People, not corporations, define Poilievre's post-2008 Canada
National Post, 09 May 2024
During the global financial crisis, government acted boldly to protect the wealthiest. Why not act for the good of all, not just the titans?
On Friday, Conservative Party leader Pierre Poilievre blasted corporate Canada in these pages, telling them to “fire their lobbyists” and present their proposals in terms of the interests of ordinary people. In related news, on Monday U.S. Senator Bernie Sanders, the socialist from Vermont, announced that he would stand for re-election.
Poilievre and Sanders — and much else besides, including the political rise of Donald Trump — are downstream from the global financial crisis (GFC) of 2007 and 2008. While the GFC was painfully experienced as the most severe global economic calamity since the Great Depression, its effect on politics was underestimated at the time. It was a profound reconfiguration, as the GFC destroyed two longstanding presuppositions, namely that large corporations were in favour of market economics, and the health of the largest corporations was a good measure of general economic well-being.
It took some time for the political consequences to be felt. In 2012, then-prime minister Stephen Harper jetted off to the Davos champagne chinwag of the corporate class, recognizing the World Economic Forum as “more valuable than ever” and praising founder Klaus Schwab for his “service of the common good.”
But the political consequences were there — the Occupy Wall Street movement on the left, the populist Tea Party on the right. By 2016, the Sanders and Trump presidential campaigns were surprisingly effective in speaking ill of large corporate interests. Poilievre loudly promises that none of his ministers will ever appear at Davos.
In his column here, Poilievre harkened back to the 1988 election as a good example of corporate Canada going to the people to persuade them of the value of free trade with the U.S. Once upon a time it was thought that corporate interests favoured free markets — hence free trade — and that if corporations were doing well the economy would be doing well, with greater earnings, investment and employment.
The first premise was likely never true. Corporations favour their own interests, and if truly free markets serve those interests, all to the good. But if the market can be regulated to their advantage, all the better. If favourable tax treatment, subsidies and regulation can protect their interests, that is preferable to abstract market principles.
That’s why lobbyists are hired after all, so that the government might act in the interests of their paymasters. There would be far less need for lobbyists if the real goal was to get the government to do less.
The GFC laid waste to the second premise, namely that success for big corporations meant success for all. There were a few large firms that went under, but bailouts were quickly arranged for the rest. “Too big to fail” meant that market outcomes were softened by massive government intervention. The giants of finance were spared the discipline of the market, while mortgage holders faced the consequences of their poor economic decisions.
Markets were for those who did not have powerful friends; government aid was for those who did. The titans of finance kept their bonuses, and their friends in the regulatory world ensured they would not be prosecuted for their frauds. The GFC made it manifestly evident that large corporate interests seek market power, not market freedom.
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