Canadian Politics Part 1: Ontario's Provincial Election

Recently, a provincial election took place in Ontario, leading Kathleen Wynne's Liberal Party to go from a minority to a majority, mostly at the expense of Tim Hudak's Progressive Conservative Party, who promptly resigned after the election in losing 6 seats and 2 very winnable elections, while Andrea Horwath's NDP stayed the same in seat count.

Given my crazy interest in Canadian politics (which is unusual for an American), here is a brief overview of the main political parties in Canada, with an emphasis on Ontario for Part 1:

The Conservative Party is a center-right to right-wing party (comprised of the former right-wing Reform/Canadian Alliance and the center, center-right Progressive Conservative party). They held minority governments from 2006-2011 (nearly interrupted in 09 by a Liberal-NDP-Bloc alliance, that was solved essentially by Harper shutting Parliament down and the Liberal Party leader being couped by a Harvard Professor [no joke]), and have had a majority since 2011, winning 39.5% of the vote (yes, that's all you need for complete legislative control..). While Harper did embrace a moderate stimulus in '09, and while he hasn't majorly upset the relatively 'Centrist' balance of Canada, some accomplishments include a 3% reduction in the corporate tax, changes/cuts in Unemployment Insurance, ending the gun registry, wheat board, supporting a stronger dollar and strong (foreign) investment into Albertan/Sasketchewan Oil Sands, (somewhat at the expense of manufacturing, forestry, etc. according to the NDP). Harper essentially won a majority in 2011 via Ontario by winning 2/3s of the seats and eating into traditionally Liberal areas in the GTA.

In Ontario, it is still the Progressive Conservative party, who controlled the province for 40+ years before 1985 and acted more like Nixonian Republicans than Mike Harris (1995-2003) or the latest leader Tim Hudak who were more like Jack Kemps and Paul Ryans. Other PC Parties, like the Albertan one, still carry a more moderate flare in the sense that they're pro-business and pro-public investment, health care, etc.


The Liberals have also been dubbed the "Natural Governing Party" of Canada, and that is because since WWI and the party's lock on Québec, it's formed government about 3/4 of the time. The New Deal-esque welfare state was essentially developed by Mackenzie King and Louis Saint-Laurent, with a very progressive, federalist, multicultural and activist state under Lester Pearson and Pierre Elliott Trudeau (alpha male extraordinaire) with things like Medicare instated. Then, in the 1990s, the Chretien/Martin Liberals essentially scaled back with major federal cuts to the provinces, leading to major cuts to Medicare among other things, while maintaining a pretty solidly progressive stance on social issues, human rights, environmental concerns, etc.

In 2006, Gilles Duceppe, former long-time leader of the Bloc, correctly accused the Liberals of campaigning from the left and governing from the right. To be fair Liberals are pretty solid on social policies, infrastructure, etc. and its current leader Justin Trudeau has admitted to smokin' teh weed a few years ago as an MP (and thus supports legalization), but they're also very third-way ish and support the Keystone pipeline, since there's an opening for some seats to win in Calgary and Edmonton. Some of their provincial parties are a little strange (LBritish Columbia is center-right/free market based, as can sometimes the Nova Scotia/New Brunswick ones too. Québec Liberal party includes basically all federalists)


The NDP was formed by the Cooperative Commonwealth Federation and labor/farm unions as a sort of all-encompassing Socialist/Social Democratic Party in the 1960s. It typically garnered 15-20% of the vote, had major influence during Liberal Minority governments (including the Lester Pearson one where Tommy Douglas got Medicare through) and generally governed provincially in a center-left fashion up until the 1990s or so; they are also for proportional representation, abolishment of the Senate, etc. In 1990, Bob Rae won a majority government in Ontario, suffered through the '91 recession (with Rae Days), and essentially traumatized Ontarians towards the NDP for the most part 'til this day (even though Bob Rae became a federal Liberal and literally ran the party for 2 years before Trudeau). NDP also went through a big slump 1993/1997/2000, where they also began to move to the center. They became pretty reinvigorated under Jack Layton, going from 11 seats in 2000 to 39 seats in 2008 to 108 in 2011, and becoming Official Opposition for the first time, while primarily embracing a Social Justice / Environmental friendly approach. If they were to form government, I'm guessing Tom Mulcair, a former Québec Liberal Environmental minister, would be slightly progressive but mostly centrist. He's one of those highly intelligent, highly capable, highly combative, and highly pragmatic politicians.. (probably one of my favorites, to give my own opinion)

The Bloc Québecois has generally held between 38-54 seats in Quebec, making it very difficult for federal parties to form government, and with the collapse of the Mulroney PCs in 1993, it became a 2-way battleground between the Liberals and the Bloc, which the Bloc began to win in 04/06 once again after losses in '97 and '00. They then began fighting a two-way front with the Conservatives, and then a 3-way front with the NDP in 08/11. In 2011, the Bloc Quebecois went from 48 seats to 4, vanquished by the NDP's increase of 1 to 58 seats in that election (that 1 being Tom Mulcair, thus his future election as Party leader). At this point, it's unlikely that it'll make a recovery, but never say never. Sovereigntists will be much more concerned with the provincial PQ, and the remainder of the Bloc voters will likely just stay home or vote NDP. They were somewhat progressive, but moreover Quebec-centric.

Greens are a party that is focused environmental issues, is centrist, a spoiler party, and only has its leader Elizabeth May elected in British Columbia. Its voters are made up of disaffected people of all other parties (including Conservatives) and young people.

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So with that being said, what happened over the course of the Ontario election? Liberals ran to the left (after previously being center, center-right fiscally under Dalton McGuinty), NDP ran somewhat to the center. Libs played to Toronto's base and ate apart the Tories + NDP in that area, while maintaining and even expanding elsewhere (mostly GTA I believe); NDP played to Southwest and Northern Ontario (manufacturing, unions, rural communities, medium cities like London, Windsor, Hamilton, Niagara, Sudbury and Waterloo?). The Tories and Tim Hudak went hardcore supply side economics, so chances are the Tories will probably need to go with a 'Red' Tory, like perhaps a return of John Tory? Or maybe just simply someone less scary and transparently ideological.

NDP can be semi-happy that their vote % actually went up (1% anyways) and they had a bunch of near-wins in Southwestern Ontario; we'll see what happens when all of these districts are all reconfigured in the new lines. Liberals obviously have to be the most happy. Tories have nothing to be happy about except that they're finally rid of Hudak.

What would this mean for national politics? Well, a minority Hudak government probably would have meant further disaster for the Harper government at the federal level. But is this exactly good for the Liberals? Liberals have never won a majority federally while they were in charge in Ontario since at least before WWII. This could either be a roadmap to the kinds of seats the Trudeau Liberals need to win in Ontario to form government, or it could be somewhat of an anchor (though Ontario/Canada doesn't look to be THAT chaotic coming ahead).

For the NDP, it could possibly build upon some of its gains and strength in Southwestern Ontario (and Oshawa/Kitchener-Waterloo) - the question is, can Mulcair's NDP not suffer that complete wipe-out the ONDP faced in Toronto (going from 5 to 2 in the city, though going from 1 to 2 just outside, neither of which the NDP holds federally)? It's pretty likely this point that Trudeau Liberals will be able to knock out the HarperCons out of most of those GTA seats, but will they be able to knock out Layton's GTA gains under Mulcair? And what does this mean for the Federal Trinity-Spadina by-election at the end of the month, which the NDP just lost provincially? And speaking of which, what would Olivia Chow's election as Mayor of Toronto mean for the NDP in the city going forward? etc. etc.

(and as always, http://www.threehundredeight.com/ is the best place for Canadian elections)

Part 2: Predicting various scenarios in Canada's October 2015 election.

College and Reinvention

“I’m thrilled today that President Obama is moving forward with an ambitious new plan to make college more affordable for every American. We know that higher education is more important than ever, but we also know it’s never been more expensive. We have heard from students and families across the country who are worried about affording college, and we believe that higher education cannot be a luxury that only advantages the wealthy.”

-From the Official Department of Education Blog
 

 

Right now, 94% of Americans expect their children to attend college. That’s a pretty remarkable rate, and nothing to sneeze at. Indeed, we’re looking at the most educated cohort of young people in history. Truly, we’re looking at a high point in American education, with more PhDs(including the STEMs), more lawyers, more accountants, more everything.

And this is the most racially diverse cohort ever. It’s not just more white kids going to school. It’s more black kids, hispanic kids, immigrant kids, everyone.

 Most hail this as a national achievement, with calls to do even more. See the Obama initiative, along with the cries that even that is not enough.

 Let’s put a damper on that for a second.

 Policy-makers are lazy bums looking at decades of past trends. They improperly extrapolate this data into the future. Worse than that, they are not looking at all the data they have today, which indicate a really tough environment for college grads and young people in general. They are not getting called out on this, and worse, they probably actually do think that more college is a magic bullet for our economic problems.

My spin: College is an important institution for the economy. A degree is useful both for signaling purposes and improving human capital. The degree is also individually important, as college students earn dramatically more money than non-graduates. However, the US economy faces significant head-winds and structural change. While this is generally acknowledged, it is NOT acknowledged that recent college graduates are merely the top rung of a sinking ladder, and that college students lack the necessary skill to propel the US economy forward on their own.

Meaning more college is NOT an economic solution, and more college right now will just create millions more credentialed paupers.

Let’s take this bit by bit, looking at some data.
 

Most people, when suggesting that people go to college, take a look at the so-called college premium. What that means is the extra money college graduates get over high school students. There are some problems with this measure, but it’s a good general measure of how much college is “worth.”

And, certainly, college students have fared better than non-college grads in this environment.

 

 

Given our lack-luster economic performance lately, along with increasing inequality, college seems like a sure-fire economic winner. Complicated theories have formed to explain this college premium over the years, many involving the change in our economic structure over time.

 

The hypothesis is that our increasingly knowledge-based and globally competitive economy rewards workers with more skill.

Certainly there has been some change in the work-force over the years. For example, we can see that so-called “routine” tasks have been increasingly automated, therefore decreasing the demand for those jobs and lowering those wages. This has been described as the Polarized Job Market:

 

 

This has been a generational change. And I don’t deny any of this. That’s pretty important from a policy perspective, too: workers need to get retrained so they can continue to earn wages. Businesses need workers with different skills to compete globally.

 

So yeah, more college=good for the economy, over the last few decades.

But in recent years,the trend does not hold. Just take a look at the graph above, with "Abstract: tasks actually decreasing slightly, after decades of increasing. Or consider wages. While college students are doing better recently, that's partly because no one is doing well.

 

Note of course that I am not entirely convinced we count benefits correctly.  However it does mean that rather than some new economic super-revolution, we barely hold our ground.

This is not what you would expect out of a new transformative 21st Century renaissance.

 This is certainly different than the economy we saw in the 1990s, which saw increasing wages. This strong economy was all-encompassing, as we would expect from a New Renaissance. Even high school dropouts had some better wage growth in the late 90s.

 

So clearly something else is happening here, just like we can see something else was happening in the early 1990s when college wages weren’t increasing at all. 

Since 2000, we show some pretty substantial decreases in the labor rates of young people, even amonghigh school dropouts and high school grads, that NEED to be working.

These economic changes do dramatically affect the less educated...high school graduates in the labor force declined from rates in the 70s to scarcely above 50, but even college grads saw their employment rate fall from 89 to 83% (likely due to recession, of course).

That really, really seems odd. Since 2000, we’ve seen a paralysis in wages. Since 2000, we’ve also seen the less educated drop out of the labor force, dramatically. Which wasn’t necessarily the case prior to 2000. What the hell is going on?

That’s an important question, actually, What the Hell is going on? Because that dictates the policy solutions.  It’s certainly possible extra college but this huge trend break makes me think we have bigger problems.

The real question we need to ask our policy-makers is what actually causes the underlying collapse in labor markets. Otherwise we are investing a lot of money in the wrong area. This is especially true since so many college entrants drop out and college debt is still increasing while the rest of the economy deleverages, and student debt might make it a lot moredifficult to pay back other kinds of debt, too.

This looks more like a collapse in the demand for labor: wages are not increasing, and participation is going down. Increasing supply in response to a collapse in demand is like a type-writer manufacturer building a new factory in 1990.

In this particular post, I do not have any explanations for the persistent economic weakness, or suggestions to improve thing. Rather, I want a quick link to point at whenever policy-makers lazily suggest “more college” as a solution to all our economic problems.

Example of something I like from the Jacobin

Sorry for just posting a quote but I noted earlier that I liked the Jacobin because it had a stronger rhetorical sense to it, and because it went past the limitations that that regular policy analysts erect around themselves.  And here they have a perfect quote on just this, from Capital Eats the World:

"But the focus on taxes is again a straightjacket imposed by the equality-versus-efficiency lens through which too many public finance economists see policy issues. The preferred policy instruments are always taxes and transfers, when it is not at all clear that these alone are the best tools for reducing inequality (although they are surely useful for increasing it). This is the same technocratic spirit that makes American liberals love the Earned Income Tax Credit as the only redistributive arrow in the state’s quiver.

The structure and limitations of Piketty’s argument also explains the love the liberal American policy wonk has for it. It comes with a Zip file full of spreadsheets, a clear argument reasoned from data and common sense, the charisma of the economics profession, and a policy prescription that is technically feasible and politically hopeless.

Like the policy expert, it has neither utopian demand-it-all energy nor the concrete backing of a political actor aiming to win. The book reminds the American wonk community that if only their people could run the show, they have the expertise (and the data!) to produce finely-calibrated optimal policies without politics."

(Sorry again for just posting a quote, I have some stuff on the works, one on the way interest groups should interact with electoral politics and the other about whether the welfare state is dead, which one would you like me to focus on given that they're both side projects?)