Poli 363/2 Course outline

Poli 363 fall 2010

Fall, 2010 . Course outline(under construction)
Canadian Public Policy :Eight Policy Problems
Professor Harold Chorney


"In the event of extraordinary circumstances beyond the University's
control, the content and/or evaluation scheme in this course is subject
to change".

e mail blmsbry36@gmail.com, Office hours tba.

Course synopsis: This course introduces students to the analysis of selected contemporary public policy problems. We select eight policy issues and examine them intensively over the next 13 weeks. The course is research oriented and requires students to spend time seeking material on the internet and in the library as well as reading extensively in each of the areas from the list of works provided. There is no formal text that covers all of these areas. However, several works including a collection of readings on the problems of public finance and 2 texts on introducing micro and macroeconomic analysis are assigned as texts. Despite the large class size we will endeavour to have informed discussion and debate in each class. This, however, obliges students to do their work outside of class in order to insure that discussion and debate is well informed and based on research rather than uninformed opinion.

The world of public policy has shifted dramatically during the past few years. The collapse in the stock and financial markets in 2007 and 2008 and early 2009; the pricking of the real estate bubble; the crisis in asset backed commercial paper;the implosion in derivatives; the spate of corporate scandals, fraud and corruption; the sub -prime mortgage collapse in the U.S. and its impact upon the banking system in the U.S.and Great Britain; the general global financial paralysis that followed this collapse; the terrible events of September 11th ,2001; the wars in Iraq and Afghanistan, the tragedy of the hurricane on the Gulf Coast and the recent oil spill in the Gulf have dramatically shifted public opinion in both Canada and the United States and to some extent globally as well.

What was once seen as impossible or passé in terms of government intervention in the economy has now once again been placed at the top of the agenda. Reregulation, intervention,investment in infrastructure and long term planning and environmentalism as opposed to laissez-faire and growth at all costs and even budget deficits as deliberate policy are back on the agenda. After thirty plus years in the shadows, Keynesian policy is once again somewhat fashionable and even celebrated Corporate executives from finance, manufacturing and transportation led the call for intervention, stimulus, bailout and reregulation.The once much vaunted theory of perfectly rational markets and laissez-faire is now once again passé. In recent months there has been an attempt led by right wing Republicans in the U.S. and Conservative politicians in the U.K to reassert sound finance principles and argue that Keynesian stimulus has failed. But the evidence is not convincing. The U.S. non partisan bureau of the budget has recently reported that the American stimulus was effective in both lowering the unemployment rate and promoting geowth and economic recovery.The problem has been that the stimulus was on the small side. More is needed if results are to improve. But politically this will be difficult to accomplish.

Keynesian New Deal style policy proposals for reinvestment in infrastructure and fiscal stimulus were advocated by leading American figures like Larry Summers, the former US secretary of the Treasury and former president of Harvard university and now President Obama's principal economic advisor, Robert Reich, the former US Labour secretary, Mayor Michael Bloomberg of New York, Governor Ed Rendell of Pennsylvania and even Governor Arnold Schwartzenegger of California. President Barack Obama has implemented a 787 U.S. billion dollar Keynesian stimulus which is designed to reverse much of the damage of the deep recession that followed the financial collapse.A second phase is now necessary but the Congress seems poised to reject any such plan.

The Republicans seem rejeuvenated by the radical right wing tea party movement. We shall see what this translates into in the mid term elections. In Canada the clash of political opponents seems less dramatic since the Harper government rather pragmatically endorsed a small but significant stimulus package and the Liberals under the pressure of events abandoned, perhaps only temporarily, their previous hostility to deficit finance.

The re-election of the Bush Republicans to a second term had significant implications for Canada.The crisis in management of the natural disaster following the tragedy of Hurricane Katrina raised some interesting questions about the balance of political forces in the US. The quagmire in Iraq greatly increased dissatisfaction with the Bush Republicans .The race for the Presidency between Democratic candidate Barack Obama and Republican John McCain turned into not just a major debate about Iraq but also the future direction of the American economy and the role of fiscal and monetary policy. The Keynesian inclined Barack Obama and the Democrats won the election decisively and policy has shifted accordingly.This will eventually have a major impact upon policy in Canada.

The American Congress at the behest of President Bush had enacted a significant stimulus package which had resulted in a modest Keynes style deficit of about 3 % of the GDP.The Obama stimulus was much larger and amounted to over 6 % of the GDP. In this respect because of different circumstances the extreme fiscal conservative orthodoxy of Canada's political parties is now overshadowed by the rediscovery of Keynesian technique in the USA. The refusal to think about the wisdom of stimulus facilitated by deficit spending in Canada now looks and is outdated and anachronistic.Under the pressure of the changed circumstances the Canadian Harper government finally moved to introduce and have passed a very modest 40 billion dollar stimulus to deal with the recession in Canada.It now no longer calls for an immediate balanced budget or the old now untimely call for balanced budgets ''come hell or high water" that Paul Martin and the Liberals articulated in the early 1990s.This is a major shift in policy.

However, the recent Toronto G20 meeting reasserted the claim of conservative central bankers like Jean Claude Trichet of the European Central bank and the current head of the IMF Dominique Strauss-Kahn that the stimulus moment had now passed and fiscal tightening was now preferred.

The energy crisis which saw oil prices rise to close to $150 a barrel from below $30 just two years before has had an enormous impact upon public opinion in both countries.They have now fallen to the 70 dollar range.This spike in prices contributed to the recession. Since Canada is a net oil exporter and very rich in energy supplies, particularly in Alberta and its oil sands, while the US is a major net importer of oil the economic impact has been quite different in both countries. The issue of the cartel that controls oil prices and its impact upon employment, growth and inflation will continue to be a hot issue in both Canada and the U.S.

Canada must now reassess its historic relationship to the
United States in the light of the on going security needs of both the United States and Canada and our increasing economic dependence upon American export markets in an era where globalization and outsourcing pose important challenges to our prosperity.The frustration of Canadian policy makers and public opinion over soft-wood lumber exports and cross border traffic may lead to a rethink about the terms of free trade with the US. The Democratic party's apparent preference for a more protectionist trade stance will be an important factor in the years to come. We have moved from a majority government to a stable minority government where these issues are likely to receive heightened attention.

We explore a number of themes that lead logically out from this new environment in the new global economy of 2010. My goal is to help the student become a skillful policy analyst and an independent thinker about policy issues.


About the professor. I am the author of numerous books, monographs, reviews and articles on public policy, urban studies, monetary and fiscal policy and political economy.I am a nationally well known policy expert trained as an economist and political scientist having studied at the Universities of Manitoba, Toronto and the London School of Economics. I hold a Ph.D. from the University of Toronto and am a full Professor in the Department of Political Science having taught here since 1982.I have given guest lectures and presented papers at a number of universities in Canada and abroad including York University, Columbia University, Harvard University, Adelphi University and the Architectural Association of London, UK. I am regularly engaged in public policy debates in the media and participate in the political life of Canada. I have been consulted by the Government of Canada, the Governments of Ontario, Manitoba, B.C. and Saskatchewan and members of the Liberal, Progressive Conservative and New Democratic parties .My research work on public finance has attracted attention from politicians, researchers and academics in the United States, Great Britain and France. I communicate my research to leading newspapers in Britain, the United States and Canada as well as to electronic media and more conventional scholarly sources. I have also worked as a housing economist, urban planning consultant and an economic consultant. I have also run as a candidate for elected office at the city level.

Texts and Basic Background Readings:(Note texts will be available at the Concordia Co-operative Book Store on Bishop St just below Sherbrooke)

Harold Chorney, The Deficit Papers,Montreal: 2010 ed..(available through me)

Joseph Stiglitz, Free Fall:America,Free Markets, and the Sinking of the World Economy

Hassan Bougrine, Ian Parker and Mario Seccareccia eds. Introducing Microeconomic Analysis

Mario Seccareccia and Hassan Bougrine Introducing Macroeconomic Analysis

Caroline Lucas and Michael Woodlin , Green alternatives to Globalization

Stephen Clarkson, Does North America Exist ? Transborder Governance under Globalization and the War on Terror


Basic background readings:

Revisiting Deficit hysteria in Labour/Le travail fall 2004.pp.245-258.(available on internet)

The Finance Crisis and Rescue, The Rotman School of Management, 2008 (recommended)

Stephen Clarkson, Uncle Sam and US

Stephen Clarkson, Does North America Exist? Transborder Governance under Globalization and the War on Terror (text)

Ha-Joon Chang, Bad Samaritans :The Myth of Free Trade and the Secret History of Capitalism (recommended reading)

Joseph Stiglitz, Making Globalization Work (recommended)

Kevin Phillips, Bad Money:Reckless Finance, Failed Politics and the Global Crisis of American Capitalism Viking 2008 (recommended reading)


John Kenneth Galbraith, The Economics of Innocent Fraud(recommended reading)

Caroline Lucas&Michael Woodin: Green Alternatives to Globalization A Manifesto (text)

Samuel P. Huntington, The Clash of civilizations and the Remaking of the World Order, Simon and Schuster, 1997.(recommended rerading)

Daniel Drache, Borders Matter: Homeland Security and the Search for North America(recommended reading)

John Dean , Conservatives without Conscience (recommended reading)

George Soros, The New Paradigm for Financial Markets :The Credit Crisis of 2008 and What it Means(Public Affairs)(recomended reading)


Thomas Kean& Lee Hamilton et al, The 9/11 Report The National Commisssion on Terrorist Attacks Upon the United States (recommended reading)


Tim Lewis, In the Long Run We're All Dead: The Canadian Turn to Fiscal Restraint. (recommended reading)

Joseph Stiglitz, Globalization and its Discontents, 2001.( recommended )

Joseph Stiglitz : The Roaring Nineties: A New Twist on the World's Most Prosperous Decade( recommended reading)

Harold Chorney, The Economic Benefits of Linguistic Duality in Albert Breton, The Economics of Bilingualism, Ottawa:Canadian Heritage, 1998.(recommended reading also may be available on the internet)

Harold Chorney and Philip Hansen, Toward a Humanist Political Economy, Black Rose, Montreal, 1992. .(recomended reading)

Bai Gao, Japan's Economic Dilemma:The institutional origins of prosperity and stagnation, Cambridge university Press, 2001.

Phillipe Legrain, Open World The Truth about Globalization, 2002, Abacus Books (recommended reading)

Noam Chomsky, 9/11, NY: Open media Book, Seven Stories press,: 2001.(recommended reading)

Lewis Lapham, Gag Rule: On the Supression of Dissent and the Stifling of Democracy (recommended reading)

Doris Sommer, Bilingual Aesthetics (recommended)

George Grant, Lament for a Nation.

Lloyd Axworthy, Navigating a New World:Canada's Global Future (recommended reading)

The Honourable Michael Kirby &the Honourable Margorie Lebreton co chair, The Health of Canadians: The Federal Role, Final Report on the state of the Health Care System in Canada, Vol Six:Recommendations for Reform, (recommended reading)

Jagdish Bhagwati, A Stream of Windows:Unsettling Reflections on Trade, Immigration and Democracy (recommended reading)

Jim Stanford,Paper Boom, CCPA, 1999.

Lars Osburg &Pierre Fortin, Unnecessary Debts, Toronto, Lorimer, 1996.

Andrew Jackson,et al, Falling Behind:The State of Working Canada, 2000

Bob Rae, The Three Questions:Prosperity and the Public Good, Toronto Penguin, 1998.

Daniel Drache & Terry Sullivan,eds. Health Reform: Public Success/Private Failure NY: Routledge, 1999

Michael Rachlis & Carol Kushner, Strong Medicine,Toronto:Harper Collins, 1994.(recommended)

Linda McQuaig, The Cult of Impotence:Selling the Myth of Powerlessness in the Global Economy, Viking 1998.

Linda McQuaig, Shooting the Hippo, Viking, 1995.(recommended reading)

Thomas Palley, Plenty of Nothing, The downsizing of the American Dream and the Case for Structural Keynesianism, Princeton University Press, 1998.

Colleen Fuller, Caring For Profit:How Corporations are Taking Over Canada's Health Care System (recommended reading)

Stephen McBride and John Shields, Dismantling a Nation:The transition to Corporate Rule in Canada.Halifax, Fernwood, 1997.

Jeremy Rifkin, The Age of Access, Tarcher, Putnam Penguin, New York, 2000.
The Empathetic civilization: the race to global Consciousness in a world of crisis.N.Y.:Tarcher Putnam Penguin, 2009

John Grieve Smith, There is a Better Way: A New Economic Agenda, London:Anthem Pres, 2001.

Paul Omerod, Butterfly Economics, NY: Pantheon Books, 2000.

Daniel Lazare, What's Killing Our Cities and How We Can Stop It, New York:Harcourt, 2001

Edmund P.Fowler & David Siegel, Urban Policy Issues :Canadian Perspectives, Toronto:Oxford University Press.,2002.

Andrew Sancton, Merger Mania: The Assault on Local Government, Montreal: 2000.

Harold Chorney, Review of Anrew Sancton's book in Canadian Journal of Regional Science.

Alan Broadbent Urban Nation:Why we need to give power back to the cities to make Canada strong, Harper Collins,2008.

Harold Chorney , City of Dreams: Social Theory and the Urban Experience, Nelson, 1990

Mark Kingwell, Concrete Reveries:Consciousness and the City, Viking, 2008


Key Web sites:
www.cec.org, web site of the North American Commission for Environmental Co-operation.

www. ville.Montreal.qc.Ca, web site of the city of Montreal

IMF; OECD; Eurostat; U.S.Treasury; U.S. Bureau of Labour statistics; Statistics Canada.



GRADE:
The grade will be based on a final exam 50 % and a mid term test or an essay 50 %.


TOPICS:
1. Introduction and overview. How does public policy analysis work? The role of interdisciplinarity. Research techniques. Policy and values.Policy and the political process. Globalization and trade.

Policy after the market crash, the credit crisis and the post 9/11 world.
Readings: 9/11 report; Drache.The Rotman school; Phillips, Soros, Chorney blog items on credit crisis, manias panics and bailouts, and the Keynesian revival,Ha-Joon Chang, Stiglitz.Clarkson.

2. The Return of Keynesian economics in public policy.Obama, Bush, McCain, Clinton (Hillary and Bill) and the revival of Keynes in the US. Canadian fiscal conservatism . Public finance.The debate about deficits,surpluses, debt and employment. The return of regulation after Enron, Madoff, the crash on Wall street, the banking crisis, the dot com bubble bursting and the credit crisis and sub-prime housing market.

Readings: Galbraith; Chorney on revisiting deficit hysteria; on deficits; Tim Lewis , Chorney blog items on revival of Keynes and the financial crisis.Chorney paper on quantitative easing and the crisis.Chorney on the role of public enterprise and regulation in The deficit papers. Chorney U tube items on Keynesianism, financial crisis and deficits and debt.

3. The Challenge of Protecting our Health care system. The Canadian, British and American models. Federal provincial disputes over health care. The Romanow Commission. Alberta versus the Federal Government. Market versus public approaches. The American health care debate. The question of affordability.

Readings:Fuller, Romanow and Kirby Reports available on the internet;Drache and Sullivan; Rachlis and Kushner.Canadian Health Information data base.Clarkson.The New York Times and the Wall Street journal, Huffington post and Salon magazine.

4. The rise and fall of the mega-city of Montreal. The background, the debate, the election and the demerger referenda.The fall election. The Mayor and Council.Scandal at city hall. Budgetary questions.The problem of homelessness. A federal role in cities ? The challenge for local democracy and economic development.
.Readings: Sancton; Aubin; Broadbent;Chorney , Mark Kingwell.

5. Managing the global economy.Corporate behaviour. The problem of capital flows. The Argentine debt crisis.Latin American contagion. The need for new financial architecture. The Tobin tax, debt repayment standstills and reworking exchange rates. Market disorder versus regulated management. Turbulence in Venezuela. Canada and Latin America.Venezuela& oil.The Brazilian third way.The policy stance of the new Japanese government with respect to globalization.
Readings: Galbraith; Stiglitz;internet on Argentina and debt crisis and Venezuela.Clarkson on Nafta; Bai Gao on Japan

6. Environmental challenges. NAFTA and managing the environment.The tension between economic growth and the environment.The Kyoto accord. Globalization and Green Politics ? Hurricane Katrina and civil preparedness.Dion's Green shift.
Readings: Clarkson; Drache; Bhagwati; internet, Lucas and Woodlin Green manifesto

7. Bilingualism: A Canadian defining characteristic.The" Spanish challenge " in the United States.
Readings: Chorney in Albert Breton; Huntington on the Hispanic Challenge; Sommer on Bilingual Aesthetics.

8.. Canada in a global world; Canadian foreign policy in the era of NAFTA and 9/11. Our security. Our relationship with the United States. The Axworthy legacy. From Axworthy to Manly to Graham to Pettigrew. The missile defense controversy. A new way forward ? The clash of civilizations ? Chomsky versus Huntington.
Readings: Drache;9/11 report;Chomsky ;Huntington; Axworthy.

9. The energy crunch. Alberta and the problem of fiscal federalism. Sharing the wealth of regional resources. Canadian oil and American needs, a strategic partnership. The future of free trade.
Readings:Clarkson; tba.



Weekly assignments: September: Read the Revisiting deficit hysteria (internet) and Manias panics and bailouts essays. The first is on the net the second is in my blog Jan.2009 Begin reading Clarkson and Stiglitz.


Readings Sept 30 The deficit papers chapters; start with ch. on Keynes, the new introduction to collection, and deficit hysteria.

Essay assignment: Due the first week of November Thursday Nov.5.

Write an essay of 12-15 pages on one of the following topics drawn from the course . Be sure to use a manual of style and properly cite sources and providea bibliography. You should use books, periodical literature and internet sources that are properly noted.

Topics :

1. Discuss the debate over deficits, surpluses and debts. evaluate the Obama stimulus as compared to the Harper one .

2. Explain the origins of the recent financial crash. What role did deregulation and laissez-faire play in this crash. What has been the experience of financial panics and crashes in history.

3. Compare Keynes' theory of unemployment and anti-recession policy with that of the monetarists.

4. Explore the problem of inflation in a capitalist economy. Can moderate inflation be compatible with real economic growth and low unemployment.

5. What led to the eclipse of Keynes from 1974 to 2008.

6. Explore the oil industry and the global pricing system for oil.

7. What is the history of Canadian health care. How does the Canadian system compare to the American debate over health care.

8. Explore the origins of neo-conservatism. How was it able to have such a lasting large impact upon western societies.

9. Discuss the debt crisis and dollar currency boards in Latin America and their impact upon Argentina.

10.Compare and contrast the argument of Noam Chomsky with respect to American power as opposed to the work of Samuel Huntington.

11. Examine the history and evolution of the debate over global warming and Canada's policy stance toward this critical issue.

12. What has been the Canadian foreign policy orientation. what should it be.

13.Examine the state of free trade between Canada, the U.S. and Mexico.Explore the evolution of the doctrine, its consequences for Canada and its likely future evolution.