God keep our land…
I lived in Vancouver, BC for two years and honeymooned there years later, but the extent of my knowledge in regards to Canada is limited mainly to such trivial (yet ironically important) matters as its rather bad selection of mixed drinks (do Canadians drink anything other than martinis?) and its rather good selection of beer (ah yes, they drink beer…). One thing I did not know, was that of all the industrialized nations of the world, Canada alone remains relatively unscathed in this current global meltdown. Grant Havers does a little summation of Fareed Zakaria’s reporting on the remarkably stable Canadian economy:
1) Canada has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. In 2008, the World Economic Forum ranked Canada’s banking system the healthiest in the world. America’s ranked 40th, Britain’s 44th.
2) Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1.
3) Home prices are down 25 percent in the United States, but only half as much in Canada because the Canadian tax code does not provide the massive incentive for overconsumption that the U.S. code does: interest on mortgages isn’t deductible up north. In addition, home loans in the United States are “non-recourse,” which basically means that if you go belly up on a bad mortgage, it’s mostly the bank’s problem. In Canada, it’s yours.
4) Canada has been remarkably responsible over the past decade or so. It has had 12 years of budget surpluses, and can now spend money to fuel a recovery from a strong position. The government has restructured the national pension system, placing it on a firm fiscal footing, unlike insolvent Social Security. Its health-care system is cheaper than America’s by far (accounting for 9.7 percent of GDP, versus 15.2 percent in America), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; “healthy life expectancy” is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America’s largest car-producing region.
Now, a few things jump out at me after reading this and Zakaria’s pieces. First of all, Canada has managed to do two often seemingly disparate things at once in order to create a more stable system of banking and, indeed, health care. Let’s start with health care, something I want to expand on more in a later post–Canada has managed to lower health care costs to levels far below American health care expenses, and at the same time they’ve socialized their health care system. In other words, they’ve taken a progressive policy and then made it fiscally responsible. They’ve done the same thing with their national pension system. This strikes me as a perfect example of good governance taking precedence over blind ideology, of fiscal conservatives working within a liberal system and making it function, something our own conservative politicians seemingly can’t even comprehend, so intent on destroying the liberal system they’ve lost all focus on the option of actually making it work.
Second, Canada has eschewed the notion of Government-subsidized home-ownership in favor of responsible home-ownership where citizens (or consumers) actually carry the burden of risk when entering into a mortgage. And yet, as Zakaria reports,
American politicians wax eloquent on the need for these expensive programs—interest deductibility alone costs the federal government $100 billion a year—because they allow the average Joe to fulfill the American Dream of owning a home. Sixty-eight percent of Americans own their own homes. And the rate of Canadian homeownership? It’s 68.4 percent.
Here we see another rather conservative approach to Government involvement in home ownership. Rather than subsidize home owners, the Canadian Government is approaching home ownership as a responsibility that the individual needs to bear, rather than the state. And, as Havers says above, if a mortgage goes belly up in Canada, it’s the mortgage-owners responsibility, not the bank’s. This changes the central risk involved in home-buying and forces Canadians to be more prudent in their purchases. This and the lack of tax breaks has lead to far fewer bad mortgages changing hands in Canada than in the United States.
Canada is exhibiting governance of the sane and responsible variety, rather than the purely partisan. After all, if national health care can actually cut costs, and limit the number of entitlement programs, than why shouldn’t it be viewed as a conservative solution for our country’s health care calamities? And if getting Government out of the home-ownership business actually leads to more prudent home buying practices, and at the same time results in the exact same level of home-ownership rates–in other words, its better for banks, the government, and the individual–how is this not in fact a progressive solution to our housing problems?
In other words, just because conservatives usually preach less government, and progressives usually preach more government, perhaps the answer is, it depends. Perhaps sometimes tax-breaks are actually too much Government involvement. And perhaps budget cuts are sometimes a huge mistake, even in the name of fiscal responsibility. Eeach situation should be judged on its own merits, and the very notion of limited government needs to be viewed in a case by case manner rather than a blanket ideology. Likewise, the efforts of progressives should not always rule out the concept that too expansionary a Government can often do more damage than good when it attempts to solve the many problems of society by simply throwing money at them.
I think we’re left with pragmatism and caution but little ideological content at all. Instead of standing athwart history yelling, “Stop!,” Tanenhaus’s ideal conservative would patiently clear his throat before ironically intoning, “Hey, would you mind slowing down a little bit so we can catch up with you before the next round of creative destruction?”
To this I can only say, perhaps modern day movement conservatives aren’t yelling “Stop!” either–they’re yelling “Attack!” Reading about the Canadian system, one can really see how conservatives have helped the liberal framework function in a conservative manner. Somewhere in that process, conservatives did shout “stop!” and because of it, they managed to create a system of good governance. They didn’t seek to undo every progressive machination in Canada’s government. They worked to make them solvent and stable. They didn’t come as destroyers, seeking to “repeal the 20th century” but rather as statesmen, looking to the future with caution and care.
Speaking of destruction, I’ll offer up one more example to drive this point home, and this is one that I will most certainly write about at greater length in the future. In my home state, we recently lost our Democratic Governor who was then replaced by the Republican Deputy Governor. Not long after our education budget was slashed by 40%. In one year, our colleges and public schools are supposed to somehow cut back their budgets almost in half.
I understand that there is waste in the system. I understand that Republicans want fiscal responsibility. But what I can’t understand is how our educators are supposed to provide decent educations for our children when in one year they are forced to cut back their budgets by 40%. This, to me, is reactionary beyond belief. This is not a conservative move, or a policy that fits within the scope of good governance. This is appalling and takes the ideology of fiscal conservatism to the brink of stupidity and chaos. What now? Employees furloughed, driving up unemployment costs? Hugely expanded classroom sizes? Layoffs leading to even higher costs both in unemployment and in State health care? More people searching for more non-existing jobs? Kids whose education once again take a backseat in our national priority?
In Canada, I attended Catholic School which was free because all school, even religious schools, are public schools. They’re also all funded adequately, or at least they used to be. It was a damn good school, too, and on Fridays I attended Mass. I learned French and mathematics and listened to lectures on God and the Trinity.
Here in the States, at the local University, the budget cutbacks equal the entire budget of our Business and Education colleges. How is this supposed to drive our nation forward into this next century? I fail to see how this is a conservative move at all. Free Catholic school seems to be a much better conservative option.
So what’s to be done? I posed the question to my father, a conservative and an educator.
“Vote the bums out of office,” he said.