Sunday 11 December 2011

Michael Hlinka (business commentator) – CBC Radio One, Ottawa Morning (November 29, 2011)


Michael Hlinka is the master of avoiding counter-arguments.  All of his economic opinion is presented in a manner which suggests it is both logical and obvious – not so much his views as just the way things are.   This narrow and oversimplified method of presenting information became particularly clear during Hlinka’s recent rant about efficiency.  The bottom-line, according to Hlinka, is that when it comes to spending, individuals are efficient and governments are not.  Of course Hlinka fails to address both what his conception of efficiency (presumably we all have the same understanding of this word) is and that individuals, banks and private companies are just as capable of risky behavior and overspending as governments (in spite of self-interests being at stake). 

A part of the argument forwarded by Hlinka is that governments are not concerned with efficiency and thus are not suited to decide where money should be spent.  Of course, realizing that China would provide an obvious exception to this dubious hypothesis, our editorialist notes that, “Last week we learned that manufacturing activity in China declined sharply.”  This is a very selective tidbit of information indeed – find one morsel of data which doesn’t really address your point and somehow try to make it fit.  Hlinka manages to avoid discussing Canada’s own drop in exports and how our current Federal government studiously blames all ill economic news on ‘external factors’.   The neo-liberal/neo-conservative line has always been the increased trade and economic integration will be our savior – yet somehow it is also our villain of convenience.   Our commentator also ignores the long-standing tradition of right-wing governments (particularly in the United States) to spend like drunken lemurs only to leave their successors holding the debt/deficit bag.  Presumably the difference here is that right-wing governments are spending on worthy projects – rather than those wasteful ones which actually assist people. 

Not surprisingly Hlinka singles out the New Democratic Party as being particularly problematic.   The NDP wants all sorts of infrastructure programs to stimulate spending – programs which, according to Hlinka, include “Roads, bridges, transit facilities, you name it…”  I really like the inclusion of “you name it” as if the list was comprised of nutty ideas which are not concretely linked to our contemporary reality.  Yep, this is indeed a list of frivolities.  Somehow our editorialist refers to all of this as “spending money for its sake”.  It goes without saying that Hlinka sidesteps the Prime Minister’s record on the debt/deficit and infrastructure spending.  Un-discussed is the fact that Harper is on record as defending (at least temporarily) infrastructure spending to stimulate the sluggish economy.  Hlinka goes on the make a link between governments borrowing money and the decline of wages.  For this theory he offers no evidence.  One assumes he is hinting at a potential increase in interest rates which will make it more costly for businesses to borrow.  If this is indeed his theory the evidence is sparse to say the least. 

Our not-so-trusty commentator also blames workers themselves.  The general idea being floated is that the public sector is unproductive – as if efficiency is somehow their sole mandate.  The problem, needless to say, is that unlike in the private sector, there are no incentives for governments to be efficient.  Hlinka states, “I think that the indifference, if not outright hostility to efficiency, has everything to do with the self-selection process of who pursues a career in government in the first place.”  There are not even any exceptions to this iron clad rule as he adds, “But no one, at least no one in government, seems to care much about efficiency.”  Slackers are drawn to the public sector and serious people to the private.  Of course anyone who has worked in multiple sectors and industries will know there is plenty of inefficiency (if the word can even be defined) to go around.  Hlinka does not seem to understand that we select, finance and control the various levels of government – they are not abstract identities unconnected to reality.  The government is us – warts and all.  And if the public sector is as ‘bloated’ as Hlinka claims, one assumes the solution is to put more people on the unemployment line.  However, if the real economic problem is that people are unemployed, Hlinka’s suggestions offer the very opposite of solutions.  They are recipes for how to make things worse.  This side of the equation goes unanalyzed.  I guess Hlinka imagines that those magic businesses enjoying their new low tax rates will pick up the employment slack.  

Of course in his measure of efficiency, Hlinka miraculously avoids the obvious – that business requires public spending, and lots of it, to function.  From schooling to hospitals to road work for the transportation of goods, industry thrives on public spending.  All of that public stuff is stuff they don’t have to pay for.  And given how few companies in Canada pay income tax (a complex issue to be sure) one could even make the argument that businesses in Canada get a free-ride from public spending and Canadian tax payers.  But this is precisely the type of counter-argument and detail Hlinka conveniently forgets … or avoids.  What is even more telling is that Hlinka knows the whole ‘rational spending’ and self-preservation argument is false.  Just this past week he was discussing how individuals often opt to study for jobs they like in spite of their being little work (and little pay) in their particular field.  I guess we humans just lack the efficiency of robots.  The nerve of us! 




"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," – Alan Greenspan (former chairman Federal Reserve Board 1987- 2006), October 23, 2008.

 “The figures, tabled recently in Parliament, show from the tax years 2000 to 2009, anywhere from 853,830 to 1,065,810 corporate tax filers did not pay income tax to the federal government. That makes up almost half of Canada's 2.4 million businesses, according to the latest December 2009 statistics from Industry Canada.” – Postmedia News, September 27, 2011.

“When (efficiency) is used as an end in itself, as a value in its own right, and as the overriding goal of public life, it becomes a cult.” – Janice Gross Stein

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