Wednesday, July 14, 2010

 

G-20 REDUX

I was introduced recently to Denis Cochrane, an academic who is the President of St. Thomas University. I've been subsequently reminded that Mr. Cochrane has a substantial political background. He has been a Member of Parliament, and was Leader of the Progressive-Conservative Party of New Brunswick in the aftermath of Richard Hatfield's 17 year reign as Premier. At that time, the knock against Cochrane was that he was "too nice."

In a series of conversations with prominent New Brunswickers which is being published by the Saint John daily, the "Telegraph Journal", Denis Cochrane muses about politics. He believes modern politicians are losing their ability to govern because they depend almost exclusively on opinion poll results, before making the critical (sometimes unpopular) decisions required of public policy makers.

While Canadians are mired in the controversy over police security tactics during last month's G-20 Economic Summit of world leaders in Toronto. The real issue: The Summit's consensus on pulling back "stimulus funding" has been all but forgotten. In fact after a poll this week in the United States that only 42% of Americans approve of President Obama's "handling of the economy" - The taps on the potpourri of federal stimulus money will likely continue flowing even as the country's nearly Trillion Dollar package adopted by Congress last year ends. At stake for President Obama and the Democratic Party are the mid-term Congressional and Gubernatorial elections this November: That's the point!

Making decisions may be part of leadership; but running the risk of losing the next election for making sometimes unpopular (though right) choices seems no longer a valid reason for seeking office. As Dennis Cochrane sees it, politicians surely have..."an obligation to consult with their constituents. They have an obligation to have a dialogue and get all the information they can...but ultimately they have to make the decision."

Essentially in the case of last month's G-20 the dialogue and the consultations have taken place and the combined wisdom of the leaders of the world's great economic powers resulted in a consensus that the recovery would best be served by growing fiscal consolidation and boosting national savings. That's what the Summit Declaration says. Though for most countries, boosting national savings is unlikely to see the light of day. In the United-States stimulus relief raised the national debt to $14-Trillion, and the bad news is the administration isn't sure what to expect next year when the stimulus funds run out. Amongst the European Union partners, there is real fear that some more partners, like Greece earlier, will default later this year on Bond issues. At the very least the economies of Ireland, Spain, Portugal, Italy, and Iceland remain on life-support. To say nothing of the United Kingdom in the event that its largest corporation, British Petroleum (B.P.) were forced into liquidation over the Gulf of Mexico oil disaster. Billions of British Pounds, primarily retirement and pension funds, are invested in B.P.

Here in Canada politicians have taken credit for our relatively soft landing from the financial turmoil of the past three years. But, it's the prospect of a further soured economy which is fueling speculation of an early fall Federal Election before "the other shoe drops." Statistics Canada has just reported that the month before the Toronto Summit (May), Canadians bought more than we sold abroad: Our imports outpaced exports by $503 Million. At the very least, the Federal Government faces the prospect of wrestling down the $60-Billion fiscal hole that was dug keeping the economy from tanking further.

Just when it seems they may be most needed; elected officials have abandoned honesty, trust and integrity as principles of leadership in favour of opinion polling and political expediency. In return, little wonder that fewer people engage and vote, and that the apathy and the cynicism grow.

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