It's the pictures that got small*

Sometime over the holidays, the two hosts on one of the all-news channels were wittering on about a prize that members of the audience could win that day: a new smartphone/tablet thingy.  They enthused about the connectivity and such, and then one of them raved that "you could easily watch a movie on it".

Well yes, I suppose you could, but why in the name of DW Griffith would you want to?  We live in an age of CGI and Dolby sound and Imax and 3-D (and Imax 3-D) and even 48fps.  Yet a lot of people choose to enjoy the movie experience on a screen the size of a pack of cards, with tiny tinny headphones, rather than on a big screen with a seat-shaking surround sound system.  It's all part of the atomization of popular culture, where nobody wants to be stuck watching something that anyone else is interested in, or at a time other than of their own choosing, even if that means losing 90% of the experience.

The same thing has, of course, been happening to music for many years.  People of my age can remember when ads for music systems boasted about huge speakers with "30 watts RMS per channel".  I never did figure out what that meant, except that your neighbours were probably going to learn all about your tastes in music.  Now most people listen to music in solitary splendour, using headphones.  And the quality of the sound has changed for the worse.  Gone, except for audiophiles,  are the days of the analog vinyl disc, which lost none of the depth and texture of the original recording.  On the way out is the CD, almost as good in terms of quality and much more durable.  Now most music is downloaded in compressed formats, with significant loss of quality. Producers are even optimizing the mix of recordings for headphones rather than for home stereo systems.   People's obsession with never having to risk listening to anyone else's choice of music has meant that they are listening to their own in a greatly diminished form.

I don't want to suggest that bigger is always better in art.  After all, for every Sistine Chapel, there's a Mona Lisa.  (You were amazed by how small it was when you finally got to see it, right?)  But for the first time, people seem to be consciously choosing to consume important art forms -- movies and music -- in a hugely downsized format, just in order to be able to live in their own little cocoon.

But there's hope.  Sales of movie theatre tickets in the US actually rose in 2012 for the first time in a long time, thanks in part to the late-year success of The Hobbit, and the music business is increasingly becoming focused on live shows rather than recordings.  These trends suggest that people are starting to pine for the shared experiences of old, in preference to the isolation that can so easily be created by personal electronics.    Whether that can forestall the complete collapse of a shared culture, only time will tell.

* Line spoken by Norma Desmond (Gloria Swanson) in Sunset Boulevard.

Over the cliff we go!

Matthew Yglesias, over at Slate, is trying to make the case that it would be better if the two sides in the US budget standoff failed to make a deal before the end of the year, forcing the US economy over the dreaded "fiscal cliff".  As Yglesias points out, legislation already in place imposes tax hikes for most Americans on January 1 -- in large measure, that's what the cliff is.  What President Obama and Speaker Boehner are dickering about is how much taxes should be cut from levels Congress has already mandated -- but that's surely not the way the debate is currently being framed.

It's an interesting way of looking at it, and it casts the collapse of Boehner's "Plan B" in an interesting light.  If the Republicans in the House had at least rallied around their supposed leader for long enough to let Plan B come to a vote, they would have been in a better position to blame the President if and when the tax hikes take effect.  However, just as Henry Kissinger once said of Yasser Arafat's PLO, the Republicans "never miss an opportunity to miss an opportunity".

Yglesias feels that come January, with the tax hikes in effect, the context of the fiscal debate will shift.  It will become clearer that the debate is about cutting, and not hiking, and that may make it easier to achieve a reasonable compromise.  Of course, the vexed issue of spending would still have to be dealt with, and looming not much further ahead is another round of haggling over the ludicrous debt ceiling, a feature of fiscal governance that the US shares only with Denmark.  To filch from Yglesias once again, now that the GOP has weaponized the debt ceiling,  US economic policy debates stand to be rancorous for years to come.

Merry Christmas to all (except this guy)

The Canadian media are giving plenty of coverage to a story out of Saskatoon, where the city bus company is facing a human rights complaint. The alleged offence?  Putting a "Merry Christmas" message on the front of the city's buses.  A dolt named Ashu Solo,  described as a "local activist" (a label that always betokens looming trouble), says the messages make immigrants feel they must convert to Christianity to be "first class citizens".

Mr Ashu declines to specify his own beliefs, but I'd be happy to bet that not only is he not Christian, he's not Jewish or Muslim or Hindu either.  Apparently he's well known to city authorities as a vexatious complainant about just about anything that happens to offend his delicate sensibilities on any given day.

As a Christian I'm pleased to wish and to be wished a Merry Christmas at this time of the year.  I'm also very happy, at the appropriate time, to wish Jewish friends Happy Hannukah; at the appropriate time to wish Muslims a joyful Eid;  and at the appropriate time to wish Hindus a happy Diwali. And I'm happy at any time at all to tell militant atheists, which I assume Mr Ashu is, to grow up and get a life.

Thanks for continuing to visit the blog over the past year.  Merry Christmas!

Sticking to their guns

Amid the very public grieving over the Newtown massacre of the innocents, and even as President Obama pledges to try to do something about the national gun culture, other American voices can still be heard.  Here, for example, is a Texas GOP member of the House of Representatives who appears to believe that things would be much better if school principals kept a weapon or two of their own in the office, just as a precaution*.  That same call was made just now on CNBC by a politician from Oregon.  And from the same state, as well as others, there are reports that gun sales over the past weekend, in the immediate aftermath of the Connecticut atrocity, soared to unprecedented levels.

As far as anyone knows, there are 270 million weapons in private hands in the United States, not counting those hastily bought and stashed away in the last few days.  President Obama can try all he wants to tighten the rules, but even if he were able to ban all future sales of weaponry to the general public, how much of that existing vast arsenal do you suppose would ever be turned in to the authorities, even in the current mood of national revulsion?  A lot of Americans think they need guns simply because a lot of other Americans have guns.

The National Rifle Association has been pretty quiet since last Friday, but it won't be long before we hear some variant on the mantra that "guns don't kill people; people kill people".  Actually, people with guns kill people, and nobody seems to have any bright ideas to stop that from happening.

*He also wants to be allowed to carry a piece of his own when he's on Capitol Hill.

The "golden generation" of central bankers?

I've dissed Alan Greenspan many times over the years -- just type "maestro" into the search box at the top left of the page and stand well back.  Wim Duisenberg at the ECB was always a figure of fun ("dim Wim"), and his successors don't seem to be getting much better press:  a week or two ago, an article on Slate described the ECB as disastrously incompetent.  And the Bank of Japan has been trying and failing to get that country's economy out of the mire for what seems like decades.

Now it's Mervyn King's turn in the stocks.  Professor Tim Congdon has written a splenetic attack on the departing BoE boss, portraying him as "the crank at the Bank" and claiming he is the Old Lady's worst-ever Governor.  The rap against Sir Mervyn, according to Congdon, is two-fold.  Firstly, he's not really a money and finance expert by training, so he's had to learn on the job; and secondly, his attitude towards the financial sector is still "hostile and bigoted".   As hostile and bigoted, in fact as "most university dons", which suggests that Professor Congdon has not noticed that since the financial crisis, fear and loathing toward the banks has spread far beyond the groves of academe.

I'm no fan of Sir Mervyn, but it strikes me as plain wrong to suggest that his poor track record in recent years is a result of his long-standing hatred of the banks.  He may well hate them now, but, like Greenspan, his problem before the financial crisis hit was that he was far too willing to trust them.. Far from watching them like malevolent hawks, both Greenspan and King showed enormous complacency in indulging the banks' every whim, and facilitating the deregulation of the sector, with catastrophic results.

Over at the Telegraph, Jeremy Warner has a half-hearted attempt at defending Sir Mervyn.   However, it's beyond reasonable dispute that while Greenspan and King (especially the former) were happy to take the credit when things were going well in the decade leading up to the financial crisis, they've been notably unwilling to shoulder much of the blame for the way things have turned out.  (The charge sheet against the heads of the ECB and Bank of Japan is different but no less damning).

Does anyone come out of the financial debacle smelling of roses?  Well, the Reserve Bank of Australia has done reasonably well, but of course the central banker du jour is Mark Carney at the Bank of Canada, now preparing to take over from Sir Mervyn at the Bank of England.  Carney will no doubt be reading Congdon's diatribe with great interest -- and pondering what may be written about him in a few years' time, if he doesn't turn out to be the miracle-worker the UK Government is hoping for.

Shock the monkey

No doubt you've seen, in one form or another, the story of the rhesus monkey in a shearling jacket that was found wandering around in the parking lot at Ikea in Toronto.  Although it's illegal to keep one of these creatures as a pet in Ontario, the owner says she wants it back. She (let's call her Ms N.) may put the matter in the hands of a lawyer.

Said lawyer will have to coach Ms N carefully.  This is from the BBC story linked above:

(Ms N) explained that she kept Darwin with her at all times.

"At the beginning, I was told that was the best for him because generally, monkeys live off the back of the mom," she said, adding the monkey would "get into a panic attack" when she was out of sight.

But the next paragraph reveals...

Darwin had been left in a parked car on Sunday, but managed to let himself out. 

So, she knows Darwin suffers from panic attacks and therefore claims that she keeps him with her at all times, but then she leaves him in a car and swans off to walk around Ikea, a trip that can never be made in less than an hour.  Can't imagine why the Ontario Humane Society would have any objections to her getting Darwin back. 

UPDATE, 12 December. Ms N has now given an interview to local TV stations in which she snarls that Darwin "isn't a monkey.  He's my son".  There's little point in commenting on that. 

Yes, but no, but sometimes maybe yes

The media are describing Canadian PM Stephen Harper's decision to permit two large foreign takeovers in the energy sector as the biggest decision yet in his term in office.  Odd that he chose to make the announcement late on a Friday afternoon.  The Toronto Star's coverage of the decision can be found here.

The Government is allowing China's state-owned CNOOC to take over Nexen Petroleum of Calgary, as well as giving the green light to a smaller takeover by Malaysia's Petronas that it had previously turned down.  In making the announcement, Harper made ample reference to the mental twists and turns he had agonized through in making the decision.  He noted that Canadians had not spent years unwinding state control over key resource assets, only to see them fall under the control of unaccountable foreign governments.  At the same time, having only recently visited China on a trade and investment-promoting mission, he could hardly turn down the first major inward investment that came along.  However, Harper also made it clear that no further takeovers of major oil assets would be permitted in the future -- unless there were "exceptional circumstances".  We'll come back to that later.

Friday's decisions are of a piece with the schizophrenic nature of Canadian foreign investment policies over the years.  Until not very long ago, the main aim of the country's generally restrictive policies was to prevent excess US influence over the national economy.  These days, thanks to the shift in economic and financial power to Asia,  the bogeyman wears a different disguise.  Indeed, in the energy sector, the US has opened the way for Chinese involvement through its dithering over the Keystone pipeline proposal, which would have seen much of the output from the Alberta oil sands heading south.

The added complication is that much of the foreign capital now circling key Canadian assets is controlled by governments, either directly (as in the case of CNOOC) or through sovereign wealth funds.  As a result, opposition to the latest takeovers has produced an unholy alliance of left (the NDP, always leery about foreign capitalists) and right (in favour of investment but antsy about governments, especially communist ones).  By suggesting that approval of the CNOOC and Petronas deals is being provided on an exceptional basis, Harper is clearly hoping to defang these critics (which may be why the announcement was made at such an odd time), while preserving what he portrays as Canada's openness to foreign investment generally, as long as it's made on a commercial basis.

Problem is, that's not generally how Canada's investment policies are seen in the rest of the world.  The business press in the UK regularly castigates Canada for its anti-investment decisions.  The most recent casus belli for The Times and others was the Harper government's rejection, in 2011, of a planned takeover of Potash Corp by BHP Billiton, which is not by any stretch of the imagination a state controlled company.  It's unlikely that anyone at BHP would agree with Harper that Canada is open to foreign investment.

What's more, Harper's suggestion that future takeovers will only be allowed in "exceptional circumstances", the nature of which he declined to specify, leaves the Government with plenty of wriggle room when the next controversial deal comes along.  Despite Harper's attempt at sounding tough and decisive, it looks as if Canadian foreign investment policy will continue to be made on the fly.      

Making a statement

UK Chancellor George Osborne's Autumn Statement, delivered on Wednesday, was a gloomy affair.  Growth has fallen well short of earlier projections:  real GDP is now expected to contract by 0.1% this year.  Fiscal targets are not being met, and the Chancellor now expects the wave of austerity he has unleashed to continue until 2018.  Yet he felt able to assert that "Britain is on the right track".  If the current mess is Osborne's idea of success,  one can only cringe at the thought of what failure would look like.

Osborne's policy response to the situation is almost comically right wing.  Cuts in welfare spending, achieved by capping the normal annual adjustments for inflation.  Lower corporation taxes.  Further cuts in central government spending in order to finance infrastructure spending, which will mostly be carried out by the private sector.  Revival of the discredited Private Finance Initiative under a new name, PF2.  And the usual craven obeisance to middle-class unrest with yet another postponement of a planned rise in motor fuel taxes. Overall, though, it's more of the same: contractionary fiscal policy settings aimed at reviving growth, in defiance of all economic logic.

Osborne's "independent" forecaster, the Office for Budget Responsibility, has given him cover for this by stating that the economy's underperformance is not the government's fault.  It's all down to those pesky foreigners, especially the Europeans.  And it's true that the UK's trade sector has been harmed by the absence of growth in key European markets.  But I'm certainly not the first person to point out that fiscal policy (and monetary policy too) need to react to evolving circumstances, not carry on blindly as if nothing has changed.  Moreover, the lesson that could have been learned from the bounce in GDP in Q3 -- that judicious one-time spending (if I can call the Olympics that) can bolster growth -- has been entirely set aside.

There's a thoughtful analysis of the Statement, by Stephanie Flanders, here.  She, and others, are speculating that the bond rating agencies will see the further delay in setting the national debt on a downward path as justification for removing the UK's AAA credit rating.  Alas,  there's no reason to suppose that a slap on the wrist by them would pierce Osborne's cloak of self-belief.

TO tales

A couple of interesting stories from Toronto have penetrated the wilds of Niagara in the past week...

Toronto City Council, which surprised even itself by voting to ban plastic grocery bags a few months ago, has abruptly reversed itself.  The ban, which was due to come into force at the start of 2013, is now delayed indefinitely.

That's good, although the council has acted for entirely the wrong reasons, mainly the fact that it was afraid of lawsuits.  In truth, there are plenty of good reasons to question the ban.  It's usually justified on the entirely unprovable grounds that these flimsy little things will take eons to rot in landfills.  What's more,  the pro-ban crowd totally ignore the fact that most people reuse the bags for kitchen waste, so if they're banned, sales of plastic bags specifically for kitchen waste will soar, offsetting any supposed benefit.

And how about this?  Cotton shopping bags, much loved by the green types, take far more energy and water     to produce than plastic bags do.  You have to re-use the cotton bags about 135 times before they become more planet-friendly than the loathed plastics.  Does anyone seriously think they last that long?

And while we're on the subject of garbage,  lovably hirsute entrepreneur Donald Trump has got himself into a fight over a hotel/condo tower bearing his name in Toronto.  The Donald lent his name to the building,  which has actually been built by a company with the rather forbidding name Talon International, to assist with the marketing.  In line with common practice, Talon then sought buyers for individual units in order to finance construction, with much of the actual payment deferred.  With visions of sugarplums (and Donald's famous barnet) dancing in their heads, a sizeable group of the greedy and the naive, together with a good number of offshore investors, took the bait.

Now Talon is looking to the investors to cough up the rest of the cash and take full ownership of the units.  But guess what, the Toronto economy isn't what it was.  Property values are falling, and banks are under orders from the government to be more miserly with mortgage lending.  As a result, a lot of the buyers can't get hold of the money, so they've called on m'learned friends to help them weasel out -- oh, and to claim a few mil' from Talon on the grounds that they were mis-sold the investment in the first place.

Remember a couple of posts ago when I said the arrival of payroll lender Wonga.com in Canada was an unintended consequence of the government's attempts to rein in the property market?  This looks like another one, albeit at the other end of the income scale.  If the original legal agreements are watertight, as Talon swears they are, then the investors must be hoping to get their money back by embarrassing Donald Trump.  Lots of luck with that.

UPDATE, 5 December: The Ontario Securities Commission (OSC) has declined to come to the aid of the reluctant investors, who must now come up with the balance of their investment by September 13 or walk away, thereby losing whatever they have already put in.  One disgruntled gent has compared his situation to the fiscal cliff, which may be just a slight exaggeration. 

The 2 percent solution

Hatchet-faced charmer Mary Matalin was on CNBC last evening, talking about the fiscal cliff.  She opined that it was wrong for President Obama to propose raising taxes on the top 2 percent of US taxpayers (roughly speaking, those declaring incomes in excess of $250,000 a year) because those are "the small business owners that we rely on to get the economy growing again".

Wow, who knew small business in the US was such a lucrative proposition?  Those of us who imagined that the 2 percent were Wall Streeters and hedgies and senior executives of large corporations certainly stand corrected.  Thanks for clearing that up, Mary.

What you don't want for Christmas

Just in time for the festive season, a truly dispiriting development.  Ads have started to appear on local TV and radio stations advising us that Wonga.com, which describes itself as "Britain's most innovative short-term lender", has set up shop in Canada.  The ads feature puppets and a bloke talking in an impenetrably thick, fake Cockney accent, so I can't be sure whether they actually mention the most innovative aspect of Wonga's offering: interest rates that can soar far in excess of 1000 percent per annum. It used to be you had to know a sweaty guy with a toothpick and a cauliflower ear to borrow money at rates like that, but now you can do it with a quick phone call or the click of a mouse.

There's a certain inevitability to Wonga's arrival on this side of the Atlantic.  Canadian household debts are at record levels in relation to income, and banks are pulling back from mortgage lending; this is exactly the combination of factors that opened the door for Wonga and its competitors in the UK.  (One difference, though: Canadian banks are tightening lending at the behest of the Government, which is fearful of a sudden fall in house prices.  The arrival of Wonga can be seen as an unintended consequence of that well-intentioned policy initiative). There's nothing illegal about it, but it's depressing to think that some Canadians will now be falling into Wonga's clutches as they struggle to meet the financial strains of the holiday season.

Meanwhile, at the other end of the credit spectrum,  my bank credit card bill this morning solemnly warned me that if I make only the minimum allowed payment each month, it will take me 47 years and 6 months to pay off the outstanding balance!  That would take me well into my second century.  Well, if that's OK with them....

Failed States

Last evening on CNN, Wolf Blitzer ran a respectful piece about a young Mexican politician who has been murdered by a local drug gang because of her efforts to put an end to violence in her city.  Blitzer alluded to the estimate that up to 50,000 people have now perished in what he referred to as "Mexico's drug wars".

But they're not Mexico's drug wars, are they?  How many Mexicans would have died in drug-related violence if it were not for the insatiable demand for illegal substances on the streets of US cities?  Mexicans are dying in their hundreds because no US politician dares admit that if there's a war against drugs, the drugs are winning it.

Yet it's "poor Mexico, so far from God, so close to the United States"* that gets tagged as a "failed state".

* Quote attributed to Porfirio Diaz, who was President of Mexico in the late 19th century -- although there's no evidence that he actually said it!

A young man for the Old Lady

A dozen years ago, there was a minor uproar in England when a foreigner, Sweden's Sven Goran Eriksson, was appointed to manage the England football team.  Was there really no Englishman capable of doing the job?  The question was asked again when Svennis, who seemed to see the job as an opportunity to meet women and launch bizarre money making schemes (any takers for a CD of his favourite music??)  was succeeded in the post by the Italian Fabio Capello.  Fabio was less of a swordsman but, like Sven,  looked to maximise his outside earnings in less than judicious ways.  Neither had conspicuous success with the actual football side of things, and the Little Englanders rejoiced when true blue Roy Hodgson was appointed to the job earlier this year, just in time for the squad he inherited from Capello to stink out the joint at the European championships.

Unperturbed by the failure of high-priced foreign talent at the FA, Chancellor George Osborne has stunned most observers by hiring Mark Carney, currently Governor of the Bank of Canada,  as the next Governor of the Bank of England.  Announcing the appointment,  Osborne described Carney as "the outstanding central banker of his generation".  Ominously, that's a title previously held by Alan Greenspan.

Osborne wanted Carney for the job so badly that he's basically allowed him to write his own contract.  Normally the Governor serves an 8-year term, but Carney only wants to serve five years, starting in May 2013.  And he's going to earn a cool 624k Sterling a year (just about an even mil' in dollar terms), more than twice what his predecessor, Sir Mervyn King, was taking home.  Supposedly the difference largely reflects the fact that Carney will not enroll in the Bank's highly lucrative pension scheme.

There's no reason to doubt Carney's credentials.  Although he's just 47 years old and has only been Governor of the Bank of Canada since 2008, he's been in and around the levers of financial power in Ottawa for almost a decade.  He's head of the financial stability committee of the G20.  Prior to switching to the public sector,  he was with Goldman Sachs (now there's a surprise) for 14 years.  He has a PhD from Oxford and an English wife, so the cultural shock won't be too much for him, though he may have to cultivate an interest in cricket if he is to step fully into Sir Mervyn's shoes.  Carney's sporting prowess is as a hockey goaltender: he played for Harvard.

Even with Carney's track record, however, the step up from Ottawa to London is a big one.  Toronto has come on in leaps and bounds as a financial centre -- it's no longer "a second rate Cleveland", to quote an old  putdown -- but it's nowhere near the top of the pile.  While it's true that Canada, during Carney's term in office, has weathered the financial crisis better than most wealthy countries (though Canadians don't want to believe that),  that can't be entirely credited to the Bank, or to its current leadership.

The Canadian financial landscape is vastly different from what Carney will encounter in the UK, mainly because Canada shunned much of the deregulatory madness that gripped the UK and the US a decade or so ago.  There was a big turning point in 1998, when the government turned down two mega-mergers that would have reduced the number of major banks from the traditional "Big 5" to three.  The Big 5 still dominate domestic banking today.  Foreign involvement in the sector is strictly limited.  Although the banks were allowed into the brokerage industry, mainly to stop it falling into American hands, they are still largely, and to their immense chagrin, excluded from the insurance business.  Last year the government even imposed  new rules on banks' mortgage lending, which is having the effect of gradually letting the air out of the housing market, especially in Toronto and Vancouver.

This bears so very little resemblance to the free-for-all that still largely exists in London that you have to wonder just what Osborne wants Carney to do.  It may well be that Carney's track record, and indeed his non-Britishness,  will provide cover for the government to take a tougher line with the banks on regulatory issues, something which the banks have successfully resisted up to this point.  Certainly, if I were at one of the big UK banks or at the British Bankers' Association, I'd be looking at Carney's imminent arrival with some trepidation.

In Canada, of course, the speculation will now begin on who gets Carney's job when he leaves.  One fearless prediction: it won't be a Brit.    




 

The Great Black North

Today is "Black Friday", the biggest shopping day of the year in the US.  Stores advertise extraordinary "door crasher" bargains to lure the shoppers in on the day after Thanksgiving, and the citizenry responds with enthusiastic abandon -- and not a little greed.  There are stories today of people buying carts full of cheap TVs, with the intention of keeping just one and punting out the rest for profit on eBay.  The whole exercise will be watched even more closely than usual by economists and analysts, amid fears that the looming "fiscal cliff" may already be causing  people to tighten their purse strings.  It has to be said, based on the televised scenes of mayhem from New York City, that there's not much evidence of that happening.

The "Black Friday" phenomenon is starting to spread outside the US, and nowhere is this more evident than in this part of Ontario, even though this is not a major holiday here.  (Canadian Thanksgiving took place weeks ago, more or less in the middle of the harvest season that we are supposedly giving thanks for).  Shopping in the US, or "across the river" in the local parlance,  has long been a way of life, and with four border crossings within less than half an hour's drive, the opportunities to stock up on eggs at a buck a dozen are never far away.  As the Canadian dollar has steadily strengthened against the US dollar in recent years, the pressure on retailers in Ontario, and especially in the Niagara region, has been ratcheting higher.

Wonder of wonders, the local retailers are fighting back in kind.  "Black Friday" deals started to appear here at least a week ago, presumably on the principle that if you can get people to max out their credit cards early enough, they won't have any firepower left to head over to Buffalo by the time the big day itself arrives.  The stack of store flyers deposited in our driveway this week, along with the free newspapers,  was even thicker than usual.

For all the flyers and the price cuts, the retailers must have been holding their breath this morning.  An informal survey in one of the Toronto papers suggested that 40% of people in southern Ontario were planning to take advantage of Black Fridays deals in the US.  This seems improbably high, even though it's customary to note that Canadians are "much more value-conscious" than American shoppers, which is a polite way of saying that they're cheapskates.  Interestingly, though, the local news reports at 9 this morning suggested that there were no undue lines at the border crossings this morning, when past Black Fridays have seen waits of up to 2 1/2 hours for those trying to get into the States.  So maybe the deals on this side of the border have had the desired effect, which can only be a good thing, particularly if it induces Canadian retailers to maintain competitive prices all year round.

Me, I'm staying away from stores on both sides of the border today.  I learned a long time ago that if you buy a TV that's regularly $799 for $299, you haven't saved $500.  You've spent $299.  The only way to save money is not to spend it.  And anyway, I've no appetite for lying about how much I've spent to the nice people at Canada Customs when I come back across the border .  So no Black Friday for me.  Cyber Monday though -- now that may be a more appealing proposition.    

Oh, shut up!

Alan Greenspan, the former Fed Chairman and discredited "Maestro", deserves more of the blame than any other person for the financial crisis of 2008.  Irresponsible monetary policy, based on a hubristic and  erroneous understanding of the causes of low inflation, created the conditions for the financial market excesses that the world is still struggling to cope with today.

If you or I had been the architects of a comparable disaster, we'd probably hide as far out of sight as we could possibly manage.  Greenspan's not like us, though.  He's still prepared to retail his discredited opinions to anyone who turns up with a chequebook. 

Hence his latest outpouring to Bloomberg News    Greenspan thinks that a small increase in taxes can be tolerated as long as it allows the US government to cut social spending.  And he goes on to say:  

“Even if we have to pay the cost of a significant rise in taxes to get a significant slowing, and then decline, in social benefits that is a very cheap price,” Greenspan said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “A large increase in taxes required to fund what is currently in the books is going to cause a recession,” he said. “If we can get away with that as the only cost to this whole problem, I think that’s a pretty good deal.”

I didn't see the interview when it was broadcast, so I can't tell you whether Betty Liu was able to keep a straight face when Greenspan said this.  Betty is surely aware, as is just about every other sentient being on the planet apart from the Maestro himself, of just how the financial crisis became so severe.  The Greenspan Fed was never willing to tolerate any meaningful downturn in financial markets, constantly easing conditions every time the markets so much as stuttered.  As a result, excesses that would have been easily dealt with through a minor correction were allowed to build up, until the whole edifice came crashing down uncontrollably in 2008.  

And now the guy who allowed all of this to happen has the chutzpah to suggest that a recession would be a small price to pay for cleaning up the mess!  Unbelievable.  And anyway, what economic theory is Greenspan now relying on to tell him that  recession will help to cure the US's fiscal problems?  A quick look at what's happening in Europe or Japan would suggest that what the US needs if it's to start curbing its deficit is continued growth, not some exercise in Republican fiscal machismo.

Nuts about nuts

A jaw-dropping story in the Toronto Star on Monday.  Donna G., a nice mom from just north of the city, wants her sons' school to uproot a group of recently-planted oak trees, on the grounds that fallen acorns pose a threat to kids with nut allergies, a group that happens to include her two boys.  Donna is chair of the school's allergy committee, a position that we seemed to manage quite well without, back in my schooldays.

Let's review some of the facts here, as they are set out by the Star.  About one child in six has some sort of food allergy; about one in fifty is allergic to peanuts, the most common groundnut allergy.  Amazingly, there don't appear to be any official statistics on acorn allergies. However, scientists apparently report no evidence that simply touching acorns has never prompted an allergic reaction in anyone, ever.  You would only be at risk if you ingested the damned things.

Aha, says Donna: there's the risk.  Acorns could be used to bully kids with nut allergies. (You think I'm making this up?  The Star article, which I well understand you may not have been able to read in its entirety, contains this direct quote from Donna's submission to the school authorities:  acorns “can also be used to bully and torment children.”)  It may not have crossed Donna's mind that with those few words, she gave the bullies at her sons' school an idea that they might not have come up with on their own.

This is all bad enough, but another story in the same issue of the Star suggests that Donna may not be the only person in her area suffering from a nut-induced lack of perspective.  Apparently many of the schools in the area ban nut-based products from kids' lunchboxes, presumably to stop gangs of predatory bullies from trying to force peanut butter down the throats of their classmates.  Some kids responded by taking sandwiches with a nut-free peanut butter substitute for their lunch, but now these are being banned too, on the ostensible grounds that they cause distress to the kids (or more likely, kid -- remember, only one child in 50 is at risk here) who are allergic to goobers.

Think I'm being unreasonable or lacking in empathy here?  I've had a lifelong allergic reaction to shellfish.  So I don't eat it.  I don't order it in restaurants and I can be a bit of a pain at cocktail parties because I won't tuck into the canapes until I'm sure there are no shrimp lurking there to get me.  It's never occurred to me to insist that restaurants that I frequent can't serve crustaceans to the rest of their guests, yet that's the equivalent of what Donna G. and the rest of the peanut butter Nazis up in Vaughan Region seem to want.

Donna insists she's "not a crazy Mom".  Jury's out on that one, Donna.  

The Petraeus Situation

I can't make head or tail of all this stuff about General Petraeus, and for the most part I really don't care.  However, I do find it a bit worrying to learn that very senior people in the US military and the FBI , people trusted to make life-or-death decisions,  appear to have the same moral standards and the same level of emotional maturity as the denizens of Jersey Shore.

Lest we forget

At the start of World War II, my father signed up for the Royal Navy even though (a) he was under age and (b) he couldn't swim.  He served with distinction for many years, before being severely wounded in a naval battle in the Mediterranean.  He carried shrapnel inside him for the rest of his days.

At the start of World War II, my father-in-law was an officer in the Polish cavalry.  After his regiment was overrun by the Wehrmacht, he narrowly escaped the slaughter at Katyn forest and undertook a harrowing journey across Europe in search of freedom.  Reaching the UK, he served with the Free Polish forces until the end of the war.

I'm humbled by the thought of what these men, and all who fought in that war, had to endure, and I'm thankful not to have had to face anything similar*.  Even so, I find myself becoming more uncomfortable each year with the growing importance of Remembrance Day/Veterans Day in the English speaking world.  Failing to pay adequate respect to the fallen is becoming one of the most serious secular sins of our age.

A couple of years ago, one or two newsreaders at the BBC were castigated for failing to display a poppy every time they were on air.  My father would have been on their side.  Despite his own service record, he always refused to buy a poppy, believing that the entire Poppy Fund was a conscience-salving scheme by its founder, Earl Haig, who had sent so many men to their deaths in the Great War.  The same pious attitude can be seen here in Canada too.  On Friday evening, the lead story -- the LEAD story -- on one local TV station was that one --ONE -- local high school had cancelled its Remembrance Day service because of a labour dispute.

There's a fine line between remembrance of the fallen, which is right and appropriate, and glorifying war, which is neither.  Veterans in Ontario can now order a special license plate for their vehicles, which renders war almost kitschy, when it's something that should always be looked upon with horror and sadness.  War is still about old men settling their disputes by sending young men** (and increasingly, young women) to face death and mutilation.  The best tribute to the fallen of past wars would be to stop doing that.  It's not a memorial I expect to see any time soon.  

*Can I suggest some reading matter?  "All Hell let loose" by Max Hastings, now available in paperback, is an excellent one-volume history of WWII, with much of the story told in the words of the combatants.

** Remember "Nineteen" by Paul Hardcastle?   "In World War II the average age of the combat soldier was 26...In Vietnam he was 19".

Your tax dollars at work

One of the things that has surprised me during my first few weeks back in Canada is the proportion of television advertising that's paid for by the Government -- or rather,  the governments, since Canada has so many levels. Here in Ontario, the provincial health plan can regularly be found informing everyone of how many different health care choices they have.  (I know how they can afford to pay for those ads -- despite being a taxpayer in this country every year since 1975, I don't qualify for public health insurance until I've been back in the country for three full months).  Elsewhere, the provincial lottery corporation repeatedly reminds us of all the wonderful things that are financed by lottery profits: community centres and such like. You know, the kind of thing that we used to be able to finance out of taxation.

The ads that surprise me, though, are the ones presented by the Federal government.  These are mostly designed to extol the government's economic "action plan", which is apparently working 24/7 for all Canadians.  There's lots of expensively-shot footage and a plinky-plonky version of the first few notes of "O Canada" to ram home the feel-good message.  It's hard to square that message with the right-wing, small government ideology of the Harper government.  Considering that the major national economic priority is supposed to be deficit reduction, one might think that these ads would be a good place to start swinging the axe.

One thing that's very clear is that this sort of advertising would never work in the UK.  Brits are much more skeptical about government than Canadians appear to be.  Any self-congratulatory UK government ad on the lines I've described would be shouted down so loudly by the pundits and the populace that you'd be able to hear the din in Ottawa.  

Fighting the last war

Nicholas Kristoff had a column in the NYT recently that bemoaned the likely course of US economic policy in the event that Mitt Romney were to win the election.  He argued, on supposedly Keynesian grounds,  that strict austerity would be exactly the wrong course for the US to follow at this time.

There are at least three points to be made here.

First, assuming that the new administration can get past the looming "fiscal cliff", there's a broad consensus that the US economic outlook through 2013 and beyond is looking much rosier.  A genuine recovery seems to be getting underway.  This is starting to look like a good election to win: the next President, whoever he may be, will be able to claim credit for the rebound, setting the stage for the same party to win again in 2016.

Second, Kristoff surely doesn't believe that Romney will actually start hacking away at government spending if he takes over the White House.  Over the past three decades or so, Republicans have had a much worse record of fiscal irresponsibility than Democrats, at least until the financial crisis forced Barack Obama's hand back in 2009. See this earlier post for a fascinating illustration (not by me!) of this point.

Third, Kristoff misleads when he cites current events in Europe in support of his anti-austerity argument.  He states that the UK economy is contracting this year.  This was true in the first half of the year, but recently released GDP data for Q3 showed a sharp rebound in growth, sufficient to recoup all of the output lost in the preceding three quarters of  "double dip recession".  In fact, Kristoff has missed a real opportunity here.  The Q3 bounce owed a lot to the massive expenditure on the London Olympic Games, so if he had got his facts straight, he would have been able to use the recent path of the UK economy as strong evidence that fiscal stimulus can work.

Kristoff's article has made me wonder for the first time if he and some of the other Keynesian policy wonks, including Paul Krugman, are continuing to fight the last war when there's a new war beginning. You wouldn't know it from listening to these folks, but the Obama administration's response to the financial crisis was Keynesianism on steroids. If a genuine recovery is getting under way, policy discussion in the US should at least be starting to focus on how and when to remove the extraordinary amount of stimulus that's currently in place.  Somehow, Keynesians never seem to be quite as vocal about that as they are about initiating the stimulus in the first place.    

Trying to have it both ways

Canada's attitude to foreign ownership of the country's major industries has generally fluctuated between suspicion and outright hostility.  Many years ago, the old Foreign Investment Review Agency (FIRA) was a byword for economic xenophobia.  FIRA is long gone, but the Federal government maintains -- and does not hesitate to use --  the power to rule on whether proposed foreign investments are in the national interest.  Some sectors of the economy are off-limits to foreigners altogether: banking, for example.  Foreign involvement in that industry is tightly regulated, even as Canadian banks go on acquisition sprees abroad.  My own former employer, Toronto Dominion, now has more branches in the US than in Canada, yet Canadians would never tolerate a US bank building up such a position within Canada.

In the past, the main concern for Canadian policymakers was to prevent excessive US control over the domestic economy.  Nowadays, the would-be investors come from further afield.  Last year, the Canadian government attracted international opprobrium for turning down the proposed acquisition of Potash Corp. by BHP Billiton of Australia.  Currently there are at least two major deals awaiting the Federal nod, both in the petroleum sector.  A proposed takeover of Progress Energy by Petronas of Malaysia has already been turned down, though the Government has given Petronas an opportunity to make fresh representations.  Also pending is a megadeal for CNOOC of China to purchase Nexen Inc.

The Government is stalling on making a final decision on the CNOOC-Nexen deal, supposedly on the grounds that it wants at the time it announces its decision also to set out its general approach to foreign ownership.  (Prediction: it will be ambiguous).  The fact that an authentically right-wing government like the current one in Ottawa has to agonize over this is the clearest possible indication of the level of public hostility that still exists towards foreign investors.

An added complication is the rise of sovereign wealth funds, in countries from China to the Middle East, who are constantly on the lookout for investment opportunities in Canada and elsewhere.  Here's the thing, though:  Canada has its own equivalent of the sovereign wealth funds, in the shape of the massive public sector pension funds of the larger Provinces, notably Ontario and Quebec.  These funds are enthusiastic buyers of foreign assets, especially in the UK, where they own stakes in the Channel Tunnel and various airports -- the type of assets that Canadian governments of almost any stripe would almost certainly place off-limits for foreign buyers.

Time to grow up, perhaps?  When Canadian banks are hoovering up branch networks across the US, and Canadian pension funds are buying up strategic assets in Europe, maybe the government should try to offer comparable treatment to companies wanting to bring money into Canada.  That would take a bit of courage: the tone of public debate on the CNOOC/Nexen deal, in particular, shows that Canadians still want to keep foreign investors well away from the "commanding heights" of the economy.        

Clear as mud

According to our local freesheet, the Niagara Advance, this area used to be one of the traffic accident capitals of Canada.  In recent years, however, strenuous efforts by the town's highways department have brought the accident rate down to much more acceptable levels.

One thing that doesn't help is the naming of the rural roads, which dates back to the time a couple of centuries ago when the land was first surveyed and subdivided.  Here's the list from the "Advance" of the most dangerous rural intersections in Niagara on the Lake; I swear I am not making this up:

Concession 1 at Line 2
Concession 1 at Line 3
Concession 1 at Line 6
Concession 2 at Line 1
Concession 2 at Line 2
Concession 2 at Line 3

And here's the first priority for further improvements to get the accident rate even lower:

"Add advance street name signs to intersection advance warning signs and stop-ahead signs, to allow drivers to make navigation decisions before reaching the intersection, as a benefit to drivers who aren't local".

Is the "Advance" suggesting that drivers might be finding it tough to figure out their way around the area?  I can't imagine why that should be the case.  

Phoney Tony wants a new job

Tony Blair says the EU needs an elected President.  I wonder if he has any candidates in mind.

Storm surge

The news media in these parts are giving wall-to-wall coverage to the "Frankenstorm", Hurricane Sandy, which is headed for Southern Ontario by way of Atlantic City.  This morning the three nice folks who hector me at breakfast time from our local talk radio station, CKTB, were expressing amazement at the reaction of some of the locals.

It seems that during the weekend, the Mayor of Niagara Falls ventured to suggest that if citizens happened to see a buildup of fallen leaves blocking the storm drains, they might consider shovelling them out of the way in order to avoid flooding when the predicted rains arrive.  Cue outrage, on the lines of "I pay my taxes, why should I have to keep the storm drains clear?"

With a natural disaster looming, I don't think I'd be inclined to stand too firmly on that point of principle.  If one of these anti-social types suffers a heart attack during the storm, you wonder how they'll feel if their neighbour refuses to offer first aid, on the basis that "we pay taxes for doctors and nurses to do that kind of thing".

Further thoughts, 30 October:

*  Just to show not all Canadians are like Outraged of Niagara Falls, the Toronto local newscast yesterday evening showed a resident of the low-lying Beach neighbourhood using a snow shovel to clear leaves from storm drains all around the area -- well done that man!

* Amid all the mayhem, a small miracle courtesy of Hurricane Sandy.  The usually insufferable Piers Morgan was on CNBC in his usual mid-evening slot yesterday, anchoring the coverage of the storm, and managed to  do a good job -- none of the customary smirking and bombast. Bet it won't last!

UK economy bounces back: that's got to be bad news!

The UK economy emerged from its "double dip" recession in Q3, posting much better than expected GDP growth of 1% over the previous quarter. So everything in the garden's lovely now, right? Well, no, actually.  If you're determined to be pessimistic, there are now two things for you to worry about.  Choose your poison!

First, since much of the expansion in the latest quarter was directly attributable to the impact of the London Olympic Games, the economy is bound to come to a screeching halt now that the Games are receding into the past: bring on the triple dip! Unconvinced? Well how about this alternative scenario:  if the economy really is getting its groove back, as George Osborne would certainly like to believe, then the UK must be in for a fearsome bout of inflation because of all that QE-created money sloshing about the place.

The simple fact is that in one quarter, the UK economy has recouped all of the loss in GDP sustained during the much-hyped double dip.  That should be cause for celebration, but you'd never know it from most of the media commentary, or from the reaction of trade bodies like the British Chambers of Commerce.  A small cheer, then, for Iain Martin over at the Telegraph website, for trying to see the brighter side of the situation.  However,  I fear it's going to take a lot more good news to dispel the economic pessimism that has become so pervasive over the last few months, not just in the UK but throughout the world.  

The flipside of Coyne

James Coyne, who was Governor of the Bank of Canada from 1955 to 1961, passed away earlier this month in Winnipeg at the venerable age of 102.  Coyne is best remembered for a territorial dispute with the government of John G. Diefenbaker and his Finance Minister, Donald Fleming, a dispute that has passed into history as the "Coyne affair".  The Chief wanted the Bank to do more to stimulate the flagging Canadian economy; the Governor refused.  Coyne then voted himself a big pension increase (!), at which point an enraged government passed a law declaring the position of Bank governor vacant (!!).

Coyne resigned the next day, but in effect won the battle for Bank autonomy, as his chosen successor, Louis Rasminsky, refused to take up the post until he was assured he would be free from government interference.  Coyne, then, can be seen as a standard-bearer for the breed of aloof and untouchable central bank head that became commonplace by the end of the last century.  Recall that it was only in 1997, with the election of the Blair government, that the Bank of England finally achieved full operational independence.

In fact, Coyne was even more of a fore-runner of the modern central banker than the bare bones story above would suggest.  Although the common recollection is that he quit over the principle of Bank independence, his disputes with the government of the day were much more wide-ranging.  Dief and Fleming were anxious to use loose fiscal policy to boost the economy.  Coyne opposed this, and did not hesitate to make his views public, thereby straying well beyond the established limits of his responsibility.

Forty years after the Coyne affair, it had become commonplace for central bank heads to pontificate about anything and everything.  None took advantage of the bully pulpit more actively than Fed Chairman Alan Greenspan.  The Maestro was vehemently opposed to what he perceived as lax fiscal policy during the Clinton years, yet did a remarkable swerve to offer full public support for major tax cuts when the Bush Jr. administration came to office.  Without Greenspan's intervention those tax cuts, which paved the way for the dire fiscal mess the US finds itself in today, might never have been enacted.

The noughties, then, were the apotheosis of the independent central banker, from Washington to Frankfurt to London.  How do you think that went?  It's not hard to make the case that, in sitting by and watching as the greatest asset bubble in history formed, the central bankers suffered one of the most remarkable collective failures, either of intellect or of will, in modern times.  So, it should be said, did the politicians, analysts and economists who mostly acted as cheerleaders even as the excesses reached absurd proportions; but it's the central bankers, who are tasked with preventing this kind of nonsense, who must take most of the blame.  

We live in world where a sports coach can get fired if his team loses two games in a row, but remarkably, no such fate has befallen the central bankers.  Ben Bernanke at the Fed? Still in post.  Mervyn King at the Bank of England?  Ditto.  Jean Claude Trichet at the ECB?  Moved smoothly into a comfortable retirement at the end of his assigned term. Having wrought the crisis, the same gang has been given the job of fixing it.

There isn't even much discussion of altering the powers of the central banks, aside from some extremist mutterings in the US, where there is always an audience for Fed-bashing.  (Hi there, Ron Paul!)  Indeed, both the Bank of England and the ECB are in the process of gaining additional powers.  A number of years ago, the former UK Chancellor, Ken Clarke, would occasionally muse out loud about how things were better when UK politicians could push the BoE around a bit.  There's very little sympathy for that view these days, even though it's hard to see how even the most feckless of politicians could have arranged things much worse that the "professionals" at the central banks did in the half-decade or so before the financial crisis.

It seems evident that the complexity and inter-dependence of financial markets has made central banking an almost impossible job.  The professionals at the banks have to run hard to keep up with the pace of innovation, while the politicians, having rid themselves of responsibility for this crucial but treacherous area of  public policy, have no desire to get back in the firing line.  It's hard to imagine that this is what James Coyne envisaged when he squared off with John Diefenbaker, but he's part of the long history that has brought us to where we are today.    

From Queenston Heights to Tehran

Remember "the Canadian caper"?  When Ayatollah Khomeini was in power in Iran, a gang of students attacked the US embassy and took a large number of hostages.  A small number of US diplomats managed to evade the students and lived in fear for their lives for a few days,  until they were covertly given shelter by the Canadian embassy, led by Ambassador Ken Taylor.  At great risk to themselves, Taylor and his staff (and family) kept the Americans safe until a plan was put together to get them all out of Tehran, by providing them with fake Canadian identities.  Once the Americans were away, Taylor and his staff also fled the country before the balloon went up.

As an aside, it was a miracle that the Iranians did not rumble what was going on, as it was an open secret in Ottawa.  I vividly recall a mid-level official at the Department of Finance, with whom I used to deal, dropping heavy hints about "what a great job Ken Taylor is doing on behalf of the Americans in Tehran".  How many others must have known?

In any case, Hollywood has now got around to making a movie about the whole affair:  Argo, directed by and starring Ben Affleck.  And guess what?  The role played by the Canadians, without whom none of this would have been possible,  has been virtually airbrushed out of the frame.  It's now a rip-roaring thriller in which the CIA, turned into good guys for once, drive the whole rescue themselves.  By all accounts it's a great show and an early runner for the Oscars, but it's raised more than a few hackles north of the border.  Ken Taylor, now in his late 70s and living in New York,  was given a special screening and voiced a few concerns, to which Ben Affleck responded by amending a brief narrative screen at the end of the movie -- when everyone is standing up and putting their coats on -- to give Canada just a smidge more credit.  Merci, Ben!

Does any of this matter?  I mean, we're all wearily accustomed to the American mass media rewriting history in order to put more bums in seats.  But let's consider an earlier example that has a particular resonance right now: the War of 1812, which began with a last, ill-fated attempt by the newly-formed United States to grab Canada from those pesky loyalists.  Know much about that?  If you're American, chances are the only thing you might be able to summon up is a folky little number called "The Battle of New Orleans".

You know the one -- "In eighteen-fourteen we took a little trip".  Yes, the war dragged on for two years, even though the main issue was settled much earlier; the reason the entirely inconsequential skirmish in New Orleans made it into song was that it took that long for the American side to scare up a victory.   Prior to that, an alliance of British, Canadian and native forces had inflicted a series of defeats on the invaders all around the Niagara region.  Further, the British had captured Detroit and even sallied up the Potomac to set fire to Washington, just to show they could.

If all of this has been largely written out of history Stateside, be sure nothing could be further from the truth in Canada.  My new hometown of Niagara on the Lake bristles with Bicentennial flags (you buy them at the municipal offices -- very Canadian!) and just this past weekend there was a re-enactment of the pivotal "Battle of Queenston Heights".  The CBC pitched in with a factual but irreverent documentary "War of 1812: been there, won that", which is unlikely to show up any time soon on PBS.

These days, Queenston is best known as the Canadian side of one of the three bridges that carry traffic between the US and Canada in the Niagara region.  Appropriately, the tone of the Canadian remembrance of these events is very much one of celebrating the subsequent 200 years of amity between the two countries. But there's a lesson for Ben Affleck here: you can try to rewrite history to make your team look like the good guys, but the good guys have very long memories.

History mystery

When I moved to Canada for the first time, back in the mid 1970s, my wife was anxious for me to visit one of Toronto's most "historic" buildings, Casa Loma.  It's a rich man's baroque folly, and as the name suggests, it is indeed a house on a hill.  I wasn't unduly impressed: the house was only completed around 1920.  As I pointed out to my wife, my parents' house in London was a full quarter of a century older, and nobody had ever been moved to call it historic.

Within days of our return to Canada, there was a fresh reminder of how shallow the pool of history can seem on this side of the Atlantic.  The Federal and Nova Scotia governments have stumped up a good chunk of change to refurbish and refloat the "historic" schooner Bluenose II, and the relaunch in Lunenberg attracted large crowds and coast to coast media coverage.  Bluenose II was first constructed in 1963!  She's a handsome vessel, but she's not exactly historic in the same sense as HMS Victory or the Vasa, is it?  Even the original Bluenose, of which the current ship is a replica, was only built in the early 1920s.  

Still, there are some bits of genuine history that can stir passions in these parts.  Aside from the Bluenose, the other big media story that greeted us on our arrival was a plan for Canada to share diplomatic facilities in a small number of locations with the UK.  This sort of thing goes on all the time without any fanfare, but some bright spark decided to make an announcement about it, mainly to give a bit of substance to a visit to Ottawa by the UK Foreign Secretary, William "the Mekon" Hague.

Bad idea! From the public reaction, you'd have though that Canada was planning a tryst with Satan. The public outcry was muddled, to put it mildly -- one letter writer referred to the Brits as the "tea and crumpets crowd", while others denounced their bellicosity -- but it was sufficiently heartfelt that the big announcement was hastily buried, though no doubt the actual sharing of fax machines and doormen in obscure foreign capitals will go ahead anyway.  The facts -- that Canada has been effectively independent since 1867, that the two countries have fought numerous wars together, are members of the Commonwealth and the G8, and enjoy innumerable family ties -- counted as nothing against the perceived slight to Canada's sovereignty and its delicate sense of self esteem.

There is, of course, one thing that can offend Canadians even more readily than a run-in with the old colonial power, and that's being dissed by the United States.  And there's a fresh instance of that going on right now -- which will be the subject of the next posting.    

I'm baaaack!

Back in Canada, back online and back to the blog.  Remember the old days, when you could get a phone line installed in 24 hours?  We've moved on from there -- it now takes two weeks, because the process is so much more complicated, what with the broadband connection, cable TV and all the other stuff to be attended to.

Anyway, all this delay gave me plenty of time to think about what to write about once connectivity with the universe was restored, so the first real posting will follow very shortly.  Thanks for your patience, and thanks for stopping by.

So long, sucker!

I haven't been blogging about the hassles and travails of our ongoing move back to Canada.  I figure nobody wants to see a grown man cry.  However, there was one quite spooky incident on our last day in the old house....

Once all our furniture was out of the way, we gave the place a good cleaning.  It was a tip when we bought it, and we were determined not to leave it the same way.  Our venerable Miele vacuum cleaner was clearly struggling to cope with all the dustbunnies and cobwebs.  Literally as I finished the very last stair, an ominous red light came on and the machine gently expired!

So it's gone to vacuum cleaner heaven, or at least to the municipal dump at Garston, where I have been such a frequent visitor over the last two months that they are naming one of the skips after me. 

Next posting on the blog will almost certainly be from our new base in Canada, as we fly out later this week.  Budget deficits, separatist government just elected in Quebec, hockey season cancelled because of a strike -- doesn't seem like much has changed in the fourteen years we've been away.  Still, plenty to blog about!

NIMBY to the max!!

The small city where I've lived for the past dozen years, St Albans, has a lot to offer residents and visitors alike.  Extensive Roman ruins, a stupendous Cathedral, lovely parks, a 100-year-old street market, and more besides.  Well worth a trip!  But don't worry if you can't get here any time soon.  The locals are determined to preserve the place like a bug in a lump of amber.

Want proof?  Just take a look at last week's issue of the local freesheet, the St Albans Review.  On the front page was a story about how residents of one of the outlying villages, Colney Heath, are up in arms about plans to build a plant to dispose of food waste using anaerobic digestion.  The objections appear to be largely based on fears of bad smells, which suggests they don't know what "anaerobic" means.

On the next three pages of the paper we learn that:

* locals are objecting to plans to expand nearby Luton airport, citing fears of noise and increased traffic;

* city council has rejected plans for development of housing on a former industrial site in the city centre, on the grounds that it contains an inadequate amount of low-cost housing.  The site has been a vacant eyesore for well over a decade -- earlier plans for a supermarket were rejected after a long battle;

* there are fears that the government will approve a planned rail freight depot just south of the city.  This has been the subject of a long-running battle, and the activists are girding up for another round;

* plans for a new hotel on the south side of the city are attracting strong opposition, because it would encroach on "precious" greenbelt land, even though the land in question is both (a) inaccessible and (b) blighted by the nearby M25 motorway.

Five anti-development campaigns in four pages -- surely some kind of record!  I'm not passing judgment on any of the individual proposals, but as Messrs Cameron and Osborne flounder around trying to get the economy moving, this kind of local obstructionism is just about the last thing they need.

Oh well, we're only here for one more week anyway.  Wonder if things will be any different in our new home town in Ontario?  I'm betting they won't.

Oscar the Grouch

Back in the 1980s, the BBC's satirical puppet show Spitting Image ruffled a few yarpie feathers with a little ditty titled " I've never met a nice South African".  Sadly, the great Paralympian runner Oscar Pistorius has just lived down to that slur,  with his complaints about his defeat in Sunday night's 200 metres final.  According to Pistorius, his conqueror, Alan Oliveira of Brazil, only won because he was using "blades" -- artificial legs -- that were longer than the regulations allowed.

The International Paralympic Committee has quickly denied the charge, and Pistorius himself has issued a grudging sort-of-apology, regretting the timing of his outburst but standing by the accusation itself.  Here's a suggestion, Oscar: watch a video replay of the event.  Over the last 50 metres or more, Oliveira's legs were pumping dramatically faster than yours were.  That's why he won.

It's such a shame.  Pistorius has been a superb athlete who has done much to bring Paralympic sport into the mainstream.  Now he risks going into the history books as a sore loser.

Not dead yet

The UK economy keeps refusing to roll over and die, but the media stubbornly refuse to credit any good news that comes along.  I've written before about the continuing strength in the labour market, which is surely  incompatible with the declines in GDP that ONS has reported for the last three quarters.  Then again, ONS has now revised its estimate of the fall in GDP in Q2 from the original figure of 0.7% to "only" 0.5%.

That's still not a good number, but ONS itself had estimated even before the data were released that the extra holiday for the Queen's Jubilee would cut GDP by 0.5%.  So it seems as if the economy may at worst be stagnating rather than shrinking -- not that you'd be able to deduce that from the press coverage.

Yesterday Nationwide reported that its widely-followed house price index posted a 1.3% increase in August, the strongest monthly figure in two years.  The firm made the mistake of describing its own result as "surprising", and analysts were quick to follow, attributing the result to thin sales volumes, counselling against reading too much into one month's data (never a consideration when the data are bad!) and warning that the positive trend was unlikely to last.

The prize for the gloomiest take goes, as it so often seems to, to the business section of The Times. (Paywa££-protected).  The headline on its report: "Jump in house prices fails to dispel gloom".  Well, if that's how you report it, what do you expect?  

How are the mighty fallen

Flicking through the channels last evening, I happened upon a programme called "The biggest loser: Australia".

Disappointing!  It turned out to be some kind of extreme slimming show. Based on the title, I had assumed it would be a review of recent events in the world of sport.  

Failing the students

How very dare they?? The people who mark the UK's public examinations (GCSEs and A-levels) have broken a two-decades-old tradition this year, by slightly reducing the average grade awarded.  Most of the media are hailing an end to the "grade inflation" that has led some universities to rely on their own entrance exams or international diplomas like the Baccalaureat to select candidates, rather than on the established exams.

Teachers, however,  are up in arms, with one head teachers' union threatening a lawsuit, on the basis that the examiners (or the government) have moved the goalposts.  They are apparently appalled that some students have been awarded lower grades than their teachers had led them to expect, especially in key subjects such as English. Well, if teachers knew exactly how their students were going to perform, there wouldn't be much sense in holding the exams, would there?  It's hard to escape the conclusion that the teachers see the exam results less as evidence that their pupils have been educated to the appropriate level, and more as a piece of ego gratification for themselves.

I don't want to come across as a grumpy old man here -- no more than usual, at any rate -- and I certainly don't want to dis the kids, who can only take the exams that are put in front of them.  However, when I read that at one school,  three students achieved A* grades in 13 GCSE subjects, I have to think something is amiss.  Delving back into my old high school year books, I find that most people even in the most academic class achieved between 5 and 7 passes -- that's just passes, not top grades -- at O-level, the precursor of today's GCSEs.

No school would have dreamed of forcing students to attempt 13 subjects back then, but then again, the exams were a bit different.  You commonly had to take two 3-hour exams to get one O-level.  There were no multiple choice papers, and no open book exams. But for those who eventually moved on to higher education,  there were also none of the remedial English and maths courses that even the best universities are finding it necessary to offer these days, a development that you'd think high school teachers might feel rather ashamed about.  The kids aren't getting dumber, but I'm not nearly so sure about the teachers.      

Excuses, excuses!

Another month, another dire set of data on UK public finances.  (BBC story here).  July, normally a strong month for the fisc (because of payments on account for corporate and personal income taxes), saw a surprise new borrowing requirement of £600 million, compared to a surplus of £2.8 billion in the same month of 2011.  The main culprit is deemed (by the Treasury, at least) to be a 0.8% fall in revenues, though some might argue that the real problem is that the Government, for all its fearsome and confidence-shattering rhetoric, is failing abysmally to get any sort of grip on spending, which is still rising at a rate of more than 5% year-on-year.

As usual, there are supposedly mitigating circumstances.  The fall in corporation tax receipts may have been caused by the closure of a North Sea oil field because of a leak.  The Treasury is also suggesting that some tax payments on account may be recorded in August rather than July.  This is such a feeble get-out that you have to wonder if the Treasury's manual of excuses is getting worn out from overuse: there's no good reason why such payments would be tallied later on average this year than any other year, unless everyone was entranced by the opening ceremony for the Olympics.

Borrowing needs in each of the first four months of the fiscal year have been above prior year levels.  Achieving the Government's aim of reducing the annual borrowing requirement ever so slightly this year now looks a very tall order.  You wonder when the Treasury may start to realise that at some point a series of one-off factors, of the type it has been blaming for the shortfalls in recent months, might just start to look like a trend.

George Osborne, no fool he, is off on holiday somewhere, so it fell to one of his juniors, Chloe Smith, to repeat the increasingly untenable party line that "these figures show the importance of sticking to the government's plan".  Interestingly,  on the Labour side, someone actually seems to have looked at the data and realised that the usual bluster about brutal spending cuts is not actually true.  This month the party has offered the much more tenable view that efforts to cut the deficit had "choked off the recovery".

Truth to tell, the state of the UK economy is still a bit of a mystery.  It turns out that Q2 did not see as drastic a fall in GDP as first reported,  employment trends remain positive, and there are still expectations that the Olympic effect will give growth a boost in the current quarter.  The borrowing data are about the only unequivocally weak part of the overall picture right now.  Even so, the government's blinkered view of what it's actually achieving on the fiscal front becomes more ludicrous with every month that goes by.          

Putin's butterflies

Back in 1968, Mick Jagger and Keith Richards of the Rolling Stones were put on trial for drug offences.  The judge chose to throw the book at them, which prompted a memorable editorial in The Times.  The paper's editor, William Rees-Mogg, is nobody's idea of a bleeding heart, but he was appalled at the severity of the sentences, and chose to quote the words of a poem by Alexander Pope: "Who breaks a butterfly on a wheel?".   Rees-Mogg's words had the desired effect, and thereafter the UK authorities increasingly turned a blind eye to minor drug transgressions by rock stars.  (This didn't stop Keef from getting into a similar scrape in Toronto a few years later, but that's another story).

Rees-Mogg, though very advanced in years,   is still with us, but apparently Vladimir Putin has not been taking his advice recently. The "Pussy Riot" trial, and the jail sentences handed to the three young women for their tawdry piece of attention-seeking in a Moscow cathedral, have led to an outpouring of anger in Russia and around the world.  If it hadn't been for the trial, the whole episode would have been forgotten months ago.  Now it stands to be a touchstone for a rising tide of protests against Putin in the coming months, even if he decides to exercise his prerogatives as President to commute the two-year jail sentences.  

As an ex-KGB man,  Putin is no liberal.  Even so,  attempts to paint him as some sort of Stalin redux show little sense of history.  Not many of Stalin's numberless victims had the benefit of a trial, even a show trial, or ended up spending time in prison rather than being bundled into a mass grave.

And if we accept that Putin may not be a nice man, we should perhaps also allow that the members of Pussy Riot are no angels.  The great and good of the rock world (and Madonna*) have rallied to their cause.  Peter Gabriel wrote after the trial that he understood that the three women were all believers, and sincere about their faith.  Given what they did, that seems unlikely: staging a political protest in front of the altar of a cathedral is a stunt designed to shock and offend, and if the Pussy Riot trio are even half as religious as Peter Gabriel imagines them to be, they must surely have known that.  The jail sentence is a draconian punishment, but this was no innocent prank. Think they would have tried something similar in a mosque?

* Madonna's intervention, at a concert in Moscow, prompted one of Putin's supporters to utter one of the insults of the decade:  "Madonna", said he, "should either take of the cross or put on her knickers".        

Ryan hot air

I never know whether to laugh or cry when American politicians decide to take aim at the UK's National Health Service (NHS), that well-known spawn of a socialist Satan.  Remember Sarah Palin a couple of years ago?  According to her, any seriously ill patient's fate at the hands of the NHS was decided by a "death panel".  I tried to get on the death panel at our local hospital but was told there was a waiting list -- typical NHS.*  One has to suppose that the concept of triage is unknown in the US health care system, or at least unknown to Sarah Palin.

Then there was the British guy who got a lot of coverage from Rush Limbaugh and others of that ilk by claiming that he couldn't get dental care on the NHS, and was forced to fix his own teeth with superglue.  I'm sure Rush Limbaugh knows perfectly well that in the UK you can get to see a dentist remarkably quickly if you're prepared to pay for it.  Of course,  the existence of choice between public and private care (which exists in all fields of medical treatment in the UK,  not just dentistry) wouldn't fit the right-wing narrative,  so there was no point in Rush bringing it to the attention of the US audience.

Which brings us to Paul Ryan, newly-minted Republican vice-presidential candidate.  On almost his first day in the "job", Ryan launched a blistering attack on the NHS, arguing (or rather, asserting without evidence) that it caused the middle classes to become dependent on the state, and thereby made it almost impossible to cut public sector spending.  Much better, it seems, to allow tens of millions of people to live without protection against unexpected medical costs, and to hand the whole industry over to the benign forces of the private insurance sector, where every ailment can be waved aside as a "pre-existing condition".  

If the US wants to spend a higher proportion of its GDP on health care than any other nation in the world, while achieving key outcomes (infant mortality, overall life expectancy) no better than in many Third World countries, that's entirely the US's business.  But it really doesn't justify the misleading assertions and outright lies that US politicians regularly see fit to utter about medical care in the rest of the world.

* Unlike Sarah Palin, I'm joking.  

It's been a triumph

I've used this blog to say some sour things about the Olympics over the past couple of years,  so as the Games draw to a close, it behoves me to say that the event has been a massive success on just about all levels.  Londoners have risen to the challenge brilliantly.  The weather has mostly cooperated (though it was maybe a bit chilly for the late evening beach volleyball sessions).  There have been few complaints about transportation, the patched-together security arrangements have worked just fine, and even the initial griping about empty seats at the venues seems to have died away.  And of course the sport itself has been marvellous.

So, aside from the medallists, who are the winners here?

The biggest winner of all, and it hurts a bit to say this, has to be Lord Coe.  Give him almost £10 billion to play with, and he can put on a heck of a show for you.  Of course his ego, never far from view, must now be big enough to eclipse Alpha Centauri, and he's setting his sights on even bigger goals.  David Cameron has already tapped him to manage the UK's Olympic legacy programme, but Coe has hinted that the job he really wants is to be head of the global governing body for track and field sports, the IAAF.  I hope their budget is up to the strain.

Then there's the Mayor of London, Boris Johnson.  BoJo wan't actually mayor when London was awarded the Games -- that was Ken Livingstone -- but he's been an enthusiastic booster, and now that it's been a big success, he stands to reap a lot of the glory.  David Cameron's star as Prime Minister seems to be waning fast, and the media are focusing more and more on Struwwelboris as the man in waiting.

The BBC has had a good Games.  Its decision to set up an array of digital TV channels in order to show every single minute of sport live has surely set the standard for all future Olympiads.  It's sad to hear that NBC, which has been broadcasting the Games in the US, has been using an old fashioned, commercial-laden pick and mix approach. They even showed the men's 100 metre final on a delayed basis, in order to broadcast it in prime time.  It's to be hoped, or indeed expected, that nobody will dare to do anything like that when we get to Rio 2016.

Sports commentators have emerged as winners.  Those we heard were generally well-informed and enthusiastic without being jingoistic, though the BBC did shoehorn some of its contracted staff into some unusual locations -- Jonathan Edwards, triple jumper, seemed very uneasy commentating on the white water kayaking events.  We also learned just how much we have come to depend on commentators, because on may occasions, for the more obscure sports, the BBC opted simply to show the pictures with no commentary at all.  Trying to figure out the differences between the various martial arts sports, without the aid of a guy with crib notes on a clipboard, was a real challenge.

What about losers?  Apart from pre-Games Cassandras like yours truly, there really haven't been many, but I will give a mention to newspaper columnist and sometime TV pundit Matthew Syed.  Matthew, as he never ceases to remind us, was himself an Olympian, in table tennis.  Oddly, however, a large part of his contribution to our understanding of these Games has been repeated and tedious references to how much sex all the athletes try to cram in once their events are concluded.  There's something almost Victorian about that obsession, which I'm sure is the exact opposite of what he's trying to achieve.

Once the big party's over, a hangover must inevitably follow.  It won't be long before we start carping again about how much it all cost, or how it didn't provide the promised boost to the economy, or the uncertain fate of the main Olympic stadium (prediction: if West Ham FC move in, they'll be screaming/litigating to get out within 5 years), or the slow progress in turning the Olympic site into a new neighbourhood. But all that can wait: at this point, we can only compliment the organisers, the volunteers, the spectators and most of all, the participants on a really great show.            

They're all doing it!

US regulators seem to be taking it in turns to tee off on UK banks at the moment over alleged money laundering.  First it was HSBC aiding and abetting the Mexican drug cartels, now it's Standard Chartered flouting restrictions on dealing with (shudder!) Iran, thereby apparently leaving Uncle Sam exposed to terrorism.  HSBC has, reluctantly,  sort of fessed-up, but StanChart is, at least for now,  strenuously denying the charges.

It's a bit of a mystery why it's mainly UK banks in the frame here, though since the BP-Horizon disaster, ill-informed Brit-bashing seems to play well on both Wall Street and Main Street.  In addition, there's more than a little suspicion that US regulators, especially the ambitious new New York State guy who's going after StanChart,  may be using their muscle to try to curb London's pre-eminence in international finance.

The plain fact of the matter is that every bank of any size in the world, regardless of where it's domiciled,  is undoubtedly laundering money every day of the week.  Even with the best possible internal controls, it's impossible to detect every single attempt at using the banking system to clean dirty money.  There are just too many ways to do it; compliance departments, which have become massive in recent years, simply can't keep up with all the tricks of the trade.

It's a different matter if a bank is wilfully disobeying clearly-defined national laws,  which seems to be part of the case against StanChart, though one which the bank itself denies.  The activity itself is, however, essentially unstoppable, as every New York bank smugly watching HSBC and StanChart getting put through the wringer knows perfectly well.

The US could, of course, put an immediate stop to money laundering by drug barons,  by legalising and then controlling the distribution of drugs.  After all, just about all the money being laundered originates in the US anyway.  It's been clear for years that if there's a "war on drugs", the drugs have won.  Just don't expect anyone to admit that.  

A move and a hiatus

As some readers of the blog may already know, we are in the process of moving from the UK back to Canada, with a target date of mid-September.  I'd forgotten how hard moving house is, and it doesn't get any easier as you get older!

Because of this, I will have less time free to spend on the blog for the next several weeks, so the frequency of postings will dwindle.  I will, however, try to make time to comment on any really important or especially annoying events that may happen during that time.  Things should get back to normal by early October, but it will be a "new normal", with more attention paid to things Canadian and less griping about the UK.  Maybe.  

Antichrist on a bike

Big excitement at the Olympic Velodrome (aka the Pringle) yesterday evening, as the GB men's cycling trio won the team sprint event in a world record time.  Medal safely in hand, however, the team's lead-off rider, Philip Hindes, made a surprising admission. In the preliminary round he had got off to a bad start, and therefore deliberately fell off his bike in order to force a restart!  The team brass were quick to cover his tracks (so to speak), saying variously that his words had been misinterpreted, or were meant as a joke.  The media, happy to see Team GB moving up the medals table, seem willing to accept this.

Here's a thing, though: Hindes was born in Germany, and until a couple of years ago could have chosen to represent that country in international competition.  Can you just imagine how the UK tabloid press would have reacted if Hindes had in fact been riding for the land of his birth yesterday, and had diddled Team GB out of a medal through such tactics? It hardly bears thinking about.

Anyway, after a hard day's Olympic watching yesterday, I decided to flip through the channels in search of something entirely unrelated to sport.  There on the excellent Sky Arts 1 was the world's smuggest man, the conductor Andre Rieu, coming to us from an outdoor stage in Maastricht.  He brought onto the stage a gorgeous African soprano, and announced that she would be singing JS Bach's Ave Maria.  In his most confiding tones, Rieu let us know that "with the passion she brings to this piece, it becomes like a prayer".  You don't say?  I wonder if that was the composer's intention.    

Ghost town

Well, there's a surprise!  After all the fears and horror stories about the inevitable transport chaos that would blight the London Olympics and embarrass the city in front of the world,  the trains and Tubes are coping quite well.  Even the expected mayhem on the roads has failed to materialise, to such a degree that some of the hated "Zil lanes" set aside for the "Olympic family" are being reopened to regular drivers.

How come?  Well, in a development that will have shocked nobody who has looked at recent Olympiads around the world, the combined threat of chaos and ripoff prices has deterred non-Olympic visitors from coming to London, and Londoners themselves are staying the hell out of the way.  The overall number of tourists in the city is way down on normal midsummer levels.  Theatres are half-full, hotels are slashing their rates,  and some restaurants have seen trade fall by as much as three-quarters.

It must be really embarrassing for all the "essential workers" who demanded (and got) bonus payments to compensate them for the added burden they would be shouldering to keep the city moving.  Tube and train operators, bus drivers, even the people who run the "Boris bike" hire scheme -- they all used the threat of strike action to extract payments of £500 or more just for showing up, in addition to all the lovely overtime they were going to get paid anyway.  Think they'll be lining up to hand it back, now it turns out they got it under false pretences?

So much for the boost to GDP that the Games were supposed to provide.  Still, if that doesn't materialise, at least we won't have the "triple dip" recession that the media were starting to salivate over. We'll just have an even longer double dip.