02 May 2016

A cut too far #nlpoli

There's a scene in the movie A Bridge too far where the British soldiers are trying to push down a road as part of a major attack on the Germans in September 1944.

The whole plan was built, according to the movie, around dropping parachute troops at key bridges and then having ground troops charge along a single road.  The soldiers on the ground had 48 hours to get to the last of the airborne soldiers, who were at Arnhem.  They didn't make it, hence the idea that the plan always involved going one bridge too far.

There are wrecks everywhere and the dead are everywhere after the first clash in the campaign.  As soldiers clear the way and take away the wounded, one officer looks up at another who is sitting on a scout car.  How do the generals expect them to keep up the pace under these conditions, the fellow asks looking up.  The fellow sitting on the armoured car has his binoculars and is scanning the road ahead.  J.O.E Vandeleur,  played by Michael Caine, looks down at his cousin, Giles,  and says:

"You don't know the worst. This bit we're on now?"

"Yes,"  says Giles, quizzically.

"It's the wide part."

That neatly describes the political problem both for the government and for the folks who are already fed up to the back teeth with the government's financial problem.

On the one side you have folks who think that government has already gone a cut too far or a tax hike too far. They are being asked to pay - altogether - about 20% of the entire financial problem this year. The government will borrow the other four fifths.  That does not include Muskrat Falls, which requires about two and half times more in borrowing than the tax increases will drag in.

On the other side you have a government whose strategy was to hike the taxes up the front end and do whatever cuts they planned  in bits and pieces over a very long time.  They have actually increased spending this year to $8.5 billion from $7.6 billion last year.

In other words, both sides are at what is effectively the wide part of the road down which both must go.  Everything from here will only be tougher for the politicians than where we are. The harder the opponents push back,  the bigger they make the problem for everyone in the long run. The debt is not something either of them can escape. They both must deal with it, politicians and ordinary folks alike. many of the ordinary folk, though, want to pretend this has nothing to do with them.  They like things the way they were.  The problem for them is that the status quo is not an option.

The folks attacking the government for the budget are an interesting bunch.  The politicians among them are the most interesting of all since they campaigned last fall on precisely the same budget plans as the folks currently in office.  They would hike taxes a bit,  they would cut a little bit but - overall,  they would borrow as much as they could to keep everything pretty much where it is. The only real variation was in how far they would go, particularly in borrowing. The NDP would borrow everything. The Conservatives would borrow a bit less and the Liberals slightly less than that.

The same but different

The politicians that didn't win now pretend that not only did they say something else last fall but that they would do something different now. Even that simply isn't true.  You can see the incredibly small differences among the parties in a piece from James McLeod that appeared online on Sunday.  Earle McCurdy would have raised taxes just not by as much and nothing that is now seen as unpopular.  He would have borrowed a lot more.  There's a shock.

Ditto for Paul Davis. Nothing that was in hindsight unpopular for Paul.  And while he acknowledged that everyone is worried for their jobs and that the budget is "crashing" the economy, Davis would have "crunched our attrition" whatever that means.

Oh yes, and Davis would have gone to war with Ottawa to "fight for us."  Fight for what, Davis does not say, most likely because there is nothing to fight the federal government about. We know this already because Dwight Ball had precisely the same thought and ran into the simple truth is that there is no magic pot of cash there to dip into. If there was more than $32 million to be had,  the Liberals in Ottawa would have found it for their friends the Liberals in St. John's.

Davis is talking nonsense, just as he always has. Everyone should know it. The last time Davis went to war with Ottawa he based it - like Danny Williams in 2004 - on a lie. The truth is that Davis and his crowd tried to change the agreement on European trade themselves and were rebuffed for their hamfisted effort.  As for Williams, for all his play-acting in 2004, he settled for far less than he said he was after.  In the end,  the federal government gave him $2.0 billion in eff off money and that is all. He never never got another thing after. Davis just got laughed out of town.

For his part,  McCurdy thinks that going to war with Ottawa is nothing but a distraction but, for all that,  "you’ve usually got to push them to get a fair shake." Again, McCurdy does not explain how the province is not getting a fair shake. Perhaps this is a bit like his infamous comment last August that to deal with the budget problem, you'd have to put everything on the table. These days, Earle has the same sort of selective amnesia plaguing Ed Martin about the Astaldi contract.

Things are tough in Tuscany this year

The truth is that whatever difference there is among the political parties in Newfoundland and Labrador is very, very small. Most of it is in the degree of hypocrisy:  some of more full of crap than others. In that respect,  the fighting among them is like the rackets in university departments. That's why it was so fitting last week that some of the news media gave a huge amount of coverage to university vice-president Noreen Golfman and her supposedly savage criticism of the budget, posted to her university blog from Italy apparently.

Let us understand Golfman's argument in perspective. "Government cut 8.3. million of our operating budget this year,   wrote Golfman. That's it.  Less than $10 million.  Golfman starts adding up all sorts of other things to show that the university administration must "find, gulp, about 56 million."

This year the provincial government must borrow 3,000 million just to balance the books. At a time of great provincial emergency,  Noreen Golfman is whining about having to find  - at the very worst - less than two percent of the problem facing the people of the province as a whole.  Dio mio! How will she endure such privation?

Of course, it is not personal privation. Golfman and the other senior administration at the university must find that $56 million out of a university budget that is more than 10 times larger than the total they are short, in Golfman's worst case. Remember that 10, by the way.

If the university is short only $8 million this year,  the least they need to find is less than one percent of the total budget.    The university has plenty of options.  One of the things they might look at is the compensation paid to the elite at the university.  That would be folks like Golfman.  Back in February, Marilyn Reid gave us some insight into the deep-rooted problems within the university community.

"Memorial University,"  Reid wrote in The Independent, "now has a president making nearly $500,000 a year, supported by a sizeable cadre of senior managers who also make big bucks."

"Contrast that with the well-educated, contractual support staff, many of whom are hired for less than 20 hours a week, presumably so that MUN does not have to pay them benefits,"  Reid said.

"MUN also has a huge schism between contractual, per-course instructors and tenured professors," she added. "Most per-course instructors, even with PhDs, make less than $20,000 a year. The tenured ranks, on the other hand, increasingly include full professors aged well over 65 who make salaries five to eight times that amount. Those in their 70s are also taking in their MUN pensions."

That's the sort of excess you will find throughout the world that takes its money from the taxpayers' pocket. Sadly, Golfman's attitude is also too typical of those who have helped create the problem. They feel entitled to their entitlements and would prefer to resist strenuously any effort to change their cozy position.  Noreen and her colleagues in the university's senior administration could easily find that $56 million without hurting those outside her income and social circle at the university.  She certainly wouldn't have to bother those per-course instructors who make, it should be noted, less than 10 times what Golfman does. There's that number, in case you forgot it. 

The Bridge to Nowhere

Political memories in this province are so short, everyone has probably forgotten what the Conservatives announced as their brilliant strategy for dealing with this mess when the financial waters receded a few years ago and the top of the rocks finally poked up through the water ahead of us. They planned to stay the course, to continue spending more than we can afford.  They would run a few deficits here or there and, as that happened, they would trim a bit here and there to cope. They would also run some surpluses as oil the oil was guaranteed to come back.  The astigmatic seer said so and everyone thought this was sheer genius because it confirmed what they wanted to hear.

Take a step back from the details and you can quickly see that the current Liberal plan is to do the same thing.  Don't listen to the folks screaming about this budget.  For the most part, the ones screaming loudest are folks with a vested interest in the screaming.  They are union leaders and politicians not in power. 

Look at what the Liberals have actually said and done.  It is the same as the COnservative strategy and it is the same as all three parties committed to do last fall.  The difference is only in relatively minor details.  The Liberals, for example have just dropped the talk of accidental surpluses. 

They just hiked taxes.  From here on, they will trim a bit and shave a bit as they need to, slowly and gradually, as they expect revenue will grow. These budget shortfall things come in cycles, as you will hear lots of people say. We just have to bridge to when oil comes back. 

Dwight Ball said exactly that, in fact, back in December: we "need to find a way to bridge us [from] where we are currently until the commodities rebound and be [sic] the significant contributor we need them to be."   Ball also said - persistently - that they would rely on attrition to achieve any changes to the public service. 

Ball evidently meant it. This budget contains no significant changes to the size of the public service. None.  All the government has done is the equivalent of some very minor shaving here and there. Sure it doesn't feel that way to the people laid off but given the size of the public service in this province, the numbers don't even register.  The budget also includes a 12% increase in spending. The political problem is that the government has expended so much political capital on what amounts to nothing that it will have a hard time finding any to spend if it tried to make any significant cuts later. 

What the Liberals and everyone else imagines is that this is a temporary problem and that some sort of magic will happen eventually to make the massive debt and the enormous deficit.  Meanwhile, the political charade goes on as usual. McCurdy and Davis say they would do precisely the same thing as the Liberals, but without the unpopular stuff.

Playing popularity politics is how we got into this multi-billion dollar mess in the first place. Everyone plans to keep it up. They say that to be successful you should go with what you know best. Having run a country hard up on the rocks before, the politicians of Newfoundland and Labrador are looking to do it again, this time with a lot more money. The last time someone was able to float 'er off again. Perhaps this time, they can get the country so far up the beach and into the woods the wreck can become an amusement park, a kind of freak show of failed statehood.

Until then, people fight about the austerity budget that is not austere. They scream that the same is different. That the few people marching in the streets for the status quo are marching for change. That asking them to pay extra in taxes is not revenue and that the government should go find revenue, which invariably is only to be found in someone else's pocket.  Or that asking them to pay more in taxes will slow the economy.  Cut four times more from public sector spending they say, as if that would not hurt anyone at all or hurt the economy less.

It is a game.  They know that whatever crowd is in power, they will not dare cut back at all.

Everyone is putting all their hope on a bridge to nowhere.

At this rate, they will get there very quickly.