Mortgages: Canada vs. US

Here is a bit by Sherry Cooper, chief economist for the Bank of Montreal. From BMO's weekly publication Focus:

Amid concern about a Canadian housing bubble, the question of the financial strength of the major Canadian mortgage insurer, CMHC, has come to the forefront. The bottom line is that CMHC is solid. CMHC has very prudent underwriting standards and the quality of its insured mortgage portfolio is strong. The rate of delinquencies is very low and stable, remaining in line with the levels for Canadian banks—under 0.5%, compared to 8% in the U.S.

CMHC is governed by a Board of Directors and accountable to Parliament through the Minister of Human Resources and Skills Development. As a Crown corporation, CMHC is also required to meet a number of governance and accountability requirements under the Financial Administration Act and the CMHC Act.

CMHC’s capital is funded by its insurance premiums, fees and investment income on the securitization portfolio of the Canada Housing Trust (CHT). It holds capital at a level nearly three times the mandatory minimum level set by OSFI to protect Canadian taxpayers from the costs arising from the risk of mortgage defaults1. CMHC has an internal (self-imposed) capital target of 150% of the OSFI Minimum Capital Test (MCT) and a capital holding target of 200% of MCT. In addition, they maintain additional capital reserves in retained earnings and unearned premiums and fees.

If CMHC is uncomfortable with the terms of a mortgage loan presented by lenders, then mitigating measures, such as an additional down payment or reduced amortization, would be requested—the minimum standard for the latter was officially reduced in Q1 of last year.

CMHC is also subject to stress testing for extreme circumstances similar to the banks. Even under the most extreme tests, with house prices plunging 30% and the economy going into a deep recession (with spiking interest rates—highly unlikely), CMHC comes through without relying on taxpayer funding.

Indeed, historically, CMHC earns an annual budget surplus that reduces the federal government’s outstanding deficit. Over the last decade, CMHC contributed over $14 billion to the government’s coffers.

The difference between Canada and America is very simple: Canadians believe in government and our regulators take their job seriously. In the US the people hate government and taxes and the regulators drank the kool-aid of "deregulation". Simply put: Canada believes in civil society while the US is a Hobbesian struggle of all-against-all.

Crystal Balling America's Future

Blogger The Big Picture has a post that notes that five years ago the Wall Street Journal had an article by Robert Frank clearly identifying the brave new world of "plutonomy" that the US, UK, Canada, and Australia were entering.

Exactly 5 years ago today, the WSJ published this post (Plutonomics) about a rather fascinating study on wealth inequality.

It was written by of all folks, Citigroup global strategist Ajay Kapur. In 2005, Kapur’s research team “came up with the term ‘Plutonomy’ in 2005 to describe a country that is defined by massive income and wealth inequality. According to their definition, the U.S. is a Plutonomy, along with the U.K., Canada and Australia.”

What are the basic characteristics of Plutonomies? According to Kapur:

1. They are all created by “disruptive technology-driven productivity gains, creative financial innovation, capitalist friendly cooperative governments, immigrants…the rule of law and patenting inventions. Often these wealth waves involve great complexity exploited best by the rich and educated of the time.”

2. There is no “average” consumer in Plutonomies. There is only the rich “and everyone else.” The rich account for a disproportionate chunk of the economy, while the non-rich account for “surprisingly small bites of the national pie.” Kapur estimates that in 2005, the richest 20% may have been responsible for 60% of total spending.

3. Plutonomies are likely to grow in the future, fed by capitalist-friendly governments, more technology-driven productivity and globalization.

Kapur also noted the impact massive income and wealth inequality had on other aspects of the economy: Savings rates, national debt level, spending patterns, reaction to high commodity prices, and more. All of these, he claimed are substantially affected by the ultra wealthy.

Note that this was from 5 years ago today — circa January 2007 was, ten months before the market peaked, 11 months before the Great Recession began, and 15 months before Bear Stearns, 21 months before Wall Street (AIG BAC C FNM LEH, etc.) collapsed, and about 55 months before Occupy Wall Street began.

Quite fascinating . . .

It is worth your time to go read the entire Robert Frank post in the WSJ. I haven't read his upcoming book The High-Beta Rich: How the Manic Wealthy Will Take Us to the Next Boom, Bubble, and Bust but I've got a hold on it at the library and expect to be entertained and appalled.

Here is a different Robert Frank, this is Robert H. Frank who teaches at Cornell University in a PBS Newshour interview with Paul Solman:



If you listen to 8:00 into the above video you find an interesting straddling of the middle. He argues from the right for the value of the free market and from the left for the importance of government in regulating the market and ensuring a fair playing field. (Funny, this isn't Darwinian. This is Adam Smith who has been misconstrued by the political right to be only the "invisible hand" guy when, in fact, he very much appreciated the role of government in helping to establish the possibility of a market.)

Don't confuse the Robert Frank who writes for the Wall Street Journal with the Cornell professor. Both have something interesting to say, but they are two different voices, but unfortunately with the same name.

As for America's future, it will succeed only if it gets off the destructive path that is creating a more and more unequal society and gets back to something more like the 1950s and 1960s when the middle class bloomed, America was prosperous, and the future looked unlimited. The future requires a more pragmatic politics that isn't dogmatic right or dogmatic left. It needs a politics that overthrows the idiocy of Reaganism and that overthrows the idiocy of a nanny state. The US needs a renewed robust middle, a real middle class, and a real political middle.

A Canadian Solution to American Political Travails

Here is a reasonable proposition from a decent people to solve the insoluble problems of Americans in the upcoming elections...

If You have a Rocketry Hobby, You are a "Terrorist"

Here is an article in The Toronto Star along with an hour long interview with the police of Byron Sonne, a person arrested in 2010 for "plotting" against the G20 meeting in Toronto. He has been held in jail for 329 days because (a) he had been spotted taking a picture of the fence constructed around the G20 site from which they got a warrant and raided his house and (b) found "explosives" which are in fact propellant for the rockets.

He belongs to the Canadian Association of Rocketry. Having a hobby of shooting rockets has become the "foundation" of the case for arresting him as a "terrorist".

If you watch the video, you should find it absolutely incredible that the cops have held this guy in jail. He is obviously innocent:



I find it really sleazy how this cop pretends to be empathic with Byron. It is pretty clear to me that this guy is manipulating Byron.

To give you an idea of the "quality" of the police work going behind holding this guy for over a year in jail is shown by this bit in the article:

Giggles arose from the body of the court when Bui asked Sonne about a mysterious powder.

“And this white substance in the fridge?”

“That is almond flour,” Sonne replies.

Sonne’s judge-alone trial is expected to begin in earnest sometime next week.

It is incredible that the legal system in Canada lets the police hold people when the policing is obviously that incompetent!

Here is a bit from Maclean's magazine, one of the premier news magazines in Canada:

Byron Sonne is a shlemiel and a shlemazl. He is clumsy and unlucky. But he is not a terrorist.

Driven by curiosity, hubris, and a genuine desire for social justice, Sonne poked and prodded the $1.2 billion “security apparatus” of the 2010 G20 summit in Toronto. He wanted to know if it was in fact just “security theater”–an expensive display of pomp and barbed wire that would never thwart an actual terrorist. Simultaneously, he wanted to know if it was too effective, if the heightened atmosphere around the summit meant that police were forgetting people’s rights. And he wanted us to know too, so he documented everything he did.

Sonne, who goes by TorontoGoat on Twitter, offered himself as a sacrificial lamb–a hapless animal who pooped on the cops via the Internet. His experiment was scattershot–he uploaded incendiary political texts of every nature to test if he was being surveilled. He flexed his freedom of speech by calling police “bacon” on Twitter. He tweeted about how the $9.4 million security fence could easily be climbed, but did not exactly say that it should be. All of this would likely have gone unnoticed if @torontogoat hadn’t clomped around the fence perimeter, shooting video. Taking pictures is not a crime, so the cops, unable to charge him with anything, threatened to take him in for jaywalking as an excuse to see his I.D. He complied with this “ruse,” as the authorities themselves have since described it, and that’s what brought the full force of law enforcement down on his head. When the cops finally googled Sonne, they went to town on him. He was surveilled, searched, arrested, questioned for 12 hours without a lawyer, and thrown in jail. Sonne spent 11 months locked up, awaiting bail. During that time his wife (also arrested, charges since dropped) left him.

So there’s your shlemiel–Byron the clumsy. As for the unlucky shlemazl, let’s consider the most serious charges Sonne faces during his trial, which continues today: four counts of “possessing explosive materials.” During their search of his Forest Hill home, police found chemicals that can be used to make explosives. That’s not so unusual–most of us have chemicals in our homes that can be used to make explosives. But actually whipping them up into something volatile may get you into serious trouble. It’s hard to imagine a good reason to do so, unless you’re trying to make some homebrew rocket fuel.

Sonne’s hobby? Model rocketry.

And from Maclean's, some questions about the police "case" against Byron Sonne:

Details of the courtroom proceedings in Sonne’s case are subject to a publication ban. As such, coverage of his case has been limited. Toronto Life published a cover story giving many details of Sonne’s life and activities leading up to his arrest. But once the ban is lifted, the real questions won’t be about what Sonne did—they’ll be about how the police and the Crown have behaved in this extraordinary case.

Here are some I’ll be asking:

-Why was Sonne, who has no prior criminal record, twice denied bail and held for over 10 months?

-Was he considered a flight risk or a danger to anyone?

-If so, what’s different now?

-Before his arrest, did the police trick Sonne into handing over his I.D. by threatening him with a jaywalking charge?

-Why was Sonne’s (now-estranged) wife also arrested and charged?

-Did the weapons charges (since dropped) refer solely to Sonne’s homemade potato gun?

-If so—really?

-Do the explosives charges refer solely to legal substances Sonne bought for gardening and toy rockets?

-If so—really?

-Why was Sonne hit with the obscure charge (since dropped) of ”intimidating justice system officials,” which is meant to prevent accused criminals from stalking or threatening judges, lawyers and jurors?

-Did it refer to Sonne’s online description of police on bicycles as “bacon on wheels”?

-If so—really?

-If it turns out that Sonne was simply a provocateur and geek who never posed a threat to anyone, at what point did the police and Crown learn this?

-If they knew this all along, why did they continue to imprison and prosecute him?

-And if so, who will answer for the loss of his freedom, the destruction of his career, and the dissolution of his marriage?

Byron Sonne may well turn out to be a guy who taunted and teased a starving, unchained guard dog to see how it would react. Maybe a guy like that is a fool, maybe he is brave—maybe he’s both. Maybe it’s not important.

The real questions are about the dog: why was it starving for meat? Why was it unchained? Thanks to Sonne, we may soon find out.

If you want a sense of how "guilty" Byron was of being a "mad bomber", consider this pointed comment in an article by Denise Balkissoon in OpenFile:

We're happy to tell you that this week, when speaking about the search-and-seizure in Sonne's home, Byrne referenced the computer security consultant's interest in science. One of the police officers on the stand, Alvin Maniquis, spoke about authorizing his team to take books on physics and chemistry.

"Essentially," said Byrne,"[Sonne]'s got a home lab, related books and documentation. He's got chemistry equipment....admittedly, they had not been put together."

So, now you know: three days before the start of the G20 summit, when arrested for possessing explosives meant to disrupt that summit, Sonne hadn't set up his beakers and bunsen burners.

That's all for now.

Yep... the police have "caught" a mad bomber with intent to blow up half of Toronto, but 3 days before the event, this "bomber" hasn't yet put any chemicals together. Funny. It would require an almost industrial scale operation to generate the hundreds (if not thousands!) of pounds of high explosives needed to seriously disrupt a G20 conference. But here is a "bomber" who hasn't mixed any chemicals and has nothing stockpiled. There is no proof that he ever tried to mix up an explosive batch. So the government's case is that he "had the books and come equipment and some chemicals". Well... under those stringent requirements the RCMP should have arrested every professor in all the universities and colleges in Canada in early 2010. They certainly had books, and equipment, and materials.

This is a completely daft case where the police have a vendetta against a guy who decided to beard the police by showing up the billion dollars of Canadian citizens money had not bought any real security but instead funded a lot of "security theatre" and a lot of booty for politicians to build stuff in this constituencies during this time period and stamp it as "security". From Wikipedia:

Members of Parliament Olivia Chow and Mark Holland labelled the initially claimed budget of $1.1-billion for hosting the summits as "obscene" and "insane" while others argued that the money could have been used for long-pending municipal projects in Canada, such as Toronto's Transit City. The security cost for the two summits was believed to be more expensive than the combined security costs of the 2010 Winter Olympics and Paralympics in Vancouver and Whistler, British Columbia, which were $878 million. However, according to final calculations from the House of Commons of Canada as of October 2010, the exact cost for holding both summits was $857,901,850.31, making it less expensive than the security costs for the 2010 Winter Olympics.

If the RCMP wanted to go after some criminals, they should have arrested Prime Minister Harper, his cabinet, and most of his caucus. They have robbed Canadians of nearly $1 billion in order to put on a big wing-ding party for big-wigs. Meanwhile, there is unemployment, poverty, and underdevelopment in Canada. That money would have been better spent feeding the hungry, providing free education for pre-schooler and college kids, and day care for working parents. Instead, it was criminally wasted. And a pook patsy like Byron Sonne has been absolutely crucified as a "criminal". His only "crime" was his ignorance about the depth of corruption and mean-heartedness in the politicians and the police, and the cold-heartedness and suspicious minds of old farts sitting as judges and acting a Crown prosecutors.

Questioning Democracy

I'm big on democracy. I'm one who thinks the Occupy XYZ groups should give up their tent cities and get involved in real politics with all their energy.

But here is a bit from Linda McQuaig in the Toronto Sun dressing me down for failing to see the need to operate outside the normal democratic channels:

When thousands of Egyptian protesters took over Tahrir Square in events widely celebrated as the Arab Spring, I don’t recall anyone being concerned that they were violating local bylaws.

Of course, Egypt was a dictatorship and the only way to protest the lack of democracy was by breaking laws.

Canada isn’t a dictatorship, and so protesters — like the group now ordered evicted from St. James Park — don’t have the same clear moral licence to ignore bylaws that their Egyptian counterparts had.

Critics argue that the Toronto Occupiers have made their point; if they want to take it further, they should join a political party — attend all-candidates meetings, put up lawn signs, eat hot dogs at summer barbecues, become backroom operatives.

Of course, Occupiers should join political parties and try to change them. But part of the Occupiers’ point is that democracy has become a hollow shell.

In theory, democracy is one of humankind’s noblest creations — a system in which people govern themselves. In practice, the results have been, well, disappointing.

In particular, as the Occupiers note, the concentration of wealth in the hands of the top 1 per cent undermines meaningful democracy, blocking the will of the bottom 99 per cent.

Or as the late 19th century Republican strategist Mark Hanna put it during another era of extreme inequality: “There are two things that are important in politics. The first is money and I can’t remember what the second one is.”

This is more obviously true in the U.S., but it’s also true here.

The financial elite manages to exert its dominance, not just at elections but at every stage of the political process — from the drafting of party platforms, the financing and organizing of political advocacy campaigns, the writing and amending of legislation, to the shaping of public opinion through the media (which they largely own). The wealthy are adept at influencing every stage of the broader political process.

Given the lopsided influence of the wealthy, those seeking to restore meaningful democracy and a more inclusive economic system can be forgiven for thinking it’s necessary to grab attention through extraordinary measures like occupying more than 1,000 parks across North America.

...

Rather than hanging out at malls or zoning out on Facebook, these young people have endured real hardship in the Canadian near-winter to fight for a more inclusive society. Any inconvenience they’ve caused through their peaceful occupation seems minor in comparison to their contribution to the public good.

As lawyers from the Law Union of Ontario point out: “Some inconveniences to local park users is a small price to pay for the larger price being paid by the 99 per cent worldwide in the face of an economic system that privileges the few over the many.”

Are occupations really necessary to draw attention to their cause? Perhaps not. But I’d trust their judgment over mine. After all, they’ve managed to change the public discourse, putting inequality front and centre — something activists and writers, myself included, have failed to accomplish despite decades of trying.

An article last week in the mainstream magazine New York notes that we’re now moving “from the terror era to the income-inequality era.”

Wow. After only two months, the Occupy movement — without backing from billionaires or governments — seems to have moved us into a new era. Not bad for a leaderless group that sleeps in tents and doesn’t even use microphones.

Go read the whole article.

I'm hoping that the Occupy movement has moved us into a new era. But it isn't yet clear to me. I wish it were true. And hopefully it will be. But I still prefer my democracy via organized politics. I can accept a short term thrust to make political parties more accountable, but I don't want to think that "change" is only possible by street protest. I watched street protest in the 1960s and it didn't change anything. Real change is hard and it comes through an organized political effort.

The energy of the Occupy movement should continue demonstrations but its real heart needs to move into either creating a new political party or seizing an existing one and reshaping it to the needs of the 99%. Institutions can run the long race. Individuals out protesting on the street are, by nature, short term. Individuals need to get on with their lives. Get jobs. Raise families. You can't spend 20 years on the street carrying a sign. But a political party can spend 20 years building a following through educating the public.

It is going to take some bitter battles to put the top 1% back in a box and rein in the big corporations that have gotten used to "lobbying" to co-opt the government. The Progressive Era spent 30 years getting consumer protection laws passed and anti-trust laws passed and improved schools and raise the educational level of the public. Today there is just as much, if not more, that needs to be done in these areas plus rein in the income inequality (not through a Great Depression which came at the end of the Progressive Era). There is a lot of social change needed and it will be a long tough slog. The Occupy movement has set off a spark. But for it to be an enduring flame of hope and real change, it will need to be institutionalized.

Hopefully the American public learned a valuable lesson with the election of Barack Obama. You can't rely on politicians. You have to move politics up a notch and ensure that political platforms have teeth and that the politicians take an oath to uphold the platform with consequences if they fail to act in a "party spirit". More discipline is needed. The last 40 years of running on "faux political platforms" has to come to an end. People need to know what they are voting for. The era of "pretty faces" and charismatic leaders has to come to an end. A new era of institutions and commitment is needed.

I think Linda McQuaig puts too much emphasis on the momentary street struggle. She needs to look back over history and see that real change only comes when the "change" becomes institutionalized. Obama was able to put forward a false platform and then ignore 90% of his promises because there is no teeth in the Democractic party. The poor voters were sold a bill of goods. The new social movement needs to either form a new party with strong institutional structure or re-structure the Democratic party to put teeth into the platform with party discipline for its representatives. Not loyalty to a "leader", but a commitment to the party platform passed in the party convention.

Hopefully we are entering a new era. But I will believe it only when there is a political party with the discipline and structure to carry out the true democratic wishes of the electorate.

Canada is Governed by Complete Idiots

The new Canadian copyright law will make it illegal for a person who has copyrighted their own work to "pick the lock" and access their own work! That is complete insanity.

This reminds of the the infamous case of Henry Lewis Gates, Jr. a Harvard professor who was arrested for breaking into his own home! He fought like a wildcat and finally got his rights "acknowledged", i.e. under the law you can break into your own house if you have managed to lose your keys. But it took a lot of wrangling and the famous "beer summit" held by Obama at the White House to cool off the injured parties: the professor and the "aggrieved" Cambridge police force.

But in Canada, the "wise" lawmakers here are going to make it illegal for you to break digital locks to access your own copyrighted property!

From BoingBoing:

under Canada's proposed copyright law, it would be illegal to remove a digital lock from a copyrighted work that you, yourself, have created and own outright.

It is worse. The new law punished innocent third parties who because of disabilities are simply seeking to access the copyrighted material which is in a format inaccessible to them:

Canada's new copyright law punishes blind and visually impaired people

By Cory Doctorow at 1:05 pm Monday, Oct 3

Canada's Conservative government is set to bull through its copyright legislation, Bill C-11, which notoriously includes a special protection for "digital locks," making it illegal to remove such a lock even if you're not doing so for any unlawful purpose. That is, under Canada's proposed copyright law, it would be illegal to remove a digital lock from a copyrighted work that you, yourself, have created and own outright.

Michael Geist is running a blog series highlighting different groups of people who stand to lose from this stupid law. These are culled from the responses to the last consultation the Canadian government ran on the subject, in 2009, when Canadians overwhelming voiced their opposition to the plan. First up is Provincial Resource Centre for the Visually Impaired (PRCVI) British Columbia, "which works to assist blind and visually impaired students:"

When the political leadership of a country is this stupid... and this sold-out to corporate interests who want their pound of flesh even in the most outrageous situations, then the people need to vote them out of power. The Conservatives must be defeated in the next election.

Update 2011oct4: Michael Geist, the Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa, has an excellent blog that looks at all things dealing with digital law including property rights. Here is his post discussing an interview with the Canadian cabinet minister who is driving the idiocy of new digital laws:

Commenting on James Moore's Copyright Comments

Tuesday October 04, 2011

Canadian Heritage Minister James Moore recently granted TVO's Search Engine an interview on Bill C-11 and Canadian copyright reform. The interview demonstrates yet again that Moore is one of the government's most skilled ministers - he knows the copyright file and is able to actively debate its merits. Yet the interview raised several points worth challenging.

At 4:30, host Jesse Brown raises the issue of the "book burning" provision that requires students and teachers to destroy lessons that rely on the exception within 30 days of the conclusion of the course. Moore moves quickly to the departmental talking points that I obtained under Access to Information, which claim that this is simply part of the balance. Yet few teachers will rely on a provision that mandates the destruction of their materials at the conclusion of a course and few students will want to have their materials destroyed. The provision is an illusion - it looks at first glance like it will assist education, yet practically it will be ignored. At 6:00, Moore continues by arguing that it is common for students to encounter "time limited" materials. But this provision does more than just create time limitations for students since it creates matching time limits for teachers, which effectively ensures it will rarely be used.

At 12:00, Brown and Moore engage in a discussion on digital locks, with Moore turning to the claim that the government isn't imposing digital locks, that the free market should work, government should get out of the way, and creators should be able to protect themselves against people who want to hack into their product and steal from them. Brown notes that a better balance is available by linking circumvention to infringment, to which Moore goes right back to the department talking points that simply state the government has the right balance.

Moore's response demands a few comments.

First, no one has suggested that the government is requiring digital locks. However, far from allowing the free market to work, it is proposing interventionist legislation that creates incentives to use digital locks since copyright works enjoy far more rights when a digital lock is present. Without a digital lock, copyright works are subject to the usual copyright balance including the various copyright exceptions or user rights. With digital locks and Bill C-11, the copyright exceptions often disappear. Second, everyone agrees that creators should enjoy protection. That isn't the issue. The issue is why the government is choosing to deny Canadians their user rights/exceptions when a digital lock is used. It could protect against those that "want to hack into their product and steal from them" and retain the exceptions by linking circumvention to copyright infringement, but it is choosing not to do so.

At 15:50, Moore restates something he said at the press conference: "piracy should be illegal in Canada and right now it's not." This is simply false. Leaving aside the fact that "piracy" is not a legal term in the Copyright Act, Canada is currently compliant with its international obligations. People who make unauthorized copies of copyright without an exception violate the law as it stands today. People who authorize infringement of copyright can be found liable under the Copyright Act. The Copyright Act includes some of the largest statutory damages in the world. There are currently lawsuits in Canada against individual file sharers and websites like isoHunt that use existing law. To say that piracy is presently legal in Canada is plainly wrong.

At 18:00, Moore harkens back to his "radical extremist" comment of June 2010 when, after Brown asks about file sharing lawsuits, he says that he has read Brown's stuff and that the one political party that agrees with the idea that "people should be able to hack into other people's software" is the Pirate Party. Moore knows full well that those calling for balance on digital locks include mainstream political parties such as the Liberals and NDP, along with virtually every education group in Canada, library group, consumer groups, and business groups. This is not about a wild west for copyright. It is about retaining the same balance that exists offline in the digital realm.

Finally, at 19:00, Brown raises the issue of U.S. influence over the Canadian copyright reform process. Moore interjects by stating "I have not met with a single American [movie] studio." A review of the lobbyist communication reports indicates that this may not be accurate. The reports reference a meeting with the Motion Picture Association-Canada and Moore in 2010, just weeks before Moore appeared before the C-32 committee. More recently, Moore met with the Canadian Recording Industry Association and the Canadian Chamber of Commerce's IP Council, which features both the MPA-Canada and CRIA as members. None of this is surprising or wrong (the only surprise would be if the Canadian Heritage minister didn't meet with these groups). The surprise was Moore's claim to have not had such meetings.

It is pathetic that Canada is ruled by such short-sighted, inflexible people as James Moore. I participated in the "public comments" on digital rights two years ago. Like most "public consultations" this was a kabuki dance pretending to get feedback from the public but simply a maneuver to get past most public objections by claiming "consultation was done". Nothing by James Moore or his commission has been sensible. It is all a front for corporations that want to milk every possible cent out of "their property rights". This is especially odious when you consider that most of the big copyright "holders" of today are corporations that have nothing to do with the original creators or artists. You can read many, many stories of inventors, writers, musicians, etc. who were tricked into signing away their "rights" by slick lawyers working for greedy corporations. James Moore is on the side of the slick lawyers and greedy corporations. He isn't for property "rights". He is for property "wrongs".

James Fallows on Police Abuse of their Power

Here is a bit from a post by The Atlantic editor James Fallows in his blog:

Adrian Lesher, a staff attorney with the NY Legal Aid Society, writes with the following observation about police abuses-of-power during the Wall Street protests, noting that he's speaking not for Legal Aid but for himself:

One point that I haven't seen made is that this sort of abusive behavior is reported routinely by people of color and by people of lower economic status. Yet their complaints are routinely dismissed or ignored in the media. Sometimes it takes middle and upper class white people getting hurt to get the media moving.

Of course that's true. But I think there's an additional interesting and crucial element in this case. Despite the largely white, largely educated nature of the crowd in these protests, to me it's obvious that the abuse stories would have disappeared if not for the videos. Very much like the original Rodney King police-beating video, they have the amazing property of rendering debate moot. The NYPD spokesman can talk all he wants about the pepper-spraying being "appropriate." But no reasonable person who spends a minute looking at the video, even allowing for selectivity in filming, can think that the coward-cop* behaved appropriately (or in accordance with NYPD guidelines).

And the make-or-break nature of the videos in this case not only raises the obvious questions about the other cases that are never captured. It also underscores the importance of a point another reader makes:

What disturbs me most about this incident - even more than the abuse of pepper spray - is the evident targeting of people carrying cameras and video cameras. Also, the focus on going after women. In one of the videos we see a different white-shirted cop seize a loudly-protesting dark-skinned woman by her big head of hair, drag her across the barricade and smash her head on the ground. (I think this is the attack that caused the group of women to start freaking out, just before the pepper spray attack) Yes, granted, she's being very loud and obnoxious, but she appears to be behind the netting and is not offering any physical threat to the cop.

In another one of the videos, apparently taken just prior to the pepper spray attack, a large woman with what looks to be a professional-level video camera is set upon by police, pulled into the street, thrown down and handcuffed. It doesn't appear that she did anything wrong at all, or even said anything, before being targeted. I think these elements of the story are worth going into. If the cops are intent upon preventing citizens from taking photos/video of them doing their work, there's obviously a problem.

Yes. The only time I got in trouble with the police in China, as I'll say more about in a forthcoming book, was when I made the same mistake -- that of taking pictures of cops who were roughing up someone else. At the time I thought: cops hyper-sensitive about being photographed? What do I expect: this is authoritarian China. It turns out that I could just as well have been saying: this is America. This is New York.

For the record: police have a hard job; most of them (especially the blue shirts rather than the higher-ranking white shirts) in these videos seem to be keeping their cool, often under provocation; videos could be selective or misleading; and the point is not to be anti-police. But enough people in uniform, starting with the coward, seem to have assumed that they could casually abuse people and not be called on it, that they need to be called.


* And, yes, OK I know from the Daily Show last night that the pepper sprayer, Anthony Bologna, is on the verge of being immortalized Onion-style as "Tony Baloney." There is a danger of the whole episode passing straight to oddball joke status. You can imagine this guy showing up soon on the talk shows, Joey Buttafuoco style. But there is a serious side to it -- which is why I have harped on it this long.

Police need to be held accountable. In British Columbia most policing is done by the federal police, the RCMP, and they refuse to allow any outside group to investigate complaints against them. Consequently they have a very long history of abuse from beating to killing. And they literally get away with murder. I'm all for a professional police force and I'm willing to pay to attract top quality people to the field. What I'm against is thugs in uniform getting their jollies beating up those at the bottom of the social heap because they know they can get away with it. (Click on the tag "police" to see other cases of police abuse including many by RCMP.)

Linda McQuaing Calls for Another Canadian "Me Too!"

Funny how Canada toddles after America. Nothing succeeds in Canada until it "proves" itself in the US. Ideas aren't serious until advocated south of the border. And "leadership" in Canada is pointing out that something is done in the US so it surely must be tried out in Canada as well.

Here's a bit from Linda McQuaig offering a "me too!" on taxes and social policy in her column in the Toronto Sun:

Canada’s ultra-rich — those in the top 0.01 per cent — now have a bigger share of national income than at any point in Canadian history, according to data compiled by McMaster University economist Michael Veall. But the median Canadian family income hasn’t grown in 30 years; in fact, it’s declined from $48,800 (in today’s dollars) to $46,700.

This means ordinary Canadians have little buying power, reducing the incentive for business and the wealthy to invest their substantial cash reserves in ways that create jobs.

As growing inequality becomes a global issue, the subject is strangely absent from Canadian politics, including the current Ontario election.

While the NDP has called for increased corporate taxes, it’s retreated in recent years from urging higher taxes on the rich — as even Bob Rae did when he was Ontario NDP leader. In the 1990 provincial election, Rae ran on a platform that included a provincial estate tax — and won a majority government.

Is it too much to hope that our most progressive party would take a stand as progressive as the president of the United States and America’s second richest man?

Don't get me wrong. I'm behind McQuaig's advocacy. My problem is that it is packaged up with a pretty ribbon and bow of "me too!".

A Walk Down Memory Lane

Here is a documentary series on the 2008 financial crash entitled "Meltdown: The Secret History of the Global Financial Collapse".

This was done by the CBC (Canadian Broadcasting Company) and the homepage for the documentary is here and provides more information about the series.

Enjoy being an eyewitness -- from a Canadian perspective -- to the end of the world as we know it...

Part 1:


Part 2:


Part 3:


Part 4:


If you need an antidote to the above grim story, here is a bit from a post by Mark Thoma in his Economist's View blog:

It seems to me that the current crisis is, to a large extent, reversing the economics of hope. When workers look forward today, what do they see? Technical progress that will make them better off -- change that will elevate their standard of living -- or do they see a future where they'll be lucky to keep the job, benefits, and wage rates they currently enjoy (if they have a job at all)? Much of the rhetoric from the right -- from opposition to government trying to help to the age old worry that the rate of technological progress is slowing -- has been about "what you couldn't change," and pessimism about the future is as high as I can ever remember.

I refuse to give up. It's distribution, not production that has failed us over the last 30 or 40 years. We produce far more than we ever have, and we will continue to increase our ability to squeeze more and more out of the resources we have. We have the ability to produce enough stuff. But the distribution of the things we produce has been tilted toward the top. Instead of wages rising with productivity as our textbooks say they should, wages have stagnated and the rewards have gone elsewhere. Thus, while the pessimism of the past was about production not being able to keep up with population -- many classical economists looked forward to a long-run outcome of a dismal, stationary state with most people struggling at subsistence wages -- the pessimism of the present is driven largely by a failure of distribution. The haves get more and more, and the have nots get less and less even though overall output is rising. And to make it worse, those in power have successfuly promoted the idea that intervening to ensure that workers get to keep the share of output they've earned will harm our long-run growth prospects.

Pessimism about breaking through the wealth and power structures that stand in the way of change is understandable, as is the desire of the winners in our increasingly two-tiered society to keep the focus on growth rather than distribution. However, this outcome is not pre-ordained, it is not etched in stone, it's something we can fix without sacrificing our long-run growth prospects. But only if we refuse to buy into the narrative that the "it can't be changed so suck it up and deal with it" crowd is peddling.

Bad News for Canada

The National Post is not known for its "socialist" message, but they've published an article that would warm the heart of any Marxist. They've printed the truth:

Work hard and you'll get ahead. That's been the mantra of folks who prefer their governments small and their success big.

But as two recent Conference Board of Canada reports show, that mantra is being cast into doubt. According to the voice of Canada's business establishment: "High inequality can diminish economic growth if it means that the country is not fully using the skills and capabilities of all its citizens or if it undermines social cohesion, leading to increased social tensions. . High inequality [also] raises a moral question about fairness and social justice."

Say the word "inequality," and many people automatically assume you're talking about the poor. But a mounting body of research shows that, left unchecked, a growing income gap affects the rich, the poor and everyone in between.

Economic growth used to be touted as the surest ticket to broad-based prosperity. But during the strongest period of economic growth in the past 30 years, between 1997 and 2007, a third of all income gains went to the richest 1% of Canadian tax filers.

Think that's normal? In the 1960s, the most recent comparable period of sustained growth, the richest 1% took only 8% of the gains from growth.

Not since 1920, when Ottawa began to collect income data, have Canada's elites pocketed a larger share of the income gains from economic growth. Top marginal tax rates for millionaires also are at rates last seen in 1920.

...

Canada's top 100 CEOs have seen a 13% year-over-year jump in average pay, rising to an average of $6-million. In contrast, the average earnings of employed Canadians has fallen to $38,500.

...

It's the promise of their own upward mobility that has many Canadians willing to brush aside the handsome gains enjoyed by the rich in the past 20 years. But rising inequality, in good times and bad, makes it increasingly feel like the game is rigged, destabilizing foundational values and expectations.

...

So what can we do to turn this story around?

Some will call for change that doesn't much disturb the status quo: Improvements in productivity, or tax cuts for Canadians with the lowest taxable incomes. But truly reducing inequality requires either increased incomes or lower costs for the majority. That means bosses and owners sharing more of the productivity gains and profits with workers; or paying more tax to expand affordable access to post-secondary education, public transit and child care, thus taking the pinch out of small paycheques.

For those who feel these measures are too costly, they should consider the alternative.

History has shown us, time and again: When too much is controlled by too few, something has to give. Continuously rising inequality is unsustainable.

Everyone has a stake in fixing this. And the fix has no political colour. It is about the future of Canada and where we're heading as an economy, a society, a democracy. That's why even conservatives are worrying about Canada's rising income gap.

I fervently hope the Conservative government listens to this. I pray that the top 1% realize the dark days ahead can't be avoided if they do not listen to this. The social contract in Canada is threatened by runaway elites. They need to be harnessed to the rest of us to ensure that we as a country progress and don't fall apart in some idiotic fight over crumbs off the table of the ultra-rich.

Pierre Berton's "The Great Depression"

Pierre Berton is always a delight to read. His style is excellent. He melds broad history with personal detail to create a tapestry that maintains interest and gives a deeper understanding by blending policy with the effects of policy on real human lives.

This book is organized into chapters by years from 1929 to 1939 to tell the story of the Great Depression in Canada. It is a unrelentingly grim picture of the depression and the utter incompetence and indifference of political leadership to the savage effects of politicians that the rich elite on the lives of the 27% unemployed who struggled hard to keep body and soul together as year after year "hard times" ruined more and more of their lives.

The politicians simply never "got it". They never understood the depth of the pain and misery. They kept worrying about how to either deny relief benefits or to shuffle the costs from off their layer of government onto another. As well, the story shows how a weird ideological hatred for "commies" led the politicians to use the police to commit horrible crimes against the innocent. Even when they came down on real "commies" the brutal treatment by the police was all out of scope with any threat from the political agitators.

This is an ugly, raw, cruel portrait of a Canada so different from the Canada of today that I don't recognize it. This is a Canada that hates "ethnics" and paranoid about "commies". It is a state that is absolutely indifferent to suffering and a state that is never held accountable for its cruel treatment of those down and out through no fault of their own. It is a searing tale of political conniving to shred political rights in a mad hunt for "commies". The portrait of R. B. Bennett is one of a cruel rich man who simply refused to believe that the government should ever provide relief to the starving unemployed. Mackenzie King comes across as a cross between a crazed spiritualist/neurotic and a politician pettily scheming about his "image" while ignoring the real suffering of the people.

The only glimmer of hope is the bits about the founding of the CCF. But even here, the founder, J. S. Woodsworth, ends up being an idealist who fails to come to grips with the real evil of the Nazis and the need to face up to an impending world war.

Here are some bits from the book so that you can get a taste of the style and the focus on facts by Pierre Berton:

It is true that the Communists were using the unemployed for their own political ends.So, indeed, were the major parties. After his defeat, Mackenzie King viewed the unemployment crisis as a bonus for his own Liberals and a chance to get in a lick at Bennett. Although "sorry for the country's sake," he recorded on March 31 his satisfaction when told by Woodsworth and other Labour M.".s that things were far worse than they had been the previous year under a Liberal administration.

That the Communists were sincere is beside the point; after all, so was Hitler. The gospel according to Karl Marx made them just as blindly orthodox as their capitalistic opponents, who clung to the dogma of the balanced budget no matter what the cost in human suffering. Yet in the ranks of the Reds and, indeed, among the leadership there was also a sense of genuine outrage not unmixed with human compassion for those who had been felled by economic disaster.

Two topics covered by this book that I found especially interesting were laws used to suppress "dissent". One was Section 98 that banned "unlawful assemblies" and was wielded brutally. Even worse was the Padlock Law in Quebec that seized property when the police "found" communist literature, but was so broadly used that it was invoked to seize Protestant literature from an evangelizer. These laws were used in the most heavy-handed way and the broad public simply ignored the effect: rights and liberties were cast to the wind. Here's Berton:

Section 98 was in force for fifteen years. It was the government's big stick against radical thought because it made mere membership in an illegal organization convincing evidence of the political or economic system by force of violence, then every member was guilty. If you went to even one of its meetings, gave it money, spoke publicly in its favour, distributed its literature, or wore its emblem you were liable to twenty years' imprisonment. And contrary to British legal practice, you were held to be guilty until you could prove your innocence. Anyone who rented a hall to an illegal group was subject to a five-thousand-dollar fine. Anyone who printed its literature advocating violent political change, or who imported similar literature, could also go to jail for twenty years. In fact, anybody who advocated violence in this context, whether he belonged to an illegal association or not, could go to jail.

The treatment of suspected "commies" was brutal in Canada:

... it was not just die-hard communists who faced deportation from Canada under the Bennett regime. Anyone who had been in the country for less than five years could be deported as a public simply by applying for relief. That regulation covered not only the "undesirables" but also thousands of others who had been recruited to come to Canada in the twenties by a business-oriented community looking for cheap labour. The Canadian Manufacturers' Association had lobbied the government to broaden its immigration policy, and in 1926 the two major railways and the Canadian Bankers' Association quietly backed the campaign. In fact, until the Depression, Canada had not only welcomed newcomers, it had also wooed them and subsidized them with low rail fares and free land, especially in the West. The immigrants, in turn, had helped make the country prosperous. Now, with hard times returning, the government was callously prepared to throw them out.

Finally, this bit by Berton shows the priggish morality of Canada at that time. It is a story about William Aberhart, a teacher with fundamentalist religion, who rose to control the province of Alberta with his "Social Credit" philosophy:

Under the Canadian moral standards of the middle thirties, sex was held to be dirty and therefore not to be discussed in public, on the radio, or in the newspapers. William Aberhart had come up against the taboo in January when he told a joke in Calgary, in which he talked about the hard time he was being given by his critics.

"It brought to my mind," Aberhart said, "the story of the young lady in the maternity ward who was in agony. She asked the nurse if there was a young man in a brown suit and brown fedora outside in the corridor.

"The nurse said, 'Yes, I saw one there when I came in.'

"'Well,' said the girl, 'tell him that if this is anything like married life, the engagement is off.'"

That parable, inoffensive by almost any standards, got Aberhart into a heap of trouble. The Social Credit leader was assailed by complaints that he had told a "lewd" joke. Efforts were even made to take him off the air.

I highly recommend this book both for the sheer joy of the quality of the story told and for the history of Canada that it reveals.

Your Friendly Local Helpful Police

Before:


After:


From Wikipedia: Kelly Thomas (April 5, 1974 – July 10, 2011) was a 37-year-old homeless man suffering from schizophrenia, and living on the streets of Fullerton, California. He was fatally beaten by members of the Fullerton Police Department on July 5, 2011.

If you are curious how the protectors of community safety, the "good guys", decided upon this treatment of Kelly Thomas, watch this video:



Sadly, in Canada the oversight of the police rests with the police. And -- surprise! -- the police decide that the good guys only do good. There are no bad apples in the barrel and the citizens are the ones up to no good and must be "disciplined" to ensure public order.

Don't get me wrong. I'm all for a well-paid, professional police force. But I want a police that serves the public and not themselves. They shouldn't abuse their position to beat up the weak and defenseless. They should focus on crime. And their focus must not be limited to the corner store hold-up. It must include the while collar crimes that steal millions -- even billions -- and unfortunately are treated as "victimless" crimes. They aren't. People lose their life savings from financial crimes. The devastation of a Bernie Madoff or, on a smaller scale, the Canadian Bertram Earl Jones is vastly greater than a corner store stick up. But the police and the courts come down hard on the little guy and let the white collar criminal off scot-free.

What is especially bad is when police take matters into their own hands and become judge, jury, and executioner. A classic case of this is the killing of Ian Bush who supposedly struggled with an RCMP officer who was behind him and trying to subdue him. The RCMP story is that Ian Bush reached behind himself, disarmed the officer, then in the struggle managed to point the gun behind his head, and shot himself to death while holding the pistol behind his own head. (Try that for yourself!) If you believe that, I have a bridge in Brooklyn that I can sell you for a very good price.

For a short list of "police gone wild" in Canada, read this Wikipedia article.

Canadians are Gullible

Here is a graphic that shows that Canadians are more likely to believe the story of "global warming" than Americans or Britons:

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I'm shocked. I would have thought that Canadians were more rational and critical. Everybody knows that the US educational system teaches credulous Americans that "creationism" is a science on an equal footing with evolution and that the Bible is literal truth. I would have never thought that Canadians would uncritically accept the codswallop of "overwhelming man-made global warming".

Everybody knows that the late 20th century was an era of globally warmer temperatures. The real argument is over whether that is mostly man-made (greenhouse gases) or mostly normal climate variation.

I'm skeptical. I've done computer modeling, I know how difficult it is to get models correct especially for complex dynamic phenomena. And climate is no only complex, it isn't a "complete science". There are lots of aspects of climate that simply aren't known well enough to model. So putting the numbers in and "running the model" to get "the results" is a bit of a joke. You get what you want by tweaking your model. Nobody's model can be validated by running it over past data to replicate past climate. So why would you accept that it can predict the 21st century climate?

Worse, I'm very suspicious of "the science is settled" crowd. They fiddled the data at the Hadley CRU. They have a very bad habit of reading into the data what they please. Right now they are declaring "global warming is proved because Arctic ice is at the lowest point ever!". Only it isn't. Read this post on the Watt's Up With That? blog.

Oh... and this "lowest ice extent ever" crowd conveniently ignores that Antarctic ice. I sure don't see any disastrous "all the ice is melting" trend in this data from the University of Illinois:

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If you want the cleanest data on global temperatues, go look at the global UAH satellite data maintained
by Roy Spencer and read his blog.

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Sure there is a rise in temps in the 1990s, but there has also been a flattening out in the 2000s. My best guess is that this variation is a natural trend, not an inexorable exponentially rising heat wave driven by greenhouse gases. I agree that the concentration of greenhouse gases right now are on an exponentially rising trend, but I don't see the equivalent in the actual measured temperatures.

I don't see greenhouse gasses exponentially rising forever. Instead I expect a sigmoid curve, equivalent to a logistic function, used in biological modelling for an invasion of a species into virgin territory with an early explosive growth but as resources are exhausted the growth dies off. I fully expect technology to continue advancing and we will move away from fossil fuels as they get more expensive. The "greenhouse gas" worry will die a death just like the hysteria in the late 1960s of the ZPG people about coming mass famines as humankind hit resource limits in the late 1970s. It didn't happen. Technology redefined the avaiable resources. The "global warming" crowd has the same blinders as the Club of Rome and the ZPG people.

By the way, the Roy Spencer mentioned above is the author of a paper who just underwent the unusual process of being contested, the editor who published the paper was forced to resign, and an "official global warming" response paper was published within a matter of just a few weeks to contest Spencer's paper. See this and this and this. Such unprecedentedly swift response is pretty clear evidence of collusion by the "global warming" crowd to suppress alternative viewpoints.

From the US, a "Strategic" Picture of Canada

Here are some bits from a publication in the US talking about the strategic position of the US, its neighbors, and the world. Here I'll pick out the Canadian references. This is all very well understood in Canada but most Americans really don't know:

Canada’s maritime transport zones are far superior to those of Mexico but pale in comparison to those of the United States. Its first, the Great Lakes, not only requires engineering but is shared with the United States. The second, the St. Lawrence Seaway, is a solid option (again with sufficient engineering), but it services a region too cold to develop many dense population centers. None of Canada boasts naturally navigable rivers, often making it more attractive for Canada’s provinces — in particular the prairie provinces and British Columbia — to integrate with the United States, where transport is cheaper, the climate supports a larger population and markets are more readily accessible. Additionally, the Canadian Shield greatly limits development opportunities. This vast region — which covers more than half of Canada’s landmass and starkly separates Quebec City, Montreal, Toronto and the prairie provinces — consists of a rocky, broken landscape perfect for canoeing and backpacking but unsuitable for agriculture or habitation.

...

In the north, the Great Lakes are obviously an ideal break point in the middle of the border region, but the specific location of the line along the rest of the border is largely irrelevant. East of the lakes, low mountains and thick forests dominate the landscape — not the sort of terrain to generate a power that could challenge the U.S. East Coast. The border here could theoretically lie anywhere between the St. Lawrence Seaway and Massachusetts without compromising the American population centers on the East Coast (although, of course, the farther north the line is the more secure the East Coast will be). West of the lakes is flat prairie that can be easily crossed, but the land is too cold and often too dry, and, like the east, it cannot support a large population. So long as the border lies north of the bulk of the Missouri River’s expansive watershed, the border’s specific location is somewhat academic, and it becomes even more so when one reaches the Rockies.

On the far western end of the U.S.-Canada border is the only location where there could be some border friction. The entrance to Puget Sound — one of the world’s best natural harbors — is commanded by Vancouver Island. Most of the former is United States territory, but the latter is Canadian — in fact, the capital of British Columbia, Victoria, sits on the southern tip of that strategic island for precisely that reason. However, the fact that British Columbia is more than 3,000 kilometers from the Toronto region and that there is a 12:1 population imbalance between British Columbia and the American West Coast largely eliminates the possibility of Canadian territorial aggression.

...

The first land threat to the young United States was in essence the second phase of the Revolutionary War — a rematch between the British Empire and the young United States in the War of 1812. That the British navy could outmatch anything the Americans could float was obvious, and the naval blockade was crushing to an economy dependent upon coastal traffic. Geopolitically, the most critical part of the war was the participation of semi-independent British Canada. It wasn’t so much Canadian participation in any specific battle of the war (although Canadian troops did play a leading role in the sacking of Washington in August 1814) as it was that Canadian forces, unlike the British, did not have a supply line that stretched across the Atlantic. They were already in North America and, as such, constituted a direct physical threat to the existence of the United States.

Canada lacked many of the United States’ natural advantages even before the Americans were able to acquire the Louisiana Territory. First and most obvious, Canada is far enough north that its climate is far harsher than that of the United States, with all of the negative complications one would expect for population, agriculture and infrastructure. What few rivers Canada has neither interconnect nor remain usable year round. While the Great Lakes do not typically freeze, some of the river connections between them do. Most of these river connections also have rapids and falls, greatly limiting their utility as a transport network. Canada has made them more usable via grand canal projects, but the country’s low population and difficult climate greatly constrain its ability to generate capital locally. Every infrastructure project comes at a great opportunity cost, such a high cost that the St. Lawrence Seaway — a series of locks that link the St. Lawrence River to the Great Lakes and allow full ocean access — was not completed until 1959.

Canada is also greatly challenged by geography. The maritime provinces — particularly Newfoundland and Prince Edward Island — are disconnected from the Canadian landmass and unable to capitalize on what geographic blessings the rest of the country enjoys. They lack even the option of integrating south with the Americans and so are perennially poor and lightly populated compared to the rest of the country. Even in the modern day, what population centers Canada does have are geographically sequestered from one another by the Canadian Shield and the Rocky Mountains.

As time advanced, none of Canada’s geographic weaknesses worked themselves out. Even the western provinces — British Columbia, Alberta, Saskatchewan and Manitoba — are linked to Canada’s core by only a single transport corridor that snakes 1,500 kilometers through the emptiness of western and central Ontario north of Lake Superior. All four provinces have been forced by geography and necessity to be more economically integrated with their southern neighbors than with their fellow Canadian provinces.

Such challenges to unity and development went from being inconvenient and expensive to downright dangerous when the British ended their involvement in the War of 1812 in February 1815. The British were exhausted from the Napoleonic Wars in Europe and, with the French Empire having essentially imploded, were more interested in reshaping the European balance of power than re-engaging the Americans in distant North America. For their part, the Americans were mobilized, angry and — remembering vividly the Canadian/British sacking of Washington — mulling revenge. This left a geographically and culturally fractured Canada dreading a long-term, solitary confrontation with a hostile and strengthening local power. During the following decades, the Canadians had little choice but to downgrade their ties to the increasingly disinterested British Empire, adopt political neutrality vis-a-vis Washington, and begin formal economic integration with the United States. Any other choice would have put the Canadians on the path to another war with the Americans (this time likely without the British), and that war could have had only one outcome.

With its northern border secured, the Americans set about excising as much other extra-hemispheric influence from North America as possible.

...

Just as the American plan for dealing with Canada was shaped by Canada’s geographic weakness, Washington’s efforts to first shield against and ultimately take over parts of Mexico were shaped by Mexico’s geographic shortcomings.

The author doesn't dwell on it, but US-Canada relations have been one-sided. The US demands and Canada/Britain compromises, as for example, by giving the US most of what it wanted with the Oregon compromise:

• Originally this territory was part of the vast HBC (Hudson Bay Company) empire of fur trapping. From Wikipedia:
  

  Throughout the 1820s and 1830s, the HBC controlled nearly all trading operations in the Pacific Northwest, based out of the company headquarters at Fort Vancouver on the Columbia River. Although authority over the region was nominally shared by the United States and Britain through the Anglo-American Convention of 1818, company policy, enforced via Chief Factor John McLoughlin of the company's Columbia District, was to discourage U.S. settlement of the territory. The company's effective monopoly on trade virtually forbade any settlement in the region. It established Fort Boise in 1834 (in present-day southwestern Idaho) to compete with the American Fort Hall, 483 km (300 miles) to the east. In 1837, it purchased Fort Hall, also along the route of the Oregon Trail, where the outpost director displayed the abandoned wagons of discouraged settlers to those seeking to move west along the trail.
  
  ...
  
  During the 1820s and 1830s, HBC trappers were deeply involved in the early exploration and development of Northern California. Company trapping brigades were sent south from Fort Vancouver, along what became known as the Siskiyou Trail, into Northern California as far south as the San Francisco Bay Area. These trapping brigades in Northern California faced serious risks, and were often the first to explore relatively uncharted territory.
  



• This early foothold was simply ignored when the 1846 Oregon "compromise" was settled. Initially the US wanted to take everything up to the parallel 54°40′ north, but was bargained into "only" taking the Oregon and Washington state territories.

Most Americans are treated to a triumphalist history, the infamous Manifest Destiny, which had God giving this land to the deserving Americans. The above "strategic" discussion of America is a healthy antidote to that nonsense. The US was hewn out of its neighbors by a designing, grasping, and ambitious political class in Washington DC. Read the whole document to see how the US treated Canada, Mexico, Spain, Hawaii, and the rest of the world.

But even this isn't the whole story. It ignores the outrages of suppressing democracy in the Philipines, the gunboat diplomacy in China, the outrageous "United Fruit" diplomacy in Central and Latin America, and the budding "new Rome" where the US, as the sole Colossus standing after WWII, built a vast empire of military bases around the world and brought war to many, many countries all cynically in the name of "democracy" or of "helping an ally". Think of US policies in South America, and a good example is how the US killed the legally elected president of Chile, Salvator Allende. Such a friendly gesture!

Canada's Leader of the Opposition

Sadly Jack Layton, head of the NDP (New Democratic Party), died shortly after leading the party to its first election victory winning official standing as the opposition party. This victory un Layton is a bit like Moses leading the Israelites out of Egypt to the shore of the river Jordan but not being able to lead the Israelites over. Instead, he was felled by cancer just months after his party's victory.

At the state funeral, here is the bit that I found to be the most moving:



Oddly, I think this Leonard Cohen song is very appropriate. It is a strangely politically appropriate song for a funeral for Canada's most successful democratic socialist politician. Layton won't replace Tommy Douglas in the hearts of Canadians. Douglas fought and won the battle for Canada's health care system. But Layton died as a great leader and will be beloved.

Leonard Cohen's oddly religious, sexual, poetic, and triumphant lyrics for Hallelujah seem appropriate for a normally a-religious socialist political funeral burying a leader who fell before he reached the mountain top of politics. It is a nicely "inclusive" Canadian compromise choice for a eulogistic musical tribute. Triumphant, but not bombastic. Hopeful, and decent. Reflective, but inspiring.

I do hope the NDP survives the loss of its leader. But even more, I want to see Canada continue with its three party politics. That puts the centre party in a position to cushion wild divergences to right or left, unlike the crazy politics of the US. I want to see Canada continue its history of compromise, pragmatism, and decency.

Sadly our political right party lost its "progressive" label (it was called the Progressive Conservative party, i.e. centre-right on social issues and hard right on economics and foreign policy). I fear that Canada is slowly drifting toward the US model of a two party system. That isn't good.

Update 2011aug29: And here is a bit from an opinion piece by Linda McQuaig in the Toronto Sun that highlighted the very un-Canadian moment when Stephen Lewis stuck it to the Prime Minister:

Allowing Layton a state funeral was probably Stephen Harper’s most generous prime ministerial act. But it led to a nationally televised scene that will likely haunt him and surely inspire progressives for years to come: Stephen Lewis, the iconic elder statesman of Canada’s social democratic movement, standing in front of Canada’s most right-wing prime minister ever, speaking truth to power.

Determined that the event be more than just a tribute to the goodness of one man, Lewis used the heft of the occasion, as Layton would have wanted, to drive home Layton’s social democratic vision for the country.

With the Conservatives’ new hammerlock on power — accomplished with a mere 40 per cent of the national vote — here at least was one joyous moment in which we could watch the country’s most powerful orator confront a prime minister who had no choice but to stand every time the rest of the room rose in rapturous pleasure at Lewis’s inspiring call for a more equal and generous Canada.

That message is exactly what those on the right have been trying to deny — that there is an alternative to the grim, slash-and-burn policies of austerity they want to foist on us, making this an ever more unequal society.

Debt Growing in Canada

The US during the first ten years of this century were the wastrels and debt hogs, but Canadians have quickly decided to step into American shoes.

From a Bank of Montreal economic research report, Focus, here is the current situation:

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This is not a good situation. The Bank of Canada needs to be stepping on the break to slow consumer debt growth. If and when interest rates rise, a lot of people may suddenly discover they can't carry the debt load they've acquired. This level of debt isn't prudent.

Government policy should be focused on educating Canadians that debt burdens can blow up in your face and use the Americans as the example of what bad things can happen if Canada continues down this path.

Here is the BMO economic & banking policy forecast:

On the economic front, we expect that a return to 2½%-plus (above-potential) sequential GDP growth next year and the prospective closing of the output gap before the end of 2012 should shift the Bank back into tightening gear around the middle of next year—despite persistent headwinds (e.g., a lofty loonie, global fiscal consolidation)—when U.S.
economic performance no longer acts as a domestic policy constraint (we expect U.S. growth will top 3% in 2012 H2).

A Canadian Perspective on "Balanced Budget Amendments"

Here is a bit from Sherry Cooper, VP & Chief Economist of the Bank of Montreal Financial Group, in an article in the BMO's publication Focus:

Balanced-budget amendments are getting a lot of play these days on both sides of the Atlantic. Most economists oppose them vociferously as they lead to pro-cyclical economic policies, dramatically exacerbating economic downturns. They are a return to Herbert Hoover economics. A real world example is the nearly unanimous adoption of these amendments by state governments in the U.S., which has required them to slash jobs, raise taxes and cut government spending during the worst recession in the postwar period. State legislatures are now busily removing these amendments, but they at least were able to fall back on transfers from the U.S. federal government. No such fallback mechanism would be available in the Eurozone. Imagine if the U.S. had a balanced budget law in 2008/09 and was forced to immediately layoff public sector workers, raise taxes and cut spending in the face of the crisis-induced plunge in tax revenues, not to mention the implications for defence spending during war or government spending to combat terrorism. Some have suggested that these balanced-budget amendments could contain language to cover these exceptions; there is no way to cover all possible future outcomes, which begs the question of why bother to have them in the first place.

Are we really ready to obliterate counter-cyclical fiscal policy? Do we really believe that fiscal tightening during a period of economic weakness reduces deficits? This is not only a bad idea, it is self defeating. Cutting government spending or raising taxes weakens economic activity and thereby reduces tax revenues, which only increased budget deficits.

The above is "common sense" and Economics 101, but with the radical right in the US, there is no common sense and no real understanding of economics. They are ideologues blindly destroying their own country. Amazing.

By Their Fruits Ye Shall Know Them

The poisonous fruits of the Tea Party fanatics are now being reaped. The stock markets around the world are falling. On Monday all kinds of interest rates in the US will rise as a "hidden tax" on Americans. The public can thank the right wing (supposedly "pro America") Tea Party for this body blow to an already down and struggling American public. I've personally watched my retirement accounts shrink by 15% over the last 3 weeks as the "drama" in the US Congress played out. I have the right wing nuts in the US to "thank" for this poisonous gift.

Here are some bits from a NY Times op-ed by Paul Krugman:

To understand the furor over the decision by Standard & Poor’s, the rating agency, to downgrade U.S. government debt, you have to hold in your mind two seemingly (but not actually) contradictory ideas. The first is that America is indeed no longer the stable, reliable country it once was. The second is that S.& P. itself has even lower credibility; it’s the last place anyone should turn for judgments about our nation’s prospects.

Let’s start with S.& P.’s lack of credibility. If there’s a single word that best describes the rating agency’s decision to downgrade America, it’s chutzpah — traditionally defined by the example of the young man who kills his parents, then pleads for mercy because he’s an orphan.

America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.

Nor did the bad judgment stop there. Notoriously, S.& P. gave Lehman Brothers, whose collapse triggered a global panic, an A rating right up to the month of its demise. And how did the rating agency react after this A-rated firm went bankrupt? By issuing a report denying that it had done anything wrong.

So these people are now pronouncing on the creditworthiness of the United States of America?

...

The truth is that as far as the straight economics goes, America’s long-run fiscal problems shouldn’t be all that hard to fix. It’s true that an aging population and rising health care costs will, under current policies, push spending up faster than tax receipts. But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved.

So why can’t we do that? Because we have a powerful political movement in this country that screamed “death panels” in the face of modest efforts to use Medicare funds more effectively, and preferred to risk financial catastrophe rather than agree to even a penny in additional revenues.

The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized.

Go read the whole article.

I find the US a perplexing place. In their Declaration of Independence they set high ideals of "all men are created equal" but their Constitutional Convention squabbled over slavery and how to allocate votes to slave holders for the "non-persons, i.e. their slaves". They came up with 3/5 of a vote for each piece of property. (One wonders why there weren't votes for acreages and houses and factories!)

As a kid I watched as poisonous Southern Democrats (who have morphed into the Bible Belt Republicans of today and the leading Tea Party fanatics) stood at the school doors and denied entry to black students saying that "over my dead body will this black child be allowed an education". These are the fanatics who have the US by a stranglehold today. And you can thank Richard M. ("I am not a crook") Nixon for this because his Southern Strategy is what delivered the hate-filled south to the Republican party.

I would love to wipe my hands of the US and say "let the Devil take you" but unfortunately the US dominates Canada. Our politicians have to kowtow to Washington's whims and our economy is very, very dependent on the state of the US economy. So I have to worry. The right wing nuts in the US have their hands about my throat and when they threaten to take the US down in a default on its bonds, they are pulling me (and Canada) under with them. Oh how I wish I could break free from the evil dominance of the US and its poisonous politics.

The Canadian Perspective on the US Debt Ceiling Crisis

Here are some gems from a publication by the Bank of Montreal's economic research team in a publication entitled Focus:

The market’s message to Washington from the five-day slide in the Dow can be neatly summed up in two words: You Idiots!

Part of the requirement for a country to be rewarded with a AAA credit rating is political stability and a clear willingness to repay debts—the fiscal fiasco calls the U.S. into question on both counts. Perhaps the most distressing aspect of the entire mess is the stance taken by some very senior leaders. The candidate currently in second place for the Republican nomination for President has openly stated that she would never support an increase in the debt limit. While it may be too much to ask for every politician to have an advanced degree in economics, it’s not asking too much that they have an ounce of common sense.

And this:

The stalled vote by the House of Representatives further delays a resolution of the debt ceiling crisis and raises the odds of a government shutdown next week. Tea Partiers’ refusal to support the Boehner Plan might well mean that they get the political onus for a shutdown and possible default. For sure, the Democrats will play it that way. The only thing that is certain about the current impasse is that it is unambiguously bad for the U.S. economy, which grew at a much slower pace than previously thought in the first half of the year.

...

The last thing the U.S. economy needs now is further disruption from Washington and dramatic tightening in fiscal policy.

And this:

Evidence is mounting that fiscal uncertainty is harming the U.S. economy. Consumer spending nearly stalled in the second quarter, and not simply because of the lesser availability of cars and higher cost of driving them. Consumer confidence tumbled in July, and a weekly measure of sentiment plunged after S&P upped its downgrade warning mid-month. Despite stellar profit growth at large multinational companies, firms unexpectedly cut durable goods orders in June. Although pending home sales rose surprisingly last month, a pullback in mortgage originations suggests sales weakened in July. The Fed’s Beige Book said more regions are slowing, with companies in the Chicago Fed District citing “heightened uncertainty about the economic outlook given recent weaker-than-expected demand as well as the ongoing fiscal issues in the U.S. and Europe”.

Investors and banks are taking extra precautions in the event of a fiscal “accident”. Money market funds are hoarding cash in the event of redemptions. Banks are conserving liquidity, restricting the supply of much-needed credit for businesses and homeowners. This is despite the fact that mutual funds, banks and insurance companies are under no obligation to unload their Treasury holdings in the event of a downgrade. A survey by the Association of Financial Professionals said that, in the event of a failure to raise the debt ceiling, half of treasury and finance executives would take precautionary action (read: cut hiring and outlays) to conserve cash.

Even if the debt ceiling is raised in coming weeks and a default averted, as is highly likely, the extreme partisanship shown by lawmakers risks pushing the fragile economy back into the mire.

Americans should contact their Congressional representatives and thank them for ensuring that they will enjoy the equivalent of the Great Depression's "double dip" with the 1937 recession within the depression.

Click to Enlarge

By 1936, all the main economic indicators had regained the levels of the late 1920s, except for unemployment, which remained high. In 1937, the American economy unexpectedly fell, lasting through most of 1938. Production declined sharply, as did profits and employment. Unemployment jumped from 14.3% in 1937 to 19.0% in 1938. A contributing factor to the Recession of 1937 was a tightening of monetary policy by the Federal Reserve.

Americans will have the Republican party to thank for this trip down "memory lane".