Conservative austerity - Not what the doctor ordered

Brian at Just Damn Stupid has found this Bloomberg article which shows the folly of cutting budgets when the economy is rocky:

Sorry, fiscal austerity doesn’t work. For evidence, look no further than the U.K.

This can’t be good news for the U.S. political right, whose mantra has been: cut spending, put a lid on deficits, and growth will improve.

All sorts of good things, it is claimed, will spring from a turn to austerity that stops all this stimulus nonsense and prevents the Federal Reserve from doing more quantitative easing. Reductions in spending, according to a theory known as Ricardian equivalence, will do no harm because lower borrowing will automatically lead to higher private spending. Plus, of course, there is the notion of crowding out, meaning that reining in the public sector leaves room for the private industry to step in and all will be well.

This is dangerous hogwash.

There is little historical precedent in the real world, though lots of fantasizing in the made-up world of economic theorists, to suggest that fiscal austerity works. The best example of austerity’s failure is the double-dip that occurred in the late 1930s in the U.S., when spending was reduced too soon in a nascent recovery. In contrast, the U.K. didn’t have a double-dip because it was engaging in classic Keynesian spending as it began re- arming.

And as Brian goes on to point out, Hugh McFadyen's promise to balance the budget on an annual basis would require ridiculous budget cuts... not what Manitoba needs by a long shot.

Is Hugh McFadyen driving away the moderates?

The fact that Brandon West MLA Rick Borotsik has decided not to run in the 2011 election would not be a big deal in itself; politicians retire all the time, and Borotsik has had a long and (by Tory standards) respectable career. However, David Faurschou has also decided not to run, and it may be no coincidence that both Borotsik and Faurschou are among the most moderate Tories in the legislature (for instance, Borotsik, as an MP, was one of the few members of his caucus to support same-sex marriage). Add to this the fact that former Tory MLA Marcel Laurendeau, in announcing his intention to run for the Liberals next year, said that McFadyen has moved the party "too far to the right", and you have to ask - do we really know Hugh McFadyen? One thing is clear - Borotsik, Faurschou, and Laurendeau do...

An unnerving poll result for the Manitoba NDP

This Angus Reid poll (h/t Curtis at Endless Spin) shows a commanding lead for the McFadyen Conservatives -- they have 48% support, compared to 36% for the NDP, 12% for the Liberals, and 3% for the Greens. I'm not 100% sure what to make of it; the last Angus Reid poll looked like an outlier, but this is an even more dramatic rise for the Tories. One aspect of the poll's methodology does make me wonder -- it was a poll of 800 randomly selected members of Angus Reid's panel. Presumably they make an effort to make the panel reflective of the electorate, but there may be limits to this (perhaps someone more conversant with modern polling methodology could enlighten me). On the other hand, Angus Reid is a respected pollster and it would be foolish to dismiss this out of hand. To someone like me, McFadyen's crowd look like a bunch of idiots, while Selinger carries an air of calm competence. However, I freely admit to not being the average Manitoban. We'll have to see if this trend continues with the next poll.

What's the deal with this "New West Partnership"?

If you've been following the proceedings of the Manitoba legislature you'll no doubt have noticed this question that Hugh McFadyen asked of Premier Greg Selinger (scroll down to "Western Provinces Partnership Agreement"):

Mr. Hugh McFadyen (Leader of the Official Opposition): Western Canadian provinces are working together to build the economy of the future, and the focus in Saskatchewan, Alberta and B.C. is to work together in order to create more jobs and more income for their people to support health care and other initiatives going forward.

I want to ask the Premier if he can confirm that he'll be in Regina tomorrow for this exciting announcement regarding co-operation among western provinces.

Well, of course he wasn't (if he was going to be, Hugh wouldn't have asked the question). But is this the horrible thing that Hugh thinks it is? Erin Weir at Progressive Economics doesn't seem to think this agreement is such a good thing:

Saskatchewan had rejected TILMA because it empowers business to directly challenge a broad range of public policy, without identifying or solving actual problems. In addition to implementing that flawed model, the New West Partnership also hoses Saskatchewan in several specific respects.

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The New West Partnership’s core is the “New West Partnership Trade Agreement” (NWPTA). If you do not want to read the whole thing, check out the five-page backgrounder.

The first page describes it as “a comprehensive agreement to remove barriers to trade, investment and labour mobility [that] covers all public sector entities, including government ministries and their agencies, boards and commissions, Crown corporations, municipalities, school boards, and publicly-funded academic, health and social service organizations.”

The second page provides for “financial penalties of up to $5 million if a government is found to be non-compliant with its obligations.” In case the reader still doubts that NWPTA replicates TILMA, page four helpfully notes that “British Columbia and Alberta fully comply with the agreement” already and then lists a series of “Saskatchewan-Specific Transition Measures.”

There is no quid pro quo: only Saskatchewan has to change its tendering system, regulations and standards. There is no compromise: Saskatchewan must harmonize to the existing Alberta-BC model.

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Third, since Saskatchewan has a much wider array of Crown corporations than Alberta and BC, it is committing much more. For example, Alberta and BC businesses will gain a legally-enforceable right to access SaskTel’s procurement. But Saskatchewan businesses will have no parallel right to access procurement by Telus, the main telephone company in Alberta and BC.

Sounds like a neocon's wet dream to me. Selinger does well to stay the heck away from this.

Some comments on those green shoots

We're hearing everywhere that the economy is now recovering. Hugh McFadyen and his motley crew are using this as ammunition against the Selinger government, saying that there's no reason to run deficits any more, because the recession is supposedly over. Now technically that may well be true, since recessions are generally defined solely in terms of the overall growth rate of the economy. And there have been gains in jobs lately, too -- but what sort of jobs are they? Armine Yalnizyan at Progressive Economics has some comments:

Forget total employment numbers, it’s the types of jobs coming back that count.

There is a shadow side to this recovery that may undo it in the end. Uncertainty is fast becoming the new normal in the labour market, and that has long-term implications for aggregate demand, household indebtedness, and the rate of defaults on mortgages and credit cards.

The latest Labour Force Survey results show that — though there are still 253,000 fewer jobs than when the recession began in October 2008 — employment growth continues its slow path upward. As Erin Weir noted on Friday, this month’s rising head count is driven by part-time jobs.

By March 2010 there were 47,800 more part-time jobs than when the recession began, but we are still down 300,000 full-time jobs. That mirrors another shift from stable to unstable jobs: more temporary jobs, fewer permanent ones.

And that's based entirely on "pure" economics, and doesn't take into account the fact that oil is likely to get a lot more expensive soon. Throw in that element and things could get quite unpleasant indeed.

Manitoba NDP back on top: poll

A new Probe Research/Free Press poll puts the NDP back at the top of the polls by a narrow margin:

NDP 42 per cent

Tories 39 per cent

Liberals 11 per cent

The province-wide omnibus telephone survey was taken between March 8 to 25 among a random and representative sampling of 1,003 Manitoba adults. The results are considered accurate within 3.1 percentage points 19 times out of 20.

Thing is, the margin of error appears to be greater than the gap between the parties (though rounding might figure in the published results), so the NDP can't rest easy just yet. And another thing stands out:

Probe found that outside Winnipeg, fully one-half of rural voters back the PCs (51 per cent, up from 49 per cent in December), while support for the NDP has slipped from 39 per cent to 32 per cent.

In vote-rich Winnipeg, the NDP continues to have the support of 49 per cent of decided voters (down slightly from 52 per cent in December), while the PCs now sit at 32 per cent support (up two per cent from December) and the Liberals remain unchanged at 13 per cent. There are 57 seats in the Manitoba legislature: The NDP has 36 seats, the PCs 19 and the Liberals two.

In the short term, this is good news for the NDP, since a decline in rural support won't cost them very many seats (they don't hold very many of those seats anyway). However, if the Liberals start to surge back, things could change considerably. Fortunately, I doubt Jon Gerrard is the guy to do that.

Also, the timing of the poll is unfortunate, since it straddles last Tuesday's budget. I'd be interested to see the results of a poll conducted entirely after the budget came down, to see if it had an impact on public opinion.

Budget notes

The new provincial budget introduced by Finance Minster Rosann Wowchuk is not particularly shocking. Like the federal government and virtually every other province, Manitoba is going to be running a deficit until 2014. Several governments, including the feds, will be running deficits for longer than that, so overall we're doing pretty well, and all efforts are being made to maintain front line services. To do this the government will need to amend Manitoba's balanced budget legislation to make it more flexible. The provincial Tories and their ilk will whine, but considering that the federal stimulus would not have been possible if the feds (you know, the folks Hugh McFadyen would presumably like to emulate) were constrained by similar legislation, I don't think they don't have a whole lot to complain about.

Interestingly, U of M economist Fletcher Baragar thinks that the balanced budget legislation should be scrapped entirely. I'm inclined to agree, though it might be hard to sell the public on the matter.

Manitoba Conservatives show lead for first time in years

Too soon to say what this means, but an Angus Reid poll shows the PCs substantially ahead of the NDP:

An Angus Reid poll released Thursday -- on the eve of the release of the new provincial budget -- shows Hugh McFadyen's Progressive Conservatives out in front of Premier Greg Selinger's New Democrats.

"This sets up Tuesday's budget," said the University of Manitoba's Jared Wesley, an assistant professor of political studies. "This is when Manitobans will have a first real look at the premier."

Wesley said Selinger and Finance Minister Rosann Wowchuk have to make a good impression on Manitobans to take any momentum away from the PCs.

"Anybody who's in politics has to take it seriously because it's coming from Angus Reid," Wesley said of the poll.

It found 44 per cent of decided Manitoba voters say they would support the Progressive Conservative candidate in their constituency if a provincial election were held tomorrow. The governing NDP is second with 37 per cent followed by the Liberal Party with 13 per cent and the Green Party with three per cent.

Brian at Just Damn Stupid dismisses this out of hand based on the poll methodology. I'm no expert, but I'm not prepared to dismiss these results, much as I might like to. While it is an online poll, it's a far cry from those worthless polls you seen on every media website; Angus Reid is a respectable firm and they make a serious effort to ensure a sample is representative. However, another factor may be in play here:

The NDP is ahead of the Tories in Winnipeg (44 per cent to 36 per cent), but the opposition party holds the upper hand in rural Manitoba (55 per cent to 28 per cent).

Some of the government's policies in the last few years have been unpopular in rural Manitoba. In particular, the new wastewater regulations and the moratorium on new hog operations have been spun by the Tories and various interest groups as an attack on the heart of rural Manitoba. The thing is, though, most of the rural constituencies are already held by the Tories; it does a party no good, from an electoral point of view, to gain popularity in constituencies it already holds.

Another day, another NDP by-election victory

Last night's results in Concordia were no surprise to anyone. What was a little surprising is how candid Hugh McFadyen was about the matter. Yesterday morning he said the following:

"We don't have any champagne on ice over at party headquarters in anticipation of a big surprise tonight," he said.

"I expect that the NDP will … own the podium when it comes to Concordia tonight."

Source. Full marks for not being self-deceptive, I suppose, but it's kind of a slap in the face to his candidate and the campaign workers -- especially since the candidate was taken by surprise when asked about this:

However, Biebrich seemed somewhat stunned when told what McFadyen had said.

"You know, that's something he's, uh, you know, him or myself, we wouldn't want to appear overconfident," Biebrich said in response. "We want to make sure every vote we can get gets out."

Ouch.

Selinger scores big in Inkster

One of the largest constituencies, by delegate count, went largely to Greg Selinger last night. This gives him a fairly comfortable lead, but as Never Eat Yellow Snow points out, the contest is not over yet. With approximately 50% of the delegates chosen (from constituencies and otherwise), this leaves Selinger with 65% of declared constituency delegates, and Ashton with 35%. Yellow Snow has calculated that Ashton could still have a chance of winning. To do so, however, he must sweep Interlake, The Maples, and Fort Whyte, as well as picking up a substantial amount of the labour and MYND support, and a few more constituencies.

Perhaps the biggest story, though, is this:

Premier Gary Doer's pending address change hasn't made a dent in the NDP's popularity with Manitoba voters, a new Probe Research/Free Press survey says.

The ruling New Democrats remain the most popular political party in the province with 45 per cent of Manitobans saying they would vote for the NDP in the next election.

For the NDP -- which chooses its new leader Oct. 17 -- this means their commanding lead hasn't changed since Probe's last poll conducted in June.

"We always talk about the equity that Doer brings to the party and to the electorate," Probe Research president Scott MacKay said. "Does his departure leave this big hole and this hollowness? There was nothing.

"What does this mean? He leaves and the air doesn't go out of the tire. It just stays where it is."

This is extremely good news for the NDP, of course. I suspect that Hugh McFadyen will soon be under pressure to step down if this pattern holds.

A history lesson for Hugh McFadyen

Some astute readers may remember the name Roger Bilodeau. In the early 1980s he successfully fought a traffic ticket on the grounds that the law behind it (along with virtually all other Manitoba laws) was invalid on a technicality, namely that the law had not been translated into French. Of course, the laws continued to be enforced, subject to the condition that the province had to translate them within a certain period of time. Presumably McFadyen, and Kelvin Goertzen, Bonnie Mitchelson, and the rest, would say that anyone who had ever been convicted of a provincial offense in the province before that point should have their fines refunded. Heck, maybe we should be paying the estates of people who paid fines in the distant past. Adjusted for inflation, even.

Needless to say, I'm not holding my breath waiting for the Tories to advocate this.

"Steady as she goes" pays off

Manitoba's NDP government is again well on top of the latest poll:

From a dead heat to no contest.

The provincial New Democratic Party regained a 10-point lead in voter support in recent weeks after running neck-in-neck with the Conservatives in December, a new poll conducted for the Free Press concluded.

The omnibus survey from Probe Research found support at 46 per cent for Premier Gary Doer's NDP, compared to 36 per cent for the Tories under Hugh McFadyen. Jon Gerrard's Liberals landed 13 per cent support.

"It's really more like what we have been seeing for all this time," said Probe Research president Scott MacKay. After the blip in December, support for each party now is roughly the same as it was a year ago, he said.

In December, the Conservatives looked to be on the upswing, coming within two percentage points of the NDP and surging in popularity outside Winnipeg.

Pollsters suspected NDP popularity took a hit in rural Manitoba over the party's ban on further hog-barn construction.

But the Tories appeared to have lost December's gains in the latest numbers, with the NDP on the upswing after recent byelection victories in The Pas and Elmwood.

The premier's popularity doesn't seem to be flagging: Doer had the approval of two thirds of voters.

From the Winnipeg Free Press. I'm still pleasantly surprised when this happens; sure, the province is in good shape, but so was Saskatchewan under Lorne Calvert, and that didn't seem to help the NDP electorally. The fact that the opposition parties lack effective leadership probably has something to do with the results here.

Still, it's good to see that social democracy remains a going concern in this country.