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.