The Daily Visionary: Wednesday, January 30, 2019

Former PM Harper cites ‘populist conservatism’ for Trump’s win and the best approach for governments

 

The Story

 

Former Canadian Conservative Prime Minister Stephen Harper has a new video posted at the educational non-profit PragerU where he explains he was not surprised by American President Donald Trump's election, citing a shift in the western political landscape.

 

Mr. Harper says the underlying issue for this shift is globalization, particularly where emerging markets such as Asia have lifted themselves up. The incomes of the developed western world’s working class have stagnated or declined, and these people voted for President Trump because the global economy has not been working for them and the elites haven’t been listening to them.

 

"Many Americans voted for Donald Trump because the global economy has not been working for them," Mr. Harper says in the video. "We can pretend that this is a false perception. We can keep trying to convince people that they misunderstand their own lives, or we can try to understand what they are saying and offer some solutions." He says ‘populist conservatism’ is about seeing the world as it is and that populists care about the interests of ordinary people, not elites. Conservatism is inherently populist because it's about serving people rather than theories.

 

The Details

 

  • Mr. Harper says there are four issues conservatives should focus on politically: Market economics (pro-free market); Trade (pro-trade); Globalization (pro-globalization); and Immigration (pro-immigration) and taking the opposite direction of these positions is a mistake.

  • Mr. Harper says populist conservatives should be supportive of all these issues, but notes that, for example, "being pro-trade does not imply that every trade deal is a good one," or that "being pro-immigration should never mean sanctioning illegal immigration."

  • He also says this approach does not mean regulation should be dismantled or government should never intervene to protect workers, globalization should not entail abdicating loyalty or responsibility to our country and local community, and pro-immigration should never mean erasing our borders or ignoring the wishes of citizens.

 

Background

 

Last year, the former Prime Minister published his latest book entitled "Right Here, Right Now" that discusses populism and politics.

 

According to British journalist David Goodhart, people in the West are either Anywheres or Somewheres. Anywheres can live and work anywhere and are physically mobile. They tend to view the world with faith in global solutions and multi-national political bodies. Somewheres live a localized life, working at a factory, local business and their social lives are very integrated within their communities. They cannot just move somewhere else when the economy suffers.

 

The difference between these two outlooks on the world lies in reality versus concept: Nation states (countries) are a concrete reality whereas a “global community” is a concept. The fact is that critical functions of law and regulations, and monetary and fiscal stability are provided by nations, not global institutions. Somewheres are entirely dependent on the policies of their national or state government, yet the Anywheres have dominated the politics of every advanced country until now.

 

This same dynamics of Anywheres versus Somewheres, Elites versus Populists is playing out across the western world.

 

Key Quotes

 

President Trump’s voters are "not the ignorant and misguided deplorable depicted in mainstream media – they are our family, friends, and neighbours," says Mr. Harper in the video.

 

Watch the full video, "Why Trump Won"

 

US warships pass through Taiwan Strait amid China tensions

 

The Story

 

The United States sent two warships through the Taiwan Strait in the first such operation this year as it increases the frequency of transits through the strategic waterway to the concern of China. The United States sent ships through the waterway three times last year.

 

The passage by the US ships will likely be viewed in Taiwan as a sign of support from American President Donald Trump’s government amid growing friction between the self-ruled island and Beijing. Despite Chinese military technological advances that pose an increased threat to US warships, the US Navy has said it has not ruled out sending an aircraft carrier through the strait, something it has not done in more than ten years.

 

The lastest transit comes at a sensitive time in US-China relations and may draw criticism from Beijing, which has previously bristled at US military activity in the region. The US Navy characterizes these transits as "routine," suggesting that they are meant to reinforce the rule of law when it comes to activities in international waters. US Pacific Fleet spokesman Lt. Cmdr. Tim Gorman said the Areligh Burke-class guided-missile destroyer USS McCampbell and the Henry J. Kaiser-class fleet replenishment oiler USNS Walter S. Diehl conducted a Taiwan Strait transit, demonstrating "the US commitment to a free and open Indo-Pacific." He added, "The US Navy will continue to fly, sail and operate anywhere international law allows."

 

The Details

 

  • China considers Taiwan its own and has not ruled out the use of force to bring it under its control. The Chinese government views Taiwan, a self-ruled democratic territory, as a renegade province, and is deeply concerned about foreign interference, particularly US military support.

  • China stepped up pressure on Taiwan since President Tsai Ing-wen, from the pro-independence ruling party, took office in 2016. It has regularly sent military aircraft and ships to circle the island on drills in the past few years.

  • Trump recently signed into law the Asia Reassurance Initiative Act reaffirming the US commitment to Taiwan, including arms sales.

  • The US recognizes only ‘one China’ and has no formal ties with Taiwan, but it is bound by law to help the island defend itself and is its main source of arms.

 

Background

 

Chinese President Xi Jinping said in early January China reserves the right to use force to bring Taiwan under its control. In response, President Tsai vowed to defend the island’s democracy and called for international support to protect Taiwan’s way of life.

 

After the USS McCampbell conducted a freedom-of-navigation operations (FONOP) earlier this month, Chinese media responded with a warning that its military had deployed DF-26 missiles capable of sinking enemy ships in the South China Sea.

 

Beijing feels US presence may embolden pro-independence forces. In a recent speech, Chinese President Xi Jinping made it clear that forceful reunification remains on the table. China sent military aircraft, specifically a Sukhoi Su-30 and a Shaanxi Y-8 transport plane, flying past Taiwan last week, causing the Taiwanese military to scramble aircraft and surveillance ships in response. China regularly conducts encirclement drills around Taiwan.

 

Key Quotes

 

"Beijing's longstanding interest to eventually compel Taiwan's reunification with the mainland and deter any attempt by Taiwan to declare independence has served as the primary driver for China's military modernization," said a new Defense Intelligence Agency assessment of China's military.

Britain's economy and job market are strong, despite Brexit fears, and explain the rise in populism

 

The Story

 

News headlines of the past couple of weeks give the impression of a tumultuous labour market amid the challenges of deep structural change and a slowing global economy. However, across the months and quarters the British economy continues to grow with increasing employment rates.

 

The expansion is evenly spread across income groups and across sectors, where only retail and agriculture have experienced some decline. About three-quarters of the new jobs created since 2010 are full-time, permanent and in relatively high-level occupations, contrary to the prevailing narrative that these are jobs of unskilled and underpaid work.

 

However, though employment has risen, wages have stagnated. Households are responding to squeezed incomes by sending more people out to work. Stagnant earnings and declining prospects have in a sense helped drive the growth in employment.

 

The Details

 

  • From September to November 2018 there were 32.53 million people in work, 141,000 more than for June to August 2018 and 328,000 more than for a year earlier.

  • There are 3.4 million more people in work than a decade ago. The employment rate (people aged 16 to 64 who are employed) has hit a new record high of 75.8 percent against 75.3 percent a year earlier. The number of economically inactive citizens, moreover, continues to fall steeply.

  • There was another record with an estimated 853,000 job vacancies for the October to December quarter, 39,000 more than a year earlier.

 

Background

 

An analysis by Stephen Clarke and Nye Cominetti of the Resolution Foundation think tank found that by looking back to the recessions of the early 1980s and 1990s, both resulted in a collapse in the employment rate and a consequent big jump in unemployment. In both cases, it took seven years for the rate of employment to return to pre-crisis levels. Yet although the recession associated with the 2008 financial crisis was much deeper, giving rise to some alarmist predictions of the sort of mass unemployment associated with the Great Depression, the employment rate fell only quite modestly. It then took just three years to recover to pre-crisis levels. After that, it remarkably carried on rising to levels never before seen in the industrial age.

 

This has been particularly good for people who previously found it harder to find jobs such as women, ethnic minorities, single parents, and the disabled. High levels of immigration have significantly added to the workforce, driving higher levels of employment, but even among UK nationals, employment is at record levels. Employment has also improved markedly among older age groups, countering concerns about the growing “costs” of an ageing demographic.

 

This is part of a much wider, worldwide cultural change that has seen growing numbers of women in particular entering the workforce. Employment is at record levels almost everywhere, with three other members of the G7 including Germany, Japan, and Canada also with labour participation rates as high as the UK or better.

 

Read the full report, Setting the record straight: How record employment has changed the UK, https://www.resolutionfoundation.org/publications/setting-the-record-straight-how-record-employment-has-changed-the-uk/

 

Key Quotes

 

The employment boom has occurred alongside (indeed, likely partly in response to) the extremely poor performance of pay and productivity in recent years. These issues both explain why the UK’s jobs boom does not receive the universal welcome we might expect, and represent the key challenges to ensure that the labour market continues to contribute to rising living standards in the years ahead,” write Stephen Clarke and Nye Cominetti.

 

germany.jpg

German finance minister attacks conservatives over 'dishonest' tax cut

 

The Story

 

At an event organized by the Association of Taxpayers, a lobby group which is pushing for tax cuts, Germany’s left-wing Social Democrats (SPD) Finance Minister Olaf Scholz rejected Chancellor Angela Merkel’s Christian Democrats (CDU) calls to lower the tax burden for the rich. He criticized the conservative CDU party to reduce income tax for the rich to support a slowing economy, calling that a dishonest and dubious move that was destroying trust in politics.

 

We can’t cut taxes when at the same time, we also want to spend more on investments, education, defense, development aid and social affairs. Making demands without saying what the counter-financing looks like is not serious,” Minister Scholz said.

 

Minister Scholz, who serves also serves as Vice-Chancellor, said he would stick to the government’s fiscal goal of increasing state spending while not taking on new debt. “We handle citizens’ money responsibly and do not want to take on new debt. Lowering the government debt ratio in times of economic growth is the way to go,” Mr. Scholz said.

 

The Details

 

  • Economy Minister Peter Altmaier and other senior members of CDU want to abolish Soli for all taxpayers.

  • The SPD version of the cut would cost the state some 10 billion euros (USD $11.42 billion) per year, money that could boost domestic demand as exports slow.

 

Background

 

The SPD and the CDU agreed in the deal setting up their coalition government last year to abolish “Soli”, a 5.5 percent surtax introduced in 1991 to rebuild East Germany after reunification. But the deal called for maintaining it for the top 10 percent of earners.

 

The government hopes the tax cuts for middle and high-income earners along with higher child allowances that come into effect in January will boost consumption, which has replaced exports as the main driver of growth. In addition, Minister Scholz is working on a draft law to support companies that are spending money on research and development.

 

Key Quotes

 

Promising tax cuts for which there is no counter-financing is dishonest and does not build trust, because today’s tax cuts are tomorrow’s tax hikes, since new borrowing has its limits,” Minister Scholz said, pointing to Germany’s constitutionally enshrined limit on debt.

 

US sanctions on Venezuelan oil reverberate globally

 

The Story

The Trump administration applied sanctions on Venezuelan oil Monday designed to interrupt the flow of oil money to the government of President Nicolas Maduro and put pressure on him to step aside and allow opposition leader Juan Guaido to fill in as interim President.

 

The White House imposed restrictions on Venezuelan state-oil company PDVSA on Monday with the goal of curbing USD $11 billion of crude exports from the OPEC member to the United States this year. US oil refiners said they would comply with the new sanctions on dealings with Venezuelan state-run oil company Petroleos de Venezuela (PDVSA) and take steps to lessen any impacts on consumers.

 

The sanctions triggered higher global oil prices and angry responses from China and Russia. The Kremlin condemned the sanctions as illegal interference, while China said they would lead to suffering for which Washington would bear responsibility. Both countries have lent billions of dollars to Venezuela and are concerned about new stress on debt payments. International Brent crude oil futures were up USD $1.31 at USD $61.24 a barrel by mid-afternoon, on track for the biggest monthly rise since April 2016, although gains were capped by abundant supply and signs of a slowing Chinese economy.

 

The Details

 

  • Interim President Guaido argues that Mr. Maduro usurped the presidency when he began a second six-year term on January 10 following last May’s election. He has moved to set up new boards of directors for Citgo and PDVSA, which could allow his parallel government to collect money held in escrow accounts in the United States.

  • The US State Department said it had certified President Guaido’s authority to control certain assets held by the Federal Reserve Bank of New York or any other US-insured banks. The certification, given on Friday, applies to certain property held in accounts belonging to the Venezuelan government or its central bank.

 

Background

 

Venezuela has sunk into economic and political turmoil under Mr. Maduro’s socialist government, with inflation seen rising to 10 million percent this year, chronic food shortages, protests, and mass emigration. Mr. Maduro, a 56-year-old former union leader, was sworn in for a disputed second term this month after being re-elected last year in a vote denounced as illegitimate by the opposition and critics abroad. Opposition leader Juan Guaido, 35, proclaimed himself interim President last week and has been recognized by Washington and many Western and Latin American countries as Venezuela’s rightful leader.

 

Most experts believe the sanctions and other measures against Mr. Maduro will encourage him to step down only if he loses the support of the powerful military, which until now has been mostly loyal to the leftist ruling party founded by late President Hugo Chavez.

 

Key Quotes

 

We are sure we can achieve a peaceful transition - a transition and eventually free elections. We must use great pressure for a dictator to leave, install a transitional government and have free elections,” Interim President Guaido said in the Spanish-language interview, which was translated into English.


 If you enjoyed these news stories, please consider becoming a patron of The Visionable