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Bob Rae

Bob Rae

BOB RAE

2014’s lessons for leaders: Don’t make assumptions, do make hard decisions Add to ...

This last few weeks should make anyone leery of predicting what next year will bring. Few would have predicted that deteriorating race relations would grip the United States, or that oil prices would collapse because of a supply war between sheikhs and frackers, or that a political party in Alberta that seemed poised to to win power just two years ago would self-destruct and all but dissolve with its own leader crossing the floor.

Life has a way of lifting you by the lapels and giving you a good shake. Stuff happens, and when it does, it can throw all the steady paths predicted by pundits, pollsters and economic forecasters into the trash heap. Business leaders who like to think of themselves as rational thinkers spend lots of money listening to experts telling them what is bound to happen, and it rarely does.

Finance Minister Jim Flaherty, whose death came far too soon, brought forward an economic statement in the late fall of 2008 that should have led to the downfall of Prime Minister Stephen Harper’s government – he drastically underestimated both the depth of the economic crisis taking place around him and the risks of minority government. The forecasts in that document never happened, and a balanced budget went to a $55-billion deficit in the wink of an eye. He kept his job and lived to see a surplus on the horizon, but again for reasons that lay beyond the power of prediction.

The “oil experts” and the “consensus of bank economists” have been assuring policy-makers for the past several years that oil prices would stay high for the present and the future, because demand would stay strong with Asian economies booming. Changes on the supply side, and a game of chicken between Middle Eastern and North American producers, have lowered prices by half. It’s possible that when this game of “who blinks first” is over, or some other political crisis unfolds, prices will go back up – but who knows?

Canadians are fixated on who the winners and losers of this game will be in Canada, but we need to lift our heads a bit. Russia’s falling ruble and the debt crisis of its elites and their companies have rightly grabbed headlines. But a couple of countries, notably Nigeria and Venezuela, are now in political crisis, and their very stability is at risk in the days ahead.

One of the implications of the 2008 world economic crisis is that regional and world institutions have much less room to manoeuvre and help sort things out. If a Greek election produces another mess for the European Union and the International Monetary Fund, or oil-dependent economies collapse with major political consequences, it will be harder for those agencies to do as much as is required. Stability doesn’t come cheap.

I am far from a doom-and-gloom prognosticator. But a healthy dose of reality and skepticism is always a good idea. In a useful piece of advice, Rudyard Kipling reminded us that triumph and disaster are both imposters. People draw too many conclusions from current trends. They fail to understand that those trends can change. And that above all, they forget that events can get in the way. A century after the First World War, whose impacts we still feel today, it’s important to remember no one really predicted its outbreak, its duration, its inhumanity, its true cost, its ending or its consequences.

One clear lesson is for leaders everywhere to learn the importance of listening and engagement. The path to resolution of even the thorniest of problems – Israel-Palestine, Russia-Ukraine, Iran, and so many other global touch points – involves less rhetoric and bluster and a greater capacity to understand underlying interests and grievances. At the same time, thug-like aggression and murder need a clear, unflinching response. Engagement should never mean appeasement.

Both Canada and the United States have been unable to shake the costs and consequences of their histories, and the implications they continue to have for the very soul of their countries. The struggle of the indigenous and minority populations in both countries – and elsewhere around the world – is far from over. When Canada’s Truth and Reconciliation Commission reports in June, 2015, the challenge ahead will become even clearer. Even Mr. Harper’s radar screen will be affected.

All of which speaks to the need for some humility, particularly in the ranks of the pundits, in whose ranks I find myself from time to time. But this is also a time for courage, because politics needs to stretch the art of the possible. Telling majorities what they want to hear will get us nowhere.

If governments were to price carbon and other forms of pollution properly, they would be less vulnerable to oil and other shocks. They would also be encouraging a shift to other ways to produce energy. For another example, Toronto’s city council needs to learn from other major cities that you need to price congestion to bring it under control. Use your high approval ratings to do difficult things, rather than to make popular announcements. I don’t expect this to happen, but I feel better having said it. Differential fees, taxes and prices are all necessary, as are more buses and trains and new routes to end the long drought in transit construction that started in the autumn of 1995.

None of the three big national parties should assume anything about the next year or the next election. Statistically, none of them is out of the game. My own experience of winning office after starting the election in distant third place leads me to discount completely any pollster who says that “so-and-so can’t win.” If a week in politics is a long time, 10 months is a lifetime. One can always hope that each party will explain why it should win in positive terms, and what difficult choices will have to be made to ensure a stronger, fairer, more prosperous country, but I don’t expect that to happen. It’s more likely to be a brutal few months.

Good public policy is what happens when all the alternatives have been exhausted. We’re getting closer to that point.

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