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Tuesday, December 23, 2008

Why would Politicians support bailouts that a majority opposes?

I can't stand the corporate welfare that has exploded over the last few months. It seems like politicians don't understand the harm that bailouts or subsidies do to people. They are taking capital away from the economy and giving it companies that have already proven that they are failures. This strikes down any entrepreneurial spirit that Canada has; this stops new jobs from being created.

I am heartened to learn that a majority of Canadians understand this, or if not this same point exactly, then they have come to the same conclusion. According to the National Post 58% of Canadians are against giving public funds to the auto industry.

There are two details in this poll that are important to consider.

The first is that at no point did the surveyor use the term bailout. According to the Post they used the word 'assistance.' This indicates that people are likely to see through most of the Liberal-NDP spin. The people aren't stupid. You can fool them certainly but you can't fool them forever. These bailouts have been going on for at least 20 years. People know that they aren't working.

The second thing to consider is the regional differences in opinion. To be more exact you should consider the fact that Ontario is the only place that has majority support for giving money to auto companies.

I'll be surprised if anyone finds this surprising. Many an Ontarian would either directly benefit from a bailout or knows someone who will. This is a little less abstract for them. In this we find the problem; the reason that most politicians are supporting the bailouts. A majority of Canadians may oppose it, even the support in Ontario is pretty thin. But the people who want it cares more than the people that don't.

An autoworker who lost their job is almost guaranteed to vote for a party that will give the corporations the most money. Everyone else may be pissed about it, but they are not guaranteed to vote for the party that gives the least or even no money. That is the calculation that every politicians make, and that is why most of our elected officials support something that most people do not.

Posted by Hugh MacIntyre on December 23, 2008 | Permalink

Comments

Certainly, you have a point. And keep in mind that enthusiastic supporters/detractors mean a lot more in an election campaign than just votes.

But there are also partisan forces at work. Assuming that Liberal/NDP voters are more likely to support bailouts, the NDP and Liberals are probably pandering to the majority of their voters. Given that Liberals, NDPers and their new-found separatist lapdogs control the majority of the seats in Parliament, and the Tories remain terrified of being toppled, the majority of the majority are controlling power at the moment.

And yet, 51% of 51% can mean just 26.01%. Seems to be a sad flaw in representative democracy (at least so long as party discipline is involved).

Posted by: Jeremy Maddock | 2008-12-23 4:03:21 AM


Overall what we are seeing here is a complete failure of the Keynsian system and a general failure of Parliamentary democracy.
The Representatives of the people no longer represent them.
Time for a new system.

Posted by: JC | 2008-12-23 5:55:59 AM


JC, there are flaws in every political system. When it becomes to any system I am generally results driven. What system would you advocate that would produce both more order and freedom?

Posted by: Hugh MacIntyre | 2008-12-23 8:45:28 AM


Hugh,

Your analysis is dead wrong here. It may well be true that a majority of Canadians say they oppose bailing out big companies, but they really don't oppose it given the aternative. A lot of people who are annoyed at the idea of giving big companies bailouts are also the first people who will complain that the government isn't doing enough if those companies should fail and lots of people be put out of work. In short, when people are asked what they think about bailouts they answer the question in isolation from the long ranging effects that the decision will have. This is just how children make demands, too.

The reason for the bailouts in the face of majority opposition is because the Conservatives (rightly) can see that when faced directly eith the reality of allowing the market to correct itself, that majority view will flip. The truth is the majority want their cake and to eat it too. No bailouts, but don't let companies put people out of work. They want the impossible, so the path followed is the one they will least be pissed about in the long run.

The decision to bailout auto companies was not a concession to Ontarians who now say they want the bailout. It was a concession to all Canadians who, if the auto companies laid massive numbers of people off, would blame the government for it and conclude that they are generally doing a bad job of "managing" the economy. A majority of Canadians might say they oppose a bailout and they might even believe that they believe that they oppose a bailout, but given the true alternative, they are for it. And the government knows it.

Posted by: Fact Check | 2008-12-23 8:59:18 AM


So true, GWB, who most American conservatives can't wait to see the door smack his ass on the way out, says "The American people want us to save the auto industry". Bullshit. How many Americans really care about some dung heap like Detroit? Not many. The same goes for Windsor. The CPC has abandoned all the conservatism it use to stand for. I will never again entrust them with my vote.

Posted by: Faramir | 2008-12-23 9:22:17 AM


Only 52% of Ontarians support this corporate welfare ... hardly an overwhelming majority.

All this proves is how minority parliaments can screw up a country. Perhaps not so curiously, the NDP always seems to be in the middle of these deals.

The rubber has not hit the road on this deal yet. As I understand, there are many conditions that must be met before any money is actually advanced.

I'd start with the insistence to scrap the sweetheart deal for retirees .... $100,000 cash plus a $35,000 voucher for a new car.

I have no problem with the money the assembly line worker makes, but that's where the CAW leaves the impression it's being attacked on.

I cannot believe the baloney about 600,000 people being thrown out of work. That would only be true if nobody every bought another car again.

People will buy cars, but right now there are more cars being produced than people are willing to buy.

Some people may have to be laid off and some plants idled, but apparently the manufacturer cannot lay off any workers unless they shut down a plant completely.

It may be a good deal for the CAW member, but it's a raw deal for the Canadian taxpayer.


Posted by: set you free | 2008-12-23 9:55:16 AM


". . .in isolation from the long ranging effects that the decision will have."

". . .given the true alternative, they are for it. And the government knows it."

The words of a crypto-socialist?

At least get it straight:

The long-term effects no bailout would have are *good*. (Resources allocated away from people who have mismanaged them, eventually creating stable long term jobs.)

The short term effects (job losses) are *bad*.

Posted by: Anonymous Coward | 2008-12-23 10:02:43 AM


What system would you advocate that would produce both more order and freedom?

Posted by: Hugh MacIntyre | 2008-12-23 8:45:28 AM

I would suggest that a "government" is a poor term in and of itself. Personally, I don't need to be "governed" and neither do you. I would advocate an administration who's job is simply to protect out individual rights, protect our borders from outside aggression, provide a civil court system that applies "only" laws of justice as opposed to laws of "control", and provide minimal infrastrucrure.
As for "more order" that simply is not a governments job other than what is necessary under a justice system, which should provide all the "order" necessary in civil society.
I am also an advocate of hard currency as opposed to the Keynsian system. What that currency should be attached to is a matter of much debate but there are solutions.

Personally, I'm sick to death of the constant manipulation of my rights and freedoms "for my own good", and the manipulation of the value of my currency by unelected and unnaccountable banking officials.

I'm sick of socialism.

Posted by: JC | 2008-12-23 10:26:51 AM


JC that isn't really an answer. What system of statehood (if you prefer) would bring about that result?

ps. by order I meant peace.

Posted by: Hugh MacIntyre | 2008-12-23 11:45:18 AM


Fact Check, Your assumptions here faulty at best. You assume that people who are saying they oppose bailouts are either, being dishonest, being hypocrites, or being stupid. I see no indication that a large percentage of these people are being any of those things.

I will grant you this much. opposition to the bailout does not mean that the people want the government to do nothing. But that does not allow us to jump to the conclusion that these people will support an action that they have stated they oppose.

Posted by: Hugh MacIntyre | 2008-12-23 12:00:34 PM


Hugh,

"You assume that people who are saying they oppose bailouts are either, being dishonest, being hypocrites, or being stupid"

I don't think they are being dishonest or hypocritical. I think they are stupid - or at least ignorant enough of the current situation that they are ignorant of what their true preference is. That's why I said "they might even believe that they believe that they oppose a bailout, but given the true alternative, they are for it.


"I see no indication that a large percentage of these people are being any of those things."

No indication? Have you ever seen the average "person on the street" interviews of people on just about ANY political or economic issue? Ignorance to the point of extreme stupidity is the default position of the majority of people. Not all, but certainly enough to give the poll results you are seeing now. Most people don't reall think deeply about politics or economics, and if they tried they would not have the background understanding of either to get very far.

Posted by: Fact Check | 2008-12-23 12:45:25 PM


I think Fact Check is correct regarding the real politics involved here. Potential job losses in the next valley away from you is not a major issue. The "majority" opposed to bailouts is fleeting and weak. Canada and bailouts are one and the same. Its hard to find much exception within the private and the rent seeking sector. The Conservatives have finessed their governance from an electorate that at best, could amount to maybe 30% described as actually fiscally conservative, libertarian, small government, socon, and or populist.
The remaining majority are somewhere on the continuum of incremental statism, many of whom are now dependent on the trough, likely signalling a parasitic society evolved beyond the point of democratic return.

Posted by: John Chittick | 2008-12-23 2:11:33 PM


JC that isn't really an answer. What system of statehood (if you prefer) would bring about that result?

ps. by order I meant peace.

Posted by: Hugh MacIntyre | 2008-12-23 11:45:18 AM

Well Hugh, I think it was a fine answer. I just didn't give it a name. :)
The administration of which I speak would be a Libertarian administration or a true "Republic" if you prefer.
How's that working for ya?
Merry Christmas, Jim

Posted by: JC | 2008-12-23 4:02:09 PM


John C and Fact Check make some valid points.
The electorate really are generally ignorant of any political or economic situation.
I can see it in their eyes when I hit them with a little reality! lol

Posted by: JC | 2008-12-23 4:06:06 PM


I think FC and John C have it right. I wish it were other wise but we have too many being opposed to government handouts unless they are the recipients. Almost no one, especially politicians, demonstrate a true concern for the country. Public opinion does not mean that a policy is good or bad for the country, because opinion is just opinion. Politicians are more interested in getting elected than the good of the country and therefore, in our present system at least, choose to pander to perceived public opinion rather than going with a policy good for the country on a whole.

Posted by: Alain | 2008-12-23 4:58:31 PM



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