A strategy of resilience

Professor Ganesh Sitaraman (Vanderbilt University) is a moderate progressive Democrat in US terms. He has been a policy advisor to Senator Elizabeth Warren ~ he is well to the right of Bernie Sanders and Alexandria Ocasio-Cortez and, probably, very slightly to the left of Joe Biden. He has written a provocative article in Foreign Affairs in which he predicts that “The coming era will be one of health crises, climate shocks, cyberattacks, and geoeconomic competition among great powers.” He reckons that America in unprepared because the liberal era, ushered in by Franklin Roosevelt and spread, globally, by Harry Truman, Dwight Eisenhower and, later by Ronald Reagan, is coming to a close. What is needed, he suggests, “is an economy, a society, and a democracy that can prevent these challenges when possible and endure, bounce back, and adapt when necessary—and do so without suffering thousands of deaths and seeing millions unemployed. What the United States needs is a grand strategy of resilience.” I agree and I believe that Canada needs the same.

He addresses the word “resilience” by saying that “For psychologists who research child development, resilience is what enables some children to endure traumatic events and emerge stronger and better able to navigate future stresses. For ecologists, resilience is an ecosystem’s ability to resist, recover, and adapt to fires, floods, or invasive species. For emergency, disaster relief, and homeland security experts, a resilient system is flexible, adaptable, and can withstand an impact. The writer Maria Konnikova has summed up the concept with a single question: “Do you succumb or do you surmount?”It seems to me that in responding to the ongoing COVID-19 crisis Canada (and the USA) have been reacting and responding but both, in my opinion, while they have not quite succumbed have failed to “surmount.” Neither was resilient enough.

Professor Sitaraman speaks glowing of an era that never really existed. He praises an era (the 1940s and ’50s, mainly) in which he thinks (incorrectly) that America “embraced a model of regulated capitalism, with high taxes, financial regulations, strong unions, and social safety net programs, and thus charted a path between the totalitarian control of the Soviet Union and the laissez-faire approach that had plunged the United States into the Great Depression.” He’s correct that the USA embraced regulated capitalism and a strong social safety net. Unions were tolerated (supported by Democrats, opposed by Republicans) because they actually helped to put a proper value on labour (as an input cost) and they had done yeoman service in improving workplace health and safety. American taxes were never high ~ not even in wartime. Financial regulation was never strong enough to tame the tooth and claw capitalism of Wall Street. What America, and Canada, had were liberal-capitalist regimes that balanced a robust, free-enterprise system with effective social safety nets. In the 1970s Canada began to drift leftward; in the 1980s the USA drifted to the right. In the mid 2010s Canada slid farther to the political left and the USA embraced a nasty form of nationalist, even slightly racist (nativist) populism.

Ganesh Sitaraman blames a whole host of problems for America’s lack of resilience: an economic policy that embraces deregulation, privatization, liberalization, and austerity; racism; and Russian interference in recent elections. None is to blame, all taken together are not to blame. But that doesn’t mean he’s totally wrong. He says that “Resilience demands reversing these trends: expanding health care and childcare to all Americans, restructuring the economy so that people gain higher wages, restoring the power of unions, making early education universal, and ensuring that students can graduate from college debt free. All these goals are eminently achievable … [not all are necessary or even useful, but some are, and he adds] … Officials must also provide the basic infrastructure necessary to operate in the modern world. The United States has a long tradition of public investment in infrastructure—from the post office to rural electrification to the national highway system. In recent decades, however, that legacy has been abandoned. The pandemic has revealed that, whether for telemedicine, remote work, or education, high-speed Internet is an essential utility, just like water and electricity. But nearly a quarter of rural Americans do not have adequate access to it, in part because Internet provision has been left to the marketplace. The country’s financial infrastructure also needs to be updated. Millions of unbanked Americans are dependent on check cashers to access their hard-earned dollars, which eats into their wages and their time. Both in normal times and during a crisis, the Federal Reserve’s policies are less effective than they could be and favor financial institutions because the Fed uses banks as intermediaries rather than interfacing directly with consumers. If every person or business instead had access to a no-fee, no-frills account at the Federal Reserve, it could reduce the unbanked population and ensure that everyone could get stimulus payments instantaneously in a crisis.” Once again, he’s wrong, but not totally wrong.

For example: simplified, limited “free” banking for all is not a wild-eyed dream. It used to be the norm. There is nothing inherently wrong with a public, limited service savings bank … perhaps it can never make enough profit to go public but it could have enough deposits to cover costs and it might be allowed to compete with mortgage lenders.

Building (and perhaps, hopefully, later privatizing) national infrastructure is always a legitimate task for governments. Building a Canadian national reliable high-speed broadband network that serves 99%+ of all Canadians would be a worthwhile Public-Private-Partnership project. The big carriers ~ Bell, Rogers, Shaw, Telus, etc ~ cannot build and operate broadband networks in remote and even many rural areas at a profit … and they should not be obliged to try. Perhaps we need a crown corporation to work with the major carriers ~ perhaps the carriers just need a guarantee of adequate payment for the those parts of the integrated national network which they cannot operate at a profit. Another much needed national project is clean water and reliable electricity in every single community, no matter how remote. There is no mystery in how to do it … but it will cost money and the government may have to override some local (especially a few First Nations) leaders.

Canada was a resilient nation up until about 1970.

Canada had relatively low taxes and a well-regulated capitalist society; it had an activist government that was heavily engaged in building infrastructure and just as keen on privatizing it afterwards; Canada had a government that was building, step-by-step an effective but affordable social safety net; the government was playing a leading role in foreign affairs ~ Lester Pearson’s Nobel Prize recognized his, personal contribution to defusing the Suez Crisis (1956) but it was, also, a reward for Canada’s leading role in world affairs from 1945 onwards ~ and that was as an acknowledged leader amongst the middle ranked Western military powers. That all changed, beginning in 1968 when Pierre Trudeau came to power and began reshaping Canada in almost exactly the way Professor Sitaraman wants to change America.

Ganesh Sitaraman says, correctly, I think, that “Democracy is not resilient if people do not believe in it. Yet Americans’ trust in the government has been stuck near historic lows for years, and surveys show that startling numbers of citizens do not think democracy is important. It is no accident that this loss of faith has coincided with decades of widening economic inequality and a rising consensus that the government is corrupt. Study after study has shown that the U.S. government is far more responsive to the wealthy and big corporations than to ordinary citizens. Only sweeping changes to the rules regulating lobbying, government ethics, corruption, and revolving-door hiring from the private sector can restore public trust.I believe that ~ corruption in government, crony capitalism and low ethical standards ~ is what Justin Trudeau has given to Canada. Canadian are losing faith in government; our, Canadian democracy is becoming less and less resilient.

It’s past time for a real change in Canada.

It’s time for both America and Canada to develop strategies of resilience. They will, of necessity, be different ~ each suiting the individual country’s needs and nature, but successful strategies will not look a lot like what Professor Sitaraman advocates. Successful resilient democracies were fashioned in the 1950s by leaders like Dwight Eisenhower and Louis St Laurent. America and Canada need leaders like them:

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