fiscal conservative, social liberal

Greetings bloggers. Upon recent grumblings of 125columbia dying, I have decided to inject some new material to help revitalize this blog, with a series of political punditry and economic and social debate. Actually, I have been wanting to start this for some while, moreso just to help practice my writing skills and help better explain my thoughts on various topics and issues.





My topic for today is the concept of being "fiscally conservative, socially liberal". I recently read an article in the Globe and Mail (not really my choice in journalistic pleasure, but its what is available at work; hey, at least its not the Toronto Star) about academic and media commentator Michael Byers who has decided to run as candidate for the NDP in the Vancouver Centre riding in the next federal election. Byers, the Canadian Research Chair in International Law and Politics at UBC, would be the Ignatieff of the NDP. Byers describes himself as left on social issues but as a Tory on fiscal issues. Hopefully, such a candidate will never be elected if he doesn't realize that such a position makes absolutely zero sense.





In short, being fiscally conservative means low taxes and letting market forces prevail. But as a "social liberal", you need a source of revenue to fund your social agenda. Hmm, what is the source of government revenue? TAXES. Basic logic shows this to contradict being fiscally conservative. Sorry folks but you're either a fiscal conservative, social conservative or a fiscal liberal, social liberal--you can't mix idealogies.

Take the whole climate change debate as an example. What strategy is best equipped to reduce GHG emissions while limiting any negative effects on the economy? Consider the options. There is Stephane Dion's Liberal party "green shift "approach, where upon full implementation, a carbon tax of $40 is levied on fossil fuels per tonne of CO2 emmissions. This would create problems in how Canadians in different parts of the country feel the effects of the tax. For instance, a Quebec home powered by hydro would not be burdened by the tax, whereas an Albertan home powered by coal would. The plan would aim to be "revenue neutral," offsetting any revenue generate by the levy with corresponding income tax cuts. Regardless, any tax on fossil fuels should sound hauntingly familiar to oil rich provinces Alberta, Saskatchewan, and Newfoundland, who may be wondering if nothing was learned from Trudeau's disastrous National Energy Progam in the 80's.

Alternatively, there is the cap-and-trade approach, described as a market solution, supported by the Conservatives and NDP. In reality however, cap-and-trade is not a market mechanism (http://www.financialpost.com/story.html?id=616117).

Any carbon pricing strategy would also surely induce headaches when it comes to international trade. The idea of tariffs to level the playing field on imports from countries who do not price carbon sounds off the old protectionist alarm.

Now, the true market approach and incidentally best approach to take would be to do absolutely nothing because the market will prevail in the end. With rising fuel prices, we are already starting to see people get rid of their gas-guzzling SUVS in exchange for smaller and more fuel-efficient vehicles. As it stands right now, fossil fuels are the cheapest and most reliable sources of energy, but with the advent of $200 per barrel of oil, private investment in research and development of cheaper, more reliable alternatives will no doubt also increase. Besides, even if there were a concensus that man-made GHG emmissions were a legitimate concern for the future of the planet's survival (which they are not), the market would no doubt react to build that into the price automatically.