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Day-After Musings

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Topics: Business, Foreign Policy, Economics, Institutions
Day-After Musings November 7, 2012  |  By Ray Pennings
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It takes more than a day for partisan emotion to adjust to reality. For the 49% of Americans who voted Republican yesterday, today is a combination of disappointment, anger, and fear. The divide in America is real and stark. Gender, ethnicity, and urbanization certainly were factors in the results, but more fundamentally, a stark ideological divide drove the results. Americans have very different visions regarding what their country should look like, and yesterday gave expression to those divisions without bridging them. Flipping through the channels, there were "alternate reality" frames being used to explain the results. Increasingly, both sides are becoming adept only at talking to themselves, via their own media, rather than to each other.

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Speaking of bridges, I'm heartened by the defeat of Michigan ballot proposition 6. The details are complicated but the "No" vote means "Yes" to building a new $4 billion bridge alongside the overcrowded Ambassador Bridge connecting Detroit and Windsor. Twenty-five percent of Canada-U.S. trade crosses that bridge—about $120 billion worth each year—but efforts to expand its capacity have been resisted by the bridge's owner, Manuel Moroun. Unlike the famed troll in The Three Billy Goats Gruff, Mr. Moroun quite liked the revenues which came from the traders crossing his bridge and wasn't keen on seeing his practical monopoly dissipate. He spent about $32 million (U.S.) seeking to convince Michigan voters to pass a provision which would make a new bridge impossible without a referendum. While Canadian interest in this matter is admittedly motivated by economic self-interest more than deep principle, the outcome is one which can be celebrated. The idea of a bridge baron controlling significant public infrastructure with a view to his monopoly interest over the public good, and seeking via a vote to restrict any economic competition, was using the instruments of freedom to restrict freedom—never a good thing. Hats off to the voters of Michigan for dismissing this for what it is.

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Democrat joy in victory will be short-lived, as the U.S. government needs to confront its fiscal crisis before year-end. Last year's budget deal was really a "cease-fire" as both sides thought this election might give them a better mandate to insist on their position. Nothing really has changed, so finding middle ground between a Republican House (elected to keep taxes down and cut programs) and a Democratic President (elected to keep programs, even if it means increasing taxes and the deficit) remains complicated. One can't wish away an almost $16 trillion debt, which is roughly equivalent to the size of the entire U.S. economy. The divisions in the country conspire with the checks and balances of their system to make responsible government extremely difficult. Canadian politics has its downsides, but a system where the executive and legislative branches of government are controlled by the same party does have its advantages.

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Earlier this week, I had the chance to chat with a few Chinese businesspeople in Canada promoting their business interests. The contrast between their experiences and my own is eye-opening: they attended the first church service of their lives on Sunday evening; the opportunity to cast a ballot is a privilege they have never yet enjoyed; they describe "greasing palms" as an ordinary business routine; they view corruption as a staple of politics; and their country's political actors continue to battle information distribution to try to allow for economic freedom without political freedom. Admittedly, the sample size of my new acquaintances is not a valid basis on which to draw conclusions about China. Still, I was reminded how rare a privilege it is to live in a country where political, religious, and economic freedoms are honoured.

There are many on all sides of the political spectrum in the United States this afternoon who feel less than enthusiastic about the results, or worried about their country's future. Hopefully, that worry will combine with a healthy historical perspective on the privilege that they enjoy, and will motivate them to pray and work in a civically engaged manner so that the United States may continue to be a blessing to her citizens as well as to her neighbours.

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