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Leo Panitch: Conservative strength means tough austerity measures on the way

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Toronto. And in Toronto, the newly elected mayor is Rob Ford, a right-wing populist. In the recent federal election, a majority Conservative government, led by right-wing Stephen Harper. In Ontario, back in Ontario again, the ombudsman report says that the police action during the G-20 may have been the greatest violation of civil rights in the history of Canada–was not even an issue in the recent federal elections. And in the upcoming Ontario elections, who’s ahead? Ontario Conservatives. What the heck is going on in Canada? We went and set up the Washington bureau for The Real News, and we came back and I can’t recognize this place. Now joining us to try to make some sense of all this for us is Professor Leo Panitch. Leo professes political science at York University, and he’s the author of In and Out of Crisis: The Global Financial Meltdown and Left Alternatives. What the heck is going on here?

LEO PANITCH, COEDITOR, SOCIALIST REGISTER: Well, Paul, on my way down to the studio I passed a woman who used to be a leader of the daycare movement in Canada. She was tending her garden as I walked by. And she asked me whether I was going into exile.

JAY: So when I was in Washington watching the coverage of the Canadian election campaign, I kept saying, well, look at The National Post, which is a right-of-center paper that normally likes the Conservative Party, and The Globe and Mail. I was seeing, in article after article, the NDP’s doing well, the NDP’s ahead in the poll, the NDP surge, the orange surge, with very little negative about the NDP and its politics and what it might be if the NDP were to win the election. And what I’m getting at here is that there was certainly a convergence of interest between the Conservatives and the NDP to wipe out the Liberal Party.

PANITCH: You put that in a way as though this was, you know, concocted by the NDP and the Tories to squeeze out the Liberals.

JAY: I wouldn’t say concocted by the NDP, but I think the conservative press played [crosstalk]

PANITCH: I think the important thing to say, especially for your American viewers, although I know you have viewers around the world and they may not be as aware of this, is that one of our favorite whipping boys, Michael Ignatieff, who was on the front page of The New York Times Magazine urging Bush to invade Iraq and speaking as though he was an American at the time, we should do this and we should do that, an illustrious Canadian, and, I must say, comes from an illustrious Russian family (his father was in the last tsar’s cabinet). He hung himself, absolutely hung himself.

JAY: Now, just again for our out-of-Canada viewers, Michael Ignatieff, after writing this pro-Iraq War (more than one, I think) commentary for The New York Times Magazine, came back to Canada and became leader of the Liberal Party, and he gloriously led it to disaster in the last election. So we had the demolishment of the Liberal Party. We now have over 100 seats with the NDP, but a majority Harper government. So where do you think that leaves Canada?

PANITCH: It leaves Canada not in a very good situation in the short run. In the long run, it could be a good thing. I certainly think that the reason people switched in Quebec to vote for the NDP was that they were voting for the Bloc Quebecois, which is the federalist branch of a separatist party in Quebec that would like to leave Canada. I think people were voting for the Bloc–and always been clear–because it essentially itself has had a socially progressive agenda, essentially a social democratic party with a nationalist purpose to it. They switched to the NDP because they wanted to see more effective social policies at the federal level, and they thought they might get that out of the federal party. That’s really why they switched. It’s clear.

JAY: And just again, for people that don’t know, most of NDP’s new seats come from Quebec. It actually didn’t pick up that much in English Canada.

PANITCH: Right. Now, the press is saying that because, you know, what happens when a party like that comes out of nowhere and they get a lot of people running for them, we never imagine they’d get elected.

JAY: Fifty-nine new seats.

PANITCH: Fifty-nine new seats. That, you know–or 58 new seats. They had one before. So the kinds of people that they were getting to run for them were for the most part people who thought they wouldn’t get elected. They were university students, they were anti-globalization activists, etc. So the press is having a field day with the fact that there’s a 19-year-old in Parliament, that four McGill students are now members of Parliament, that one woman who was tending the bar at the Carleton University pub, and who spent part of the campaign in Las Vegas on a holiday she paid for before the campaign began, and had never appeared in her constituency, that these are the members of Parliament. Well, you know, they’ve also elected the former leader of the Public Service Alliance of Canada, which is the largest union of federal public employees. They’ve elected a person who’s a major human rights lawyer. They have a very impressive list. But the press has been after their lack of experience. And one of the ways in which the NDP responded to this, or at least one of their backroom boys responded to it, was don’t worry about this; we will teach them to sound like parliamentarians, act like parliamentarians, dress like parliamentarians, and behave like parliamentarians. And, of course, give the NDP due, does this. And they will try to do it, although they’ve also said we’re happy to have such broad representation, etc. They will effectively, I think, undermine the good potential that ought to come out of this.

JAY: Because if they behave like normal parliamentarians, in a majority government particularly, they will do nothing.

PANITCH: They will do nothing. They will look boring. Above all, they will not educate Canadians about the world they live in and the real issues.

JAY: So from the left point of view, the only hope is they don’t behave like parliamentarians.

PANITCH: The hope is that they will now use their soapbox, which is what this success in the election gives them, to be able to mobilize people, to educate people, to develop people’s capacities politically, ’cause this goes back to the first point you asked. What he heck were immigrant communities, people from South Asia, from Somalia, etc., doing voting for this right-wing government that is anti-immigration? They have switched from voting mostly for the Liberal Party to voting for–to the Conservative Party. And the Conservatives had a determined mobilization for a long time, and they finally succeeded. Now, it also was appealing to the Jewish community, because this government is the most slavish follower of Israeli policies and the most draconian in the way it disciplines anybody who speaks at all critically of Israeli policies. They also won the Jewish vote, which, as in the United States, has tended historically to be quite left-wing. But they targeted these ethnic communities. And you ask yourself, why were people who were mostly working class people from these communities voting for the Tories?

JAY: And you can say the same thing for Rob Ford’s election in Toronto [crosstalk]

PANITCH: And what is likely now to happen in Ontario, insofar as a Conservative government is likely to replace a Liberal government here. And it does have to do with people, in the context of this economic crisis, trading their vote for a cut in taxes of $35 a year in, really, the most ignorant kind of way, if I may say so, because they will pay Rogers or Shaw, the cable companies in Canada, $200 extra a year with no accountability for it and not think that they have any control over this. But they use democracy, and I think people around the world see democracy as a way in which they can pay less taxes. The cost of that, of course, is that their kid’s schools are worse, the social services for their elderly parents are worse, all of whom they have to take care of, for the most part. They pay increased fees to the government for all kinds of services. Of course, one doesn’t want to blame the victim. But there’s an element of dumbing down in our society, which–The Real News does something about that, and I congratulate you for it–that is very, very severe.

JAY: Is part of what’s gone on in Canada, at least one gets through the media–and I guess I’m asking you the reality–that Canada kind of dodged the recession in a way the United States didn’t, and that’s because of good stewardship of this Harper government, so don’t switch horses, because who knows what will happen?

PANITCH: No. I mean–no.

JAY: I’m not–well, I think that’s [crosstalk]

PANITCH: That’s the line. That’s the line.

JAY: That’s the line. What I’m asking is: that seems to have had some influence on people, but is that the reality?

PANITCH: Well, gauged a little, although Canada is so integrated with the United States, especially Ontario, where this Conservative government’s about to be elected, that the United States sneezes, we catch pneumonia, as Pierre Trudeau once said, or sleeping next to an elephant, it rolls over, and you suffer the consequences. So our banks didn’t tank, but our auto industry did. And Ontario is built on, and has been throughout this century, on the motor industry, including the steel industry in Ontario, which is connected to the motor industry. So there was enormous suffering and the unemployment rate went up considerably. And although, you know, everybody goes on about how high the unemployment rate is in the United States, it’s only about 1.5 percent less in Ontario. So one shouldn’t overdo this, by any means. Secondly, we are mainly lucky, lucky in the sense that whereas the United States has a highly competitive banking system–and the reason even the big banks were going after these toxic securities that the mortgages were had to do with that great degree of competition in the American financial market. Five institutions control the Canadian market. And although there was a commercial paper crisis here in August 2007, which was one of the harbingers of the later mortgage crisis, etc., our banks simply are so integrated and so profitable and they are so backed in the Canadian mortgage system by the Canadian state that they didn’t get into this business. That’s what it was. And the notion that we had a kind of regulatory system that protected us, etc., you know, if we have that kind of regulatory system that protected us, it’s only because it’s in the interest of the banks.

JAY: In terms of looking ahead, both in terms of the Canadian economy, there’s already lots of talk about a double-dip recession in the United States. Some people have suggested if, you know, the real recovery, there’s some in the industrial sector, but the real recovery’s been in the finance sector. So how real is that in terms of GDP? So if there is another bout of recession in the United States, you know, how real is this Canadian bubble?

PANITCH: No, no, no. There’s no Canadian bubble. First of all, though, you know, it hasn’t been as severe a housing market, certainly, which was the main thing. And we are a commodity-exporting country [incompr.] we also export manufacturing that goes mainly to the United States. But commodity prices are high. If commodity prices are high, then the Canadian economy generally does well and the Canadian dollar shoots up, which is what has happened, you know, which allows us to buy things more easily. So, yes, if there’s a double dip, it’ll affect Canada seriously. If there’s a double dip, it’ll affect commodity prices. There’s no question it’ll affect Canada very, very seriously. This government has promised that it will get rid of the fiscal deficit, which every state has, because it’s a year earlier than what it had previously set. Now, I want to indicate to our viewers that in the last election campaign, every Canadian politician who appeared on the television debates when the crisis had already begun–this was in October 2008, so it was at the severest point of it–when asked what they would do about the fiscal deficit, every one of them promised that they would get rid of it. Now, you just said in an earlier interview we did, what sense does it make to be cutting the deficit, introducing austerity, when there’s a crisis on? Which is what Greece has been told to do. You know, every Canadian politician, including the leader of the NDP, promised that he would do that, because the political culture is one in which you conventionally have to give this answer, or you get skewered in the mainstream media as being economically illiterate. That’s what was–went on then. Then they discover that everybody was stimulating. The G-20 was pushing everybody to stimulate in order to save the bankers’ bacon. At that point, even the Harper government said, yes, we’ll run a deficit for a while. Now, if there’s a double dip and this government is promising to reduce the deficit more quickly, it’ll make it worse.

JAY: Seriously worse.

PANITCH: Seriously worse.

JAY: Thanks for joining us.

PANITCH: Good to talk to you, Paul.

JAY: Thank you for joining us on The Real News Network.

End of Transcript

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