Tuesday, June 22, 2010

On the G8/G20.

Dissertation work ran overtime, so this will be quite short. Even by my standards. Basically, just a few thoughts that have occurred to me in light of the G8/G20 meetings that are about to royally fuck up my city for a few weeks. (Ick, I just called Toronto "my city".) It's also very off the cuff; so, apologies for that.

First is regarding the security aspect. I've never really understood the logic behind the way security is done these days. Anyone with a functioning brain and a basic set of social skills knows that the worst Way to ensure you don't wind up with a violent, hostile situation is by presuming a violent, hostile situation is inevitable. Locking down the city and filling it with thousands of police curtails the options for resistance to just two: don't resist, or resist aggressively. The middle ground of peaceful, but forceful, protest has been eliminated.

It's obviously foolish, but it happens again and again.

The sensible option is to treat the protestors like people -- ordinary, everyday people, who have opinions and want an opportunity to have those opinions heard. It's easy to justify fighting when it's against a faceless wall of uniformed police, but it's hard to justify when being engaged in conversation and discussion. I keep meaning to look up the details, but I recall hearing (I think it was in The Corporation?) about a CEO of, I believe, Shell who had a group of environmentalist protestors show up on his front lawn. Literally -- the front lawn of his home. He could have had police show up, called security, had them forcibly removed and filed lawsuits left and right -- which would have lead to confrontation, tremendous (negative) publicity, and so on.

Instead, he and his wife went outside and brought the protestors tea and sandwiches. And then sat down and talked to them. After eating and talking, the protestors left.

I remember during the York University strike of last year, a group of strikers and their supporters staged a sit-in outside the President's Office. They even invited the President to come and sit with them and have some pizza and talk. Not only did President Shoukri not show up, when some of the folks involved the sit-in ran into him -- in the hallway, I believe -- he literally ran. And then called security. Which turned what could have been a quick, human, productive interaction into a protracted, aggressive, impersonal confrontation.

I get the feeling the G8/G20 security thing is going in exactly the same way. Uniformed but unarmed cops, circulating in the crowds, interacting with the protestors in polite, friendly ways might actually do something to stop violence from happening. Standing behind security fences in full riot gear, with weapons at the ready, might just provoke it.

It's part, I think, of the foolish reliance of many in current society on rigid rules rather than careful judgement: the replacement of the ethical with the legal. Somehow, we've become so incapable of dealing with other people as people that we believe unyielding structures will prevent bad things from happening. It's stupid -- bad things happen; the trick is to minimize them by encouraging the people involved to take responsibility and exercise their own capacities to solve whatever problems that emerge.

(I'm not being original here, by the way. This is just Kant: the world according to pure reason -- the world of science -- consists of strict rules and principles, and the world of practical reason -- the world of ethics -- consists of judgement and careful cultivation of character/will. Both worlds are relevant, both worlds are necessary, and both worlds must be held together, in constant but necessary tension. And even Kant isn't being original: it's little more than Plato's old distinction between the perfect, abstract World of Being and the imperfect, variable World of Becoming.)

Second is regarding the economic aspect. Our beloved Prime Minister, responsible for creating ever more ways to ignore and delegitimize the federal government, is joining the chorus to reduce deficits and debts, despite the fact that the effects of the global recession are still being felt. There's a number of problems with this.

The first and most obvious is that governments are moronic when they panic about deficits and debts. Canada's current deficit is $56 billion. Sounds like a lot of money, right? Canada's yearly "income" -- its GDP -- is $1.5 trillion. Which makes the deficit to GDP ratio 4%. Canada's current debt is about $530 billion. Again, sounds like a lot. But the debt to GDP ratio is 35%. By way of comparison, a 4% deficit to income ratio, for an individual, would be like a person making $38,000 a year (the national poverty line) and spending an additional $1520, per year, on a credit card. Or, for the 35% debt ratio, it'd be like that same person carrying an accumulated $13,300 in debt -- which would be about the debt covered if our subject took out a car loan. Not only do people at poverty-line incomes easily bear deficit and debt levels equal to those that the national government currently holds, they often exceed them. Suppose our $38,000 income-earner buys a home. A cheap home in an inexpensive part of the country might cost, say, $50,000. Taking out that mortgage would leave our subject with a debt to income ratio of 132%.

Furthermore, if you look at Canada's debt-to-GDP and deficit-to-GDP ratios historically, they've been much higher than they are now. And we've not only failed to cut spending in order to deal with them, spending has actually increased with no negative (and some positive!) impact on Canada's economy. I'm not going to delve into the historical data to prove this point, but it's readily available, and anyone speaking to the issue should be at least vaguely familiar with it. (Hence ruling out Harper and Flaherty tout court.)

My point is that deficits and debts are financial instruments. They're tools. There's nothing inherently bad or good about any given level of deficit or debt. The sort of panic that attends "big" deficits like $56 billion is completely unwarranted -- we don't apply the same standard to personal debt and deficit, and we haven't freaked out this badly historically.

Moreover -- second problem -- the economy is still very weak. If you look to other economic indicators than GDP, unemployment is still high, exports haven't recovered, real estate is weak, personal savings are low, luxury/entertainment spending is down, and so on and so forth. Cutting now would just deepen the wounds that already eixst. We need to spend at the government level now so that we can curtail government spending -- cutting now will require even greater increases later, in order to solve the problems the cuts create on top of those created by the recession. Unless, of course, Flaherty follows his usual dispositions and protects his friends while screwing the rest of us over. That's another way out, but not one that's particularly praiseworthy.

So, we've got a group of very wealthy people gathering in Toronto and Huntsville, discussing how to keep their wealth to themselves, while leaving the rest of us to twist in the wind because of problems created by very wealthy people. And they're doing it either because they are genuinely callous and want to see us hurt, or because they really have no idea what they're doing.

(To be fair, the G20, at least, does have members that see that deficit/debt-fighting is stupid right now, particularly India. And Obama is at least indulging in pro-spending rhetoric -- but, as always with him, we'll have to see whether that gets realized in action.)

In short, governments need to figure out what kind of outcomes they're going to tolerate. Is the misery of the masses (and everything that follows from that) really a good outcome? Is deficit and debt something that can be handled later rather than now?

Once again, it seems that the basically unserious nature of our governing bodies is betraying our interests. And, as said earlier about security, they're doing everything they can to keep from having to deal with us and our problems honestly and humanely.

1 comment:

Catelli said...

I do wish that our government would wield the borrowed money like a scalpel, solving pressing issues (water quality, transit, clean power, whatever) rather than like a drunken sailer on a bender.

Its the second that upsets me. If debt is an instrument than it should be wielded skillfully. It is a tool that requires finesse to maximize return (financial or social or both). Otherwise it is being wastefully used at a precious time.