14 July 2015

It was Greek to me #nlpoli

After days of intense talks,  the Europeans apparently have finally reached a final deal to help Greece out of its latest financial misery.

Greece is broke.  With a gross domestic product of about US$238 billion, the country had a government debt of about US$346 billion.  Some of the country’s banks have very low reserves of cash.  People have already made a rush and withdrawn their money from them.  This has forced the government to impose a tight limit on withdrawals in order to avoid a bank collapse of the type that hit Newfoundland in 1894.

Under the new deal,  the European Union will place officials in key parts of the Greek government in order to ensure that the Greeks actually implement reforms that are part of the bail-out deal.

It’s a tough response, but then again the Greeks are in a tough economic spot.  The third tough spot, since 2009. For all that, though, there are people around the world who believe the whole problem is imaginary.  They believe that something called “austerity” is the real culprit.  If you just got rid of it, so this way of thinking goes, the Greeks could go back to the way things used to be.

There is reality.

There is what people who think that way actually believe.

Two different things.

The economy is based on a fairly simple idea.  We trade things.  We need potatoes but have lumber. A woman has some potatoes but either needs lumber or will use the lumber to trade with someone else.  So we cut a deal and figure out how many potatoes we can get in exchange for an amount of lumber.

Economics 101

You can’t get something for nothing in this exercise.  Sometimes,  we might let people have the lumber or they might let us have the potatoes in exchange for a promise to trade something valuable for them later on.

Later on, someone figured out a system where we put value in something like gold or stones.  We figured out the trade price of potatoes and lumber for gold.  Then we didn’t need to have one thing to trade for another.  We could trade money for our lumber.

And before too long, someone figured out that we could even get money in exchange for a promise to return it later.  It’s another form of trade,  if you will. 

The whole system works as long as everyone does their part and meets the promises to pay.  Every now and then, though, someone in the trading system can’t meet their promises.    Or they are in a situation where people won’t accept their promises to pay any more.

Or in the case of Greece, they get to the point where they can’t pay full stop, as promised.  Greece has defaulted on loan payments a couple of times already.  They got money and promised to pay.  Then they didn’t have the cash when the time came to pay.

That’s what a default is. 

When you’ve defaulted a couple of times, don’t have enough money to pay your bills,  and people don’t want to give you any more money, you have a problem.

So you cut spending:  you lay people off, cut wages,  cancel government programs. Once you can’t borrow money any more, you can only get what you have the cash to pay for or, in the worst case, the goods you have to trade. 

Austerity is not the problem:  it’s the sign of a problem.  You can’t make the problem go away by preventing the cuts or the job losses or what have you.  The people who are protesting against austerity whether in Greece or in Newfoundland and Labrador genuinely don’t like what is going on but they have, for the most part, no idea what is really going on.

Austerity in seats

It’s a bit like the folks who got upset at the cuts to seats in the House of Assembly because it reduces representation in rural seats on the island.  Redistricting did have that effect,  no doubt.  But what was going on behind it is the real problem.

Let’s leave aside the issue of cutting the number of seats and how it was done.  Let’s just look at the way the House of Assembly wanted to make the cuts.  Ordinarily,  the commission would divide the whole population equally into the number of districts the House approved.  That way every person has a vote that is worth exactly the same as every other vote.

In 2015,  the House confined the changes to the island.  That meant that some people in rural Newfoundland and Labrador (that is, Labrador) had votes that were worth – relatively speaking – more than other voters either in the so-called urban areas of the province or in the rural parts of Newfoundland.

That was the real problem:  the redistricting created situations where some people in Newfoundland and Labrador had votes that were worth two or three times what votes in other places were worth.

That isn’t what some people in rural Newfoundland complained about though.  They complained that they had fewer seats at the end of everything.  That’s the logical result, though, since rural Newfoundland has a lot fewer people in it now than it used to.  Even if the new district scheme had had 48 seats, there’d have been fewer seats in rural Newfoundland and Labrador just because there are  - wait for it – fewer people living there.

Earle and the Cult of Ruralism

In 2013,  the provincial Liberals and the provincial New Democrats proposed cuts to the size of the House of Assembly as one way of dealing with the provincial government’s financial problems.   A couple of years later,  the New Democrats changed their tune not out of principle but out of a desire to capitalise on the old townie/bayman divide in the local culture.

Earle McCurdy pounded away on the idea that the cuts would be coming primarily from rural Newfoundland and Labrador.  Now surely Earle must know the rights of things, but he’s too experienced an activist to let the facts get in the way of something that might motivate a few  people in the way he wants.

He’s also too smart a politician to actually run in a rural seat just to stand in solidarity with the people he’d have you believe are being hard done by. The Dippers haven’t been polling too well outside the metro St. John’s area.  Earle isn’t even running in the seat he lives in, no matter what Gerry Rogers might think.  Earle is not running in Mount Pearl North  - where he lives - against Steve Kent.  He is running in St. John’s West, where the New Democrats think they have a shot at the seat.

The NDP banner in rural Newfoundland will be held by people like Mildred Skinner.  She tried for the Liberal nomination once and lost. Her background, though, reads like that of a hard core New Democrat:  Mildred “has served on the Fish, Food and Allied Workers union's inshore council and board of directors for 17 years.” 

Now she’s running for the New Democrats. That would be the party run by Earle McCurdy who – in case you missed it – ran the FFAW while Mildred was on the board.  Skinner supports Earle enthusiastically, or at least that’s what she said in a news release sent to media and, in all likelihood drafted by the NDP staffers in their bunker in St. John’s:

He has the know-how, the track record and the leadership skills our province needs.

The reason Skinner gave for her supposed party switch is very familiar.  At the time she ran for the nomination before, “I had no idea the Liberal Party would ever even consider turning its back on rural Newfoundland the way it did by joining with the PCs in the late-night deal to support Bill 42.”

Had no idea?

Dwight Ball’s comments were widely reported in 2013, usually right next to those of Lorraine Michael.

But Mildred and the NDP writers who put the news release together didn’t just stop there:

As district size is based on population, anyone could have seen (and many people did) that rural Newfoundland and Labrador would lose representation.

So clearly, the NDP understand exactly what has been going on.  They also understand the logical consequences of the population decline in rural Newfoundland and Labrador. Even if they had redrawn the boundaries with 48 seats,  there’d be fewer seats in some parts of the province  because “district size is based on population.”  They just don’t care about the truth since they think there’s a greater advantage in spreading false information.

Greek Logic

What’s even more – take your pick:  funny, curious, disingenuous -  in a news release laden with really [insert the word again] comments is in the district Skinner will contest on behalf of the New Democrats.

Fortune Bay – Cape LaHune wasn’t touched by the recent redistricting.  The boundaries remain exactly as they were.  So, too, does the population.  The result is that the typical voter in the district Skinner wants to represent has not been hard-done-by as a result of the redistricting.

Quite the contrary.  The typical district these days in the metro St. John’s area has upwards of 14,000 voters in it or more. The district Skinner lives in has fewer than 8,000.  Any one of her potential constituents has a vote worth almost twice as much as a vote in St. John’s West, the district where her blessed Earle would like to be the member in the provincial legislature.

As with Labrador and a few other seats on the island, people in Fortune Bay-Cape LaHune  are grotesquely over-represented in the House of Assembly.  Despite that, and despite knowing exactly what seat distribution is about, the New Democrats and their candidate Mildred Skinner are claiming that somehow voters outside metro St. John’s are getting the shaft under redistricting.

There is what is really going on.

There is what some people mistakenly believe.

And in Newfoundland and Labrador, as in Greece, there are politicians who will encourage people to misunderstand because it serves the politicians’ purpose.