluses.

But there’s a problem with this argument: None other than the fiscally responsible Martin himself endorsed the emphasis on investment. “You should be investing to pay for the kinds of things that are going to give your children a better life,” Martin said in defense of Trudeau. “And that’s what infrastructure is, what education is, it’s what research and development is.”

After the election, I spoke with Chrystia Freeland, a Liberal who won overwhelmingly in her Toronto district (and with whom I recently served on a think tank project on economic policy). She made the essential point: “It’s really important that people not approach economic policy as ideology or with quasi-religious convictions,” Freeland said. “Economic policy is about the facts and the circumstances.” A weakening Canadian economy strengthened the case for Trudeau’s approach.

In breaking the ideology of austerity, the Liberals, a traditionally centrist party, boxed in their main competitors for the anti-Harper vote. The New Democrats, known as the NDP, are usually to the Liberals’ left. But like the British Labour Party and social democratic parties elsewhere, the NDP under its leader, Tom Mulcair, felt that abandoning fiscal prudence would make the party look irresponsible to swing voters.

It was the wrong call, and Trudeau, who started the 11-week campaign running third, behind Harper and Mulcair, turned himself into the candidate of “real change,” which the Liberals embraced as their slogan. For good measure, Trudeau was unabashed in offering other proposals to push against growing inequality: a tax plan that would pay for a middle-class tax cut by raising taxes on those earning more than 200,000 Canadian dollars (about $152,000) a year, and a substantial increase in the child benefit for the poorest Canadians.

Paul Wells, one of Canada’s premier political journalists, observed in his post-election wrap-up in Maclean’s magazine that Trudeau “had to go big, or the Canadian voter would send him home.” By going big, Trudeau’s new home will soon be 24 Sussex Drive, the Canadian White House, where he lived when his dad, Pierre, was prime minister.

It’s true that the political and fiscal situations of Canada and the United States are different. But progressive politicians in the United States and elsewhere would do well to learn that if they let orthodoxies paralyze them, they will have little to say to voters who, as Trudeau declared on election night, are tired of the twin ideas that they “should be satisfied with less” and that “better just isn’t possible.”

By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, October 25, 2015

October 26, 2015 Posted by raemd95 | Austerity, Canada, Justin Trudeau | Deficis, Economic inequality, Economic Policy, Infrastructure, Progressives, Republicans, Stephen Harper, Trey Gowdy | 1 Comment