Sometimes They Get It Right

The nature, ideology or beliefs of the people who govern matter less than the actions of those people; and, logically, if such people get it wrong the majority of the time, they sometimes get it right.

John Flaherty's refusal to extend the stimulus deadline exhibits a case of getting it right. Yes, the government dragged its feet getting the stimulus out the door. Anyone but the credulous would suspect that to have been deliberate.

That aside, if the large number of polls are to be believed (sometimes they get it right too), most Canadians other than those working in the construction industry, would have preferred no stimulus - and no bailouts, the worst form of 'stimulus' -, rather than incur a federal deficit.

These Canadians, the majority, would have preferred that the corporations and industries that over-extended themselves in the (correct) belief that governments would cover their asses, should have been allowed to perish if such was their natural course.

The majority of Canadians would have preferred that people who consumed and spent like there was no tomorrow, all the while aware of circumstances strongly suggesting they should make changes, not be rewarded for their gluttony and intentional denial through emergency government programs.

The majority of Canadians think that no person, bank, corporation or industry will correct his/her/its behaviour toward survival if Big Daddy is always there for his/her/its rescue.

Enough is enough. End the stimulus.

Also end the bailouts.

Oops, too late on the bailouts.

Witness yesterday's vote in the House of Commons on the flawed F-35 contract. The gullible will suppose that the motion passed in aid of supporting Quebec's economy. Others will nod knowingly that the true reason for all those Yes votes yesterday was to save the necks of certain Conservative and Bloc politicians.

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UPDATE on Tweeting the HST

From the Globe and Mail today, about the Nova Scotia's NDP government and its recent move to raise the HST to 15 percent:

The Nova Scotia NDP under Darrell Dexter are that rarest of political birds: the tax-and-cut party. They are increasing consumption taxes while cutting civil servants and their perquisites.

Take their budget issued this week, which raises the harmonized sales tax two points to 15 per cent from 13 per cent, while cutting income taxes - particularly for those with very low incomes and in the $93,000 to $150,000 range - and laying off 10 per cent of the civil service.

Like many other provinces, Nova Scotia is moving away from income taxes and toward consumption taxes to stimulate the economy and create jobs.

For HST opponents in the NDP, like federal leader Jack Layton, Ontario leader Andrea Horwath and B.C. leader Carole James, this is a real challenge. One of the two provincial NDP governments are not only in favour of the HST, they are actually increasing it. [my emphasis]

It would seem that when in opposition, the party that favours more public services will oppose any taxes to pay for those services, unless those are corporate taxes. But while in government, leaders of the party haven't the same concern.

I'm fine with NDP governments facing economic realities. My objection is to any political party that opposes merely for the sake of opposing, as the BC NDP did with the carbon tax and is now doing with the proposed HST. If that's the (Carole James') NDP method of redefining itself, then the leadership should think again.

[Cross-posted at economius ridiculous]

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Andrew Coyne's Suggestions for Resurrection of Liberal Party

Andrew Coyne has some excellent suggestions for the Liberal Party of Canada, six in fact, which the party might use to re-brand itself. All have merit, however the following are my particular favourites; I've suggested them all myself on this blog:

• The party of democratic reform. How we nominate candidates, how we choose leaders, how we elect members, how Parliament functions—there’s clearly lots of work to do here. This used to be a Conservative issue. Today, not so much.
• The party of taxpayers. Former Liberal MP Dennis Mills used to campaign vigorously for the flat tax, complete with postcard-sized tax form. A corollary would be reform of EI and social assistance, along the lines recommended by the impeccably Liberal Macdonald commission: a simplified, streamlined universal income guarantee.
• The party of the environment. Yes, that means a carbon tax. It’s a good idea, the only way Canada is ever going to come close to meeting its carbon emissions targets, and everyone knows it. Was it the carbon tax, as myth holds, that doomed the Liberals in the last election? Or was it because it was poorly designed and poorly presented? A better plan, better presented—a real “tax shift,” as implemented by Gordon Campbell’s Liberal government in B.C. - might be a winner.

True, that last.

Although the BC NDP tried to incite electors against the BC carbon tax, James & Company failed abysmally. In fact, the party's disingenuous (to put it politely) Axe the Tax™ campaign was among the reasons the party failed to defeat the Liberals in May 2009. British Columbians essentially agreed that a carbon tax was necessary. While the majority of us dislike the Liberals (again, putting it mildly), we are perfectly capable of separating the person or party from the essential principle.

Will the LPC re-brand itself with any or all of Coyne's suggestions? Not unless it's grown a spine, the lack of which has been evident these past few years.

I strongly recommend that all members of the LPC read Coyne's article in full.

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NFB Film: Marilyn Waring - Who's Counting?

Amazing film. Will stir you up, make you angry and strengthen your resolve to keep fighting for change.

Synopsis:

In this feature-length documentary, Marilyn Waring demystifies the language of economics by defining it as a value system in which all goods and activities are related only to their monetary value. As a result, unpaid work (usually performed by women) is unrecognized while activities that may be environmentally and socially detrimental are deemed productive. To remedy this, Waring maps out an alternative economic vision based on the idea of time as the new currency.

If you haven't already seen it, I strongly recommend you do so.

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"Our" Recovery Unaffected by Rising Loonie

Loonie's surge threatens our recovery, blares the headline, one of many similar headlines topping financial news reports today.

But here's the thing. "Our" recovery obviously doesn't include people whose households fall below the lowest tenth in income.

The higher dollar will, eventually, mean lower prices, once manufacturers and retailers have grudgingly unstuck their sticky prices.

Life at the bottom of the poverty well floats at much the same rate regardless of activities above. The poor haven't investments that can be hurt by the rising loonie, so our recovery will be unaffected, if not slightly improved.

Your recovery may be a different matter, however.

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That's My Kind of Candidate

... one who speaks up for women.

At an all candidates meeting at which both invited Liberals were absent, Refed candidate Linden Shaw puffed out his opinion that "the pendulum of society in a lot of ways has swung the other way and with men’s and women’s issues certainly has swung too far one way.... The feminist lobby has undue sway with our government and a lot of men are being discriminated against in our province and our country."

According to this report,

Shaw’s remarks sparked a response from Green Party candidate [Dirk] Becker during his opening address.

"We've got a long way to go in terms of women's rights and working with men like myself so I can become a better nurturer and a better father and a better community person," said Becker. "We need a system that is much more fair and balanced where men and women are working together harmoniously."

Thank you, Mr. Becker!

No one denies that some men are having it bad these days. But Shaw and his ilk want to blame that on "the feminist lobby"? Feminists are the cause of the current financial mess, which began: i) in the US, ii) due to the sub-prime mortgage idiocy, ii) which was dreamed up by the boys working above the glass ceiling?

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Alternative Currencies on the Rise

This citizen-driven movement has been around for decades, but the adoption and promotion of local currencies to boost local economies is seeing a rising wave of popularity lately. We can thank the global economic "crisis" for that.*

About a dozen communities have local currencies, says Susan Witt, founder of BerkShares in the Berkshires region of western Massachusetts. She expects more to do it.

Under the BerkShares system, a buyer goes to one of 12 banks and pays $95 for $100 worth of BerkShares, which can be spent in 370 local businesses. Since its start in 2006, the system, the largest of its kind in the country, has circulated $2.3 million worth of BerkShares. In Detroit, three business owners are printing $4,500 worth of Detroit Cheers, which they are handing out to customers to spend in one of 12 shops.

During the Depression, local governments, businesses and individuals issued currency, known as scrip, to keep commerce flowing when bank closings led to a cash shortage....

Pittsboro, N.C., is reviving the Plenty, a defunct local currency created in 2002. It is being printed in denominations of $1, $5, $20 and $50. A local bank will exchange $9 for $10 worth of Plenty.

"We're a wiped-out small town in America," says Lyle Estill, president of Piedmont Biofuels, which accepts the Plenty. "This will strengthen the local economy.... The nice thing about the Plenty is that it can't leave here."

If you're an anti-capitalist, then local currencies don't provide a solution. They're still currencies and still place a monetary value on goods and services - which I and the other WISE storytellers object to. But given that capitalism serves the elite (when propped up by corporate welfarism), it's not going anywhere soon.

Therefore, anything that promotes local economies is a good thing, since provincial and federal governments don't give a damn about municipal and regional pain.

People must act to rescue their communities. Creating and promoting a local currency is one step toward addressing that concern.

* Having lived through the 80s and 90s recessions, I do not consider this to be a "crisis." The 80s recession saw interest rates soaring to over 18%, high unemployment and a rapid, deep hit to the housing market. The 90s recession was shorter and not as painful as the 80s recession.

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Jobs vs Mutual Aid: Taking Back the Meaning of 'Work'

In March 2007, Daphne and I did a presentation to the Economic Security Project's Jobs & Justice conference. Given the current crisis due to runaway capitalism the issues we raised couldn't have been more timely, e.g., the auto industry, credentialism, and the valuation of everything and everyone in monetary terms.

We took as our jumping off point the second group of recommendations from the WISE storytellers. In its plea for a return of community, that set of recommendations suggests a different way of looking at, and a revaluation of the activity called ‘work’ whose modern equivalent is ‘having a job’."

Jobs vs. Mutual Aid: Taking back the meaning of "work" in community.

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Which "experts" to believe?

There is the "economist" head of state whose investment advice and understanding of the "fundamentals of the economy" make Joe the Plumber appear intelligent by comparison; and there is the man who heads the Bank of Canada who predicts a turnaround beginning in a few short months.

Then there are those like Yanick Desnoyers, assistant chief economist at National Bank Financial in Montreal who says “the prompt responses of [the] Canadian government and the central bank will induce a recovery, provided the U.S. recession doesn't persist.” Who must be compared to the OECD's chief economist Klaus Schmidt-Hebbel who forecasts the global economic downturn will deepen considerably more than even the IMF predicted last month.

Need we remind ourselves that economics is social psychology dressed up to look like hard science?

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$6B infrastructure package enough to shovel a molehill

It's $232 billion short. That's right, the Harper government's $6 billion infrastructure "stimulus" package is TWO HUNDRED AND THIRTY-TWO BILLION dollars short, when you add together the funds required to repair existing facilities to those needed for future growth.

Jean Crowder is the (NDP) MP for my riding. In an article she writes in one of today's local papers, she cites several problems with the Harper shovels-in-the-ground budget.

Since 2007, three major flaws ensured that the $33 billion Building Canada Fund has flowed very few dollars: an excess of red tape, reliance on private-public partnerships (P3s), and the fund's reimbursement model, rather than upfront funding.

Even if the first two could somehow be managed, the last means that the poorest communities and hence the ones most needing help will be unable to access these "stimulus" dollars.

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IMF: Cons' rosy projections unreal

The International Monetary Fund defies the picture painted yesterday in the Conservatives' budget and that painted earlier in the week by Mark Carney, governor of the Bank of Canada. Au contraire, according to the IMF,

Canada will indeed fall into a recession this year, with a 1.2 per cent contraction similar to that projected by both the Finance Department and Canada's central bank. But the IMF sees Canada's economy remaining in the dumps in 2010 with a 1.6 per cent advance, which barely gets it back to where it was before the slump began.

Finance Minister Jim Flaherty and bank governor Mark Carney have projected a much stronger rebound.

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More Credit to Fix the Credit Problem: How is this logical?

How does making more credit available to consumers for acquiring cars, new gadgets, and new housing fix the inherent problem in the USian economy? Wasn't it the over-availability of credit, without matching REAL dollars, the cause of the current economic breakdown?

The U.S. Federal Reserve and Treasury Department pledged $800 billion US to help boost the flow of lending for mortgages, students, cars, credit cards and small businesses...

Key markets for consumer debt such as credit cards, auto loans and student loans essentially came to a halt in October, said Treasury Secretary Henry Paulson at a news conference announcing the new measures.

"This lack of affordable consumer credit undermines consumer spending [and] as a result weakens our economy," said Paulson.

But it was my understanding that people over-extending themselves was a huge part of the problem. How does MORE credit help?! It doesn't matter that the credit may come at lower rates. It still means acquiring more debt.

Tuesday's action is the latest effort by the government to dissolve a hardening credit clog that has badly hurt the economy... A survey released Nov. 3 by the Federal Reserve found that 60 per cent of banks that responded said they had tightened lending standards on credit card debt.

But isn't this a good thing? For those who favour free markets, isn't this simply a much-needed market correction?

I simply don't understand how making more credit available will fix the inherent problem in the system. To me, this will only make the situation worse, not necessarily in the short term but down the road.

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