Bring Back Steve West

April 13th, 2010
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My Open Range column from the April 2010 issue of Alberta Venture magazine:

Alberta’s Deficit Requires Tough Politicians to Make the Tough Cuts

Cutting back offends something deep within human nature. Tightening one’s belt, making do with less, deciding not to buy something intensely desirable, switching to a lower grade – self-denial is immensely difficult. Like dragging a laden canoe up a swift river, every step is hard won, the bone-wearying effort creating the urge to give up and float downstream. And that’s when your own financial future’s at stake. When you’re playing with other people’s money, the temptation must be overwhelming to keep spending, pushed along by the current’s immense weight, ears covered and yelling “la-la-la-I-can’t-hear-you” to dull the ascending roar of the oncoming cataract. It takes a hard man or woman to keep moving upstream. And looking at the recent provincial budget’s massive deficit, I’d say Premier Ed Stelmach’s got none.

It would take only a few politicians to make the tough decisions, face down the yelling public sector unions, the cloying cause-pleaders and the perennially can’t-do senior bureaucrats, and just get the job done: cut spending, outsource and privatize, repeal stifling regulations, hold down taxes. We’ve done it before. Back in the mid-’90s, six or eight tough guys (plus one or two gals) took on a crisis of huge deficits and escalating debt caused by two decades of profligate spending.

The hardest of the hard was Steve West. In a succession of portfolios that included transportation, utilities, municipal affairs, energy and treasury, the hatchet-faced country veterinarian from Vermilion privatized highways maintenance, provincial registries and, most famously, the liquor retailing monopoly. He downsized the now-redundant portions of government departments and brushed aside anyone who resisted. He helped drive the government’s overall program of deep spending cuts. The cuts of the ’90s saw West and the Ralph Klein government wield a broadsword on department budgets. There were absolute reductions of 20%, with thousands of civil service jobs gutted, hospitals closed and welfare rolls slashed. Contrast that with the budgetary caps, freezes and slowdowns in rates of growth that the Stelmach government has employed.

In the ’90s, the usual suspects shrieked and at least one top bureaucrat fled rather than helped out. It felt to some like the Goths’ 40-day sack of Rome in the sixth century. West certainly didn’t seem to care whether people liked him – he revelled in being reviled. The opinions of “Edmonton” – news media, bureaucrats, opposition pols and waffling colleagues – were immaterial. West was trying to restore balance by reining in the guilty party – government itself – rather than punishing the taxpayers who elected him. He did seem to care what his voters thought – and his greatest landslide came after the toughest cuts.

The New York financial media even took note. Friendly caricatures of Klein appeared in outlets like Barron’s and the Wall Street Journal. Alberta’s fiscal combo of spending cuts, tax reductions, privatization and deregulation was presented as the go-to model for American states – and Canada’s federal government. Klein was used by the increasingly worried U.S. financial community to prod Liberal prime minister Jean Chretien into finally tackling Ottawa’s massive deficit.

Nowadays the fiscal information from the U.S. is overwhelmingly about multi-trillion-dollar Washington deficits or crumbling state governments. But there are a few success stories, and the parallels to Alberta of the ’90s are intriguing. Minnesota’s Republican governor, Tim Pawlenty, has been facing down his state’s spendthrift Democratic-controlled legislature. First he vetoed a $1-billion tax increase that was to be used to fund higher spending, then exercised a line-item budgetary veto on a redundant health subsidy that was spiraling out of control, and lastly cut direct spending by nearly $700 million, balancing the state budget.

Like Klein, West and their colleagues in the ’90s, Pawlenty concluded that his state’s financial future and his own political life depended on solving a fiscal crisis, not just delaying the reckoning. When times are hard, most individuals and families manage to live with less, rather than steal – why can’t a state government? Pawlenty is a lot more popular than Ed Stelmach.

Pawlenty wields a few weapons not available to all U.S. governors, such as a line-item veto and a balanced-budget provision in the state constitution. But his powers are more limited than those of any Canadian premier with a legislative majority. Premiers can craft, refine and pass almost any budget they want – if they have the will. That’s where today’s Alberta government comes up short. There are no more hard men. Ted Morton, the alleged right-wing barbarian who three years ago gate-crashed the Conservative castle, has melted into a centrist pussycat.
I couldn’t locate West (he retired from politics in 2001 and will be 67 in May) to ask him to recall how he got the job done 15 years ago – or what he might think of his successors’ work.

There’s a three-way relationship among elected politicians, government departments and taxpayers. Most politicians see their job as shovelling ever-greater volumes of funds into the never-satisfied maws of the public sector and its advocates, while finding artful ways to separate taxpayers from their money. Like a soft-headed vet, they opt for limitless compassion and quickly forget about the taxpayer. They find themselves liked, or at least tolerated, by more of the people they deal with day-to-day – bureaucrats, public-sector union officials, opposition politicians, news media and the endless parade of cause-pleaders. Even if they’re quietly despised by the folks who elected them.

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By George Koch