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....
Friday, 30 November 2012
Wednesday, 28 November 2012
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!
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!
Monday, 26 November 2012
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.
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.
Friday, 23 November 2012
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.
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.
Saturday, 17 November 2012
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.
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.
Wednesday, 14 November 2012
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.
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.
Tuesday, 13 November 2012
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.
Sunday, 11 November 2012
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".
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".
Friday, 9 November 2012
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.
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.
Monday, 5 November 2012
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.
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.
Friday, 2 November 2012
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.
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.
Thursday, 1 November 2012
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.
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.
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