Paradox 2

There is another paradox we find with trade today - as we get fatter and more comfortable from the goods and services we enjoy practically tariff-free, we get more tolerant of the tariffs that remain even when they obviously make the item more expensive. The perfect example is dairy. Most of us are not dependent on the price of food precisely because of the Free Trade World we live in.

 We are more prosperous than ever and get more goods and services than ever often at no tariff because they literally aren't covered by the obsolete "Tariff rate schedules" that used to be so encyclopedic (e.g.: computers and cellphones). It seems a small price to pay to have dairy or poultry be more dear than  it should when your main budget problem is whether you can go to Disney World this year (where you will blissfully consume BGH dairy!). Patriotism and ferocious lobbying of our "statesmen" does the rest.

 Thus, the more benefit from free trade, the more likely we are to tolerate marginal protectionism. It's not fair or right, especially to those of us who live from one grocery bill to the next, but it explains (along with shall we say "low information" habits) why there appears to be absolutely no real political constituency to fight this even in the urban areas where you would think it would  be a natural cause (witness the absurd Lewis memo). What happened to Bernier certainly is used pour encourager les autres on the issue! Can a constituency be created and rallied to fight this? Of course. But it will need leadership and heft and I do not know where it will come from in a country where one of the reasons we ignore the issue is free trade has already made us too comfortable to worry.

That is why a more global approach is needed. The Supply Management system must be held up as just one of the many reasons we are not as prosperous as we should be. We are earning less than African Americans and as much as West Virginians. We are at least 33% behind the purchasing power of Ireland and the US. To get at and root out the last vestiges of tariff and non-tariff trade barriers like the Milk Laws (my favourite campaign moniker for them), we may have to use the "blind" of emphasizing the general theme that, whether it is because of regulation, tariff or monopoly, we are all making less money than we should and thus our quality of life and standard of living is being degraded (and has been in comparison to the US since at least the 1980's).

Protecting Free Trade

The "Protectionism" article on Wikipedia tells us a number of counter-intuitive things about Protection and Free Trade or Reciprocity. First, it notes the work of an economist named Irwin that asserts that it is a myth that America's industry grew and prospered due to high tariffs. America really grew he says because of her openness to people and ideas. In Sandburg's Lincoln, Abe points out that, by the 1830's, the UK had 170 million dollars invested in the US. Corn Laws, Hamiltonian tariffs and the fresh memory of two wars were not going to make the US any less an attractive place in which to invest for Britain.

Second, there are actually three reasons tariffs are imposed by a country: 1. to get revenue; for what is a "tariff" but a tax on trade? Second, protection. Third, to force other countries to arrive at reciprocity agreements to increase TRADE! Let's review that. 

First, the tariff today does not collect revenue. As Irwin's charts (a real eye opener for people who want to know about Protection history) show, the World as a whole gets not even 1% of GNP from tariffs. We get barely 1% of our federal revenue from them. Second, the tariffs, with one big exception are not protecting any one. Most of the industries our tariffs were supposed to protect either are miniscule parts of our economy now (e.g. shoes) or are gone. The exception is supply management but it is the reminder of the exception rather than the rule. The real barriers to trade are non-tariff like the ban on BGH or the Telecomms, Airline and Banking laws that give Canadian firms monopolies or "buy Canadian" policies and programs.

The third point is surely the paradox and the dilemma - sometimes maybe often you have to erect tariffs to induce potential trade partners to negotiate free trade agreements with you. This is exhibit A for the proposition that Donald Trump is the true free trader in using what appears to be on the surface a protectionist hammer. Trump makes it explicit like a Mafiosi selling protection to a shopkeeper (if the thuggish analogy pleases Trump haters so be it):"You do a deal with me, I will drop the tariffs" and usually starts dealing the moment the tariffs go up and takes them down when the deal is done. The Irwin charts show clearly that the US has been in trade deficit since 1970 with it often equalling 6% of her economy. There is no reason why the US should tolerate that if she can rectify the balance with better deals as was done with both the Chinese and USMCA deals. Yet, Wikipedia still manages to put in a few nasty shots at Trump as "trade neanderthal" anyways. 

This brings me to the other note - we're living in an era of free trade such as we have never known. Average Tariffs on Total Imports and Dutiable Imports are lower than they have ever been, especially since the coming of the Bretton Woods Agreements, the GATT/WTO and the various Trade "Rounds". This is especially true of the US but even more true of Europe. The average tariff was 20-60% from 1833 to 1945. It is now 5. The real threat to trade today is not only non-tariff barriers as mentioned above (of which Europe in particular has been an avid and hypocritical practitioner) but lopsided and unhelpful deals or non-deals that naturally enough create ill will in the countries on the wrong end of them and real damage to their economies. If you do not like Trump's trade policy know that it is the incompetent, ill-considered and insensitive fanatical devotion to free trade at any price of his predecessors that invented it. This gave Trump the constituency to take the presidency and implement a vision shared by many Americans who feel that free trade unvarnished and without looking out for the interests of the US has hollowed out their industries and denied good jobs to them.

Thus protection comes in many guises as does reciprocity and free trade. The course of history and the consensus among economists on free trade is encouraging as is the overwhelming evidence that it enriches consumers, grows economies and liberates business. However, several things must be kept in mind going forward so as to build on this critical  part of history's liberating Human Consensus:

1. Tariffs are no longer a serious revenue-collecting tool but a tool, if at all, for expanding reciprocity and freer and fairer trade. They protect no one except the specific interest it was supposed to protect but usually, if long term, leave that interest also poorer, less efficient and, sometimes, no more;

2. The two biggest enemies to free trade and reciprocity are non-tariff barriers to trade and elites who mistake their interests for the interests of their nations in this matter;

3. The Villains of trade (and we and they know who they are) must be blocked, prosecuted and ultimately punished so that they and others thinking of adopting their trade practices will be appropriately discouraged from such a course. It is true that, like in an arms race or a war, tit for tat usually just leads to worse races and wars. However, the good players should never be afraid to use the weapons given to them by the WTO to combat the baddies (I'll translate that to Chinese later).

We live in an unprecedented era of free trade and reciprocity across the globe. Paradoxically, we may have to use the tools of protection to ensure that this endures and thrives.

P.S.: BTW, check out the cartoon that heads up the "Protectionism" article in the Wikipedia. It's a delightfully metaphorical British Liberal Party Ad from 1906 that extolls free trade. That is almost certainly the great Tariff advocate, Joseph Chamberlain, as the forlorn Protection shopkeeper! I wish this ad was on the wall of the office of every legislator in the World.

A speech

What I wish the next Leader of the Conservative Party of Canada would say as soon as they are Elected:

You've heard a lot about "social conservatives" and "fiscal conservatives" and "red tories" in the Press and from Pollsters during this Leadership Campaign. Well, I believe they're forgetting about the most important type of Conservative of all - the Freedom Conservatives. Because I believe that's what this Party you have honoured me by selecting me to lead is all about - protecting and expanding the freedom of Canadians. Today, We are all Freedom Conservatives.

We express the heritage of two Prime Ministers, one of the old Liberal Party of classical liberalism who once said,"Canada is free and freedom is its nationality!" The other of the old Progressive Conservative Party who, in introducing the first Canadian Bill of Rights to the Parliament that he and his idol, the same Liberal PM loved, said,

"I am a Canadian, a free Canadian, free to speak my mind, free to worship God in my own way, free to stand for what I think is right, free to oppose what I believe wrong, free to choose those who govern my country. This heritage of freedom I pledge to uphold for myself and all mankind."

Now that should be the pledge all of us on this party make as Conservatives, too. For it is more important than ever that we do so in this troubled time where not only our freedoms but our way of life and the Rule of Law, our Constitution are under unprecedented assault not only by interest groups, the social media and outright thugs but, I am sad to say, by our own Government.

I am here to say you all, incuding those who did not support me but also those who did not vote for our Party in the last election or may never have voted for us, that I wish to be inclusive. But, if you do not support me on the following tenets, you should vote for someone else or go home. It will be alk the same to me and the other 337 candidates on mour Team. We do not want you to support us out of convenience or boredom or tradition or even because you cannot stand the other teams.

We ant you to support us for what we stand for and because you think what we want will be better for you, your family and Canada.

If you are threatened by free markets and free enterprise, don't vote for us.

If you believe capitalism is great as long as it's politically correct and has guaranteed profits, don't vote for us.

If you are one of those people who believe that there ought to be a law to forbid every little thing that offends you, don't vote for us.

If you believe that the government is the answer and the solution for every ill we face, then please don't vote for us.

If you believe any of those things than for the love of God don't vote Bloc but please feel free to vote for one of the three other socialist parties of Canada.

On the other hand, if you support the freedom to speak without fear; the freedom to worship without penalty and the freedom to work without

hindrance, then welcome to the Conservative Party of Canada!

Come help me and my Team rid Canada of the Trudeau Gang, save our Parliament and together we'll make Freedom our National Creed again!

Reagan Consensus - Part the Latest

The Reagan Consensus and History -

It is too easy, for we who lived through the Reagan Consensus' arrival and entrenchment or have always lived in accord with it, to believe that it is some sort of political and economic comet that just arrived to blaze in our skies and never left our orbit. Because most of us were not alive when there was a pre-Reagan Consensus or certainly were not adults, we have come to believe, whether friend or enemy of it, that the Reagan Consensus was a sudden development that came almost out of the blue.

The first hint that this is wrong is the fact that there was a previous Consensus that, in itself due to its more deleterious effects, helped bring on the Reagan one. Second, in turn, we then have to look at the broader sweep of history to see how inaccurate this "current events" driven narrative is. When we do this, we also see both how durable the Reagan Consensus is and that, in fact, it is part of a trend that began centuries ago and, despite many sometimes catastrophic bumps. moves majestically on its way.

In other words, the Reagan Consensus is nothing more than the most recent and decisive victory of the move towards human freedom, knowledge and prosperity that is often said to have started in what we usually refer to as the Age of Enlightenment. But indeed, the cultural and legal foundations for this overall consensus started much earlier. 

The legal documents that were part of what I call the Human Consensus we are familiar with: the Magna Carta, the Florentine Constitution, the Bills of Rights, the Declaration of the Rights of Man, the Declaration of Independence and US Constitution and so on. What is often forgotten is that the documents also underpinned the growth of human prosperity by anchoring freedom for mankind. For example, the most important and enduring contribution of the French Revolution to this Consensus was not the often adulterated Rights of Man but the property rights given to the middle class of France. However, some will also argue that the Human Consensus began on the Cross but that it took almost 1800 years for us to listen.

This unleashing of Humanity was also of course supported by the writings of countless thinkers in the most influential nations, including Hume, Smith, Voltaire, Descartes, Goethe, Locke, Jefferson and Erasmus, all cleaving in one way or the other to the humanism that is central to the Human Consensus. The result of this, in tandem with the coming of the industrial revolution and the social progress that came in its wake both powered by innovation, was that the human being, who had been working for barely $100 per year in all history before 1800 usually under the jackboot of a brutal tyranny, saw their income soar to $18381 by 2019 or increased almost 184 times in just over two centuries. Meanwhile, there were two countries that could be bravely called "democracies" in 1800. There are now 74 which are rated by the Democracy Index as at worst "flawed" democracies. As well, the cornucopia that has flowed from this dual advance has lowered the Misery Index considerably by reducing poverty, disease, pollution, illiteracy and starvation drastically everywhere even compared to the 1980's levels of these scourges.

Again, it is easy to miss the human progress forest for the tyranny and war trees, particularly if you are on the Left. The 20th Century saw the coming of the bloodiest wars and the most brutal and total tyrannies in history. However they, for the most part (and China still may finally slip from its last human vestiges of tyranny due to the prosperity its people have imbibed from their experimentations with the market and property rights) were defeated in those bloody wars or (in the case of Vietnam, for example) adopted the ways of the Human Consensus economically after the war was over. 

But, it is also easy for those on the Right to imagine that Reagan and his acolytes somehow descended (no doubt in a plane piloted by Goldwater while reading the National Review) from the Political and Economical philosophical heavens and wrought all the change and groundbreaking consensus by their lonesome. Even before the Berlin Wall fell and the USSR abolished itself, for example, 22 nations became democracies while Reagan was POTUS. On top of this, most of the key reforms inaugurated by him and others were introduced in barely 20 years from the deregulations of the late 70's to the tax cuts and balanced budgets of the late 90's. What seemed like an ironclad consensus as to how the World would be organized, how trade and international finance would operate and what roles the state should perform in an economy were turned on their head and shattered in the space of one generation. And, as mentioned in previous chapters, the core underpinnings of the new consensus have not (yet) been seriously threatened.

The reality is that we must view the latest Consensus as simply the most recent albeit the most intense and dramatic installment of the Human Consensus, that is, that the Human Being should reign over their affairs first only guided by the Rule of Law and Logic. When we do that, we make two edifying conclusions. One - the Reagan Consensus, far from being a phenomenon of our times, is part of a Great Movement of literally billions of people, millions of entrepreneurs, thousands of thinkers and statespeople going back to Christ. It burst forward in the Middle Ages, birthed the Renaissance and the Age of Enlightenment and finally truly launched for all practical intents and purposes in 1800.  It fought to fly and soar through the Industrial Revolution, the World Wars and the great totalitarianisms. Now we live amidst its glorious jubilee of triumphant fireworks from the 1970's forward and still going on today. The birth pangs and fits and starts of this Movement can be frustrating, such as when we see on the wonderfully unexpected eruption of democracy in Belarus but the almost ignored suppression of it in Hong Kong. One tax is cut here, one tax is raised there. A market we thought would always be controlled is deregulated here, another proves absurdly immune to reform there. 

But, the key, the Northern Star, that leads us to the second conclusion, that this Consensus will take, is clear when we see that it is but a part of the not inexorable or inevitable but generally victorious movement in favour of people liberating people. Reagan was right to warn us that the freedom built up over centuries can be lost by one generation. However, if we are vigilant, patient  and imaginative, we will have had the privilege and benefit of building upon and reinforcing not only the Reagan Consensus but the Human Consensus.

Next, I will  suggest ways that we can contribute to the Consensus.

Why Erin O'Toole MUST be Leader of the Conservative Party and then Prime Minister

There are some surface reasons to want Erin O'Toole to be the next Leader of the Conservative Party, the Official Opposition and then PM.

First, he has a seat in Parliament. This is no small thing when we live in this desperate environment where we are facing a PM who is serially corrupt and has no compunction about bending and breaking the Rule of Law and shutting down whole branches of our government, that is, our only democratic tool for oversight of the government and even less compunction about making the new leader wait to take a seat (as he made Jagmeet Singh wait 15 months in far less dire circumstances). While we face a literally unprecedented assault by an unprecedented prime ministerial dictator and his advisors and ministers on our Constitution in the midst of the worst challenge we have faced as a Nation in 25 years (yes, that was in 1995 when we came 50,000 votes away from losing Quebec PRE-Clarity), we simply cannot afford the bump of a byelection. Is this still a relatively ephemeral reason for choosing O'Toole? Yes, if you believe that we will be getting a vaccine for the virus that has unleashed these oppressive forces upon us by September 21, when Parliament is finally due to re-open after almost 6 continuous months of darkness. Even if the virus recedes, we will still be facing a rogue PM who will stop at nothing, including a snap election if need be, to get his way. (BTW, Sloan is an MP but cannot possibly win so he is out)

The next reason is also a relatively negative one but must be said: as a human being, like many Red Tories, Peter Mackay is a nice enough father and husband but, as a politician, he is simply not to be trusted. He is to be depended on to promise the conservative moon while running and then abandon those heights the minute there is any sign of trouble and even while winning. His career is devoid of achievement or principle followed except that set out by the Focus Group and the pollster. He is governed, as so many of his ilk are, by fear which he is afflicted by in determining any course of action and will inflict on others who get in his way. In that sense, most disturbingly, he resembles the PM in a rather casual attitude about basic values of democracy and the Rule of Law. Witness for instance, his seeming to endorse the PM's plans for regulating free speech on the internet or his infamous "stinking albatross" comment on some fellow Tories.

For a man like Mackay, who has to be the youngest "Man of the Past" in history, everything is "relative"even out most cherished ideas if they threaten one's political rear. Such a sanguine outlook might have remotely had some value in a time of perfect peace and tranquility or at least could have been tolerable. But he is one of the people who has helped the Party to lose its way intellectually under Harper and his outlook is not only ill-timed but downright dangerous in a political world where the Conservative Party appears to be the only alternative to the overwhelmingly liberal and socialist third parties and the Government. That critical choice will be weakened and may be negated under a Mackay leadership.

Now, the positives. As a person who is deeply and personally concerned with our Defence, I like that O'Toole will be the first Leader since Pearson to have any military background. This is critical in light of the neglect and lack of vision shown by both main parties in defence affairs since the 90's (including the failure owned in part by Mackay to finish the purchase of new fighters). Is this a narrow reason for liking him? No. Defence is one of the few areas of complete Federal state responsibility and is still one of the biggest parts of the Budget. We need a man in leadership and hopefully in the PMO who finally understands the need for reinforcement and reform of this department and has the brains and guts to carry it out.

Speaking of brains, I am impressed by Erin O'Toole's intellectuality. I once watched him conduct a policy seminar themed on China ( one of the greatest threats to our defence and security today and in the foreseeable future) and saw his mind working in front of me as he carefully dissected the octopus-like challenge of China. No one running for the leadership and no one in leadership of a federal party today shows anything like the depth of mind, seriousness, experience and knowledge, and ability to articulate it to people, that he has. In a word, we have a chance with O'Toole and O'Toole alone to bring an adult back to the OLO and the PMO. But that leads me to the most important reason for supporting him.

He is a man of the people. Yes, his father was an MPP. But he served 12 years in the Forces and rose to be a top lawyer with hard work and application. It is no insult to point out thus that, with relatively minor resources and not great natural talent, he has acquired and built up a remarkable career. In this way, he relates to millions of Canadians who are not necessarily Tories but believe in hard work, honesty and freedom as the passport to a better life. He thus can relate in a way that Mackay cannot, who took relative privilege and deeded opportunity and built a bridge to nowhere. He has both a tactical and strategic political vision and instinct that few, except maybe the scoundrels advising Trudeau, possess.

How did he demonstrate this to me most vividly? During one of his online seminars with Conservative Party members, he made the almost offhand but incredibly astute comment that working class voters in places like Hamilton and Windsor (areas we have written off for almost 50 years now) are no longer represented by the Liberals or the NDP, that is, their own MP's. We should therefore go after them by pointing out that we are the only Party that fights for their interests as consumers, taxpayers and above all workers who often earn their bread in politically incorrect industries like energy, auto or steel. A man with such an original, elegant and broad breadth of mind (and who reflects that he can learn from the recent success of conservatives in jurisdictions like Ontario, the UK and Australia thereby) needs to be in power, first as the Leader of the Opposition, then as, God willing, our PM.

How do we know we can trust him? We do not. We only know that we cannot trust Mackay, except perhaps to complete the Red Tory takeover of our Party, and we cannot accept another term of Trudeau and his gang in office. Erin O'Toole is most likely to preserve the Party's critical choice for Canadians and oust arguably the worst government in our history as soon as possible. Thus, he wins our provisional trust because of what he has said, done, and prioritized so far (such as his unswerving loyalty to Scheer after losing the last leadership and his promise to respect the views of all conservatives, including the stinking albatrosses) and because we have no sound other choice save neophytes or the Old Prince of Red Torydom.

 A perfect example of how and why I feel that I can lend my trust to him: in one of his ubiquitous videos (another reason I like him BTW), he appeared on a particularly hot day in Ottawa with the Parliament buildings as a backdrop. As he went through his peroration on Parliamentary democracy being under threat and why he was best to defend it, he was obviously sweating like a pig. Instead of soldiering on and dysfunctionally pretending everything was fine or editing it as no doubt a Trudeau or a Mackay would have done, he wiped his face and said words to the effect of,"Well, this was a hot one for me to do this today, wasn't it!" Any man who is that secure about himself may just deserve our loan of confidence.

Erin O'Toole has proven he is a hardworking, earnest, smart and decent man with superb political skills which his predecessor and opponents signally lack and which this country imperatively needs to defeat Trudeau and the Liberals and restore sanity, the right and respect to our governance again. He has earned and deserves my and all other voting members' vote on August 21. He must be thrust into the heart of our national affairs as soon as possible.

The Reagan Consensus - part 6

The Reagan Consensus and its Enemies -

Another threat to the Consensus is the Debt. No, not consumer debt, which is usually paid off without taxes and, after all, represents spending done voluntarily billions of times for the things we want or often need. No one worries about whether the "shelf" of private debt will overwhelm the economy even a year from now precisely because most of us will have paid it off or completely secured it (in the case of real estate or automobiles) as soon as our next credit card statement comes in. The Great Recession of 2008 was not caused by conventionally secured commercial or consumer debt. It was caused by profligate mortgage policies that many of us warned would hurt the economy and that were legislated and enforced by government (e.g.: Fannie Mae, Freddie Mac and the Carter Urban Loan programs).

For the first time in living memory and before COVID, the US and other nations were racking up enormous deficits and thus piling up debt without the excuse of an emergency or a war and, in  the case of the US, in the midst of a lengthy economic recovery and then a two year long Trump boom. Yes, Trump did not promise to balance the budget or reform entitlements (except for Obamacare, which received no GOP support in Congress) which, as we saw in the last installment, are a double threat to the Consensus. But, it is still a fact that, despite ushering in an unprecedented economic boom, despite having no Cold or Hot War and despite there being no other emergency until COVID, Trump has seen trillion dollar deficits racked up every year of his presidency.

The fact that his predecessor was at least as bad (after excoriating his predecessor as "unpatriotic" for compiling half the debt he amassed) is not an excuse for this record. However, it should be noted that quirks in the US political system established not so long ago, like the Senate's appropriations filibuster and the Budget Act of 1974, have made it hard for any POTUS to tackle this problem. The rules and laws brought in referred to have taken away his power of impoundment, his pocket veto (where one can kill one bad bit of spending without vetoing the whole budget) and his ability to avoid a government shutdown even when he holds majorities in both Houses of Congress. For example, even when the GOP controlled Congress, they refused proposed budget cuts Trump made and voted higher spending than he asked for. 

Why is all of this important? Many point out that, despite all, the US level of debt is not as bad as other countries in the West and not as bad as others in history, including the US. How is this a threat to the Consensus? The primary problem is that this overhang of debt will one day need to be paid off in the form of taxes which would afflict future generations' standard of living and discretionary income disastrously and, in turn, impair and derange the virtuous circle of the Consensus.

But there is also what can be called the "crowding out" effect. As the state borrows more, it denies the private sector the capital it needs to grow, to innovate and develop, all critical ingredients of the Consensus. The opportunities lost by this effect are countless and also often irretrievable.

Finally, the larger the public debt just as the larger the state, the more the state is able to extend its tentacles into business and even the lives of individuals that squashes not only economic promise but also personal freedom and ultimately the Rule of Law. A perfect example of this (which also harkens back to the danger to the Consensus of the cynical political use of the big Crisis) is when President Obama bullied the Car Companies' creditors into surrendering their right to sue to protect their financial interests in those companies. (Here in fact we have an example of three of the threats to the Consensus all wrapped in one: Dependency, in the form of subsidy and bailout for two enormous companies, the use of Debt to create that Dependency through TARP and, of course, the Big Crisis that set off the "need" to intervene to "save" two of the Big Three rather than just let them fail like is the rule in other industries when a company is anemic and losing.) In this case, the freedom of the creditors to run their business affairs as they deem fit was sacrificed for "the greater good", ill-defined and narrow as it was, while the Rule of Law was trampled in denying them their rightful legal remedies (and, even worse, resulted in a payoff to the very unions who had helped to ruin the companies in the first place).

Debt makes government MORE powerful not less powerful. It helps to crush the entrepreneurial spirit both morally (as in the absent "Moral Hazard" rule in bailing out the Big Banks in 2008 as "too being too big to fail" despite their authoring the disaster themselves in tandem with the Federal Government) and materially as the Debt shuts off more and more credit that could have been used to breathe life into private initiatives and ventures. Indeed, an ironic impact of the Bank and Consumer Credit "Reform" and "Protection" laws passed in response to the Great Recession was that, even as the Government and the Federal Reserve respectively incurred more and more public debt and expanded its portfolio of investments in the economy, credit became harder to get for business and individuals.

The net impact of too much debt (as a moderate level of government debt for necessary or "consensus" elements of state activity such as defence, education and infrastructure, is tolerable and even desirable and useful) is thus severely deleterious to the strong enterprising dynamics of the Consensus that makes it such an elixir for an economy. It needs to be controlled or paid off if already ruinously incurred. How to deal with what may be seemingly an insurmountable fiscal mountain? There are two approaches conservatives must take - one for the short term, one for the long term. (And here, despite the Obama and liberal propaganda to the contrary, you can cite Hamilton as your authority for deploring high levels of debt!)

In the short term, the answers include modest spending cuts. I say modest when I look at two examples. First, the Chretien government's finance minister, Paul Martin, balanced the budget of Canada by simply freezing spending despite the belief of many that it could never be done without severe spending cuts and force majeur laws to reduce public entitlements and benefits. Mike Harris balanced a budget deficit twice as large as the enormous one faced by Ontario today by cutting spending by 10% while cutting taxes by 20%! Further, Senators Lee and Paul recently demonstrated that the huge US federal deficit could be eliminated by only a 1% cut in spending per year for 5 years. A systematic outside audit of government spending can also be undertaken to reduce those infamous triplets, Waste, Fraud and Abuse. The sale of state assets and more privatization can also be good one time boosts to revenue. But, in the end, general spending must be controlled (and soon in light of the COVID Bubble of Debt that has recently ballooned).

Conservatives can also cite supply side economics and the Laffer Curve to show that the budget can and should be balanced not just by spending cuts (and repeat many times that spending is the culprit behind mounting public deficits, not lack of revenue) but by revenue from economic growth from tax reduction and reform. But, in the long term, they must also propose new statutory rules to control against the return of out of control spending and soaring debt and deficit levels. For instance, the removal of baseline budgeting that literally makes it illegal to actually cut spending levels from where they were the year before. Further, balanced budget laws and constitutional amendments with reasonable bands for the fluctuation of spending especially in well-defined emergencies. As well, tackling a big source of government debt (and of natural opposition to the Consensus) - the far too generous pay, benefit and pension arrangements for public sector workers. (Yet, beware "statutory rules" as a panacea - in 1999 as part of setting up the Euro currency Zone, the EU set "convergence" guidelines for the level of debt and deficits acceptable relative to GDP as a condition of membership in the Zone. Today only a handful of mostly small members of the EU have complied and the non-compliant are still allowed to remain in the Zone! Without the political will, there is no way.). Finally, a Sinking Fund based on a portion of any new revenues can be set up to start to reduce the Debt.

Reagan once said that a nation cannot long thrive where 37% of its product is the tax collector's share. The average Canadian now sends 43 cents on the dollar to tax. It was 33 cents when Reagan said those words, in 1964. The mushrooming of public debt, despite tax increases and the addition of several major taxes (including Capital Gains, the GST/HST and the Carbon Tax), since then proves that the answer to combating this threat to the Consensus Reagan helped to forge is to control spending. If this is not done, the economic miracle wrought by the Reagan Consensus will be constantly vulnerable to that fiscal grim reaper of hope, promise and creativity, excessive public debt. If it is not controlled and reduced, it will enable a new financial and political tyranny that may extinguish our freedom and the Rule of Law that protects our liberty.

In the next installment, I will look at where the Reagan Consensus fits into the sweep of History.

Errata and addenda with one big errata, indeed

The selection of Senator Kamala Harris proves that Biden will NOT do anything to be POTUS (even if only for a year? By his impossibly narrow criteria, it should obamiously have been Michele Obama) but it DOES prove that Harris will. Way back in January, she called Biden a racist segregationalist (who can forget her fake tears over "being bussed" when it was actually impossible for that to have happened to her personally?). Now she carries his name with pride and in the second most important political harness in the World (hopefully never to be the most with all the disaster that that implies +). Suffice it to say that Harris, after denouncing her own record as an AG in CA, will be the perfect black female complement to Biden who has spent most of his campaign denouncing what paltry achievements he was able to cobble together in just 45 years. She is the African American XX chromosomed classic example of Vidal's evil Senator Cantwell ("Bad character in a man is tragedy enough; but for a Nation it is a disaster.") or...Hilary. "God bless America, Land that I love, stand beside her and guide her through the night with the light from above."

THIS JUST IN!...Patrick Brown is a stupid asshole. Search: "Mayor Patrick Brown's Hockey Bag" to see what a truly dumb scumbag those of us not living in Brampton really dodged.

Insurance Can Do It! -

 Are there too many horses out of the Barn for us to consider the idea I had at least 3 months ago and was reminded of again by a caller on talk radio in the States? Might the thieving monopolist assholes that comprise the Placid Gold-filled Lake we call our "Insurance" Industry have been conscripted to underwrite a National/Provincial COVID Insurance Plan? Any surplus or bankrupting liabilities could have been underwritten in turn through a Re-Insurance Program that would have cost the taxpayer a fraction of the cost of the COVID stimulus SO FAR. The cost to a business (beyond maintaining local authority standards and PPE) would have been the premiums (which the state would no doubt insist be nominal or at cost) and some stationery would be nothing compared to being closed down.

It would work this way: If you want to go to visit any hard business site anywhere, you must sign a release to the effect that you will not sue the business if you get COVID unless you can prove gross negligence (like not complying with mask requirements). This release would be posted at the main entrance of the business or organization (church or school) with a petition style name section that would also require a name and phone number in print so follow-up could be effected if there was an outbreak. (Hell, use the lists for marketing if you want!)

In the end, the customer or parent or student or worker or parishioner would have a choice. After all, there is only one reason for not going to a business:: fear of dying from COVID or giving it to someone who dies. If you can prove that happened (or temporary disability) due to gross negligence, your estate or family can claim damages accordingly. If you do not want to go, do not. Choice: I like the sound of that! Making the Insurance companies do their patriotic duty without more obscenely huge profits - priceless!! It's never too late for our benighted and beknighting "leadership" to prove they are more than medical stenographers and give us a chance to live with some sort of modicum of normalcy again.

The Reagan Consensus - Part 5

The Reagan Consensus and its Enemies -

The next great threat to the Reagan Consensus is Dependency. No, I do not refer to the danger of being turned into a colony by some foreign power (though that is more likely when the population is taking more than it gives) nor the possibility of substance abuse (although, addiction to alcohol and/or drugs is often a result of such a life). I refer to the increasing dependency of Americans and peoples of other nations on state aid. This dependency is most classically manifested in welfarism. A person lives no life but that that is supported by government assistance of some kind. The most obvious examples of public welfare in the US and which increased all of their client loads dangerously during the Obama presidency, are welfare ("Temporary Assistance for Needy Families), food stamps and Medicaid. 

After the historic bipartisan Welfare Reform in 1996, surely one of the best examples of building on the Consensus, tens of millions were lifted out of poverty, including some 20 million children. But, over the years, just as medicaid was expanded to cover more and more children and adults and pharmacare given to even the wealthiest aged, the program was chipped away. The Federal Govt., rather than encouraging the States to make people work for welfare from an "envelope" of Federal funding, the core concept behind the reform, turned this on its head as now the US encouraged states to drop work requirements and gave incentives for bureaucrats to get more people on food stamps.

This aggressive effort to roll back (or ratchet back?) welfare reform created a new, growing and dangerous dependency on government which stifled enterprise, hard work and the incentive to retrain to get into the workforce again. For instance, jobless benefits given out in the Stimuli of 2008 and 2009 were often more lucrative than working at even a job above the minimum wage. We are now seeing this phenomenon again with the ill considered, profligate, badly aimed and largely unnecessary COVID stimuli. 

Worse, so-called "industrial policy" also known as Corporate Welfare is also apparently making a comeback. Through myriad tariffs, loan programs, deductions, monopolies, regulations and subsidies, companies at all levels, but most conspicuously and shamefully big business, are receiving state support. This has the same effect on the corporation as it does on the individual - it crushes the incentive or need for competitiveness, innovation, efficiency, service and fair pricing. This effect of dependency on both company and individual is fatal to the magic circle of work ethic, creativity and opportunity married to labour and capital that the Consensus needs to continue to grow and sustain.

The loss to a society's morale of such a constant institutionalized and general dependency in a population and its commercial sector can be witnessed in Europe. There, especially France, Spain and Italy but to some extent most of the rest of Western Europe, the Reagan and Thatcher revolutions never really took complete hold. Large sectors of their economies, aided, abetted and compounded by the bureaucratic monstrosity known as the EU, are still much more regulated by the State in great detail, particularly labour but also in quid pro quo heavy subsidy and trade protections for the corporate sector. France especially never privatized large parts of its economy such as banks. The result - horrific economic stagnation, lack of innovation and modernization as well as chronic joblessness and underemployment. 

This, too, almost took hold in the US under Obama, who was openly hostile to business, re-regulated large parts of the economy especially health care and health insurance, interfered in the auto industry, launched welfare expansion and discouraged or outright shut down energy exploration and exploitation. The result was an historically slow recovery despite massive deficit spending that doubled the national debt and repeated stimulus and monetary quantitative easings. This was only arrested by the coming of Trump's presidency and his economic and tax reforms, deregulations and determination to again "roll back" the attempt of Obama to turn back the ratchet on welfare reform. It remains to be seen whether COVID will provide a new excuse and opportunity for welfare theorists and advocates to get their way and apply this deadly opiate of the Consensus again as they did in 2008-2013 (when an estimated 47% of Americans were taking some state benefit).  The Trump Tax Reform also eliminated the ludicrous state and local tax deduction for the rich and the Obamacare mandate while Trump tried to allow consumers to have some ability to buy health insurance across state lines, among other practical, free market and cost control steps for health care.)

Conservatives must fight this first by listening to and advocating for the warnings of economists like Arthur Laffer (and a key architect of the Consensus) that government dependency coming in the form of so-called "stimulus" is wolf bane for the dynamic economy of the Consensus. Then the conservative, if successful in delaying, hobbling or at least blunting the impact of such dependency-fostering programs, must then offer an alternative - self-reliance and choice. A good example of this was the proposal by conservatives to grant a payroll tax holiday and the Bush scheme to allow young people to invest their Social Insurance premiums. 

The problem with these ideas on both occasions was follow through and the simple political will to do what they proposed. At the first sign of political trouble, the conservative political parties backed down on ideas like this. Yet, the tax reform by Trump, which amongst other things allowed American parents to invest for their child's primary and secondary education tax-free, welfare reform and the Harris Ontario government's abolition of corporate subsidies and "workfare program" all show that, when conservatives are united and strong and remain committed to tangible reform of entitlements and welfare despite the often absurd and demagogic opposition to patently sensible policies, they can win.

If the Reagan Consensus is to dodge the insidious bullet of welfare dependency on the state, conservatives must not just talk about programs of more freedom and independence for people, they must do the hard work of researching about, presenting and arguing for these ideas and stick to them through thick and thin. Ideas like auto-investment of government benefits or premiums, school choice and vouchers, broadly lower taxes and regulations to get business off the government bread line and lower and tougher welfare in return for on the job training, daycare and other benefits (not least of which is the dignity of working or building a business of your own under your own direction) are all ideas that can reduce state dependency, restore the work ethic and business ethics and build on the Reagan Consensus.