Senate Scandal Part I

The current scandal in the Canadian Senate is interesting from a variety of perspectives. A new poll, for instance, suggests that Canadians find this scandal rather serious, more serious perhaps than the sponsorship scandal that helped bring down the federal Liberal Party and helped Stephen Harper and his revamped Conservative Party to power. You can find the news story here:

Canadians Rank Senate Expense Scandal

What I find interesting about this scandal is a number of things. I'll comment on only one here: differing styles of political leadership. Scandals put political parties on the defensive and, when these happen, they employ a standard number of strategies. For instance, they try to deflect attention by pointing to public policy issues on which they think they have credibility (witness the sudden discovery that Canada has more money than previously announced.) Indeed, according to a Vancouver Sun story, the federal Finance Minister predicts that Canada will be out of the red much sooner than expected. Through the first days last week, for instance, Conservatives routinely said that they wanted to focus on the economy, an public policy area where they think  their credibility is high an that of the opposition parties low. Second, they will try to slag the opposition by suggesting that they, too, have done dishonest things. Witness Harper's attack on Mulcair today. Now, this does not indicate that your party has been pure as the driven snow but it raises (or, hopefully raises) suspicious about the other party. Third, they try to "we did the right thing" approach. Paul Martin tried this with the sponsorship scandal. The current en vogue version is "I, the PM, did not know but as soon as I found out I acted to set things right. People in my party may be dishonest but I am not and I will sack those who are." This is Harper's current line du jour, a variant of this is "this is an isolated problem," which Harper used all summer.

What differentiates Harper, however, from previous Canadian PM's is that he's introduced a relatively new innovation to the scandal managing playbook: throw everyone and anyone in your own party remotely associated with this scandal under the bus as quickly as you can. This is the "it was an isolated incident; I have fixed the problem as soon as I discovered it" variant but a particularly nasty one. Duffy was the first to go; Wallin second; Brazzeau third; and now Wright.

Now, I should say I know none of these people and I am not suggesting one way or the other that they are honest or dishonest. I do think Wallin is right on one point: due process is probably something that should be deployed when deciding whether or not to penalize someone (it really does make a difference as to whether this was, say as an example, intentional theft or an accident; intentions count). But, I actually doubt any of these people would even bother to talk to me. So, I am not trying to defend them but point to differing leadership styles.

Compare the way other PMs responded to scandal. Martin with his "Mad as Hell" tour after the sponsorship scandal broke might look like a comparative case but its not (with the exception of Alfonso Gagliano, the ambassador to Denmark). Martin, for all his faults, let the judiciary and the inquiry do its job. He may have hated some of the people in his caucus, but he did not throw them under the bus. Other PMs certainly did not respond in this way. Chretien was shockingly loyal to minister involved in scandals (witness Jane Stewart and Gagliano). Chretien remained defensive and defiant in front of the commission and, to the best of my knowledge, never conceded that there was a scandal. Brian Mulroney, a ghost from the past, may have pressured ministers caught in scandals to retire, but publicly he stood by them.

Harper is not dealing with minister but I can't see either Chretien or Mulroney publicly saying that members of their own caucus or their close advisers were, in effect, dishonest to the point that they should be canned.

What does this tell us. Does it tell us something about the seriousness of the scandal (despite the news story cited above, I doubt it). We are dealing with what is, in government terms, a small amount of money and the next election is, at best, two -- but potentially three - years away (ignore the election law; Harper does). Does it tell us something about the views of the "Conservative base." I doubt it. Where else is that base going to go? And, that base can be satisfied in other ways (some tough talk on "moral issues", for instance, and a few jibes at the "socialistic welfare state" and they will be happy).

Instead, one of the things that I think is important is that it shows us that Harper's leadership style is very different from Chretien or Mulroney's. Perhaps this is because Chretien and Mulroney realized that they were leading brokerage parties and that loyalty on the part of party members was needed to avoid further conflicts, whereas Harper is more ideological and believes that ideology is more important than either Chretien or Mulroney. That is a guess but it might be something to investigate. I think, more than anything else, it points to a different way of leading into and of itself. Chretien and Mulroney expected loyalty (they did not always get it) and were, in return, remarkably -- at times to extreme lengths -- loyal themselves. Harper expects obedience and the two are not the same thing. Ultimately, this scandal may prove more difficult for Harper to escape for precisely that reason. What he's shown is that he will not "dance with the one who brought him," as Mulroney used to like say, if he thinks that dance will hurt his chance of dancing with someone who thinks is better.

The Problem is the Solution

According to The Globe and CBC, Stephen Harper thinks that the problem with the EU is a lack of integration. The CBC news story on this that I heard the other day went even further, more or less agreeing with Harper's perspective (well, more likely the reporter simply accepted what he was told by Harper or a Conservative staffer and didn't bother to look it up himself). In effect, the CBC reporter said that the EU was had an integrated economy but lacked an integrated polity. Its goal was to maintain national autonomy on the political level but promote economic integration.

Well, this might be true if we were talking about NAFTA, but even here it would be a statement that is open to debate (as Stephen Clarkson's work on this subject notes). But ... with regard to the EU? The EU has moved much further down the road of political integration then has NAFTA and has a host of common policies on matters like currency, mobility, environmental protection measures, resource redistribution, agriculture, etc. To state that the EU functions, in effect, mystifies how the EU actually functions.

Why would this be important? This is important because if you don't understand how the EU works, you can't understand the character and nature of the solutions and this is precisely what Harper is doing. How much more integration does he feel is necessary? Sure, the EU maintains political autonomy on all sorts of matters (tax regimes, say). But is this  the root of the problem? Is he -- or anyone -- trying to suggest that the problems in the EU would disappear if there were common continental wide policies on just about everything? In Canada, thanks to federalism, we can't get common national policies on a whole bunch of things (education comes to mind as a key example). What right do we have to tell anyone that they should abandon their autonomy when Alberta and Quebec and New Brunswick guard theirs within Canada. My point is not that Canadians are hypocrites; the opposite. Let's assume that the differences within Canada with regard to matters of provincial jurisdiction exist for a good reason and let's assume that that reason relates to the difficulty of tailoring policies on a national level for geographically diverse populations (Newfoundland, for instance, simply needs a different policy with regard to daycare or education then BC).

If this is true, if Canada's decentralized approach actually has some merits, why would we suggest that others abandon the very things that have allowed Canadians to tailor social, education, health, and economic policy (with admittedly more or less success) to the needs of its population. If "one size fits all" does not work in Canada, why would we think it would work in Europe?

But, let's go further ... what has caused the problems in Europe? It is caused by national economies or is it a product of spill-over from national economies caused by increased international integration? In other words, if Europe truly had isolated national economies, I would argue that they would not have the problems they have now because those problems could be isolated in one or two nations. Increased economic integration -- particularly, but not exclusively in capital markets -- are what has created the disastrous spill-over effect (there are other causes, too, to be sure, such as rampant real-estate speculation and serious macro-economic mismanagement).

The argument for increased integration might be that a bigger polity (say, a continent, has the resources to withstand the shocks set out by, say, Greece or Spain). Perhaps, but is that not what is happening now? Are not Europeans responding more or less on a continental level (let's leave aside the question of whether or not we agree with their response)?  If this is the case, what is there to be gained by increased political integration? Could a more united EU have responded faster? Perhaps but that would depend on the system of government they have (doubt me, as yourself how fast the US responded to its health care crisis). Anyone who says big governments are more responsive then small governments has simply failed to study politics. Anyone who has will tell you that the speed of responsiveness is not a factor of size but of organization. Big governments, I'd guess, tend to be a bit slower just because of their size but this point is not universally true. A dictatorship, for example, can be big and can respond very fast. Our concerns with the dictatorship are not in inefficiency but its ethics.

So, increased political integration does not bring more resources to the table (all resources are scare is  rule #1 of Econ 101) and cannot necessarily increase the speed of response. Moreover, it is possible that increased integration in capital markets is at least part of the problem. So, what is the advantage to increased integration?

I raise these questions to point both to this issue and another one: if the argument for increased integration is so unclear ... why would anyone make it? What do they have to believe and at what evidence have they looked to make such a statement.

Political Genius?

Far too much has been made of Harper's supposed political genius. This might not have a lot to do with Canadian public life. Indeed, I think that most public discourses places far too much emphasis on the degree to which party leaders make decisions themselves. It does happen, but everything that I've read suggest that the norm is something else. It suggests that leaders consult with advisors, the cabinet, key members of the civil service, caucus, pollsters, foreign leaders, heck all matter of people before arriving at a decision. In this sense, the Conservative's decision to go for a majority government last time round, bringing down their own minority government, was not Harper's alone. There are a lot of people who can be blamed for it.

I mention this because in retrospect, it seems like a very bad decision. The goal was to gain a secure hold on government with what I think Conservatives thought would be a majority, a slim one perhaps but a majority none-the-less. Heck knows they have worked hard enough for it. And, of course, they are still at it. Harper has been on non-stop foreign tours, they ditched their own economic philosophies in the face a recession and started dolling out money right, left, and centre; cut taxes; subsidized stay-at-home parents; pulled just about every political trick anyone could think of -- proroguing Parliament, violating their own election laws, attempting to cut finding to opposition parties -- are in permanent campaign mode with a loaded "war chest" that allows them to blanket media in a way that other parties can't. They've even sent out flyers on the public tab.

Now, I am not blaming the Conservatives for this nor am I saying that they are any worse than any other political party. I've noted before that I think their political philosophy has problem and I think their electoral strategies -- which appeared modeled on the American Republican Party -- are intensely problematic. I would argue that they have moved politics to a different level, but politics is, after all, politics and we would be naive to believe that a political party would not take advantage of opportunities to defeat their opponents and maintain themselves in power.

And ... opportunities the Conservatives have had. They got lucky in that Paul Martin staged a coup inside the Liberal Party, deeply dividing it and just about killing a large chunk of its organizational structure. In other words, the civil war in the Liberal Party did not divide the Party the way the Progressive Conservatives fractured in the last years of the Mulroney government, but it did seriously hamper the ability of the Party -- and the desire of the Chretien wing of the Party -- to fight an election. Add to this, Martin's lack of vision; media that had become intensely hostile to the Liberal Party, an ineffective successor who few in the Liberal Party wanted; further disaffection; the collapse and discrediting of the Quebec wing of the Party; the collapse of the Party's funding; a revitalized NDP and a vibrant if ineffective Green Party siphoning votes away from the Liberals on the soft left; and policies that Canadians neither understood nor seemed, at least at the time, to want. Moreover, the Conservatives had the benefit of balanced budgets. They did not need to prudent -- at least in the short run! They could cut taxes and increase spending.

Put all this together and our understanding of the last two Conservative victories requires no interpretation at all. The character of the opposition parties virtually handed the Conservatives an election victory. Now, again, this is not anything to blame the Conservatives for. If we were in class, we'd analyse the election results to determine exactly how popular the Conservatives (or, their policies) really were. We're not so I won't. What I will say is that Conservatives found themselves in a situation that was similar to -- not the same as but similar to -- the Liberals in 1993. The Chretien Liberals won 1993 almost by default. There were other reasons, of course, but one big reason was that they took advantage of a fortuitous situation. And, they were able to parlay this luck into a series of election victories.

Here is where political genius might enter into our discussion. The Conservatives have not been able to do this. It was genius or calculation or strategy that helped the Conservatives into power. Strategy might have played a role but, in retrospect, the Conservatives were handed a golden opportunity. They took it ... but, so far at least, have not done very much with it. Let me pick just one example to illustrate my point. Again, the situations are different so my example is a bit forced by in 1993 the Liberals entered office with a defined economic plan. One might like it; one might dislike it. But, they had a plan and they stuck to it. The Conservatives entered office with an economic plan -- return the Canadian economy to a more free market basis -- but abandoned it quickly. They introduced meaningless tax cuts that served only to impoverish the capacity of the state, unleashed a dramatic increase in state spending, and, when the going got tough, tried to ignore world economic problems -- I'm actually not convinced that they ignored the problem; I think they actually may not have understood the magnitude of the problem -- and then abandoned their own economic plans completely. Now, Harper says (and, I believe him) that the Conservative government will consult with Canadians to determine in what direction they should move. This sounds to me a lot like they are unsure themselves. Ultimately, the Conservatives lack of faith in their own economic platform and their quick grafting of another platform onto theirs has created problems for them. They appear indifferent to problems and then unable to provide the resources they said were "in the tube" for stimulus. They have driven up a huge debt, with their numbers changing almost monthly and have declared that they don't have much of an idea about how to proceed  from here.

This is not political genius. Political genius is the ability to determine policies in advance, ensure that those policies have some effect (or, that they work) and then stick to them. Political genius is the ability to take advantage of the opportunities with which you are presented. And this, the Conservative government has not done.