It seems to me that prosperity is just around the corner. Happy times will be here again. Uh, unless that's just Herbert Hoover with a ghastly forced smile on his face.

Since such smiles are the typical attire of the prognosticator I usually stick to predicting the past. But we study history to illuminate the present, so let me throw my head into the ring and explain my qualified optimism.

I think we are going through a massive shakeout. All sorts of things that weren't working and couldn't work are being exposed. What Joseph Schumpeter called "creative destruction" is upon us and while it's regrettably blowing close to gale force, the destruction of failed arrangements is essential to the creation of successful ones.

Remember, the U.S. "subprime" market didn't become unsustainable last fall. That's when we discovered it was unsustainable and stopped it destroying wealth. Likewise, the financial downturn also didn't make North American automakers unprofitable. It simply drove home that they had long ago ceased to be a rational use of labour and capital. The faster we liquidate counterproductive arrangements the better off we are, by definition.

If this advice seems harsh or unfeeling my short answer is that the worse our economic prospects the more important it is not to waste our dwindling resources on things that destroy value. But my long answer is that things may not be nearly as bad as they seem.

First, let me revisit this notion of gale force creative destruction. I realize it's hard for people who've lost their jobs. It always is. But really, when you look out your window or go to the mall do you see catastrophe? Just because politicians keep saying it's a crisis (and I've said it too) doesn't mean it is one.

Of course we may just be enjoying the false spring of March 1930 and in three years people may be selling apples in the streets. But I think it's far more probable that we're getting a lot of things right at the moment and governments are, as usual, getting them wrong.

What the financial contraction has revealed is that massive improvements in efficiency have rendered a lot of old ways of doing business obsolete and brought storied old firms crashing down, too often onto a soft bed of tax money.

But those same improvements in efficiency are causing a huge upsurge in economic vitality, one that traditional measurements such as GDP can't capture.

I'm no gaga technophile; I'm barely reconciled to fire. But let me especially mention new dedicated "social networking" online systems like Ning (www.ning.com). These things make it far easier to conduct social, economic and charitable activity, and that's hugely wealth enhancing because it cuts costs dramatically. I won't give you an elaborate sales pitch partly because I'm not paid to and partly because I don't have to. But I'm on this bandwagon and you should be too.

I admit I still don't understand the business model of getting rich by giving stuff away online. But when my brain stem panics about us all making a living taking in one another's websites, I remind myself that the switch from manufacturing to services caused alarm as did the switch from farming to manufacturing. Heck, nomads probably said you can't run an economy on people watching plants grow, you gotta go find stuff.

Here's why it will all be OK: When new technologies reduce the effort required to do things, everything gets cheaper.

Remember, in the early days of the microchip there was much talk of a "productivity paradox" as big investments in information technology seemed to reduce growth. Actually we were measuring it wrong. GDP likes effort, not wealth, and gains in efficiency reduce effort. (For more on this topic see my recent article on Mercatornet.com.)

Faced with a decline in GDP, governments are tempted to "save the economy." But the economy isn't a thing you can go tinker with, nor is a "failing industry."

So they actually give money they haven't earned to firms that have proved they can't earn it, which destroys wealth instead of preserving it.

It isn't surprising that governments respond to creative destruction by stifling the creativity to increase the destruction, given their chronic fixation on the visible and short-term over the subtle and long-term.

But it is dangerous.

I actually hope the modern bloated state will be among the things whose failings will be exposed by this bout of creative destruction.

But we must be vigilant against the proven capacity of governments to mess things up with tax hikes, protectionism and frantic misguided subsidies.

Otherwise we'll all end up with sickly smiles again.

[First published in the Ottawa Citizen]

As the financial crisis becomes a general economic crisis it seems that GDP is going out the window. I certainly hope so. No, I’m not some Luddite hoping the economy collapses and we all end up in caves eating wholesome grass and breathing brisk fresh air. I’m hoping we’ll stop using GDP and “the economy” interchangeably and stop now.

Perhaps I sound eccentric. Sure, GDP isn’t perfect, but it’s a pretty good measure of the economy and we need one, right? Wrong. I don’t know if we even need a good measure of the economy. But if we don’t have one, we harm ourselves by thinking we do.

GDP is not the way to measure economic activity. It’s a way, designed by certain people for certain purposes a long time ago, and those purposes were fatally flawed. I don’t want to get so technical that I lose not just readers but also my own way. But what GDP measures, fairly accurately but for Keynesian purposes and in Keynesian ways, is how hard we work commercially to create wealth. It is, effectively, a commercial labour theory of value, and thus worthless.

In an economy where nothing much changes, it would be reasonable to use GDP as a proxy for “how we’re doing economically”. Whatever the failings of GDP, they would remain constant relative to the actual creation of wealth so if GDP went up total wealth probably would too. But a defining characteristic of modern economies is that lots of things change constantly. And when they do, the defects of GDP become overpowering. Which is especially misleading at precisely those times, like the present, when we are urgently trying to determine how much things are changing and how.

Let me illustrate a few really major holes in GDP. These are not technical problems that can be patched with yet more cleverness but defects in the concept. GDP actually measures what Keynesians wanted to measure quite well. It’s just that, to quote John Rhys-Davies’ character in Raiders of the Lost Ark, “they’re digging in the wrong place.”

Speaking of digging, if I start growing my own tomatoes it may be good for my soul, my health and the environment. But if it also saves me money, if I increase my spending on fertilizer, pruning forks, gloves and so on less than I cut my spending on commercial tomatoes, GDP will drop. What is that a measure of?

Environmentalists have long complained that GDP fails to account for environmental damage. Most of them got the technical problem dead wrong; GDP only misses the harm done by pollution because property rights to air and water are not assigned so damaging them is free to individuals. That we could fix, to the horror of these same environmentalists, by privatizing them, so that I could sue anyone dumping sludge into the lake in front of my cottage as readily as if they’d put it on my lawn.

To see where the greens almost tripped over a major issue, take back my library book. Please. It’s overdue. But I digress. If I read a book from the library instead of buying it, I don’t spend the purchase price, paper and glue for an extra copy are not bought by the publisher, it is not shipped (or is sent within Ottawa instead of to it), bookstore employees don’t get paid and so on. From the point of view of GDP, it’s a dead loss and I am an antisocial wretch. But why? I’ve reduced my environmental footprint, saved money, and helped strengthen an important “civil society” institution especially useful to the poor. Yet GDP cannot like a library book.

Because GDP measures commercial effort, anything that increases efficiency registers as a loss. And again, this is no mere correctible technical defect. John Maynard Keynes really believed it would be good for the economy if the government buried old bank notes in bottles and then people went and dug them up. So does GDP... provided, of course, that buriers and diggers-up are paid wages.

GDP can reconcile itself to increased efficiency, with a non-trivial delay, if I go out and spend the money I save on library books or home-grown tomatoes. But as the Federal Reserve Bank of Dallas noted in its 1993 Annual Report, “By far, the largest omission in measured GNP is leisure”. If increased efficiency lets us spend more time with the kids, help the needy, improve our minds or cultivate a hobby, it’s bad for “the economy”. And if everything gets easier, which is another way of saying “if there’s technological progress,” GDP makes growth look slower precisely because it’s faster. Indeed, if manna were to rain down from heaven for any length of time, GDP would fall drastically, prompting calls for government stimulus packages or perhaps a “war on manna.”

GDP is either blind to qualitative change or hostile to it, clearly a major defect in a modern economy. Which is why I save for last the example that the GDP of China was larger than that of Britain until the late 19th century. Yet any fool (even one with a PhD) can see that Britons could muster far more wealth in 1880, individually, for social purposes and in pursuit of political ends. Britain was colonizing China, not the other way around.

The bewilderment or enmity that GDP exhibits toward efficiency is especially dangerous in times of tumultuous change. It produces bad measurements and bad reasoning that combine to generate bad policy. We may well be living through a massive liquidation of unsound institutions and bad habits. Yet an Ottawa Citizen story early in March bore the telling secondary headline “GDP snapshot shows we are learning to save again — not the prescription for restarting the economy”. The story admitted that Canadians were rational to spend less given recent shocks to their net worth. I would add that such conduct is both prudent and dignified given the absurd recent tendency of people to live beyond their means in societies wealthy beyond the dreams of Bourbon kings. Yet in the funhouse mirror of GDP, it becomes an obstacle to “restarting the economy” which isn’t even a machine that could have “stopped” anyway.

If you must have numbers, ydon’t tinker with things like the UN Human Development Index. It measures only life expectancy, time spent in school and per capita income. You wouldn’t write an obituary based on those three measures, praising the man who spent six decades at graduate school over the one who laid down his life for a friend. So don’t use it to categorize a country.

You might be better off using unemployment adjusted for labor market participation, or total profits. But you might not. I said near the beginning that we might not want a number that measures “the economy.” Milton Friedman often described visiting Hong Kong in 1963, praising Financial Secretary John Cowperthwaite’s laissez-faire policies and asking why he didn’t collect data to publicize their success, and Cowperthwaite replying that if he collected numbers people could insist that something be done about them while now they could only look out the window and see that business was booming.

In retirement, Cowperthwaite advised poor countries to abolish their offices of national statistics. In that spirit, I liked the impressionistic measure cited in 2004 by the CEO of Wal-Mart, that so-called “displaced merchandise,” that is, things people put into their shopping baskets then take back out and leave elsewhere in the store, is a really good indicator that consumers are hurting. But whatever you do, don’t measure GDP and then demand that the government do something about it. Especially not now.

No sir. Open the window, look around, and while you’re there, chuck GDP out through it.

[First published on Mercatornet.com]

Back in 1866, opposing a bill to reform Britain's parliament, Benjamin Disraeli said while it was important to adapt to circumstances, "the original scheme of the Plantagenets may always guide us." Such a remark would get him laughed off Parliament Hill today if anyone could even figure out what he was talking about. Maybe it shouldn't.

For one thing, just one year later Canada acquired a Constitution "similar in Principle to that of the United Kingdom," written by men on both sides of the Atlantic who talked and thought that way. So if you agree that our political system doesn't now work the way the picture on the box suggests, it might be worth going back and rereading the instructions.

We could start with another criticism of the 1866 reform bill, by one Robert Lowe, who said that the key question in an electoral system was not the person or riding "that obtains the power of sending Members to Parliament, but that Parliament itself in which those members are to sit" and that to talk of giving the vote to people "because we think them deserving ... is in my opinion to mistake the means for the end."

This proposition comes across today not as wrong but as heretical.

But why?

Most of us would not accept the claim in Edward Bellamy's best-selling 1888 utopian novel Looking Backward that a man should have an equal share in the economic system "because he is a man." Yet that is exactly our view of politics, as if it were more important to vote than to eat.

I am not suggesting that we let the government go around taking away individual people's right to vote. But to avoid some pitfalls of the current system and resist bogus reform proposals, we do need to open our minds to other ways of understanding the nature of voting than the one we now take for granted. Like Disraeli's 1866 argument that MPs "do not represent an indiscriminate multitude, but a body of men endowed with privileges which they enjoy, but also intrusted with duties which they must perform."

Privileges? Duties? What's this stuff? It may be startling but it was no chance utterance. Disraeli frequently spoke of popular privileges and explicitly contrasted them with the democratic rights he supposed to exist in America, for instance also asserting in 1866 that "this House should remain a House of Commons, and not become a House of the People, the House of a mere indiscriminate multitude, devoid of any definite character, and not responsible to society, and having no duties and no privileges under the Constitution."

Humour me while I explain how this line of reasoning might apply to proposals to adopt a system of proportional representation. We often hear that "PR" would give us a Parliament more reflective of Canadian society. The proposition is debatable on technical grounds, since certain personality types will be more attracted to politics under any system. But it is also more fundamentally debatable, because surely our first concern is to get a Parliament that acts fairly and wisely.

That a Parliament broadly reflective of the populace is likely to be more fair-minded than one composed of aspiring politicians I think quite reasonable. And while such a body is likely to be lacking in some of the technical skills required to legislate wisely, legislatures full of politicians frequently exhibit similar infirmities.

What really worries me is that PR is likely to produce a Parliament that has grave difficulty acting at all and only manages to legislate on the basis of vulgar political expediency. The need to assemble coalitions after rather than before an election, and between parties rather than within them, is fatal to the coherent development of a legislative program. And it makes it harder to experiment with dramatic changes of policy direction when circumstances change.

If voting is a right, allowing me to validate my being and admire myself in the mirror of politics, this objection is irrelevant.

But if Robert Lowe is right that the point is to return Parliaments well-suited to the task of legislating, including holding the executive branch to account, then PR is irrelevant, because it answers the wrong question.

The right question is how we get back to regarding voting as a privilege that carries a social duty to cast intelligent, responsible, public-spirited ballots, not a right allowing us to howl, grab or preen.

Yes, it goes against the temper of the times. But is there not at least superficial plausibility to the claim that the "fairer" our electoral methods have become, in our terms, the shabbier the resulting politics?

If we do not miss Gladstone, Disraeli or Robert Lowe today, it is essentially because we never heard of them. It's no laughing matter.

[First published in the Ottawa Citizen]

Does anybody remember policy? We used to spend a lot of time not discussing it. But today it seems we've just lost interest.

No really. In the glory days of the 1980s and early 1990s we actually bickered about things like free trade and tax reform.

We weren't discussing policy; rather, we hurled insults with some fairly clear connection to the substantive matters we were avoiding. Whereas today policy ideas seem to wander about in an intellectual Tartarus, barely recognizable shades of their former selves, without memory or purpose, gibbering inanely.

Consider social programs. Back in the day we thought about pondering their shortcomings, possibly even mentioning aloud that they might be making people's problems worse not better. Which I mention not from nostalgia, but because the Institute of Marriage and the Family Canada just brought a very important speaker to Ottawa to try to raise the topic.

It was Iain Duncan Smith, who used to lead the British Conservative Party and is now Chairman of the Centre for Social Justice. And as he explained to me in an interview on Wednesday, the Centre for Social Justice has had considerable impact in Britain because it has produced a mountain of research on what's wrong (including the massive, frightening 2006 study Breakdown Britain) and also on what could be done better. In the process, Duncan Smith and his colleagues have silenced the more abusive among their critics by piling this research on the table and asking "What do you know that we don't?"

If you're at all interested in the topic I recommend their website (www.centreforsocialjustice.org.uk). But be very sure you type it correctly because their idea of "social justice" is not like a lot of other people's, in that it is well-informed rather than shrill.

Duncan Smith explained to me that his centre's approach is to survey existing research and then do its own, both statistical analysis and one-on-one interviews with actual humans caught up in various social pathologies from addiction to debt to crime. As a result, Duncan Smith is able to make a convincing case that serious problems really do exist in identifiable forms, including the harmful effects of family breakup on children.

Will anyone here care? I'm inclined to doubt it. If Bill Clinton were in town bloviating about building a better world, the press would be all over it and the smart set would be lining up to shell out ticket fees that would embarrass a rock band. But when the Institute of Marriage and the Family Canada brings in Duncan Smith and other experts to address a conference, no one even bothers shouting "Booooring."

True, John Ivison interviewed Duncan Smith then wrote a fair and intelligent piece in the National Post. But it focused on whether the Centre for Social Justice approach would work politically for Stephen Harper, which strikes me as somewhat less important than whether it would work for the poor.

To define a problem accurately is not to dictate a solution, of course. And frankly I find some of the CSJ suggestions damp while others are positively soggy. (Sorry, that may be a British joke, because over there Duncan Smith is what they call a "wet," roughly corresponding to a Red Tory in Canada.)

When I spoke to him in Ottawa this week, he made some very good points about the existing welfare state asking the wrong questions from the wrong angle, starting with a top-down "What can the government do?" instead of a bottom-up "What's really wrong with people's lives?"

Too often existing programs address problems in isolation, from unemployment to alcoholism to single parenting to poverty, that usually form a tangled mess in actual individual lives. But he put forward solutions I find quite moist, about the state funding private agencies that have shown themselves to be good at preventing rather than patching up problems at a personal, human level.

I think Duncan Smith and his colleagues underestimate the structural tendency of government funding and regulation to create perverse incentives for any people and any private agencies that become dependent on state help. But I'm pretty sure his response to that criticism would be to put a mountain of research in front of me about places where this approach is working in various countries. Then we could have a discussion.

We might even have a debate. But it would be courteous, constructive, intelligent (on his part, anyway) and no one would turn purple, bluster, jab fingers at anyone, yell, make barnyard noises or substitute abuse for analysis.

Unfortunately it's very hard to see how politicians could be drawn into such a conversation. If you don't agree, watch Question Period and then tell me what you know that I don't.

[First published in the Ottawa Citizen]

Thomas Jefferson famously said "Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter." If he were alive today, I think he'd look at the troubled state of the industry and say, "Is that thing a newspaper?"

I don't mean that snidely. It's easy to be snide about modern newspapers, and governments, and indeed about Jefferson, who in turn was very snide about the defects of journalism in his time. But I think his initial reaction to today's newspapers would be an expression of bafflement at the format.

He might be startled by the vulgarity and puzzled at the mildness of the political invective.

But what would really surprise him would be all the advertisements. Here my colleagues on the business side sob "What ads?" And of course I know about the relentless, technologically driven decline in ad revenue. That's why I invoke Jefferson, to insist that advertising is not as central to newspapers as we might think.

Recently in these pages David Warren warned that "The future of newspapers cannot be assured by making them any more frivolous or sensational ... The cost-cutting should be aimed at eliminating the frivolous, and concentrating instead on the classical function: fearless reportage and truth-seeking in a world that has always been too full of lies." Indeed. So forget truth and honour while I prate about technology.

I'm not some dizzy pseudo-conservative who thinks economic progress can forgive our trespasses or deliver us from evil. Rather, like Marshall McLuhan, I study modernity to avoid being run over by it. And in the process I note that technological change created the modern newspaper so it is unreasonable to complain, and obtuse to deny, that it is contributing to its decline.

Late 19th-century "convergence" of rotary presses, wood pulp paper and better graphics made cheap magazines and newspapers possible just when corporations wanted publicity for their newly packaged and branded products. Centralized production for a mass audience, supported by advertising, made such good economic sense that the United States went from fewer than 600 daily papers in 1870 to more than 2,500 by 1909, and circulation rose to more than 24 million. (It also worked immediately for radio in the 1920s.)

Unfortunately the microchip came along. Then some darn fool invented the Internet (I think it was Al Gore) and wretched entrepreneurs promptly created countless new ways to interact socially, politically and commercially. Including connecting buyers with sellers. That's what's doing us in on the advertising revenue side and regrettably the Internet is bigger than we are and we can't make it go away by shouting or banging pans.

So we need to rethink our business model. To be blunt, a newspaper is not essentially a bunch of ads with some facts and opinions jammed into the "news hole" because without that guff there won't be readers to look at the ads. It's a business that gathers and filters information, then writes about it for literate, engaged people. I don't resent that advertisements have paid my wages. But those days are going fast, and we must start raising money primarily from readers.

Or rather, go back to doing so. And why not? Newspapers flourished economically and culturally on that basis in the 18th and 19th centuries and can do it again in the 21st.

Here the Internet is friend as well as foe. Electronic delivery saves huge sums on paper, ink, machinery, maintenance, heating, property taxes, trucks, gasoline and labour. And clever business people keep improving the on-screen reading experience.

Of course we must get the content right. And if we do, we have a big advantage over bloggers. G.K. Chesterton warned that cities are parochial because their size and diversity let us consort only with people like ourselves. The Internet makes this problem far worse and a good newspaper is one way of combating it. (A bad newspaper, by contrast, is a wasteful way of repackaging elite prejudices about trivia, and if we go broke doing that we have only ourselves to blame.)

Here I am not chasing the will-o-the-wisp of "objective" coverage. Old-tyme newspapers tended to be organs of opinion, which is fine by me. But done right, they offered informed opinion to intelligent readers willing to pay to be made to think rather than merely emote.

That's the essence of a newspaper: the news, not the paper and certainly not the ads. And obviously no one said the job would be easy. But hey, the modern decentralized economy brought back the 18th-century coffee house.

Why not the newspapers they used to read there, too?

[First published in the Ottawa Citizen]

It is bizarre and confusing that David Ahenakew was just quietly found not guilty of hate speech. If his venomous ravings weren't hate speech, what is? And how is anyone meant to understand our laws or court system now?

In case you missed it, a provincial court just let him off, following a 2005 conviction and successful appeal, because his, although his statements "about Jewish people were revolting, disgusting and untrue," he lacked the intent to spread hate -- and you need to have intent for the remarks to be criminal. Now this is foolishness because, as Lorne Gunter wrote in the National Post, Ahenakew repeatedly spewed filth in public settings, even after a theatrical apology, including during his first trial.

I trust you remember the gist of his original 2002 outburst. For one hesitates to repeat his various revolting statements, even when they are well known and even though there now seems to be no legal jeopardy in making them enthusiastically, let alone quoting them critically.

Actually I take that last bit back. Our courts are by now in the habit of delivering astounding judgments and I can well imagine them convicting someone, especially a white person, for saying precisely what David Ahenakew said about any minority except, possibly, Jews. I just don't understand why the legal system does what it does.

The authorities seem equally lost. The Crown prosecutor in the case says he hasn't yet decided whether to appeal the acquittal, but either way "The fact that these comments were noted to be disgusting, untrue and revolting -- that's why these cases must be prosecuted." Which is compound foolishness, implying as it does first that it is the job of the state rather than citizens to blow raspberries at jerks and, second, that it is not the job of the state to create clear rules only against what it considers significant acts of force and fraud, and then enforce those rules firmly, consistently and impartially.

Ahenakew clearly is a jerk. His response to the verdict was "Thank God it's over" but "I'm still that same guy. I'm too damn old to change." So he's not merely unrepentant, he can't even stop swearing in public.

Yet part of me wants to support this verdict, because I am opposed to hate speech laws. Now, now, don't go moving away from me there on the bench. I'm not defending the content of offensive speech.

Rather, I am very close to a free speech absolutist because, as I've said before, John Stuart Mill nailed it in On Liberty. Free speech helps truth defeat error, first because a heretical opinion may turn out to be correct, and second because when a remark is both offensive and wrong, its open expression leads to vigorous criticism and denunciation. Moreover, hateful speech is the rattle not the fangs and usefully warns us that the latter are present.

For instance, news stories at the time of his original outburst made it clear that David Ahenakew's associates knew about his views of Jews, and other minorities. Yet they continued to accord him respect and position. Everybody, of every race, needs to be aware of the long years of bigoted mistreatment of aboriginals in Canada. But we also all need to recognize the sometimes unpleasant and unreasonable forms the resulting resentment has taken. And we should all be able to discuss and debate these things without worrying that someone might go to jail for speaking frankly, even if they are both bitter and wrong.

So I wonder where the defenders of hate speech laws stand on this verdict. Do they, like me, suspect that it is an isolated case, and that if one were to suggest the extermination of six million ... No. I can't. A concern for decency and my legal situation alike forbid me to suggest in print, even to illustrate a judicial hypothetical, that some other group deserved to be dealt with as Mr. Ahenakew praised Hitler for treating Jews.

The same concern for decency requires me to ask pointedly, "Is it just Jews?" and "Did he get off because he's not white?" If so, I defy anyone to justify it. But if not, I presume we're going to get rid of our hate speech laws and Star Chamber tribunals persecuting Mark Steyn and Maclean's, Ezra Levant, and sundry Christian eccentrics and loudmouths. Instead we'll just let people argue and, if they choose, disgrace themselves by the arguments they put forward.

Won't we? Or is it now a coin flip whether spewing race hatred gets you a jail sentence? Indeed, if Mr. Ahenakew were tried again would he be convicted? Can anyone say with any confidence what the rules are, or why?

Surely that's an astounding state of affairs, incompatible even with order, let alone good government.

[First published in the Ottawa Citizen]

The kerfuffle over re-enacting the battle of the Plains of Abraham has ended, as expected, with a humiliating sacrifice of our history on the altar of political correctness. Possibly I should be glad they didn't restage it with Montcalm awakened by Jean Chrétien, as the latter famously wished in 1999, in time to win the battle. But unless you're in the Louis XV fan club, I can't understand why you'd want to falsify or deny our past.

The outcome of this squabble has rightly been deplored as a victory for intimidation. I do not think it is an invitation for everyone to play this game and I do not think that anyone should.

But it distresses me that anyone who dared threaten a group of separatists would not merely be arrested and punished, but would in the process probably be given exactly the same stern lecture about peace, order, good government and the Canadian way that this ragtag band of odious sovereigntists were not. Almost as though those in power were in sympathy with their motives.

Sorry. Did I say "almost"? Actually, Premier Jean Charest, though condemning the threats, supported the cancellation of an event he had earlier criticized and pointedly refused to attend. And as Graeme Hamilton noted in the National Post, in announcing the cancellation, National Battlefields Commission president André Juneau said "French people were still worried to see all those red uniforms on the Plains, even if it's 250 years ago."

Excuse me? Were there protests in Paris? Who are these French people of whom you speak? And what exactly is their ethnic or intellectual affiliation with Louis XV and his troops?

My question would, I am sure, be met with contempt in Quebec. Allow me to reciprocate.

As I wrote in 2005, "It was appalling tribalism for Jean Chrétien to wish he'd been there to wake up Montcalm, as if a preference for constitutional monarchy, civil rights and representative institutions over French absolutist tyranny were some grotesque Anglo propensity like boiling vegetables into pasty grey submission."

There are aspects of history that are genuinely painful to recall. For instance, things that are just plain bad. In the U.S. history course I'll be teaching this spring at the University of Ottawa, covering 1865-1945, we must deal frankly with obscene racism including the ghastly reality of lynching. But while we shudder, we do recall it, with moral as well as factual clarity.

A second painful category is events where something good was squandered on behalf of something bad. Thus Americans re-enact Gettysburg without controversy, and even express some nostalgia for the chivalry of the Old South, but only because virtually everyone knows that on the main point, slavery, the Confederacy was utterly and repugnantly wrong.

A third and more problematic category is events in which both sides were in large measure wrong. An example is the enduring and lethal divisions in Ireland over the Battle of the Boyne, where wilfully obtuse Jacobitism faced off against centuries of brutal misrule from London. But no such thing happened when Wolfe met Montcalm.

On the Plains of Abraham the political fate of the northern part of North America was settled. Not the ethnic fate, the political fate. And it was settled in favour of democracy and toleration. The British government promised francophones "langue, loi et foi" and kept their word. Does anyone think a victorious enlarged New France would have respected the English language, Protestant religion, common law or for that matter self-government?

It is not irrelevant here to observe that Quebec separatists don't even like their own history, let alone ours. They repudiate the Church and the deferential society of 19th-century Quebec in theory and in their personal lives. They call even the Duplessis years "the great darkness." Not one of them would advocate the political, cultural, religious or economic arrangements of 18th-century France.

So what's the problem? Are the Montcalmites sorry they missed their date with Robespierre and Madame Guillotine? Do they wish they had stood with Napoléon at Waterloo, and Napoléon III at Sedan? Quebec nationalists didn't exactly rush to the colours when France was threatened in 1914 or needed rescuing after 1940. What's wrong with British self-government, suppression of the slave trade and defeat of Hitler that you'd rather be part of, say, Vichy France?

The past isn't about competing narratives equally valid for various ethnic groups. It's about truth. The truth is that Britain defeated France in the Seven Years' War. And in the process self-government vanquished absolutism on the Plains of Abraham, leaving everyone including Quebecers far better off.

So shut up and put on your wool coat.

[First published in the Ottawa Citizen]

Would you please just stop? Stop panicking, running in circles and throwing money into the bonfire? No, apparently not. Wednesday morning I picked up the paper and found that President Barack Obama had found a way to hurl another $2 trillion into the flames.

OK, he didn't find a way, let alone a reason. His administration just announced its determination to do so anyway.

I realize there is more to life than failed subprime investment vehicles. But much as I would like to write about Michael Ignatieff deciding to let a handful of opposition MPs actually oppose the budget, roughly seven seconds after realizing he couldn't stop them, or the Heart and Stroke Foundation suggestion, trumpeted by the press, that the government should regulate the price of foodstuffs so pasta doesn't cost more in Dawson City than in Barrie, the fact remains that the meltdown of thought and government finances in the United States is of primary importance to all of us now.

And while it's a long way from Canada to Washington, especially these days, if we all raise our voices a little one of us might emit the final "Yawp" that will be heard somewhere outside the House Republican Caucus.

It's increasingly urgent that we do so. I gave a speech on Tuesday on "How not to stimulate the economy" that, with all due respect to the expensive follies of our own governments, gave pride of place to the Americans for the magnitude and hysteria of theirs.

At that point the latest costly weirdness was the Obama administration's delaying revealing its "plan" to spend $350 billion bailing out banks, because refusing to explain specifics would make Congress more willing to fork over another $827 billion to bail out whatever. Oh, and because, the New York Times added, "Details of the new plan, which were still being worked out during the weekend, are sketchy." So it's not really a plan, then, is it? (And by Thursday the other bailout had become $789 billion; who knows what it might be come Monday.)

As it turned out, the details -- revealed Tuesday after Congress voted -- were both sketchy and scary. As the Times then reported, the plan-like object "is far bigger than anyone predicted ... Administration officials committed to flood the financial system with as much as $2.5 trillion..."

I found that ominous, because I already felt that $350 billion was a lot. Where do they think they're going to get all this money?

Well, the Times continued, $350 billion was to come "from the bailout fund and the rest from private investors and the Federal Reserve, making use of its ability to print money."

So part of the Obama's administration's hope is that private firms will step up and purchase enormous quantities of toxic assets with whatever money they have left after huge deficits, high taxes, ominously underfunded social programs and a bewildering succession of hugely expensive amorphous bailout plans.

Unfortunately the private sector has, very belatedly, come to the realization that if it's toxic it's not an asset. It is time governments came to that realization too.

Next they must recognize that a determination to hurl staggering sums about ataxically is very bad for desperately needed private sector confidence. As the Times further observed, "the initial assessment of the plan from the markets, lawmakers and economists was brutally negative, in large part because they expected more details." Fools. Why would we give you details? You might be tempted to think we politicians knew what we were doing.

Or not, since the part of the plan to save the economy by printing money was scarier even than the private purchase of toxic assets or the vagueness and delay.

Last week I wrote: "When the U.S. Congress threatens to apply sweeping 'buy American' requirements to its stimulus package we are driven to stop debating the dubious merits of stimulus packages and start trying to explain free trade instead. From the beginning." And now, it seems, the U.S. administration wants us to stop debating the dubious merits of protectionism and start trying to explain sound money again. From the beginning. As if we hadn't fled Salvation Island, refused to Free Silver and hosed back all manner of other money quackery over the years.

When you increase the money supply, but not the real wealth of a community you don't get richer, you get inflation. Everywhere, always, for obvious reasons. Inflation lies, confuses and confiscates.

We need sound money, balanced budgets and sensible policy. And above all, we need to stop panicking expensively, and instead give people time to collect their wits and start sorting out their investments and personal finances.

[First published in the Ottawa Citizen]