Over the last 83 million years, the Earth’s magnetic poles have reversed 183 different times. Political history is measured in much shorter time frames, but it too has seen its share of these sorts of dramatic inversions. Take the U.S. Democratic Party’s evolution in the wake of the 1964 Civil Rights Act, which turned its long-standing political strongholds in the South into red states, or the more recent flip-flop within the Republican Party on Russia, which went from mortal enemy to potential ally after Donald Trump became its presidential nominee in 2016.
It’s hard to see right now, but there’s a similar (and suitably Canadian) shift underway in our political universe. For the first time in a long time, progressives want to build.
This shift is already underway in the United States, where the Biden administration and its allies are pushing what they’re calling “supply-side progressivism.” This is a major break from decades of progressive political orthodoxy, which held that the right’s obsession with so-called “supply-side economics” was really just about cutting taxes for rich people and that the real solutions lay on the demand side of the economic ledger. Now, in the wake of COVID-19 and yet another financial crisis, progressive thought leaders like Ezra Klein, Derek Thompson and Matt Yglesias are pushing for a different approach.
“The basic idea is that progressives will only achieve their social and economic goals in a world of abundance,” the Cato Institute’s Ryan Bourne writes. “To the extent that the government can remove barriers to abundance or actively enhance its prospects, progressives should favour policies that grow the supply side of the economy.”
That was part of the pitch that former Bank of Canada and Bank of England governor Mark Carney gave to the Liberal insiders and other progressive elites at the recent Global Progress Action Summit. “That’s our calling: to build. Progressives build things that last — health care, infrastructure, schools, opportunity, sustainability and prosperity.” Conservatives, he said, are far more interested in destroying than building. “When politicians proclaim that our great democracies are broken, it’s not because they want to fix them. It’s because they want a licence to demolish.”
He didn’t mince words when it came to Pierre Poilievre, either. “Starving the beast was the reflexive response of Pierre Poilievre to COVID. He saw a humanitarian catastrophe as another chance to cut taxes and spending.” But, Carney warned, there’s a method to Poilievre’s political madness. “The bad news is that while these tactics never work economically, they can work politically,” he said. “Brexit happened. Donald Trump was elected. So we can’t dismiss the impact of anger. But we must resist its power. Doing that starts with progressives taking control of the economic agenda and making it everyone’s.”
For Liberals desperate to hear some sort of coherent theory of governing from the Trudeau Liberals, this speech must have seemed like an oasis in an otherwise parched desert. The federal government seems to list from one crisis to another, unable to present anything to voters other than a list of accomplishments and complaints that they just aren’t communicating them effectively enough. Right now, their only saving grace is time — and even that’s starting to run short.
It’s hard to imagine Carney running for this version of the Liberal Party right now, given both its increasingly dire prospects and Justin Trudeau’s obvious determination to captain the ship into the next election — and go down with it, if necessary. But his speech, and his vision, offer them the closest thing they’ve seen to dry political land in months. Yes, it would help neutralize their underwhelming track record on housing, especially among younger people. But it could also shift the conversation on climate and energy, away from things like carbon taxes and rising costs and towards the creation of jobs, opportunity and a new way of living that many Canadians want to support.
They need something to vote for, in other words, rather than just something — or someone — to vote against. They want a future they can get excited about, one that expands and enhances their own sense of economic and social opportunity. This was the lesson the Alberta NDP failed to learn in the most recent provincial election here, and it cost them the best opportunity to form a government they might get for a long time.
If the Trudeau Liberals want even a puncher’s chance of staying in power past 2025, they’ll need to do more than just point out Poilievre’s negatives. They also need to offer up their own economic story, one that taps into their core values and manages to create some genuine excitement about the lower-carbon future that’s coming our way.
If they can find a way to get Carney to tell it for them, all the better.
Comments
Mark Carney is what the Liberal Party desperately needs.
Gonna have to disagree here. Parts are right, but the main thrust Max is pushing is straight up wrong.
First the parts I agree with.
The Liberal Party's messaging has been really weak, there is no real vision in terms of what they are offering, and what little they have done in terms of criticizing Poilievre has been a big miss.
The Liberal Party does need to offer a coherent vision for what they will do, and make it a positive vision that creates hope for the future.
Absolutely.
Where I will disagree with Max is that the messaging should centre on so-called "supply-side economics" is both wildly wrong, and kind of surprising to be hearing from Max.
Recently, proponents of supply-side economics (rather notably, including Pierre Poilievre,) have taken to making promises about what the outcome they are promising, while being deliberately vague, or just not talking about what it actually entails policy wise. We do; however, know exactly what they are proposing, and what the outcomes are in the real world.
Supply-side economics rests on three pillars:
- tax cuts
- reduced government spending
- deregulation
Critics of supply-side economics will point out that contrary to point three, governments that claim to follow supply-side economics actually increase military spending, in a big way; the cuts to spending come from the other stuff that governments do.
Also important to note, given that Poilievre is targeting his messaging at the working class, governments claiming to follow supply-side economics have also severely undercut labour unions.
We also know what the result of these policies, based on the record of governments like that of Ronald Reagan and Margaret Thatcher. Supply-side economics did not bring the economic miracle the proponents claimed it would; it did cause massive budget deficits. Which these governments then used this as an excuse to destroy just about everything the government does, other than the military.
This is why we can say, objectively, rather than allowing the Liberals to build the things progressives want (as Mark Carney is claiming,) virtually everything progressives want will get destroyed (or at least set back substantially,) by adopting supply-side economics.
And it's not just me that's saying this. Economist Paul Krugman has written a book taking on supply-side economic arguments:
Arguing with Zombies: Economics, Politics, and the Fight for a Better Future
For more on the social impacts of "Reaganomics," there is a great book by journalist Thom Hartman:
The Hidden History of Neoliberalism: How Reaganism Gutted America and How to Restore Its Greatness
I would also like to promote an upcoming film by George Monbiot, who refers to neo-liberalism, but it's really the same thing as supply-side economics:
https://www.kickstarter.com/projects/eatthemoonfilms/the-invisible-doct…
Lastly, from a straight political perspective, running with the message that tax cuts are the solution to everything will be a blood-bath for the Liberals. To the point that it's truly baffling that both Max and Mr. Carney are promoting this as a winning strategy for the Liberals.
Canadians already overwhelmingly see the Conservative Party as the party that delivers tax cuts. Mr. Poilievre has been doing the deliberately vague thing, but the talking points he has been using are all designed to fit the tax cuts and deregulation message. If the Liberals run on tax cuts and deregulation, they would literally be telling Canadians to vote Conservative.
The Liberal Party really does need to come up with a vision, and a message, but supply-side economics is definitely the wrong one for the Liberals. I do think the Liberals also need to go after Pierre Poilievre, but the criticism needs to be on policy, rather than personal attack. The way to attack Poilievre on policy is to make sure Canadians understand the terrible impact of supply-side economics.
Thank you. Curious to know if Carney himself said anything about 'supply side', or if that was where others took his argument.
I think you have misinterpreted what Carney said, likely due to getting hung up on the term "supply side."
Carney is talking about building and investing in the things society needs, not demolishing them. In other words. INCREASING the supply of housing and public healthcare services, the antithesis of shrinking taxes and decreasing social spending.
The 80s were rife with Milton Freidman's Chicago School "supply side" theories which were then termed "neoconservative" and indeed were all about moving wealth further upward under rocket power and misnaming it "trickle down." Casting an evil eye on social spending cannot possibly allow any wealth to trickle anywhere but up. The cuts to public hospitals and schools in some places were to the bone. Mike Harris, Ralph Klein and Bill Bennett were infected by the supply side shrinkage bug.
The lesson here is don't be too susceptible to rhetorical myopia. Supply side economics are relative to the philosophy of the ones practicing it, liberal, conservative or social democrat.
Then why quote someone from the Cato Institute, a self-described Libertarian organization? Even the quote from the Cata Institute member, lays it out:
"... government can remove barriers to abundance ..."
Supply-side economics is predicated on the idea that the "government barriers" to "abundance" are taxes and regulation. And also:
"... policies that grow the supply side of the economy."
Which is (right-wing) supply-side economics in a nutshell.
You state:
"Carney is talking about building and investing in the things society needs, not demolishing them. In other words. INCREASING the supply of housing and public healthcare services, the antithesis of shrinking taxes and decreasing social spending."
Proponents of supply-side economics never say they will demolish things; rather, they claim that by cutting taxes and regulations, this will lead to abundance, and lower costs, including for the same things that progressives want. Which also seems to be Mark Carney's argument.
Regarding your own statement:
"Supply side economics are relative to the philosophy of the ones practicing it, liberal, conservative or social democrat."
As noted in the article in The Atlantic that Max links to (which, kind of hilariously, is actually a critique of supply-side progressives,) the so-called "supply-side progressives" are in fact, clearly talking tax cuts and deregulation.
Admittedly, I haven't read Carney's book, and I'm not inclined to. Mark Carney desperately wants people to believe he is a progressive, but the more he opens his mouth, the more I hear right-wing talking points.
Yes, quoting the Cato Institute struck me as odd. They are indeed libertarian and promote freeways and sprawl over public transit and human-scaled communities; urbanism is my point of exposure to their reports, and also rebuttal by smart transit planners. The quotes seem out of place, almost like Mr. Fawcett was cherry picking.
Nonetheless, the content of the quote is spot on regardless of the "supply side" handle and the fellow's membership card in a biased private interest-funded organization.
In pure linguistic terms "supply side" is neutral, an economic polarity to "demand side." It's the right wing ideology and abhorent political action attached to the terminology that causes an automatic negative reaction in progressives.
Yet, as I mentioned, action in supply side economics can refer to both increasing or decreasing supply. Back in the day the neocons chose to decrease taxes to the rich, increase military spending and invite private investment in public budgets and assets, affecting the overall supply of financial resources.
The polar opposite could be applied to increasing public spending on the social safety net and climate action while also decreasing spending on fossil fuel subsidies and clamping down on giving away public assets to political donor pals at bargain basement prices. It still affects the overall supply of financial resources, but in a more socially responsible way.
It's wise to not judge a book by its cover including Carney's 'Value(s)', or jump to conclusions without understanding the content behind the rhetorical terminology of titles that can mean almost anything.
There's "no real vision" in what the Liberals are offering?
How about the fact that the only other option is batshit crazy and cult-like?
And avid, dedicated purveyors of misinformation who are also SO deeply anti-science that a majority of them still refuse to accept that homosexuality is real, let alone climate change. Or disease. Or public health.
And how about the fact that they're clearly the VERY worst among us, embodying pure nastiness with an ever shallow talent pool that reflects that?
However, I appreciate the link to George Monbiot's upcoming film....
Being better than the worst isn't exactly "vision." It's just the same-old, same-old choice amongst the evils that be.
A real "vision" would offer something positive to vote *for* ...
So first, a lot of the people Mr. Fawcett wants to call "progressives" are not. I'm not really clear about Mark Carney, for that matter--he's a fairly ambiguous figure.
So what this article seems to be saying is that INSTEAD of taxing the rich and redistributing some of the dough and breaking up some monopolies and making sure people can make good wages, we should BUILD, thus increasing the size of the pie.
This is a departure from the previous orthodoxy that claimed deregulation, tax cuts for the rich and in general the retreat of government, would increase the size of the pie. And it is an improvement, in the sense that the deregulation/free markets thing does NOT actually increase the size of the pie, whereas government building things often does.
But it is NOT a departure from the idea that it's OK if a few very rich people grab all the goodies. Rather, it seems to be the same old notion that a "rising tide lifts all boats"--that if we can just increase production, everyone will be better off. Yeah, not if rich bastards grab it all, which they remain positioned to do. It's not like the economy hasn't grown for decades--real people just didn't get any of it, while the hyper-rich are quite literally 100 times as hyper-rich as they were a few decades ago.
In reality, those "decades of progressive political orthodoxy, which held that the right’s obsession with so-called “supply-side economics” was really just about cutting taxes for rich people and that the real solutions lay on the demand side of the economic ledger." were quite correct. And, if you want to build stuff, it helps to have money to build it with, which you ain't gonna have if you're giving all the money away to billionaires and multinational corporations. So we're not talking about two opposed alternatives here. The "building" philosophy needs the "reducing inequality" philosophy if it is to either work or do anyone any good once it does work. If you say "Oh, the supply sider free-marketers are fine, we just need to build some infrastructure to enable them" you'll end up building your health care system then giving it away to the private sector so they can take the economy for ransom. Nobody will see a bit of good from all the building if you don't rein in the oligarchs (or eliminate them).
One thing that runs counter to the build now give it away later view is the intentions of voters.
If, for example, the federal government built 350,000 units of affordable housing in our cities over a decade, the renters become a potentially powerful block of voters who would surely rise up and scream very loudly at any new government proposing to sell them off to the private sector later on.
That is a bit simplistic but it illustrates how meeting a very real demand today (affordable housing) could build future support for the government party that directly acted instead of talking incessantly about affordable housing.
Trudeau's childcare program isn't quite off the ground yet, but with decent management it could evolve into a decent program that fulfills a vital need which could pay for itself with greater tax revenue as parents re-enter the workforce earlier than if they took full child rearing leave. Poilievre would lose tremendous support if he dared to kill the program, or sell off the assets to some kinda oligarch.
Let's not forget the obvious: that "building" means more loans (profits) for banks, more contracts (profits) for the building industry, and more profits for the shareholding class. One more upward transfer of wealth.
I may have missed it, but I didn't see any words around building "affordable" or "public" housing ...
I bought Mark Carney's aptly named book 'Value(s)' a couple of years ago. It's pretty dense where he describes the evolution of economics and the marketplace, but well written and extremely informative.
Carney has effective if complex ideas on how to meet the climate challenge from a finance perspective. The ideas he espoused at the talk Mr. Fawcett describes follows in that vein. Essentially, grow the supply of vital elements that meets the most important needs of society using public policy and finance.
I recommend the book.