The true dimensions of the economic crisis of the last year is becoming clear as we see western countries set out their budgets for the coming year. Yesterday both Ireland and Britain set out what the future means given the events of the past 12 months. Ireland was once the economic miracle known as the Green Tiger. For years it pursued an aggressive economic agenda that included deep tax cuts, virgorous monetarism, radical deregulation of banks and other large economic players, and the pursuit of a knowledge based, high tech economy. It cut its university tuition fees to zero and invested heavily in technological industries. For over a decade it was credited with having achieved an economic miracle. Alas it all came apart as a result of its deep policy flaws. Many neo-conservative economists, now cowering in academic and university think tanks in shock as their deeply ideological agenda lies in ruins, once held Ireland up as a model. Yesterday, the Finance Minister in Ireland admitted that things are bad. The media report ’savage cuts to save the ailing Tiger’. Economic growth will fall 7.5% this year, compared to 4.5% for the UK. The budget deficit will run to 14%, an unheard of level anywhere a few short months ago. There will be huge cuts in public sector pay and benefit entitlements. The public debt is exploding and the currency is hovering on the brink of collapse. The banking sector is in crisis and with it this once proud nation. While the Finance Minister promises better for the future in typical political double talk, there is genuine fear that the country may be headed to become a second Iceland, which is wallowing in economic disaster. Both countries remind us of the havoc economic and financial advisors created with their aggressive rush over the years to push small countries to become laboratories for untested and dangerous economic ideas. Anyone familiar with the role of these people can see the horrific damage that results when ideology rather than knowledge and facts drive the agenda. It is hard to believe that a single group could wreck so much havoc with so little sense of responsibility or intelligence. Ireland and Iceland are two examples of the dangers of getting caught up in the unsubstantiated claims and beliefs of unaccountable experts taken over by beliefs rather than science. It is doubtful whether the economic profession’s credibility can ever be restored. Just as in eastern Europe and Russia where Marxists economist did the same thing years ago, few who pushed the disastrously mistaken ideas that became the mainstream of prevailing economic beliefs have expressed any remorse or acknowledged how wrong they were. Perhaps a life-long banishment to Iceland and Ireland would be in order in the absence of some contrition for the bill of good the poor citizens of those countries were sold.

Britain experienced some of the same ill affects of bad advice from a ill educated economics profession. However Britain will be experiencing only a 4.5% drop in GDP this year, which is much more manageable. Britain has also under more robust and informed political control and thus averted some of the most disastrous of the affects of economic mismanagement. And the British government has announced that its budget measures will be more in keeping with the traditions of sensible economics. Revenue measures will see increases in income, payroll and sales taxes, a punishing claw back of bank bonuses over $40,000 (thank goodness some government has stepped up to plate and put a stop to these economy wrecking practices that contributed so much to the mismanagement of bank finances and the necessity of huge bail outs of backs), and cuts in spending while at the same time increasing pensions, child and disability benefits, and free school lunches. Government borrowing will increase a modest 3 billion pounds. This will be a budget of sensible ideas and sound management. As proof, the currency markets have responded positively, and the stock market has provided a vote of approval.

With an election coming in the next few months the right wing press has nevertheless but as expected gone ballistic. Not for it any learning form the past mistakes. Fortunately Prime Minister Gordon Brown has responded with a calm determination to avoid the excesses of the past. Indeed Brown has been the key sane voice at the top of governments in the west. He was the world leader in calling for a coordinated economic rescue package that has prevented world wide disaster. He was the one who insisted the bank crisis had to be aggressively dealt with. And he is perhaps the only leader who is prepared to risk telling the truth on taxes – namely that countries must pay their way over the longer hall, and that the promise of free lunches through big tax cuts for the well off is just more of the ideologically extreme pandering to the special interest making up the wealthy, largely business class (such as we have and continue to practice in BC and Canada, and which is still promoted by many economists including some of my own colleagues. Oh my, how hard it is to see the truth when taken with blind ideologies).

The sad thing about Britain is that the Prime Ministers’ honesty and economic competence will likely go unrewarded in the soon to be held election. The large right wing press is going ballistic about the higher taxes and increase in basic benefits. A perfectly manageable public debt is being painted as the height of mismanagement. It is mostly politics. But there is still a yearning to return to the bad old days when economists and much of the media largely shilled for disastrous policies that led to certain destruction. It is discouraging to see. Perhaps the Prime Minister will prevail in getting this basic message across about responsible economic management, but it is hard to be optimistic. Ideologically driven ideas and interests die slowly if ever, perhaps because there is still a hope that that will serve the interests of those who got rich under the old discredited policy regimes. Special interests never give up. Time will tell whether they will prevail in the face of all that is so obvious about past failings. The British election will be a good test.

The blow-up in Parliament over the testimony of a former Canadian intelligence agent in Afghanistan is fraught with errors and missed opportunities. The agent, Richard Colvin, testified that from May 2006 through to the end of 2007 he frequently informed officials and politicians that Taliban prisoners transferred by Canadian forces to Afghani jails were being tortured by their Afghan jailers. While politically dangerous for the government if not handled well, few people were particularly surprised by the testimony.

What has been surprising is the way the government and many of its critics have responded. The government appears to have been overtaken by hysteria immediately upon hearing the reports of what Colvin said. In a classic case of ill-considered political management, Ministers shrilly denounced Colvin, making him out to be an unreliable fool and liar. His character has been trashed, his motives questioned and his competence denounced. As to the substance of the charge, the strategy has been simple – deny, deny, deny. Nothing was done wrong, brave soldiers just did their jobs and it is unpatriotic to raise any questions of this sort. Even the senior military officers and the Prime Minister have leaped into the fray.

The result has been a disaster for the government. Why has the government responded the way it has? Anyone with any skill in managing difficult political issues could have see immediately that this is a losing strategy. The government should have immediately done a few basic things. First it should have given the appearance of listening to what was said and of examining the situation seriously. Second, it should have set out its narrative about the challenges of taking Taliban prisoners and jailing them in a country where the government and the justice system are fragile and underdeveloped. Third, it should never have attacked Colvin’s character and believability. No-one will side with the government in that kind of attack. Fourth, it should have left room for the fact that mistakes and screw-ups could well have occurred over that time, but that the system has been fixed and can now be relied upon. As for response style, it should be cool, not red hot; considered, not fight or flight. And the Prime Minister should never become an attack-dog in these kinds of situations. Leave that to Ministers. And they should only engage in attacks on politicians, and then only when it is credible to do so.

This government looked until this week as if it has gained some maturity and skill in handling hard political issues. All of that has been undermined in less than a week. It is amazing to watch a government make so many huge missteps in a weeks time. One wonders who is responsible for this strategy. Are there no senior people who have the power and smarts to prevent these kinds of things from happening? Is there no adult supervision in the Cabinet Office?

Meanwhile on the other side there has been a unseemly number of people lighting their hair on fire with claims that war crime charges will, or should be, proceeded with immediately. They may be right. But for the moment they way overshoot the mark with this claim. The extremity of the claim, with so little evidence yet available, is almost as off-putting as the defenses of the government. It has undermined their credibility almost as much as the government has undermined its own credibility. I have no doubt that prisoners were tortured. But we know next to nothing about the circumstances. There are any number of extenuating circumstances that make charges unlikely – the fact that these are actions of a democratic nation, the circumstances of the transfers, the environment within which they took place, are all factors . There is considerable discretion for prosecutors in such case. It is very unlikely that any Canadian is going to stand trial on this matter whatever the evidence. They may have screwed up, but it is not credible that a federal minister or Canadian General deliberately subjected prisoners to torture as a strategy. But torture is wrong. We live in a democracy that officially proscribes it. The issue must be addressed by Canadians holding the government politically accountable. Answers must be provided and if anyone is fount guilty of wrong-doing they must be dealt with through exposure and dismissal.

It is time for cooler heads to prevail. The committee should continue its work. MP’s and Cabinet, including the Prime Minister should keep cool. They should answer questions. They should avoid extreme opinions. They should not attack public officials like Mr. Colvin. He is more believable to the public than they are right now, which is always the case in these kinds of situations. They will lose that fight politically. Someone needs to tell Mr. Harper and MacKay this, since they seem not to get it themselves.

And they should prepare to open the lid on what has been happening in Afghanistan with prisoner exchanges. They should explain the challenges and difficulties. And they should be open to admitting that things have not and perhaps could not be perfect. They need to stop attacking and begin to look reasonable and responsible. Above all they need to bring the temperature a way down. When in trouble a little humility can go a long way.

A just released report from the excellent International Crisis Group (ICC) looks at the disastrous Afghanistan Presidential election and concludes that the election “delivered a critical blow to the legitimacy of both the government and the international community”. The ICC says:

“Karzai’s retaining power under these circumstances has bolstered the impression that the international community is disinterested in or incapable of checking corruption. It handed the Taliban a huge public relations victory”.

It adds that “to stem the decline in public confidence, the international community, particularly the US and the UN, must urgently put in place and vigorously support a number of key measures, including:

• restrictions on the size of the cabinet, and more importantly barring nominees with demonstrated links to armed groups or criminal activities from joining government;
• the formation of an impartial commission of inquiry to conduct a thorough public review of the 20 August 2009 elections; the National Assembly’s use of its full sanctioning powers against those suspected of abusing their offices to influence the polls; and vigorous pursuit by the attorney general and courts of criminal prosecutions of those involved in flagrant violations of the law;
• consultations among relevant Afghan and international actors to achieve consensus on immediate steps to strengthen the machinery for the 2010 elections;
• convocation of a loya jirga to undertake constitutional reform, including consultations on the role of the Supreme Court; enhancing the independence of the judiciary and legislature; and meaningfully devolving authority and resources to provincial and district levels; and
• resignation of UN Mission in Afghanistan (UNAMA) chief and UN Special Representative of Secretary-General Kai Eide, since he has lost the faith of many on his staff and the necessary trust of many parts of the Afghan polity, accompanied by a thorough re-evaluation of the advisory role of UNAMA’s Enhancing Legal and Electoral Capacity for Tomorrow (ELECT) program view to rebuild public support for Afghanistan’s electoral institutions and processes”.

These are absolutely essential matters for the west to respond to. Canada’s Minister of Foreign Affairs and the US Secretary of State attended Karzai’s swearing in, in an apparent show of support for Karzai. That was disturbing because it seems to put the stamp of approval on Karzai’s election. Now President Obama is about to announce the US plan for Afghanistan going forward. It is critical that the matters raised by the Crisis Group be part of that plan.

Afghanistan is at a tipping point. A large scale expansion of military forces will not save it from disaster. Governance and development are the important things. If Karzai is permitted to continue his embrace of the criminal warlords and drug dealers, including appointing three of the most notorious warlords to his cabinet as he indicated he will do two months ago, there is no point in continuing the western presence there. If the failure to develop services, infrastructure, housing and jobs continues, the people there will see no point in maintaining the existing western supported regime. Canada has sacrificed the lives of well over a hundred smart, tough young soldiers who have served well beyond what should be expected of anyone, much less the young, with a great future ahead. It will be criminal if the ICC’s proposals are not accepted as a minimum part of the plan going forward. Stephen Harper needs to make that case with vigour, as he is entitled to do as a result of the incredible contribution of Canada over the past few years.