”œBig Years” come once a decade, or so historians tell us. They are defined by eruptions, wars and revolutions, often totally unforeseen. Churchill would argue that 1939 should have been foreseen, as should 1949, when first Hitler and then Mao changed the world. Few could claim to have predicted the economic horrors of 1929, or the joy that December 1989, and the fall of the Berlin Wall, evoked around the world. One single morning in September made 2001 one of the years that changed the world.
Before we ring in the New Year, it is already clear that 2011 qualifies as a very big year. There was the Arab Spring; the take-down of Osama Bin Laden and Moammar Qadhafi; WikiLeaks; the release of Aung San Suu Kyi, months of civil unrest in Greece and Chile; and record tsunamis, earthquakes and floods in half a dozen countries. Then the collapse of both the Greek and the Italian governments, with the near collapse of the euro and the European banking system rumbling on, guarantee 2011 a place in the top ten years of the past century.
In Canada, we saw a record number of elections, both provincial and federal. In March, the tone-deaf Michael Ignatieff foolishly brought down the Conservative minority government on a contempt of Parliament motion, an issue no one cared about in the ensuing April campaign. In May, voters returned our first majority government in seven years " and the first Conservative majority in seven elections. In June we saw hockey riots in Vancouver. In July there was the courageous but shocking appearance of Jack Layton to announce that his cancer had returned. By the third week of August, he was gone. In a gracious gesture that showed he understood a prime minister’s role in bringing Canadians together, Stephen Harper offered a lyingin-state and a state funeral. In Ottawa and Toronto, Canadians stood in line by the thousands. Layton’s funeral in Toronto became a joyous celebration of his life. By September, as Parliament resumed, it was clear how much the NDP missed him. We knew Jack Layton, and Nycole Turmel was no Jack Layton. October and November brought six provincial and territorial elections, and incumbents of all political stripes were reelected. Imitation being the sincerest form of flattery, Dalton McGuinty even shamelessly stole Harper’s campaign script, calling for ”œa strong, stable government.”
By Remembrance Day in November, Canadian soldiers had returned home from their combat role after a decade in Afghanistan and six years in the dangerous southern province of Kandahar. With 158 lost soldiers, no one could say Canada hadn’t done its part. Fittingly, the Silver Cross mother at the National War Memorial, Patricia Braun, had lost her son in Afghanistan in 2006. Generational change had come to Remembrance Day. Rather than being old enough to be the Prime Minister’s mother, she was clearly his contemporary.
By December, winter and cold nights were closing in on the small parks and squares of several Canadian cities that joined dozens of other cities around the world in the Occupy movement, which might well become 2011’s biggest legacy. Pundits, politicians and pollsters were surprised that the crash of 2008 did not produce more popular anger, as banks but not struggling homeowners were bailed out.
What appeared at first to be mild fiscal jitters in Southern Europe were the trigger. The first round of austerity measures set off more bloody street fighting in Athens than had been seen since the 1960s. The unrest spread to Spain, where two out of five citizens under 25 are jobless, and then to Latin America, which has not seen civil unrest on this scale since the 1970s. Several English cities were ripped apart by mindless street riots during the summer.
One month later came the social phenomenon that may be this year’s most surprising legacy. To wide disinterest and mainstream media sneers, a small group of protestors announced that they intended to ”œOccupy Wall Street” on September 21. The snickering ended after the first few weeks when the Occupy movement revealed the deep social anger it had tapped into around the world.
Similar protests broke out in London, Rome and several European cities. Canada and a dozen American cities followed, with young protestors still shivering on small patches of parkland as police moved into remove them in late November. Months after they began to sing, chant and drum their message of anger at banks and the politicians who enable them, the popular anger at the rising income and wealth inequality in many countries appeared likely to keep growing.
The data, after all, had been piling up for years: more than one third of American black households have zero assets and/or significant debt. The average American family has not seen its income grow for more than a decade. The richest Americans now hold shares of new income and new wealth not seen since the 1920s.
And there is a jobless divide among young Americans. US Labor Department statistics put youth unemployment among whites at 16 percent, among Hispanics at 20 percent and among blacks at 30 percent. Overall youth unemployment in the US was officially measured in the fall at 18 percent, fully four percentage points higher than in Canada.
In Europe, a chart in the Economist detailed an even bleaker picture than the US. Through the first quarter of 2011, youth unemployment was 44 percent in Spain, 38 percent in Greece, 32 percent in Ireland, 29 percent in Italy and 23 percent in France.
The anger in Southern Europe, where unemployment among the young is at Depression-era levels, is unlikely to fade. What happens when the snow melts in Northern Europe and North America next spring will determine how real is the legacy of the Occupy movement.
Declining economies and austerity cutbacks, combined with intransigent labour market rules protecting their baby boom parents’ jobs, seems likely to stoke young protestors’ rage into the foreseeable future. The United States has slid back to third world levels of income inequality, having been near the middle of the pack for half a century, a spot Canada now holds.
In London and Toronto, observers marvelled at how ”œnormal” many of the Occupiers appear. Unlike the protest movement of the 1930s or the 1960s or the anti-globalists of the 1990s, however, these protestors are younger, better educated and more middle class. The media, fighting the last war as always, first tried to dub the protestors as a new generation of hippies, anarchists and wing nuts. They fixed on the scattered long-haired ”œlegalize marijuana” veterans and the few bearded Socialist Workers’ Party pamphleteers. It took a while for them to admit they had missed the angry middle-class moms and the jacket-andtied but jobless former young executives.
A more nuanced picture slowly emerged of frustrated unemployed university graduates and laid-off service workers, protesting the absence of stable jobs for their generation. As the lead editorial in the Financial Times put it, ”œIt is easy to dismiss the protests as the product of an incoherent fringe…The protestors do find common ground in their outrage at the lack of economic opportunity and their alienation from mainstream politics.” Canada is not Chile or Greece.
Our social safety nets may be somewhat moth-eaten but they are not collapsing. Our unemployment rate is the envy of the G7. But the bitterness at declining opportunity and rising inequality is nearly as powerful on the streets of Vancouver, Toronto, Montreal and even Ottawa as in countries that have slid farther. Expectations drive politics, and Canada’s millennial youth were raised to expect more.
As conservative columnist David Brooks observed, the American political challenge is that there are two forms of inequality in his country. The first is among the ”œ1 percent,” where there is a widening gap between the incomes of professionals, small business and senior executives on one side, and the CEOs and those at the top of the professional pyramid on the other. Brooks describes the impact of the ”œsuperstar effect.” Top performers in each sector, he reports,
who may have gone to the same college (as you)…are earning much more…benefiting from low tax rates, wielding disproportionate political power, gaining in prestige and contributing seemingly little to the social good.
Despite his indictment of this tilt at the top of the meritocratic American dream, Brooks says it is the second inequality gap, at the bottom, that matters more.
A generation ago, a college degree earned you an average of 38 percent more than a high school graduate. Today that gap has nearly doubled to 75 percent. Worse, non-graduates today are far more likely to be losers on a much broader front: they are socially isolated, have little community involvement, are more likely to divorce and to have children out of wedlock. And the gap is increasingly transferred generationally, with college graduates breeding the next generation of winners.
In Canada the gaps are widening at the top, and in First Nations communities, the gaps at the bottom are as real here as in the US. To date, though, we have not yet seen the development of a permanent social underclass. All politics, as Tip O’Neill famously said, is local, and it is always relative " not to another country, but to your own history. The perception of unfairness and increasing inequality seems likely to keep growing in the year ahead in Canadians’ political thinking.
The anger of young people in Canadian parks who are neither starving nor homeless may seem preposterous to set alongside the bravery of teenage anti-Qadhafi fighters in Tripoli or the victors of Tahrir Square in Cairo. They do share two convictions: a belief that the system is rigged in favour of the rich and the powerful, and a bitterness that they have been conned by their political leaders.
That there are few good jobs for them, after years of struggling to win a good degree from a good university and emerging loaded with debt, is corrosive. This double whammy " ”œthe system is unfair and I have been taken for a fool” " is as powerful a driver of the unrest in Cairo as it is in Canada. As Martin Wolf, a conservative economist and senior economic analyst for the Financial Times, wrote:
It is impossible to define an acceptable level of inequality. Any inequality is corrosive if those with the wealth are believed to have rigged the game rather than won in honest competition. As inequality rises, the sense that we are equal as citizens weakens…The left doesnot know how to replace the market. But pro-marketeers still need to take the protests seriously. All is not well.
And Canadian voters, in an apparently confusing set of choices, demonstrated in 2011 that they too believe all is not well. From the upheaval elections of two outsiders as mayors in Toronto and Calgary late last year, to the historic collapse of the Liberal Party to Tories and New Democrats in the spring, to a series of puzzling provincial election outcomes this fall, Canadians expressed their unhappiness through a variety of channels.
The conventional wisdom shifted around the dial as pundits attempted to align their wrong-footed analysis with each surprising result. The ”œinevitability” of another minority government sank on May 2, with some pundits complaining it was merely the product of a ”œone-off” delirium of Quebec voters that made it happen. That this was profoundly insulting to Quebec voters did not seem to strike some English-speaking media pundits.
Nor were the Tory and NDP victories solely a product of vote-splitting to the detriment of the Liberals " another conventional wisdom in pundit land " as two men who should know pointed out. As Ken Boessenkoel, an old Harper ally and senior Tory strategist, and Brian Topp, former NDP campaign director and now leadership candidate made meticulously clear in a post-election piece in the Globe and Mail, their parties’ pluralities in the Red Fortress of Toronto were twice that of the surviving Liberal incumbents: 7,000 and 8,000 votes per riding versus 4,000 for the Liberals.
In all, the Tories won 30 out of 45 seats in the Greater Toronto Area, 21 out of 22 in the suburban 905 belt, and 9 out of 23 in the city itself, the 416 area. The NDP grew from two to eight seats in the 416, while the Liberals were reduced from 21 to only six seats in the city, and one in the 905. Fortress Toronto was just breached, and it was painted blue and orange.
A lens less distorted by history or partisanship would conclude something different about how Canadians voted and why. Quebec voters dumped dozens of BQ incumbents for the same reasons as Ontario voters dumped many Liberals: they were fed up. Whether voters chose Stephen Harper or Jack Layton to inflict their anger, their mood was the same.
In Quebec especially, Layton’s smiling presence and his positive message caught fire. Voters responded to his message of hope and change that had been carefully tailored to les chordes sensibles of Quebecers. They also admired his gallant campaign as the man with the cane.
With the majority government came the new conventional wisdom that ”œCanadians are moving right,” and they would elect several new right-wing conservative governments this fall. Except that they didn’t. Saskatchewan and Newfoundland’s red Tories, PEI’s pale blue Liberals and Manitoba’s pinkish New Democrats all came back " with an unprecedented fourth term in Manitoba’s case. The only genuinely right-wing campaign on offer " produced by Tim Hudak’s Ontario team " got thumped, with Liberals and New Democrats stealing their marbles.
The Ontario election was not unique in demonstrating, once again, that a really inept campaign can still turn a 10-point lead into defeat. It was unique, in that more than half of the Ontario electorate stayed home " despite the fact that the province was on the verge of a double-dip recession, with tough political choices for any new government just weeks ahead.
The only other genuine right-wing choice available to Canadian voters this fall was that on offer in the Alberta Conservative Party leadership race where new members could join the party right up to walking into the voting booth in the first round on September 16 and the second preferential ballot two weeks later. There voters stayed home in great numbers as well, but those who turned up chose the least likely and most progressive leader, Alberta’s new premier, Alison Redford.
Just as the right was foolish in thinking that the election of Rob Ford as a ”œno more gravy train” politician was proof that even Red Toronto was moving their way, so progressive Canadians should hesitate in celebrating the ideological victory of Calgary mayor Naheed Nenshi, or Redford or even BC Liberal Party Leader Christy Clark. They are united in their appeal as outsiders, pledged to kick the establishment’s butt.
Harper and McGuinty fought capable if uninspiring campaigns, but it was the incompetence of their main adversary in each case that delivered victory for them. No one on the centre-left of Canadian or international politics should be sanguine about the meaning of this series of ”œthrow the bums out” results. In the eyes of too many of their traditional base among working families, they are among the bums.
Brad Wall’s devastation of the Saskatchewan NDP was a personal triumph, in part due to his shape-shifting brilliance in appearing to channel Allan Blakeney more than his former boss Grant Devine. Harper, McGuinty and Wall were elected by nervous and unhappy voters seeking comfort in familiarity, stability and demonstrated competence in government. In Wall’s case it helped that Saskatchewan is booming and that the premier was riding a personal wave of popularity in the wake of his successful campaign last year against the BHP Billiton takeover of Potash Corporation.
What do all these straws in the political winds on several continents portend?
First, that voters remain deeply worried and in some places angry " worried about their futures and angry at their leaders’ failure to offer credible reassurance about it " but they won’t vote for the incredible, viz. Michael Ignatieff. Second, that an energetic insurgent outsider like Alison Redford or Christy Clark can still overwhelm organization, money and political history; expect more upsets. Third, incumbent governments facing their voters after the snows of the grim winter ahead have melted will face some of the most skeptical and disgruntled voters in a generation; soyez prudent, Premier Charest.
For Liberals and New Democrats, the news is ominous. In the absence of a compelling new progressive agenda, conservatives have demonstrated in European contests in the UK, France and Spain they can defeat every centre-left competitor. In the US at the depths of recession, the most rightwing Republican cohort in modern history routed the Democrats in last year’s midterms. Henry Kissinger’s famous bon mot, uttered shortly after the fall of the Berlin Wall, ”œNever in human history have so many enjoyed the benefits of democracy; while at the same time, never in their history have the traditional democracies been so unpopular with their own citizens,” seems an even more powerful observation two decades on.
It is a comforting slur for some political scientists and indolent journalists to blame this slide into disillusionment and ennui on the ”œslippery snake oil merchants and spin doctors” who force our politicians to spout such offensive nonsense. Such slippery political lubricants have been part of electoral life since the days when you could still buy ”œgenuine” snake oil. Its vendors were artful persuasion masters 200 years ago, but voters then and now can spot authenticity in a personality and a message. And they are even more demanding of that authenticity today than they were then.
Maurice Duplessis, Huey Long, Wacky Bennett and Joey Smallwood peddled snake oil by the case. I doubt that the best spin doctors could help them move voters today. John McCain, Gordon Brown and Michael Ignatieff all had huge budgets and the best spinners in the business at their service and still failed the authenticity test. Young voters’ refusal to be patronized, to digest infantile political rhetoric or to be patient and accept that ”œbetter times are coming if you elect me!” may be frustrating to political strategists " but it might be a platform from which to rebuild faith in our democracies.
So what are the lessons of this big year? For the courageous young street fighters of the Arab world it is painful: people power, only when backed by hard military power, can overthrow entrenched security states. Libya was bombed into regime change by NATO’s air campaign in which Canada flew 600 missions, 10 percent of all the sorties on a mission led by a Canadian general, Charles Bouchard. Egypt’s and Tunisia’s police states were betrayed by their armies. The year ahead for the increasingly brutalized young street fighters in Syria and Yemen will be determined by whether Turkey or the Saudis bring their considerable military power to their aid.
For the beleaguered citizens of Southern Europe and their increasingly irritated Northern European neighbours, the lesson of the euro crisis of 2011 is that action delayed is almost worse than a failure to act at all. The hiccupping failure of a dozen European crisis summits provoked the collapse of both the Greek and the Italian governments and pushed the EU itself very close to collapse.
A trio of Canadian leaders, relatively little noticed at home, accumulated considerable authority throughout this year in those forums and in the G8 and G20. The Prime Minister, Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney were unanimous in public and tough in private with the Europeans about the need for faster, bigger and more comprehensive measures.
US Treasury Secretary Tim Geithner thought loud public demands for action from the senior finance minister of an even more imperilled public treasury would be well received. So irritated were Europeans by this effrontery, they took the almost unheard of step of slapping him down publicly " twice! Harper, Flaherty and Carney understood better the rules of effective diplomacy and delivered their harshest messages in private. Perhaps as a reflection of their role, Carney was rewarded by a mainly European electorate with the chairmanship of the new international Financial Stability Board.
Europeans will pray that 2012 is not a Big Year. The events that would make Europe an even bigger player on the global stage next year are almost all painful to contemplate: the collapse of another economy " choose from Spain, Portugal or Italy " or a set of major banks, or the euro itself. The painful reality for American and European voters is that their countries’ tribulations are clearly political before they are economic.
For Canadians, the year past is probably prologue. Canadians returned incumbent governments, in some cases grudgingly, partly out of fear and partly because of unimpressive performances by their opponents. Tim Hudak took a 10-point pre-writ lead and almost delivered a Liberal majority government, so inept was his campaign. None of the other four provinces’ governing parties were seriously challenged by their opposition.
The year 2012 may see fascinating elections in two big provinces: Quebec and BC " and maybe not. Neither Premier Christy Clark nor Jean Charest need to pull the plug until 2013. Each may be tempted, however. For Charest the challenge is to his right in the form of an insurgent new movement led by businessman and ex-Parti Québécois minister Francois Legault. Charest will be tiring, some months from now, of the incessant rain of bad news that will pour out of the construction inquiry he was finally pushed into launching.
British Columbians may have an election before their fixed election date in 2013 if Clark sees the new and untested NDP leader Adrian Dix stumble. For her the caution is the surprising growth of a provincial Conservative Party. It has the potential to split the anti-NDP vote for the first time in a generation. BC New Democrats will no doubt be offering quiet local support to this insurgent, giving them their best chances of governing for the first time in more than 15 years. As for Alberta, bring on the race between the whip-smart Redford and laser-beam focused Danielle Smith.
But the overarching development in Europe and North America which sits as a large question mark over the political class and their increasingly unhappy citizens for 2012 and beyond remains the continuing anger of the citizenry. Does the fear of joblessness, the anger at wealthy bankers, the bitterness at growing inequality have legs or not?
In the view of Jeffrey Sachs, the prominent Columbia University economist and economic development adviser to a dozen governments in the past decade, we are at the beginning of a new era.
Reflecting on the impact of the Occupiers as their tents began to collapse under winter snows and police batons, Sachs offered the following analysis to the New York Times:
Historians have noted that American politics moves in long swings. We are at the end of the 30-year Reagan era, a period that has culminated in soaring income for the top 1 percent and crushing unemployment or income stagnation for much of the rest.
He sees the chaos in Zuccotti Park, its leaderless and sometimes flaky claims, as the seeds of a new progressive movement in America. Sachs is a liberal, but he is no socialist radical. He was an early adviser to East European governments about how to build their market economies. He chastises some of the Occupiers’ frivolous demands but says they are aligned with the basic demands of a majority of Americans:
The new movement…needs to build a public policy platform. The American people have it absolutely right on the three main points of a new agenda. To put it simply: tax the rich, end the wars and restore honest and effective government… Those who think that the cold weather will end the protests should think again. A new generation of leaders is just getting started. The new progressive age has begun.
A recognition that widening inequality is bad for democracy, bad for productivity and bad for the legitimacy of any government attempting to implement big changes is spreading quickly across the political spectrum in many countries. Thoughtful conservative analysts such as David Frum and David Brooks have chastised their own tribe for failing to understand that tax cuts alone will not deliver better educational attainment, better innovation or fewer unwed mothers.
It appears as if the rage that was rarely expressed by voters on either side of the Atlantic after the collapse of 2008 simply percolated underground while voters struggled to overcome their own financial nightmares. It came roaring back in 2011.
Lorrie Goldstein, one of the founders and a former editor of the Toronto Sun, is a tough conservative populist, but he is at the same time a savvy skeptic when it comes to selfserving nonsense from entitled establishment defenders. Responding to criticism from right-wing commentators about his anger at Wall Street and its impunity, he lashed back:
Yes, the Occupy protesters may be naïve, misguided, troublemaking, freeloading, commies and hippies, in cahoots with professional leftwing agitators and public sector unions. I certainly don’t want them occupying a public park in downtown Toronto all winter. But they didn’t cause the global economic devastation we’ve been experiencing since 08. And the real disgrace is the people who did, got away with it.
The challenge for centre-left politicians in attempting to ride this tide of populist anger is their own lack of credibility over too many years in too many countries. It was the Labour Chancellor of the Exchequer, Gordon Brown, who cultivated the City of London and presided with pride over its increasingly ”œlight regulation.” It was Bob Rubin, as Bill Clinton’s senior financial adviser, who helped bring down the Glass/Steagall Act " the separation of investment banking from the more boring, less profitable, corporate and consumer banking. It was Jon Corzine who as chairman of Goldman Sachs took the Wall Street investment bank public in 1999, before becoming first a senator and later governor of New Jersey. After his defeat in 2010, he returned to Wall Street as head of the brokerage firm MF Global, which filed for bankrupty in November 2011. He had bought $6.3 billion in high risk Greek, Italian and Spanish bonds, betting that Europe would vouch for them. In the end, MF Global had only $1.3 billion in assets and $44 billion in liabilities and was leveraged at more than 40 to 1. Clearly, some people learned nothing from the calamitous events of 2008, even people like Corzine, who should have known better.
If merely bellowing ”œCut taxes” endlessly is an insult to thoughtful conservatives in the 21st century, so is the equally simplistic ”œTax the rich” from the left. As Brooks and many others have pointed out, we have cut taxes enormously since the Reagan era. Corporate taxation has never been lower in most democracies. Ensuring that Warren Buffett’s secretary does not pay a higher rate of tax than the world’s most eloquent billionaire is essential to fairness and to the legitimacy of any tax regime. But confiscating Buffett’s and the next 100 richest Americans’ wealth and income would put only a small dent in the soaring levels of US public debt.
The far deeper and more troubling challenge for progressive politicians in attempting to seize and then bend public anger to support an agenda for change is employment. The private sector seems incapable of creating sufficient quality jobs for a hungry well-educated new generation, either in India or in Indiana. And the state, while absorbing incrementally larger slices of GDP in more and more advanced economies, is becoming demonstrably more inefficient and more ineffective at delivering even basic public services.
The year ahead will see an American president re-elected, or not, based on his ability to square these circles. The French president Nicolas Sarkozy, the ebullient ”œmaster of economic reform” who arrived with such optimistic plans for change, also faces forced retirement for his failure to deliver. As does Angela Merkel, if one more European ”œbroken wing” economy needs to be bailed out by German taxpayers.
In Canada, we will see the beginning of a process of painful retrenchment in Ontario and Quebec, as each struggles with stagnant economies, aging populations and mounting debt. The federal government, buoyed by resource revenue, will probably have an easier time, fiscally. With only two big elections on the possible political calendar for 2012, Canada’s new year looks likely to be quieter than this.
Despite the best efforts of Mark Carney and the world’s finance ministers and central bankers, however, the Europeans may sleepwalk themselves over the fiscal abyss.
Then 2012 will be a much bigger year than this " perhaps the biggest since 1929, in Canada and around the world. Let’s hope not.