Raise the Hammer
By: Ryan McGreal
Published: 2006/11/24 (Category: Politics)
Received wisdom in political circles is that Bob Rae, a major contender for the Liberal leadership, is weighed down by the legacy of his former premiership of Ontario under the NDP banner. The common argument is that his legacy of recession, 'reckless spending', and Rae Days will scutter any attempt to become Canada's next Prime Minister.
However, a look at his actual record in office, rather than the rhetoric that surrounds it, paints a much different picture.
The Ontario NDP is routinely crucified for their star-crossed 1990-1995 term, but the cards were stacked against them from the start. Just as Bob Rae came into power, the Bank of Canada was jacking the Canadian prime rate six points higher than the US prime, ostensibly to fight inflation but really to shock-treat Canada into the FTA.
This had a number of mutually reinforcing effects:
It was a total disaster. The 'made-in-Canada' recession threw a million people out of work, decimated the manufacturing sector, and left the Rae government deep in the red. They were attacked viciously in the media for running deficits over which they had no control.
The deficit ballooned into the ten billions, and the Rae government tried some Keynesian counter-cyclical spending to soften the blow for families being thrown out of work, which of course made the deficit worse (but what else could they have done?).
After the worst of the recession was over, the NDP set about reducing the deficit, albeit without eliminating public sector jobs. Rae went to the unions and asked them to agree to renegotiate their contracts to save money. He called it a "social contract".
The unions flat-out refused to bargain, so the Rae government unilaterally implemented the changes they were hoping to make. No one lost their jobs, but the dreaded "Rae Days" came into effect, in which public sector workers were required to take occasional unpaid days off.
At the same time, the economy was recovering and the deficit was falling, but the damage was done. Vilified from all sides for their efforts to soften the recession and balance the books without laying anyone off, the NDP were almost universally hated.
In 1995, when the NDP lost to the Mike Harris Tories and their "Common Sense Revolution", the deficit was down to $3 billion and falling. Harris, an economic conservative and therefore "fiscally responsible", immediately reversed the downward trend in Ontario's deficit by implementing a series of tax cuts that overwhelmingly benefited corporations and the rich.
The Harris Conservatives also laid off public sector workers, cut welfare payments by over 20 percent, reduced funding for education, health care, and the environment, and dumped cyclical expenditures onto cities with the notorious Omnibus bill.
Over the next eight years, a period of non-stop economic growth in Ontario, the Tories managed to balance the books exactly twice: the first time by selling off a chunk of Ontario Hydro, and thet second time by selling off the 407 ETR.
Now, any economist will tell you that if you have to sell off capital assets to balance your budget, you're not running a sustainable operation.
By the time the Tories handed power to the McGuinty Liberals, Ontario's deficit stood at $5 billion, actually higher it was eight years earlier, when the NDP were trying to bring Ontario out of the worst recession since the Great Depression.
(The size of the deficit was not revealed until after the Liberals had taken over the government. Prior to the election, the Tories had claimed the deficit was in the $1-2 billion range.)
Even taking inflation and population growth into account, that's a heck of an accomplishment for a party that is supposed to stand for "conservative" - i.e. prudent - fiscal management.
It's a shame that the legacy of the Rae government has been so hijacked by the business-friendly newsmedia that Ontarians can't see just how good a choice Bob Rae would make as Prime Minister. He's smart, savvy, experienced, pragmatic, socially conscious, and has a very good track record. History has been quite unfair to him.
Far from the dogmatic leftist caricature that dogs him, Bob Rae was actually a very competent 'Liberal' Premier. He would make a very competent Liberal Prime Minister as well.
To answer the last question first, Harris was elected twice because Ontario voters didn't understand that the Ont Con agenda was 180 degrees opposite of their own best interests. If either the Fiberals or Cons were in power during the "Rae years", they also would have been turfed for the inability to deal with the same intractible economic issues. The Harris Cons spent the first term "setting up" their real attack on the working and poor classes, waiting for tern 2 to REALLY stick the knife in. The fact the McGoofy Fiberals with no plan, no brains and no substance managed to get in at all shows how bad the Harris/Eves Cons were.
And as for Bob Rae... a political opportunist of the first order, all too common in Canadian politics it seems. Only out done by Ignatief, our "resident" US Republican Liberal.
By Ryan | http://www.raisethehammer.org
Posted 11/27/2006 9:12:07 AM
Hi Jack,
I'd like to respond to your points in turn.
* "it represents a typical leftist attempt to resurrect Bob Ray’s reputation"
I'm actually trying to argue that Rae was a good 'Liberal' premier. He spent most of his term trying to balance the books during the worst recession since the Great Depression, a recession caused by the FTA and the Bank of Canada's high interest shock treatment.
* "When Mike Harris was elected in 1995, not only did he have to deal with the recession"
The recession was long over by the time Mike Harris was elected.
* "he also had to contend with very deep cuts in Federal transfers in transfer payments by the Federal Liberal Government"
That began when Rae was still in power. In fact, the Rae government used to complain about the cuts in federal transfers, and the Harris opposition accused them of trying to pass the buck. Once the Harris Conservatives won, they made exactly the same complaints.
* "Despite this setback, his government still managed to turn Ontario’s economy around"
Ontario's economy was already turning around before Harris came into power. The steady economic growth that Harris enjoyed began around 1993, when Rae was still in power.
* "and avert the disaster that would have occurred had Bob Ray [sic] not been thrown out of office."
What disaster would have occurred. Both the recession and the recovery were unquestionably due to macroeconomic factors that were outside the provincial government's control. The recession was caused by the advent of FTA and the BoC's extremely tight money policy. The recovery was caused by the relaxation of that tight policy (which accelerated under a new BoC chairman, Gordon Thiessen, in 1994) and the huge amount of spare productive capacity in the Ontario economy by that time. It's easy to grow when interest rates drop, wages are low, and a million people are desperate for jobs.
Harris had almost nothing to do with this, and his ostensible measures to 'push' people into the workforce (e.g. cutting welfare by 20%) actually ended up pushing more people into destitution and homelessness than into jobs.
* "why did he get reelected with such a big majority in 1999?"
The Harris Tories won 45.1% of the popular vote in 1999. They only won a majority of seats because of Ontario's "first past the post" electoral system.
Nice summary Ryan.
It's amazing what the pageantry of party politics will cause people to overlook.
I've had to listen to Liberal party members of every Ontario persuasion bad-mouthing Rae for the last two months.
Even in Hamilton, where the NDP is winning Liberal ridings, there are few LPC party members who are willing to accept Rae as a pragmatic political solution to the left-of-centre vote splitting that has caused them (in part) their losses. To their mind, Rae does not represent the party colours. He is not a Liberal and never should be. It’s an irrational conclusion, and evidence of how painfully clannish party politics in Canada have become.
Bang on commentary. Rae's a victim of the total media hate-on for progressive politics. The Sun bit into him when he got voted in and never let go. We could do a lot worse than Prime Minister Rae - he's not a business whore and he's not a leftist ideologue. Gimme a Liberal minority with an NDP opposition and a couple of Green MPs and we'd have one hell of a government!
"Gimme a Liberal minority with an NDP opposition and a couple of Green MPs and we'd have one hell of a government"
No thanks. I am not willing to endure another sponsorship scandal or tax increase from a government that does not value and will most likely waste the taxes that I work so hard to pay. Especially from a government that has no principles or backbone; that will try to be everything to everybody while pleasing nobody.
Hey Marc, the sponsorship scandal happened when the Libs had a majority = no one to keep them honest. With a minority, the Libs have to listen to the country and we get good things like the budget that actually put money into climate change and sustainable development (gasp!).
When the Cons have a minority, they don't get much done because most Canadians (and most other parties) don't like their angry politics, their wedge issues, and their stubborn refusal to change their minds when everyone thinks they're wrong (I guess you call this "principles" or "backbone"). We've seen plenty on where "principles" and "backbone" get us south of the border, where another conservative government refused to listen to the rest of the country and created a whole series of scandals that makes the sponsorship scandal look like forgetting to turn off a light when you leave the room.
No thanks!
I'm not really sure why Unions got more upset about Ray Days (unpaid manditory days off) than the got about the thousands of people who Lost their Ont. Gov. jobs, part or all of their pensions, during the Mikey/Tory years? Or the fact that OPSEU is now dead in the water as an effective union.
Total effects of Ray Days: You tightened your belt a notch or 2, got to spend some time with your family, maybe you even got your birthday off work. However, you kept your job & your benefits.
Total effects of the Harris Torys: You lost your job, you had no idea from day to day if you had a job, or not until you got your pink slip. After you got your pink slip, if you were lucky, you got hired on part time/ contract by one of the Tory '*Pet Corps' at 1/2 your former salary, with no job security, no vacation time, overtime on demand by the employer that you had to fight to get paid for. The Torys really thrashed people who had devoted 30, or 40+ years to the Ont. Gov.!!!
* Pet Corps - one of which was & is Profac Lavalan SRC (based in Spain) who own the 407 toll hwy., provides much of the former building maintenance & trades people like plumbers, & electricians in all Ont. Gov. & many Fed Gov. buildings -on contract, part time etc. They are also supplying none combat personelle (cooks,& other support people) at low salaries to the Cdn. military in Afghanistan. (If these people are injured at work they cannot even hitch a ride to medical facilities because they are not military. (This has already happened at least once. A woman (cook) who hobbled around on a broken ankle for a month because no one would assume any responsibilty for her or her injury, or medical treatment, in Afghanistan.)
Give me a Ray Day any day of the week. The Torys took real jobs away from real people, & handed then part time/contract/seasonal crap jobs. They deluted their pensions with early termination, with no golden handshake as the Torys have given their own, even if in ugly situations. I wish some of these 'Union Spokespersons' would get off their soap boxes & deal with reality. If anybody killed unions, labour, & rights of none unionized workers in Ontario it was the Harris Torys, both in the Ont. Gov workplace, changes to the Labour Standards Act, & a dozen other places!
“Total effects of Ray Days: You tightened your belt a notch or 2, got to spend some time with your family, maybe you even got your birthday off work. However, you kept your job & your benefits.
Total effects of the Harris Torys: You lost your job, you had no idea from day to day if you had a job, or not until you got your pink slip. After you got your pink slip, if you were lucky, you got hired on part time/ contract by one of the Tory '*Pet Corps' at 1/2 your former salary”
You guys don't know what you are talking about. I was in Ontario during Bob Ray's stint as Premier and it is a known fact that thousands of Ontarians lost their jobs during the Rae years. Many people that I knew lost their jobs and it is revolting that you are acting as if nobody lost their jobs.
We had an unemployment rate of 10% during the Rae years and many if us could not find jobs, and not only did thousands lose their jobs, but many also lost their homes due to the interest rate hikes and increased taxes that his government was responsible for.
Not only did Bob Rae betray the trust that Ontarians placed in him when he was elected, he also stabbed his union buddies in the back by breaking his agreement that he made with them and implementing Rae days.
Regarding your love of Rae days, try telling a family that is barely getting by that they will have to forgo several days of pay for work that they have done. For them it could mean going without food, missing the rent/mortgage, not being able to pay school fees on time. A majority of Ontarians are 1 to 2 paychecks away from poverty. Answer this question. Did you think that Bob Rae and his cronies lost 1 day of pay when they forced thousands to forgo the money that was rightfully due to them? So don’t pretend that Ontario was this grand utopian society when Bob Rae was premier, because it was not.
You can say what you want about Mike Harris, but under his regime after initially correcting the damage that Bob Rae did, Ontario’s economy recovered, unemployment rates went down, interest rates went down, tax rates when down, and their was a boom in the housing market.
By Ryan | http://www.raisethehammer.org
Posted 12/4/2006 12:08:26 PM
Jack, with all due respect, you might want to go back and re-read the article at the top of this thread, and then re-read the comments to which you're replying. Your conclusions simply do not fit the facts.
No one's denying that lots of people lost their jobs between 1990 and 1995. However, they lost their jobs because companies in the private sector laid them off through bankruptcy, restructuring, moving factories to the third world, etc.
More important, there's simply no question that the recession was caused by the Bank of Canada's fanatical efforts to stop inflation and raise the value of the Cdn$ before FTA came into effect, and not by anything the Rae government did.
The Ontario government had absolutely no control over the recession, and made every effort it could to soften its effects - including **not laying off public employees**, which is what Raydaze clearly stated. The Rae Days were a compromise the government imposed to reduce public spending without laying people off.
By the time Mike Harris was elected, the recession was already over, unemployment was already falling, the economy was already growing again, and even the provincial deficit had fallen from $10 billion to around $2 billion.
In the next eight years Harris pursued slash-and-burn government with zeal, throwing thousands of public employees out of work, cutting welfare so much that many families just fell into destitution, stalling the minimum wage so that low-income workers saw their real wages fall steadily, and introducing "workfare", which actually slowed job growth by providing a captive class of ultra-low wage workers - all while national interest rates fell effectively to zero and the economy expanded steadily.
In those eight years of steady economic growth, which would have happened whichever provincial party was in power, the Conservatives managed to transform the $2 billion deficit they inherited into a $5 billion deficit when they finally lost to the McGuinty Liberals.
Dear Jack, my husband worked for the Ont. Civil Service, & was out on the picket lines 3 times within less than a decade. For the last 4 years of his employment with the Ont. Gov. we actually didn't know from day to day if he had a job.
(He was in his 60's & a cat's whisker away from a pension. Or maybe a pension, or no pension, or part of a pension, depending on if he got the axe today, or next year, or the year after that. It was pure hell living without any idea of what tomorrow would bring for a period that extended into years.)
Our daughter was in primary school at that time. No music lesson, sports, or other extra activities. We didn't know what tomorrow would bring. No holidays, spare birthdays, & lean anniversarys that consistented of a cake & little else. We knew that in spite of being a skilled tradesman, my husband's job propects were slim indeed because he was over 60. (That later proved to be true.)
When he finally job his 'walking ticket' we move to Hamilton to try & make the best of what money we had, since Toronto had amalgamated, & no sooner had moved here than Mr. Harris broke his promise & amalgamated Hamilton too. So much for 'downsizing' your expenses, when you can't predict that a Party's word is worth less than the paper it was written on.. This even took the local Tory Federal M.P. to the point of resignation over that flip-flop.
So, my husband got his old job back at part salary, no holidays, no seniority. (Imagine that if you will. Working in the same place, doing exectly the same job, at 1/2 the salary.) Overtime called with no notice, termination of contract with no notice, & having to wait months for the overtime pay that you worked. And a demand for employees with No Specified training to do asbestos removal! My husband died 2 years ago, ditto the other fellow who worked with him from Cancer. In both cases, it appears to be from exposure to industrial pollutants, quite possibly asbestos.
We got up every work day a 1:45 a.m. to get him to the Go station for the 3 a.m. train & bus to his old job. Thanks to the problems with the train service in Hamilton, sometimes he didn't get into Hamilton until 8 p.m., which by anyones' standards is one Looong work day! (We were also trying to save on car insurance by using the train & bus..)
So Jack, please don't decide to tell me what our lives were about. We lived it, you didn't, & the arrogant way you make you statements is a bit hard to take. Yes, Ray Days were a cakewalk next to the living hell that followed after them. You can state your own viewpoints, but don't even think about trying to tell us what happened to us. We were there!
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By Jack
Posted 11/25/2006 6:40:11 AM
I disagree with the above article, as it represents a typical leftist attempt to resurrect Bob Ray’s reputation and excuse all of his misdeeds as Ontario’s premier. When Mike Harris was elected in 1995, not only did he have to deal with the recession, he also had to contend with very deep cuts in Federal transfers in transfer payments by the Federal Liberal Government. Especially in the areas of healthcare and education. Despite this setback, his government still managed to turn Ontario’s economy around and avert the disaster that would have occurred had Bob Ray not been thrown out of office. If Mike Harris was so bad for Ontario, why did he get reelected with such a big majority in 1999?
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