Monday, 28 November 2011

Policy Solutions - Vaz Oxlade for Finance Minister

Another Friday, another instance of Canadian Finance Minister Jim Flaherty running up to the first podium he finds to pretend he's a doctor desperately and single-handedly trying to cure the ailing global economy's woes.

He said Europe is in a dire situation and needs to take urgent action. What a surprise! How original - only the deep intellect of a bay street lawyer could have produced that statement. Actually, meaningless and par for the course. Conservative minister talking points are always based on soundbites they think people want to hear. Never mind reality or worse, unpleasant truths. Let's pretend we're the stern moral compass of a lazy, disorganized, bureaucratized European continent and people will eat it up. Forget that Canada is hardly in a position to talk or that there is nothing to be done at this point - indignation makes the minister look like he's working really hard, or something. Well, Jim, don't apply for that stress leave just yet because I'm going to make your job, this international fake superhero of finance part of it anyway, easier for you. Bailout or no bailout, the whole European continent is on the fast track to DEE-FAULT, and you would think a guy who takes himself for a serious economist would talk to more real serious economists, who are by now all pretty much in agreement on that.

A little more complicated is the domestic front. Jim said when lecturing Europe: "individual households don't live like this." He must not have been referring to Canada.

Jim, meet Gail. Gail, meet Jim.

Gail Vaz-Oxlade is the host of tvs popular "Till Debt Do us Part", where she educates hopelessly indebted households on the ways to get out of the stupendous financial holes the Canadian financial system is only too happy to aid and abet their falling into. Pay down debt, cut expenses, make tough decisions, start saving. She has plenty of content to draw from week in and week out because this is a huge problem in Canada. All the smug idiots in the Conservative cabinet who love bragging about the "stability" and "strength" of Canada's economy continue to ignore the record household debt, record debt to asset ratios, and record bubble real estate prices in Canada, all of which have passed 2006 pre-bubble U.S. levels. Maybe if Jim sat down with Gail more often instead of the CEOs of the financial institutions fuelling this debt maelstrom, he would think twice before making the illusory common sense proclamation that "households don't live like this."

I don't want to use Ms. Vaz-Oxlade as a prop in my column. I greatly respect the work she's done over the years, especially publishing The Canadian Woman's Guide To Divorce in the early 1990s, a time when our society had considerably less resources for divorced women and considerably more patriarchal baggage than it does today. I mention her work because it is comprehensive. Staying financially healthy might seem simple when you consider it just a matter of not letting more funds go out than you take in, but as any student of economics will tell you, there is much more to it than that. Trade-offs must be made and priorities must be set because, as the golden rule of economics states, there is no such thing as a free lunch. There used to be financial barriers to entry around BMWs and home theatres. There still are, but our society of late has evolved from the free lunch doctrine to one resembling "You can have everything you want at the all you can eat buffet and more at Prime minus a quarter". Enter the market for a show like Till Debt Do Us Part.

Which is why I implore Jim to quit his weekly media bellyache over Europe and maybe do his job and focus on his own government's finances instead. He is presiding over the same financial wreckage at a nation-state level as one of these basket case couples on the show does at the household level. Not only are there not plans to cut Ottawa's current fiscal deficit, the minister is likely unaware and certainly uninterested in the infrastructure defecit, which is that Canada's infrastructure needs something like $80 billion in upgrades in the next five years just to stay functioning as is, plus $150 billion in upgrades to properly service the futurepopulation. There's a great interactive map on the CBC about this here. Under this government we will watch this crumble and do nothing, because as Jim Flaherty's stated in the past, "Ottawa is not in the business of fixing potholes." Even though Ottawa collects the majority of our taxes, and every province and city is broke.

About those provinces and cities, their debt plus the Federal government debt puts us, the Canadian nation, at a higher level of indebtedness than these countries, like Italy, Greece and America, that Jim takes it upon himself to lecture.

The advantage of having Gail for finance minister over Jim is she does two things he won't do - she looks at all money coming in and going out and she makes people plan for the future. With the revelation that this government is indebted like all the others and the minister saying himself in his speech that this is no time for "risky" and "dangerous" new spending, why is the government spending $33 billion on warships, $35 billion on fighter jets, $2-5 billion to start on new prisons and mandatory minimum sentencing, plus tens of millions on new MPs, and who knows what else on various private-sector subsidizing boondoggles and endless "Economic Action Plan" pork-barrel scams (Read of the week - Andrew Coyne's hilarious column on innovation and "grantrepreneurs"). The finance Minister doesn't mention these things, because as usual he is more interested in being a financial maven poser than talking about his own government's record, a government that is hell-bent on driving this country to financial ruin and ignoring any facts or reality that get in its way. Individuals have Gail Vaz-Oxlade and thousands of not-famous people like her to pull their heads from the sand - but who will perform this task for our delusional minister?

Saturday, 19 November 2011

Culture Club - Are things as bad as they say they are in Italy and Greece?

They've been dominating the front page and business section for several weeks. So let's start out today with some conventional wisdom on the two Southern European Mediterranean countries called Italy and Greece.

You may know by now that their birthrates are in the bottom five of all countries worldwide (both hovering around 1.2, well below the 2.1 population replacement rate). You may know that their debt to GDP ratios are among the highest of all nations on earth. You may know that their borrowing costs and public finances have become catastrophic to the point of causing two elected prime ministers to resign and be replaced by unelected, European financial-industry technocrats in the past week. Yet even if you do know all this, it remains unclear how these leaders will right their nations' fiscal ships at the pace needed to restore "confidence" in the euro zone. The governments of these places are rife with corruption, collect few taxes, and continue to fund expensive state run apparatuses (military, health care, etc). Unsustainable spending and social programs in both places have wrought havoc on the euro zone, made its common currency vulnerable to collapse and threatened to bring down the whole global economy, but the structural flaws I mentioned will still never be called into question. Rather, even more debt will be piled on by the IMF and other parasitic institutions under the ridiculous pretext that these economies are going to rev up and fire all cylinders soon.

Whether you were aware of the numbers or not, they are all national statistics and mainstream media facts which you could have gleaned from looking at the headlines and reading news articles over the past few weeks. And the phenomena are just as applicable, for the most part, to Japan. The ugly demographic and economic pictures don't tell the whole story, though. What do shitty economies actually mean to the people of these nations?

If you're young and urban, it may very well mean voting with your feet, as millions of Italians and Greeks have done for decades. The descendants of these folks make up a large part of North American society now, including yours truly. This would be nothing new for the wanting-to-be-upwardly mobile, bourgeois section of these societies; there is scarcely an elite (doctor, lawyer, press, finance, economist) within them who has not received all or part of his education at some prestigious, English-speaking institution abroad (I know immigrants used to be poor with that dime a dozen "Came here with $20" story, but immigration for poor people effectively ended in North America decades ago). Take the highest level example: deposed Greek prime minister Papandreou and opposition figure were former roommates at an Ivy League university.
I remember travelling in London a few years ago and meeting an upstanding young Greek man under 30 who was doing his master's or PhD, I can't recall, but what I do recall is how incredulous he was when I wondered aloud why he might not study in his country or, god forbid, his language. The point is that these countries have suffered a brain drain amongst their well-heeled who, for many reasons, prefer the anglo-saxon way of doing things to their native lands'. Unable to reconcile the two, they have left and continue to leave for the shores of North America, UK and Australia.

Other people have stayed back. And I wouldn't worry about most of them, despite their greying character. I heard two things in the last week that made me remember how incompatible modern, digital, up to the minute news driven society and the flashy, skyscraper, benz and suit character of modern ponzi scheme capitalism are with the idyllic mediterranean countryside. In the comments of one article a gentleman remarked how he recently ate at a Greek restaurant in North America and asked the Greek waiter, as a joke, when he was going back to Greece. The waiter surprised him by explaining his parents had a house, a garden, land, goats, and made everything from wine to cheese themselves, and whatever happens in Athens doesn't mean a damn thing to them. I'm sure they used drachmas to purchase what they needed for decades and wouldn't bat an eye at using them again. Such people generally don't have time for the hyperbole and noise of 21st century debt-bubble capitalism on steroids and the 24 hour tripe cycle on the interwebs.

As I'm sure it is for the good people of Sardinia as well. I was reading in a publication last weekend (a circular for Italian Canadians living in the GTA, actually) that this island, the 2nd biggest in the Italian territory, is one of the rare "blue zones" in the world. This designation comes from the UN which monitors population statistics and health indicators and gives the "blue zone" label to people such as the Sardinians who live to 100 much more frequently than average. Chalk it up to moderation, a healthy localised economy, and the olive oil, low meat mediterranean diet. I'm sure more heart attacks about Italy's economic situation have occurred on trading floors and in front of computers and TVs around the world than in Sardinia.

So there's today's bit of unconventional wisdom. Instead of clinging to the mainstream media's depiction of these countries as basket cases and economic clowns, maybe you should go visit them and see what really goes on outside the capitals. You will find millions of people who are opted out of a destructive system on many levels - because they were anchored enough in a healthy and traditional lifestyle that it never made sense for them to buy in to begin with. These are people whose lives will probably not change very much when their countries' economies collapse and the rest of the world is plunged into chaos with defaults, bank runs, and 2012 social unrest that will make Occupy Wall Street look like the Santa Claus Parade.

Thursday, 10 November 2011

The Key To Success - Set a Goal and Stick To It!

As the cold weather sets in, municipal governments lose patience, and mainstream media's fascination turns into scorn, the Occupy Movement risks sliding into total obscurity and irrelevance. Rather than further alienating people with what's become an incoherent grab bag of vague causes and issues (native rights, police brutality, 'inequality', the death of the middle class, climate change) that no one person can act immediately to change anyway, I suggest they regroup. Pick something strong, one thing, that is meaningful, important and resonates with people, and drive the point home relentlessly. Tell everyone else to leave their cardboard, tents, freakshows and urine at home, or start their own protest and take it there. I'm really annoyed with the amateur behaviour and ignorant declarations coming out of certain occupy canada locations. Starting with the fact that church lawns and art galleries are not Wall Street, and your vagrancy of these valuable community properties is proving nothing.

Indian activist Anna Hazare has accomplished something - by going on hunger strike and demanding that the parliament of India create an ombudsman to police runaway political corruption. He has succeeded. Ontario Dairy farmer Michael Schmidt almost died on his hunger strike asking premier Dalton McGuinty to meet with him over the right to drink raw milk, and although the premier didn't budge, Schmidt got his meeting and the chance to eat again. Which means he got closer to an elite figure than any of these rag tag losers ever will, because he had a specific question.

How could you let your movement run away from you and be co-opted by people demanding an official inquiry into 9/11? This is supposed to be about fixing capitalism, which, in case you haven't noticed, is not happening with your "occupation". The fact is that you made a drum circle and failed to make any specific mention of, say, Joe Cassano. In case you didn't know, that's the guy who invented the credit default swap at AIG and who is possibly the biggest financial terrorist of all time. He continues to sit in London on the 400 million dollars he made at that bailed out institution. He has faced no criminal charges which tells me that real wrong that has been done. Injustices like these abound, and there are untold untapped reserves of anger and frustration out there that your movement could have tapped into by calling them out, but you've failed to do so.

Let me give you something to help you the next time around (which will be soon): this resolution I've come up with. It won't solve all the problems you're upset about (and nothing will), but I suspect it will be a good start in taking some of the power back and addressing the issues the more clear-headed among you might be trying to affect change on.

"Let it be resolved that we are living in a free-market, capitalist society and as such all firms are fully responsible for the risks and decisions they take. Let it be resolved that we require the constitution of our country to be amended to criminalize and outlaw corporate bailouts in all their forms. Let it be resolved that no corporation, business, or publicly traded entity is "too big to fail" and regular bankruptcy and winding up laws will apply to all failed companies no matter their size or the economic consequences for society. Not another cent of taxpayer capital is to go toward the subsidizing of corporations, as it only delays these institutions' inevitable failures, and the taxpayer sees no dividend or benefit when these corporations are profitable."

Stick to that and see how far you get. And because of the focus and coherence, I'm sure that moderates and hordes of new unemployed will be right there with you. Finally, take the fight straight to the banks this time and demand to meet the CEOs - the small businesses, residents, and thinkers who are increasingly getting caught in the crossfire of this "occupy" stunt don't deserve it, because this isn't about them. Occupy Wall Street was invented by the Vancouver-based Adbusters magazine. How ironic that it is in that same city where the movement has deviated the farthest from its initial innocence and serious intentions - Occupy Vancouver building its reputation on such commendable actions as a tragic drug overdose and the dumping of a bucket of urine on a city worker's head. Next time, lets skip all this sideshow crap and cut straight to the heart of the matter - the bottomless trough of taxpayer capital corporations believe they have unconditional access to - and stay there until we get what we want. This started out with good intentions but has turned into a stupid punk rock looking, big dog wielding, anarchist wannabe dirty hippie street party joke.

Saturday, 5 November 2011

A Call To Arms - An End To Seriousness

Lacking Credentials has been silent for at least a week. And today, the reason for this hit me like a hard punch. I'm not suffering from windswept autumn fatigue or running out of ideas. I just haven't taken to the blogwaves with fire in my belly lately because writing about everything suddenly seems so...redundant.

All my favourite blogs, Zero Hedge, James Howard Kunstler, Charles Hugh Smith's Of Two Minds, Dmitry Orlov - have basically published the same article this week. This is not a criticism of the excellent work by these four men. It is not their fault that there is nothing left to document in the grand scheme of things and there only remains one conclusion to be drawn. The jig is up, and the lies of the establishment are apparent: Western countries' economies cannot grow meaningfully ever again. This is not a bad thing. Greece's default is no longer a matter of if but a matter of when, and when it happens, banks and nations around the world will follow in not becoming insolvent, but admitting that they have been for some time. Nobody knows what that will look like and it will be painful in some ways, no doubt. But it will be an enormous relief, too, to be finally be rid of the pretentions of the elite and this bullshit of theirs we've been sold as the only viable paradigm: Constantly rising economic growth into infinity, fuelled by bottomless resource inputs. All the finance ministers and central bankers in the world can brandish their MBAs from Harvard and pHds from the London School of Economics in my face and call me a know-nothing doom sayer until they faint - they're the ones who think piling extra trillions of public debt on countries that will never register a positive growth quarter again is necessary because "failure is not an option". Sort of sounds like the name of a tour a certain delusional and mentally ill ex-sitcom star went on a few months ago, doesn't it?

So it was settled that I couldn't think of any analysis on the international economic situation worth doing. Yet this same situation was eclipsing many of the trivial subjects I might be otherwise inclined to write about. I asked myself what I could do that was worthwhile? After all, this blog is almost two years old, and I have been flat lined at 350 readers a month and 7 followers for as long as I can remember. What really matters to me? Why am I doing this on here?

I'm doing this because, as I've explained on multiple occasions, there are three levels of government in Canada lousing up their work so bad it literally keeps me up at night. Since they are rewarded by a media that fawns over them and coddles them, acting like their stupid ideas are the wisdom flowing out of infinitely wise oracles, this web log's mission has formed over time from a desire to hold them to account. The mainstream media fails to do this. Whether its the "serious" Globe smacking the wrist of the federal government in every editorial while failing to grasp the irony that they told people to vote for this same federal government in a previous editorial, or the "blue collar" Sun chain's ignoramus Don Cherry-style partisan cheer leading, this country's "fourth estate" is guilty of severe dereliction of duty, and the situation has gone unaddressed for too long.

An example of this was Globe and Mail "political" columnist Jane "TMZ" Taber going on CTV last weekend and getting pretty excited about the possibility of a third Harper prorogue in three years. Since with his majority he is now able to ram through all the idiotic legislation a minority prevented his government from enacting (tough on crime omnibus bill, F-35 fighter jet deal, long gun registry and wheat board abolition, etc.), she seems to agree with him that there is little reason from parliament to sit, at least through the winter before summer vacation starts, once all this legislation is said and done. When the host asked her what legislative priorities his government might want to pursue whenever they got around to getting back to work, Jane giggled giddily and seems almost ecstatic to report (I quote) "Oh, you know, status quo!"

How inspiring. We are in the early years of a new millennium. If this new millennium had to be described in a single phrase, that phrase would probably be "The status quo is not sustainable". And yet, one of our country's top political correspondents who is supposed to be informing us is instead climbing on the highest roof top, jumping for joy, and shouting as loud and proud as she can that our government worships at the altar of the status quo. That is probably when I realized I was going about this all wrong. Do you know why?

Because I know that every day, strongly worded and powerful letters by people much smarter than me are mailed to our political leaders. Well researched, well-written, reasonable advice, opinions, reports, statistics, and facts, compiled by field-leading experts and delivered in reports, recommendations and open letters. Economists, geologists, physicians, professors, former political leaders, and businessmen have all tried to reach the mayor of Toronto and the Prime Minister of Canada, among other arrogant incumbent politicians, without success. They have tried to advise them on transit, on public finance, on resources, on planning for the future, and on economics. What impact has it made? Zero. You might as well be talking to five year olds singing "I'm the king of the castle and you're the dirty rascal".

If the opinions of geniuses, experts, and highly accomplished people mean nothing to our political leadership, what impact can I expect my long, poorly edited, not always easy to read articles to have? I am trying to publicise the same things that the more visible people are admonishing the leaders are, in the name of common sense. But if I'm to go by the actions of these leaders, I am wasting my keystrokes.

Here's the final straw though. John Doyle, Globe TV critic, made me realize some things with his observations of Canada's media-political sphere upon return from visiting his native country, Ireland. Well, actually one thing. That our leaders are not only arrogant, ignorant, belligerent individuals, but that they demand respect and devotion at all times. And we Canadians, highly educated, not-suffering-fools-gladly people, just give it to them!

No more. I have greatly enjoyed working here on Lacking Credentials but my days of serious long essays are over. If I do write them it will be in the form of letters addressed to the people they actually concern on my other neglected blog, No, Lacking Credentials is getting a new style, a new address, makeover, audio and video, and I won't post until I'm back with it as promised. If I can't count on a single channel or media outlet to hold the government to account in a way that doesn't bore people to death with details and beat them over the head with doom, then I am going to be it. We can't rely on corporate media, and better though flawed as it is, I don't think we'll be able to rely on our public broadcaster much longer either. Welcome to Guerrilla media 3.0 heading into 2012 and beyond, Lacking Credentials 3.0 leading (I hope) the way (very soon).