When will we ever learn?

Thursday, September 15, 2005

Franklin Delano Roosevelt once responded to a question about his planned agenda by stating that his administration would "try something; and, if it doesn't work try something else." Unfortunately, the current trend in governing seems to be more inclined to "try something and, even if it doesn't work, keep doing it." Surely it is not too much to expect that our elected representatives would actually examine the consequences of their actions and try to learn from their mistakes. Based on three recent examples, there may be some small hope of that occurring.

In July, Toyota announced that it was rejecting the more generous incentives offered by various American states and locating its new manufacturing plant in Woodstock, ON. New York Times columnist Paul Krugman wrote that the decision was a slap in the face to those who argue that "government is the problem, not the solution." Pointing out that Ontario's highly skilled workforce was a principle attraction to the company, Krugman also gives a large share of the credit to Canada's health care system.

Canada's other big selling point is its national health insurance system, which saves auto manufacturers large sums in benefit payments compared with their costs in the United States…. Funny, isn't it? Pundits tell us that the welfare state is doomed by globalization, that programs like national health insurance have become unsustainable. But Canada's universal health insurance system is handling international competition just fine. It's our own system, which penalizes companies that treat their workers well, that's in trouble. For now, let me just point out that treating people decently is sometimes a competitive advantage. In America, basic health insurance is a privilege; in Canada, it's a right. And in the auto industry, at least, the good jobs are heading north.

Of course, many Canadians would question Krugman's assessment that our health care system is "just fine" (although, from the point of view of most Americans, it must look pretty damn good). The cuts to health care and the trend towards privatization that have become de rigeur since the mid-1990s present a very real threat not only to our health, but also to our economy. If we want to keep attracting investment, we have to stop the creeping Americanization of health care.

A surprising report release last week TD Bank also offers a lesson to governments, should governments be prepared to listen. The report, prepared by TD Economics on behalf of the Task Force for Modernizing Income Security for Working Age Adults, notes that "While Canadian governments have made great strides in recent years in improving the financial security of children and senior citizens, the needs of low-income working age adults have been comparatively neglected. There is overwhelming evidence that current policies and programs do little to support adults in gaining economic independence and forming a stable attachment to the labour force - and, in some cases, run contrary to this objective."

Don Drummond, Senior Vice President and Chief Economist of TD Bank Financial Group, was critical of the "reforms" made by the Harris government. "The provincial government defended the measures on the grounds that they would help nudge more adults into workforce, thereby laying the groundwork for a more enduring solution to the problem of poverty. But, while welfare caseloads did fall in the ensuing years, a closer look at the data suggests the real driver was fewer people being able to get on welfare - not the intended exodus of welfare recipients into the workforce."

Remember, this is the TD Bank talking, right from the corner of King and Bay. When even Bay Street is telling governments that their welfare system is punitive and counter-productive, it seems possible that maybe, just maybe, governments will listen.

The third and perhaps most obvious example is the devastation caused by Hurricane Katrina. While there is evidence to suggest that global warming may be responsible for the statistical increase in the number and severity of hurricanes, it has been the response to the disaster that has generated considerable hope for a turnaround in American politics. For example, even Lt. Gen. Steven Blum, chief of the National Guard Bureau, has said that the fact that most of the National Guard members from Mississippi and Louisiana (along with thousands of helicopters which could have been used for the rescue mission) are currently deployed in Iraq held back the response time by days. "Had that brigade been at home and not in Iraq, their expertise and capabilities could have been brought to bear," said Blum.

Moreover, the resources that could have been used to shore up the levees (the ones that President Bush tried - not very successfully - to argue that "no one" foresaw being breached) have been squandered on a war that has made life worse in Iraq while doing nothing to stop terrorism. They've also been squandered on tax cuts. In the aftermath of the hurricane, Americans are now openly talking about issues of race, of class and of income distribution. And, equally importantly, the media are actually starting to ask questions for the first time since the Bush's election, er, appointment as President.

While I have no illusions about Bush and his administration changing their mind about what they want to do in office, I'm growing hopeful that growing public pressure will at least force them to act differently. That would the next best thing to an actual lesson learned.

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