Listen To The Hippies This Time

Looks like the leaders of the eight largest economies agree with the hippies, at least in part, that the economy still faces rough patches and additional stimulus could still be necessary.

G8 leaders believe the world economy still faces "significant risks" and may need further help, according to summit draft documents that also suggest failure to agree climate change goals for 2050 [...]

Documents seen by Reuters before the G8 summit began on Wednesday cautioned that "significant risks remain to economic and financial stability" while "exit strategies" from pro-growth packages should be unwound only "once recovery is assured."

"Before there is talk of additional stimulus, I would urge all leaders to focus first on making sure the stimulus that has been announced actually gets delivered," Canadian Prime Minister Stephen Harper said.

That chimed with comments from the International Monetary Fund, which said it believed the global economy was starting to pull out of recession but recovery would be sluggish and policies needed to remain supportive.

Harper isn't wrong, the stimulus in the queue must get out. But recovery has not yet been assured, and so the smart move would be to prepare for some contingency where more public money has to go into the economy.

It's interesting that everyone has whitewashed the debate from early this year.

During the initial discussion of the stimulus, the debate was framed almost entirely as a debate between Obama and those who said the stimulus was too big; the voices of those saying it was too small were largely frozen out. And they still are — if it weren’t for my position on the Times op-ed page, there would be hardly any major outlet for Keynesian concerns.

And here’s the thing: in this case, there isn’t any hidden evidence — you can’t argue that the CIA knows something the rest of us don’t. And the voices calling for stronger stimulus are, may I say, sorta kinda respectable — several Nobelists in the bunch, plus a large fraction of the prominent economists who predicted the housing crash before it happened.

But somehow, the pro-stimulus people are unpersons. Who makes these decisions?

I don't think Krugman wrote that without knowing the answer.

World Report

Happy that I appear to have dodged the Blogger problems going around the Internets today, why don't I throw down with a world report?

• Zimbabwe: Robert Mugabe's wickedness is finally starting to catch up with him. He is in serious trouble because of both a crippling cholera epidemic and a threatened revolt of the internal security forces. Mugabe has run the country into the ground, and sooner or later the runaway inflation and searing poverty was going to impact how Zimbabweans viewed their country. You can only push people so far, even ones who are frightened.

In a clear sign that President Mugabe's hold on his state security machinery is starting to crumble, his once-loyal soldiers ran amok across the capital on Monday after they failed to access their paltry wages in the cash-strapped banks. The unarmed soldiers fought with heavily-armed police and several were arrested.

It was the third outbreak of such violence since last Thursday. The sight of rampaging soldiers was then unprecedented. Army sources said an inquiry had already begun, with dozens facing courts martial. Unconfirmed reports say three of the 12 soldiers who took part in Thursday's riot have been killed.

This is a time when Morgan Tsvangirai should live up to the name of his political party and lead a movement for democratic change.

• Thailand: Everyone was wondering what the Thai king would say in reaction to mass protests and the removal of the country's leading political party by the judiciary. Turns out he called in sick. And the caretaker government has cancelled a Parliamentary session to select a new Prime Minister. That would be what you'd call "paralysis."

• Israel: This is a hopeful sign that Israelis are finally starting to deal with the irrational right-wing element in their midst:

Israeli soldiers and police stormed a disputed building in the biblical city of Hebron on Thursday, dragging out 250 young settlers in a raid meant to send a warning to Jewish extremists fighting to keep what they see as God-promised land.

But activists responded with a wave of attacks on Israeli forces and Palestinians in the West Bank, even as Israeli politicians and some settler leaders denounced them.

The attacks are troubling, but the united front from the government and law enforcement is great. Sooner or later, Israel is going to have to give Palestinians their own state to live without fear in exchange for peace. It's the only solution, and ridding these extremists is a big step forward.

• Iraq: The Iraqi Presidency Council has now approved the security pact calling for withdrawal within three years, which means that there's nobody else in the Iraqi government that needs to approve it. Conservatives can scream all they want that this means they "won the war," which in the face of continued bombings and deaths is laughable (400 civilians still die every month in Iraq, at a minimum), but the need to reconcile and work together toward stability without the crutch of a US presence is going to have to be the long-term goal now. At this point, we owe it to the Iraqi people to leave.

• Canada: Everybody get to know the word "prorogue." That's what Stephen Harper did today in a desperate attempt to save his Prime Ministerial position.

Gov. Gen. Michaëlle Jean has granted a request from Stephen Harper to suspend Parliament until late next month, a move that avoids a confidence vote set for Monday that could have toppled his minority government.

"Following my advice, the Governor General has agreed to prorogue Parliament," Harper said outside Rideau Hall after a 2½-hour meeting with Jean.

Harper would not reveal the content of the discussion, citing constitutional traditions, but he said the first order of business when Parliament resumes on Jan. 26 will be the presentation of the federal budget, to be delivered the following day.

"The economy is the priority now, and the public is very frustrated with the situation in Parliament. We're all responsible for that," Harper said in French.

Monday's no-confidence vote could have precipitated the rise of a proposed Liberal-NDP coalition, supported by the Bloc Québécois, or could have resulted in another election, depending on the Governor General's response.

So there's no government in Canada until January, buying Harper time to wage a PR campaign to keep his job. There isn't much of a precedent for this since the 1600s. Jeffrey Feldman has a pretty good explainer. The upside for the center-left coalition is that Harper's spending cuts, anti-union measures and elimination of public financing will be shelved along with the government.

A Tale Of Two Coups

It was quite a turnaround to see the liberal government coming to power in America with the conservative government in power in Canada, but apparently, Stephen Harper massively overreached and is about to be shown the door.

With the announcement of a formal alliance among opposition parties, Canada moved closer Monday to removing its Conservative government without holding an election.

If the pact — signed by the Liberal and New Democratic parties and the Bloc Québécois — is successful at dislodging the Conservatives, it will be the first time since 1926 that the federal government has changed hands without a vote.

Coalition governments are rare in Canada, and the opposition plan still faces constitutional and political uncertainties.

Adding to the political turmoil is speculation about how Prime Minister Stephen Harper, whose government is outnumbered by the opposition in Parliament, will respond. Over the weekend, the Conservatives tried to stifle the movement against them by withdrawing some economic proposals, including an end to public financing of political parties, that angered the opposition parties and prompted the negotiations that led to their alliance.

There is speculation that Mr. Harper, having failed to fend off the opposition through concessions, may end the current session of Parliament to at least postpone his government’s removal.

Harper was basically trying to cut off the lifeblood of the smaller parties, and they instantly revolted. It's amusing to see him backtracking now, but I'd be surprised if it worked. The center-left parties should have been forming coalition governments for years, where the electoral majority is reflected in the governing majority. Without proportional representation, of course coalition governments best reflect the will of the people in a Parliamentary system. I think the Liberals, who are centrist (hey, it's Canada) had this mental block against joining with the DFHs in the Bloc Québécois and the New Democrats, but that's over now. They have an extremely similar platform, anyway.

The latest revolution in Thailand is not nearly so tidy.

The Constitutional Court on Tuesday ordered Thailand’s governing party to be disbanded and barred the prime minister and many of his senior ministers from politics for five years.

The court ruling, which came amid protests that have paralyzed the government and blockaded Bangkok’s two airports, dissolves the People Power Party of Prime Minister Somchai Wongsawat.

Thousands of protesters at Suvarnabhumi International Airport, the country’s main tourist gateway, roared when one of their leaders announced the news of the court’s decision from a makeshift stage outside the airport’s departure hall.

The protesters claim that they will now leave the airports (by the way, I've been to that airport in Bangkok, and it's not really worth the sit-in), but if recent Thai history is any guide, the replacement government will be installed by the crown and the military. I expect they won't tolerate all this civil disobedience, and it could get much worse than the bomb blast that has already killed one protester.

O Canada

This NAFTA/Canadian consulate flap is becoming a full-fledged international incident. The Canadian Embassy has now apologized for conveying the message that Obama's campaign was saying different things about NAFTA to them in private than he has in public, and a member of the New Democratic Party questioned Prime Minister Stephen Harper harshly today.



It's clear to me that Obama economic advisor Austin Goolsbee probably said SOMETHING to SOME Canadian official, but that he was completely out on his own in saying it. I don't think Obama's team has been prepared for how this turned out, but I don't know if the two-faced charge is accurate, and certainly Obama is really not much different on NAFTA than Clinton, so again it's the Clinton campaign saying "he's just as bad as I am!"

UPDATE: You cannot discount the role of Stephen Harper in this. His conservative government is in routine contact with conservatives in the United States, and as this ends up looking bad for Obama and potentially extends the Democratic race, the idea that this is simply a favor for McCain is possible. Now we learn this.

Canada's left-leaning New Democratic party demanded that Harper fire his chief of Staff, Ian Brodie, who is reported to have leaked word of the meeting.

Sandra Buckler, a Harper spokeswoman, denied Monday that Brodie or anyone in Harper's office leaked word of the memo or meeting.

Somehow I don't believe Harper's spin. I think this was a trap.

Welcome To The New World Order

Apparently, activists like Retired Col. Ann Wright and Medea Benjamin of Code Pink are being denied access to Canada because of their misdemeanor arrests for things like disorderly conduct during antiwar protests.

As Rick Perlstein notes, this is really something:

This is a horrifying development for human rights. This is a horrifying indication of the moral wasting visited upon the world by an American conservative movement invested with governing power. And, last but not least, this is a sad step backward for Canada's proud history history of refusing to be intimidated by the United States.

In one of the last issues of Lingua Franca, I wrote about a very fine little academic study entitled Northern Passage: American Vietnam War Resisters in Canda, by John Hagan. American officials were outraged when Canadians asserted their sovereign right not to turn back war resisters. But Canada refused to be bullied. Those days, apparently, are over: America says jump; Canada answers, "How high?"

I'm sure Bush-lite Canadian Prime Minister Stephen Harper has something to do with this. It's pretty dispiriting.