Is Donald Trump an Idiot?

On CNN this morning, Donald Trump was asked about his support of John McCain and for his opinion about the bailout. Like any good politician, he answered the question he wished he was asked and not the one he was asked.

To paraphrase: "Well yeah I support John McCain because of his experience and because he knows how to deal with OPEC. You have to control the price of oil. Listen, If I owned a store, and you owned a store and we fixed prices, we would be thrown in jail. That is exactly what the OPEC countries are doing. I like John McCain because he will go to those OPEC countries and address this and tell them they've got to stop hurting our economy."

But the true slice of brilliance came next:
The 'Trumpster' added: You see it with the failure of the bail-out. The bailout failed and the price of oil dropped by $10 a barrel, the highest ever drop in the recording of oil. Look, I think the price of oil is more important to our economy than interest rates."

How the hell did this man ever make one red cent?

The price of oil drops when speculators and buyers believe that there will be a drop in demand for oil. If anything, OPEC regulates the supply of oil not the price. Numerous countries have held revues of the system, world economists, resource experts and all pretty much agree with the way the system is run. The issue with oil is that it is an incredibly inelastic market so that any increase in supply results in short term price decreases that spur demand that ultimately result in price increases.

So yesterday, as wise as it may have been not to give Secretary Hank Paulson a blank check for trickle-down economic intervention, the markets reacted poorly and speculators held the belief (I would imagine) that the economy was in for a rougher than smooth ride with more job loss and a general slowing of economic activity. In other words, they believed as credit freezes up, foreclosures and bankruptcies continue, notwithstanding that Congress may still act to do something to prop up the flailing US economy there would be less demand for oil and gas in the coming weeks and hence lower prices.

We witness this every summer in Ontario as prices decrease Monday morning as a portion of those people in the workforce go back to work (think of how nice traffic is in July and August) and rise again for the weekend as people make plans and drive more. Then there is a refining stage between crude oil and gas at the pump which adds its own supply and demand issues.

What baffles me about Trump's comments are that he deals in real estate, a different market that involves speculation, regulation and responds to supply and demand. If a housing market is flooded with very nice, high quality, cheap apartments, it doesn't make sense to build a Trump Tower for instance. Similarly, if there are few apartments, the price of those on the market goes up - as anyone who moved to Toronto in the mid-to-late 90's can attest. With respect to land values, speculators do what they do best and buy properties that they believe will be critical pieces of a larger assembly or assemble properties believing zoning changes are achievable. If major transportation projects are announced, speculation runs rampant. There are short games and long games, micro and macro effects and forces at play in both oil and gas and the housing market. So Trump must enjoy a better understanding than his comments demonstrate.

Perhaps this is an Apprentice-styled rouse?

Perhaps Trump is smarter, way smarter than I am giving him credit for. Trump relies heavily on the price of carbon-based fuels to build his buildings - everything from steel, concrete (very CO2 intensive,) glass and simply moving dirt around, costs more as the price of gas goes up. So, if there is doubt in the economy, created in part by the total lack of understanding in the economy of a President McCain, that would mean that the price of oil would be fairly low for sometime into the foreseeable future. But there's a flaw in his thinking if that's the case since less people would be able to afford his luxury condominiums if the economy remains ill. So that would not be very wise ultimately since he benefits far more from a strong economy than from cheap gas and instability.

Perhaps Trump truly believes that McCain does have the ability to impact OPEC policies while every single other world leader also dependent on cheap gas to fuel economic growth has been unsuccessful. Those leaders undoubtedly employed more diplomacy than McCain is capable of, enjoyed a greater esteem for their nation and was seen as less greedy - things the US are not very well known for as they enter the post-Bush era. So how will John McCain be able to do anything about oil prices (especially when in reality, there is a fixed supply, whether we burn it quickly or slowly is another issue?)

He could invade those nations that are members of OPEC and remember that he will not tell his plans because you 'don't tell sovereign nations what you're thinking.' That would ultimately cause higher gas prices - nothing costs more to fuel than a War! Would McCain create greater stability in the mid-East region? That is highly doubtful given that he supports maintaining an occupying force in Iraq and is talking tough about Iran.

Oil and gas markets want stability - as most markets do. McCain does not possess the skills to stabilize the economy and his approach to foreign affairs would not necessarily create greater stability than Obama - not enough to look past his lack of economic knowledge. Forget Palin. She's a nightmare.

McCain would give a gas tax holiday - at least if he keeps his word, when gas prices are at their highest, which would of course, drive prices higher while also removing the source of the Highway Trust Fund. So he's not an Eisenhower by any stretch of the imagination as some are suggesting he is with his Nuclear Plant program. Though one could argue that McCain's nuclear plan is similar to Eisenhower's Interstate program in that it would create an infrastructure that is ultimately financially unsustainable!

Anyway you look at it, there is simply no way in which a McCain government would be able to do anything about the price of gas and inevitably, his efforts to fix the problem would only make them worse. The flip side of the question here is whether the absence of OPEC would decrease the price of oil or whether competition would have a deleterious effect on the oil market? OPEC mandates and regulates how much each nation is contributing to the global pool of oil. This ensures that in times of crisis in one OPEC nation, others can ensure that global supply is maintained.

Lastly, if the Americans possessed the world's majority share of oil and had the ability to set prices, do I even have to ask the question that logically follows? Would they subsidize the rest of the world by selling their natural resources at below-market rates? And would they sell that resource off prior to it achieving its highest possible market value? Oil is not currently worth what it ultimately will be as supplies continue to dwindle and if our consumption continues at its current levels or worse increases. So wouldn't it make sense for nations to keep the lid on their supplies for as long as possible to achieve the highest market value - the last barrel is worth significantly more than the first - notwithstanding the expense of getting to that last barrel.

What is up with Trump? Is he being serious or has too much carbon-based hair product finally leaking through to his brain! Oh, right. He's American which means the sun rises over his bed every morning and it will and should forevermore!

Capping CEO Compensation vs Progressive Taxation

They're at it again. They're talking about birdies instead of fundamental problems - even if the birdie is part of the fundamental problem.

This morning it appears that Congress will support a package of $700 Billion in aid to failing Wall Street and Main Street banking firms. However, before Congress votes a number of Members of the House of Representatives must get up and speak before voting since they're up for re-election. And since this is the height of silly season in the US, speak they will!

And who better to kick around than CEO's? The best, most hypocritical of these speeches come from House Republicans. First, let me say that I do not disagree with a policy that CEOs of those firms that receive Federal assistance should have caps on their remuneration packages. Given that the entire economy is on the line, largely because of their greed, it is reasonable to expect that the leader of a firm needing assistance shouldn't get anything extra.

But let's back up a moment here. Remember that most true conservatives will argue for user pay in most instances and that taxes should reflect as closely as possible the consumption of services, not to ensure the equitable provision of a service regardless of income, i.e., that taxes should be based on the cost imposed on society by the individual and not their income. The rich don't cost anymore to serve so they shouldn't pay more in taxes the belief goes. Flat taxes are the conservative ideal. From there it is a gray area - an attempt to limit the mix and balance of the share of individual proportions of the entire tax bill.

It is also the partner of the belief that high taxes reduce the incentive to innovate, work hard and try to get ahead. I think that is a fundamentally flawed view - there are leaders and followers, achievers and under-achievers regardless of the amount of taxation. Conservatives want government to be small, off our backs (though oddly, religious conservatives want to be in your bedroom) and for taxes to be constantly reduced regardless of other factors. And market intervention is to be avoided as much as possible.

But, it appears that deregulation of the financial services sector has resulted in massive over-speculation in the housing market, bad, risky and predatory loan practices and the bundling of mortgages into funds that have eliminated many ties between the investment and the asset. In other words, some of the mortgages are totally illiquid since there is no direct tie to an actual property. 100's of mortgages were bound together as packaged investments and now that the housing market has collapsed due to a slowing of the economy, over-valuation of houses and over-borrowing by consumers, well, there's about $700 Billion of artificial value that needs to be bought. That is why even the experts don't know the value of the assets.

So now it is crazy election time. Rather than advocating for higher taxes on the wealthiest Americans - after all, if John McCain thinks that those earning over $500,000 a year aren't rich, then raise it to $1 million per year or whatever level you believe is wealthy and crank their taxes. Then you wouldn't have to drive further firms from Wall Street to London, further reducing the economic and commercial influence of America. What many Americans fail to see is that many firms have already left the NYSE because of the possible prosecution of CEO's for accounting errors. It's my belief that in their effort to recover their political careers after ENRON and Worldcom, Politicians passed wrong-headed legislation that went too far and after the wrong things. By all means, clean up malfeasance but go after the crimes, not the errors. Perhaps one of the flaws with the Enron business was the significant reliance on private power companies in California and the concession agreements they had with the State?

If the Federal Government taxed the hell out of Golden Handshakes - be it from stock, options or dollars, then they really needn't worry about the size of these packages. In fact, the bigger the better. To the best of my knowledge, a CEO's compensation is determined by a Board of Directors, appointed by Shareholders who own stock and meet on an annual basis to make major decisions. These are the people to whom the CEO is responsible and accountable. CEO compensation packages and the details of their contracts are their problem! Tax Corporate earnings and CEO compensation packages and let private firms determine market value for the services of CEOs!

I cannot believe that in all this din, no one is talking about the hypocrisy. Obama should be saying - 40 percent of a $75 million dollar CEO compensation package is $30 Million; A lot of money. Why does John McCain not want the CEO to pay those taxes? Instead, my opponent would rather show-boat and suggest doing something that he knows we cannot legally do and that is a far more interventionist, socialist, liberal policy than anything I'd ever suggest; Capping private sector wages. He opposes a minimum wage and high taxes but wants to cap incomes? Who is this John McCain? Who are these conservatives?

If your firm gets a bail-out or declares bankruptcy, you shouldn't get a 'golden handshake.' If you leave a firm at any other time - congratulations, good work, enjoy your wealth. Now gimme those taxes!

It's these kinds of debates that really make me think we have little hope to solve the larger problems that we face, be it climate change or pandemics or the looming energy crisis. We get so caught up in these petty issues that we fail to see the trees for the forest.

McCain vs McCain

"I'm a foot soldier from the Reagan Revolution."
"I believe in regulation."
"I believe in de-regulation."
"I'm for the bail-out."
"I'm not for a bail-out."
"I believe in a free market."
"I want to limit CEO compensation packages."
"I believe in tax cuts."
"I'm experienced."
"I represent change."
"I own 9 houses." (No, wait. He didn't say that - he couldn't remember how many he owns!)
"I care about the Middle Class." (No, wait. He didn't say that. He said Main Street.)
"I don't believe in taxing the wealthiest at a higher rate."
"I believe in giving Americans tax credits for mortgages."
"We need to address the problems that Americans face."
"We need to freeze spending."
"We don't need the UN to tell us what to do....except in
"I can work with our partners."
"You don't tell your partners what you're going to do."
"I took on these guys, I took on those guys."
"I can work with anyone."
"I do not have a temper."

You might think that these statements were made by two separate candidates in the US Presidential election. Unfortunately, these are all quotes or paraphrases from John McCain. McCain is a populist hypocrite and a public liar.

On this morning's ABC's This Week with George Stephanopolous, he was trying to clean up after his botched Debate. What a loser. This man has contradicted himself every day of the last two weeks.

Foreign Affairs:

Palin says "If we know Osama is there we should go into Pakistan." Meanwhile, McCain tries to convince the American people that Obama wants to invade Pakistan rather than send strike forces in to take out Bin Laden. Obama has taken the George Bush position (that killed John Kerry in 2004) that America is responsible for its own security and will answer to no one. Obama means that if you see Osama Bin Laden on Satellite or have intelligence as to his whereabouts - you take him out with a covert, strategic strike - just as Palin has suggested and most Americans would agree with. Pakistan, and the governing party must understand that this is a potential consequence of their inaction - by not allowing them to respond ahead of time, to assist NATO in Torra Borra, McCain exposes his Pakistani allies to retribution from extremists in Pakistan. "You don't tell them what you're going to do." He is so totally out to lunch on this issue it's not funny. Lie to your friends, be honest with the indifferent and threaten enemies seems to be his M-O.

By McCain's reasoning - you can openly threaten states that are hostile to you but you cannot threaten to cut off foreign aid to allies when they don't help you. Is anyone buying this bullshit? That Americans do not see him as an Angry Old Man who will do or say anything for power is startling.

On Domestic Issues:
McCain supports the Bush Tax cuts and is continually trying to convince the American people that Obama would increase taxes on Americans - particularly on the middle class. How do people let this guy lie to them? Go to obama.com and you can see Barack's tax plan. It is clear that it will shift burdens from low-wage earners, single-income families and middle-class Americans on to Corporations and the rich.

John McCain says he doesn't believe in the greed of Wall Street and the excess that is rewarded. Yet he does not want to tax the rich at any higher rate. In essence, he wants a flat tax. How can people not see through this? Forget the compensation packages - like Earmarks they are a visual yet ultimately fairly inconsequential part of the problem. Allow Shareholders to limit compensation packages - they ultimately own publicly-traded companies. The Federal government has the ability to claw-back compensation packages by a much simpler measure - TAX THEM!!! Instead, McCain is playing populist - they all are with respect to the financial bailout.

Health Care:
McCain argues that nationalizing Insurance means telling people which Doctor they can visit. What an idiot. Americans: I am Canadian and can chose my own Doctor - though we do have a shortage as 'greedy' doctors go to America to earn money off the backs of your sick and fail to pay us back for our investment in their education - so, thanks for running a profit-drive health care industry. We take your guns, you take our Doctors. Back to my point. By eliminating profit-driven Insurance companies from the Health Care equation, you eliminate a 3rd party, non-medical decision maker saying no to necessary treatments. (Hello? Greed anyone?) Look at the facts. US Health Care delivery costs more and has worse outcomes than in Canada. FACT.

It's basic. Government does not profit from its activities and when it delivers a surplus - that's the peoples' surplus. AIG, a major insurance company, with major health care services and investments in health insurance is going to be bailed out by the Federal Government. AIG will at some point, deliver benefits to its shareholders though that looks like it will be the American people for the foreseeable future. So...AIG makes money from people who need health care/insurance. They and their competitors say no to services they perceive as unnecessary and pay-out only portions of coverage for services - a health care coupon as it's called.

Here's how it works in Canada. I need health care, I go to my doctor or Hospital. I get treatment. Sometimes that means medication, a portion of which is covered by our Socialized drug-purchasing policies - those programs that attract AARP buses to Toronto from Buffalo to buy cheap drugs. Sometimes my health care entails a wait. But I never, ever get a bill for it and I can feel comfortable knowing that the person serving me my food also has the same opportunity and that they're not coming to work with an infectious disease because they can't afford a doctor's visit or medication to solve their problem.

So John McCain talks big about limiting greed and corruption. Then he endorses the current Health Care approach - a license to Insurers and private Hospitals to print money. What a liar. What a hypocrite. What a jerk.

Earmarks:
Much ado about nothing? Earmarks totaled $18 Billion last year. The US spends 10 Billion everyday in Iraq. Earmarks pay for local projects such as needed road fixes that don't meet bureaucratic criteria, bridges to encourage economic development (under SAFETLU bridges are assessed only from cost-benefit/transportation perspective) and cultural projects like privately run Holocaust museums.

Spending Freeze:
I'm not sure what McCain meant by this. If he meant that when he took office, no cheques would be issued except those he excluded (Defense, Veterans Affairs, maybe one other) then he is proposing to close Washington DC until he gets educated on line-by-line spending - in a budget of over $3 trillion! He has already shown that he is a slow-learner. Does this mean that DC would be closed until sometime in 2010 when he understands finally how government works? I'm confused. How will congressmen get to Congress with all that garbage piling up on the streets of DC? Does he mean that Congressmen won't get paid? The Federal government cannot simply have a spending freeze of any substantial weight since most of what the Federal Government spends is in entitlements - programmed spending to deliver... core programs. Does he close the Federal Highway Administration? Does he close the FDA with all the food security issues the US faces? What exactly does John McCain mean by a spending freeze? It sounds great because it plays on our passions - which are emotional, not rational.

How will John McCain fix the bankrupt Highway Trust Fund? He's already stated he wants a Gas Tax holiday. And here is my conclusion:

The problems in the American Economy have been created by a detachment with reality and a lack of effort to address cracks in the system as they've developed like so many cracks in the New Orleans levies. Greed fuels the whole thing - whether that's an expectation of lower taxes or mortgages based on good wishes instead of economic solvency, unlimited credit and ego-driven anger against those who succeed under the current rules. Americans love to kick their success stories while also boasting of the American Dream. There must be some parallel to psychological conditions, like schizophrenia and/or paranoid delusion but definitely ADD.

America, if you want another high-functioning Moron as your President, one who will lie to you, lie to your neighbours, threaten your foes and take us to the brink of all-out Global war...then please, vote for John McCain. If you want this ship we call earth, to steer itself successfully through the challenges we face, then vote for bold change - vote for Obama, or please for the sake of the rest of us on Earth, just don't vote at all.



New Conspiracy Theory: Bush went after Saddam cause he went after his Daddy. Given McCain's quoting of Teddy Roosevelt's 'walk softly with a big stick' (totally misinterpreted by the way) and his propensity to not tell anyone what you are really thinking and McCain's well known anger towards those who have ever crossed him, even once, let alone torturing him for 10-years leaving his body scarred and maimed .... McCain secretly wants to send the US Military back to Vietnam to make those m-f's pay for what they did to him!

Presidential Debate - McCain Whack-a-Mole?

CNN this morning says that John McCain has now left Washington and has gone to his Campaign Headquarters in Virginia. Why? I thought he had suspended his campaign until the Financial Crisis had been solved. If he is at his campaign headquarters, presumably he will be working on, discussing and in other ways, working on his campaign. I guess, he's figured that his whole idea of suspending a Presidential Campaign is ridiculous.

The US has been focussed on the question of who the next President will be and what direction they will take the country in that it is impossible for one candidate to suspend a campaign. Regardless of his inaction, the rest of the country, his party, his supporters, independents and of course the Democrats are still campaigning and are still seeking answers and leadership. McCain loses any right to point the finger at Obama for ever voting 'present' in the Illinois legislature. At least Obama was present. McCain has done nothing but make himself irrelevant this week which certainly undoes much of the hard-work he has done.

The President, as much as we'd like the current one to do so, cannot simply disappear from the scene, nor can his return to Washington cause a solution to crumble to pieces - as McCain's recent return to Warshington has (*yes, Warshington, this is McCain we're talking about.) So Obama has largely said little of deep consequence but his presence has been calming and displays to the American public that he both hears their concerns while also realizing that the health of the Economy at large, on a macro-scale, is of crucial importance to the lives of Americans.

University of Ole Mississipi, which is hosting the debate, has spent $5 million in preparation for the debate. McCain tried to cancel this debate, a debate about foreign issues which he is supposed to have the upper-hand on. He is truly desperate. He is starting to know why VP candidates must be carefully veted - Palin clearly is bombing now that people are looking beyond the surface. Anytime she speaks now, all one can think is, my god, McCain better live if he gets elected.

"Anytime Putin raises his head in our Airspace, where do you think he's going to go first into America? Hello? Alaska and that is where we send them up to keep eyes on them..." wooohooo.... what world does Sarah Palin live in? Did they stop reporting news in Alaska sometime during the Cold War? Doesn't she know that Economics are what killed soviet communism - not tough talk.

Now I'm seeing Harry Reid and Chris Dodd hammering away at John McCain. No one on the right is doing that to McCain. His designates have gone silent - because they have no clue how to spin this. The Republicans are trying to distance themselves from their own President. McCain is stuck between Iraq and a hard place - to either support Bush's plan and further alienate house republicans and true conservatives, or to support the plan, side with Democrats, and go with the majority of experts (albeit Bush appointees) who seem to agree that major intervention is required. The times have caught up to McCain in the worst of ways.

Obama is playing this as well as anyone possibly could. He has in essence said many of the same things as McCain. However, he of course benefits because he didn't say stupid things about the Fundamentals of the economy in the last 10 days as McCain did. It's like watching a game of Presidential Whack-a-Mole. Anytime McCain raises his head, Obama, Biden and a host of surrogates are ready to whack him! It's almost unfair. Obama's lead will continue to widen.

Obama played the debate coin-flip well too. They put the foreign affairs debate ahead of the domestic affairs debate. Obama will not lose any ground on foreign affairs and will destroy McCain on domestic issues next week, particularly after this debacle and McCain's total fumbling of Economic Issues. Young people, influenced by shows like Jon Stewart and Stephen Colbert, can only drift further away. And the excitement on the Democratic side, the unprecedented voter registration and grass-roots movement that is Obama, will ensure that there are no election day swindles this time around - no Florida's hanging chads or Ohio vote-count issues. Hopefully.

Just wait unit Obama puts forward his ideas for who would be in his Cabinet - Clinton, Clinton, Powell and William Cohen are among those I speculate will be named to prominent positions. Perhaps General Wesley Clark? Oprah? lol Then add a couple of republicans for a Lincoln-esque Cabinet, challenged by those who disagree with the President and Obama will pick up a huge number of independents. Palin for Secretary of Hockey Moms?

However, until John McCain finds his way out of Virginia, proves that he knows how to get to Ole Miss by 9:00 tonight, we have to assume he is lost.

Harper's Math don't add up to Democracy

I just saw a headline that was worth at least a minor blog. Jack Layton is entertaining the possibility of a coalition with the Liberals, should Canadian voters deliver another minority mandate. Stephen Harper is saying that this idea is 'undemocratic.'

Huh? If this is an example of Steve's math, anyone considering giving him the keys to the Canadian economy for another 3 or 4 years might want to reconsider. 37 percent is a minority Steve. When you run a minority government like a majority, that is undemocratic. When you use a 37 percent mandate to steer us closer to the nightmare that is our southern neighbour's economy, you are undemocratic. When you reduce Cultural funding without any notice and when you impose censorship on culture, that is undemocratic. When you reduce or eliminate funding of challenges to the Charter of Rights and Freedoms, that is undemocratic.

What is not undemocratic is the formation of a coalition government of parties that share a general political viewpoint that's left-of-centre/progressive. As usual, there are slim differences between the Liberals, the New Democrats and now the Green Party. I vote Liberal generally though I have voted NDP strategically in the past - sorry Tony but Olivia Chow is simply a better (harder-working, more transparent, accessible) politician. I imagine many fellow Canadians hold their nose and vote for the ABC candidate and will this election.

I kinda feel sorry for Steve and his poor conservatives. They've inherited a great economy that is currently suffering with the fate of the US economy and its credit crisis. The measures they have taken have done nothing of note - a 2 percent GST cut that did little to stimulate the economy and that most people don't really tend to notice. Most economists will tell you that Sales Tax cuts are also beneficially regressive and keep more money in the pockets of those who already have it. If anything, Sales Tax reductions increase personal savings. Meanwhile, they've run our government so close to balanced that there is little room to absorb any need for higher social supports that would be needed as a result of a significant economic downturn. Like the hordes at the gate, they've raided reserves and played fast and loose with Canada's fiscal health.

Canadians, hopefully, are smarter than that. We have not voted for fiscal conservatism in Canada in at least 3 elections. Now that we've seen the mean-spirited, anti-democratic, we're right, you're wrong and on your own style of Conservatism brought by Harper in action, I think voters will be turned off even more. You can put him in a turtleneck and sit him beside a fire to chat about crime and punishment and he becomes even creepier!

I also like that the New Democrats can have an impact on the Afghan mission while not having full control over it. In a Liberal/NDP coalition, presumably the Liberals responsible, global-partner approach to foreign relations would be balanced against the NDPs unrealistic, stay-at-home, peace-nik, can-we-hug-it-out, approach. While I don't agree with preemptive strikes, I do believe in striking the fuck out of people who help others hit you! In other words, if other words are necessary, the NDP has a very convenient way of advocating for women's rights in Canada, not so much in Afghanistan - apparently 97 Canadians killed is too high a price for the freedom of Afghan women. One might want to ask this of the local New Democratic candidate when they knock on your door: "If your daughter wasn't allowed to go to school....How many Canadian soldiers would you be willing to sacrifice to change that?" Sorry - I'm a Kissinger fan - Real Politik. We'd all love for everything to go peacefully and for everyone to get along but there are people in the world who will stick a knife in you even after you give them your wallet. Bin Laden is one of those.

You see. This is the problem with Steve. He doesn't get that while Canadians had concerns about corruption within the Liberal party, they generally agreed with the surplus-spending approach taken by Mr. Martin and Mr. Chretien. They like that Jean stood up to George and said, "You have no proof of Weapons of Mass Destruction in Iraq." Would Steve have had that courage? At the same time, Jack would quit NATO (or be a member like France, on his own convenient terms) and would sell our F-18s for Bicycles! Probably not, but you get my drift.

And this all brings me back to Democracy and Steve's concept. In a cynical attempt to win votes in an election, Harper has now flip-flopped on the Afghanistan mission and has foolishly threatened the welfare of our troops by setting a firm time-line for withdrawl. No word about how Canada will react if other NATO members do not step up. And let's be clear, here. Pakistan must be convinced of the necessity of allowing NATO troops to enter their sovereign country to hunt and kill or otherwise bring to justice, Osama Bin Laden. So, Harper has now betrayed his own convictions to appease voters. How undemocratic.

Let's have a centre-left coalition that recognizes global climate change issues and wants to introduce innovative cap-and-trade and carbon tax systems to better address our current crises in energy and environment, not one that speaks to a narrow base of Conservatives that are angry for some reason or feel they've paid more than their fare share. I guess if you only have a Grade 10 education though, you might be owed some money back since the rest of us used it to get a higher education! I think most Canadians had hoped this is what we voted for the last time.

A centre-left coalition would represent greater than 50 percent of Canadian voters and if strategic voting takes place, which is highly likely, that number could be as high as 60 percent. That's a greater mandate than George W. Bush has ever enjoyed.

I can also accept that people don't necessarily want Stephane Dion to be Prime Minister. I think it's wise of the leader to surround himself with his teammates because in a democracy (hint, hint Steve) decisions are made by a multitude of people - not a kingly leader who silences his own cabinet and reverses any previous policy of open and non-confidence votes. So please Steve, don't insult our intelligence when your opponents shift to react to the winds of public demand for government that functions and meets the needs of Canadians. Not one that plays political games to try and take advantage of polls and economic cycles. Not one that promises fixed elections, then runs to the Governor General as soon as government breaks down. No Steve. You, sir, are undemocratic.

American Money Madness

This was written Monday, September 22nd amid the Wall Street Financial Crisis.

It chops, it shreds, it dices, slices, cubes and juliennes...well, maybe not but the brand of the American Greenback has been amazingly strong for the past 60-plus years. Many have speculated about the future of the Empire and given its current attraction to spectacle and violence, one needn't wonder why. Is this the sunset?

Recently, American financial markets have approached collapse. Much of the blame for this problem lies squarely with the American people themselves and their lust for bright bobbles and colourful beads. Without regard for how they will ever pay for material goods, Americans continue to consume like there really is no tomorrow. Why won't this generation pass on a better lifestyle? Because this generation has mortgaged the house to buy dinner. Because this generation has put their retirement on layaway. The strongest Generation gave way to the hungriest, thirstiest, most-consumerist generation of people on the face of the planet

I'm never sure how much anyone pays attention to Lou Dobbs but based on the fact that he does have a number of best-selling books, a prime-time Cable News Network show and a nationally syndicated radio show, he does have some ability to sway public opinion. That's a very scary thing for someone with no public record and a seeming inability to link his complaints together! The price of gas should be low, governments shouldn't run deficits, income taxes should be low, politicians should earn less as should Corporate CEOs. Wall Street should be bailed out but so too should the American Consumer who pays, hold your breath, 18 percent interest fees on their 3rd Credit card. My favourite Lou Dobbs position though is on illegal immigrants; who should be neither deported nor granted amnesty (there's a mysterious 3rd option I guess.)

So today (and all week) the news is all about Washington's Wall Street bail-outs. 700 Billion will be loaned to AIG Insurance, coming a few months after the Bear Stearns bail-out, the decision not to help a number of Investment Banks and to allow Morgan Stanley and another Investment Bank to become commercial banks...phew...that's only part of it. Today, Washington (add an R if you're a McCain fan) will be starting to debate this bail-out and much of the sentiment being expressed in the US Capitol reflects much of the Main Street thinking in the US. I'm a main-streeter on this one and I admittedly am not enough of a macro-economist to understand monetary policy extremely well. But that doesn't stop me from being concerned or thinking that somehow a 'fast one' is being pulled as George W Bush exits the Oval Office.

The basis of the problem is that greed spurred Wall Street to bundle and re-sell below-Prime Mortgages, many of which were issued to people with no income, no credit and no paperwork to prove either fact. Loans were being handed out to anyone who could sign their name to a form. Often, mortgage agents were grossly over-calculating buyers' ability to pay a mortgage and signing them up to ridiculous loans that were bound for default from the day they were signed. These mortgage brokers made commissions directly based on the value of those mortgages. So here is one place where greed raises its ugly head. The heads of these bundled mortgages were in some cases, making upwards of $10,000 per day in commissions. Greed on Wall Street.

Onto the homeowner, who is not without fault here. Someone once proposed to me that these homeowners were suckered in by crafty mortgage brokers. But anyone who earns a paycheque will tell you that they know what they can and cannot afford. If you are a minimum wage employee (in a country with very low minimum wages) you probably aren't going to own a home worth a $1/4 Million. That's basic math, which I suppose the US does do extremely poorly in standardized tests compared to other developed nations. But it is also greed. The refusal to accept one's own fate is a factor of greed. While striving to make one's lot in life is admirable, one must also realize the value of one's talents in the market-place.

Now it comes time to address the problem - Americans, both private and in business, are defaulting on loans and mortgages that exceeded their ability to pay for them. The value of homes is decreasing as the market reacts to unprecedented foreclosures. Home ownership is not a right - shelter may be but owning a home is not. Owning a home is a result of hard work, wise investment, posessing an economically valued skill (like being able to dunk a basketball) and a number of other factors.

To paraphrase, Bill Maher: "The US can't simply say we're number 1 and expect it to be so." Like Ontario in the early 1990's, when banks issued far too many Ontario Bonds, the US needs to realize that the sun could set on them if they don't work hard to ensure the robustness of their economy. John McCain is quite rightly calling for people to put country first. But does that mean bailing out Private capital interests with public money to the tune of $700 Billion?

We are seeing the most-free market, non-interventionist President interrupt and interfere in the economy to an unprecedented degree. The lack of rules and regulations on Wall Street over the last 10 years (yes, Clinton bares some blame) has led to runaway greed which has led to this failure. Now, instead of a middle-path creating stable markets, the market has gone wild and needs to be reigned in to a miserable degree. Again, this loan is to prop up the finances of investors - not everyday people with high mortgages, 401Ks and insured savings accounts. No, this is for much bigger money that makes money with money! This is a Sunday morning mulligan at Augusta National, not at your local Muni!

It may also be a good thing that "American confidence" is down. For too long, the US has been overconfident in the resiliance of its economy without working to ensure the fundamentals remain strong.

An Idea to reduce the impacts of Property Re-Assessments

First off, let me be quite clear that I am not an expert in Property Taxes. Let me also state though that I often fail to give myself enough credit and that I may indeed be an expert in Property Taxes relative to most people, even though I've only briefly paid them directly in my life.

All properties in Ontario are assessed by the Municipal Property Assessment Corporation (MPAC). Re-assessments are conducted on a semi-yearly basis. I say semi-yearly since there have been frequent adjustments made to this system since its introduction by Mike Harris' Conservatives in 1997. The original goal was to have every property receive a Current Value Assessment each year and for local governments to base next-year taxes on those assessed values. However,  in Toronto at least, there have been phase-ins of increases and decreases within property classes and clawbacks between classes of assessed properties.

The idea is based in an idea of financial fairness - all properties should be assessed on the same market value. However, financial fairness does not always mean fairness in application. For instance, updating a property to current value means that those people who have built equity over many years of home ownership can be driven out of their home or forced to take drastic financial measures to stay, if their incomes drop. 

Now, I am very cold and rational when it comes to home ownership and believe that an asset must be used appropriately for one's position in life. In other words, to me, it doesn't make sense for a retired couple to own a 4-bedroom home after all the kids have left - my own parents included. I wonder why one would tie up that equity and those extra bedrooms when we have both a senior's income crisis and a housing/homelessness issue. Certainly other forms of investment can offer more stable, reliable and as high return on investment without the volatility of taxes that are based on the market value of an investment.

I believe therefore that it is up to individuals to make decisions based on their own interest - the system of Current Value Assessments is itself is fair in its basis - all properties are treated the same. What is unfair is the application of current value assessments to the system of property taxation.

Let's delve further. First, there are a number of separate classes of property from a simple residential class which includes condominiums to multi-residential (6 units or more) and onto Industrial and Commercial classes. Each assessment class has its own formula for the calculation of assessed value. Multi-res for instance factors in market value of similar apartments in a largely de-controlled rental market -typical incomes are factored in as they are for a commercial property. Property Taxes then have to be split into their two components - school taxes and local/municipal taxes.

Education taxes are curious. All properties pay the same tax rate so that a condominium owner pays more in education taxes than someone who rents an apartment of the same time (because all things being equal, condominiums have a higher assessment per sq foot than rental) yet a homeowner with the same number of children pays substantially more than the renter. So in essence, homeowners subsidize the education of the children of tenants. This has an effect of equalizing the inequality in the mill rate between homes and rented units which the left often complain are taxed unfairly. More unfair is the difference between a condo owner and a tenant of a multi-res unit who consume the exact same amount of service and the similarity in the mill rate between the condo owner and the home owner - when the homeowner is less efficient in the consumption of public services like Garbage Collection, Fire and Water to name a few.

Each year, the City gets both a figure for the entire assessment of the Cities properties in each class and for each property individually. It uses those assessments to calculate who gets what share of the total tax bill for the City - the cost of providing current programs and servicing debt associated with Capital expenditures. In other words, the City slices the pie - first according to class - each class gets a certain weight - Residential 1, Industrial and Commercial something like 3.14 but coming down due to a phasing of weight towards residential to attract more business. Then those classes are divided up so that the Forest Hill Mansion worth 10 Million gets its share relative to the Junction bungalow worth 350,000 and the Rosedale tenant gets there share relative to the tenants of north Scarborough (through their annual rent.)

The difficulty with using Current Value Assessments is largely their volatility and the average homeowners ability to manage significant year-to-year increases in Current Value and resulting taxes. Not many people can withstand an after-tax increase in one cost center of 3 to 5 percent which is by no means unheard of. CVA also disincents homeowners from making improvements to their own home since those improvements may result in the value and consequently, the taxes. However, CVA, is still in its basis, fair because it reflects wealth, as closely as it can. If a home increases in value, so too does the homeowner's wealth increase, notwithstanding liquidity issues.

So here is the idea. Since the City receives the Assessments on each property, presumably it has the ability to retain those records and to perform such tasks as calculating a five-year running average of each assessment. Therefore the City could greatly reduce the volatility of the property tax system by basing taxes on a Five-year running average, thereby removing the cross-sectoral and inter-sectoral subsidizing that occurs through clawbacks and phase-ins. In essence, this is a budgeting tool for residents that allows them to see a gradual increase in taxes while also basing them on current values. This would smooth volatility while decreasing complexity of a system to minimize impacts. A system such as this was not possible prior to now but since MPAC has been running for nearly 10 years, it should be easy.

This came to mind after I saw a headline that said something to the effect that assessment had grown by 20 percent in the 3-years while the Ontario Liberal Government had frozen assessments. Clearly, some property homeowners in the province will be hit with massive increases while others will see mild reductions due to revenue neutral tax shifting. So the short-term benefit of the freeze will result in extreme pain in the short term for those whose assessments increases are among the highest. 

I see lots of elderly homeowners in my Parkdale neighbourhood and I wonder how they will handle the hotness of this neighbourhood when they get their reassessments. Of course, I think they should sell their asset for over a million to one of many willing buyers and live comfortably without having to climb stairs or shovel sidewalks, but that's my insensitivity right?

Handguns and Handjobs

Look at the Birdie!!! Don't look at the Camera, the Flash or the photographer! Look at the Birdie.

Now that your attentions are diverted from the real problem we face with violence in our schools, the desperation that an element of our youth face, or the mere fact that we will always have a criminal element in society running an underground economy made larger only by the number of things we prohibit...

LET'S BAN HANDGUNS...Puuhhhllllleaaase!!!!

Typical lefty bleeding heart response. I'm not huge on guns. In fact, two years ago I turned down a chance to go to a shooting range in Las Vegas, later learning that I missed the golden opportunity to fire an Uzi, a 357 Magnum and an AK-47 - at nothing less than images of stereotypical muslim cut-outs.  (tongue planted firmly in cheek, heavy sarcasm font.) Apparently I missed something close to the Zed and the Gimp scene from Pulp Fiction.

But, I did shoot a .22 calibre rifles when I was in Boy Scouts - at a shooting range in the basement of a High School no less! Simpler times I guess? I think it's important to note that I grew up in conservative London Ontario, not Evansville Indiana or some such place. After Toronto's second-ever school related shooting, I'm troubled that Toronto's Mayor simply keeps re-iterating his desire to infringe personal rights and ban handguns, as if the guns being used in crimes are legal or registered in the first place. 

Guns are already licensed at this point and I believe, registered - or at least they were at one point in Canada. In the past, the Mayor has said that the guns being used in crimes are largely coming in from the US where handguns will never, ever be banned. Not even American liberals, serious ones anyway, would ever suggest banning handguns, so this issue dies at the border. Which is exactly where the problem lies - aside from the social causes. So the Mayor's strategy - as well communicated as it is, is sadly off the mark, please pardon the pun. We may as well have a turnip as Mayor given the chance of success of such a strategy. 

While I agree that much of the responsibility for addressing this problem lies at the feet of the Canadian federal government, I believe Mr Miller needs to speak to different people in Ottawa and address different problems than he is with his lame, unimaginative and to date falling on deaf-ears "Ban Handguns" message. The problem is with our porous borders and our pathetic federal criminal justice system, which lacks skills, funding and manppower in terms of enforcement  CSIS? RCMP -who? The US has made a cottage industry from law enforcement! We're also plagued by judges who seem incompetent of reading the winds of public opinion and applying that sentiment to their sentancing.

If Mr. Miller is serious about getting guns off the street and I believe he is, he must push for more support to enforce EXISTING laws from federal law enforcement agencies. Who is Canada's DEA, ATF or FBI? If it is the Toronto Police that is responsible, then perhaps funding should be redirected from hassling pestulant squeegie kids to hassling dangerous gangsters with violent rap sheets. The power to redirect those resources lies within the Mayor's office. Rudy Giuliani didn't just wait for the Feds to clean up Times Square and if that is what our Mayor is claiming he'd like to, then he should genuinely get tough, not put on a tough-guy act when times are tough.

It's ironic too because in the past, the left has traditionally argued for the decriminalization of some things that others consider detrimental to society-at-large. I'm talking mainly about Marajuana, which most honest and educated political scientists will tell you ought to be decriminalized and I frankly agree. I'm not saying decriminalize handguns either - licensing has an impact, as the City of Toronto ironically will also tell you when it comes to Massage Parlours. So the Mayor essentially finds that licensing suffices for handjobs but not for handguns? Or he just believes that prostitution ought to be legal? I didn't see that in his platform, did you?

And here is my conclusion and its probably stating the obvious. City Hall is really good at pointing the finger at others while doing very little to innovate or find solutions to problems that they actually have control over, particularly under this administration.

North American Jobs, Free Trade and Individualism

I just saw a comment written to CBC and aired on their morning news on Newsworld. The gist of the comment was that the writer wanted to know what the next government would do about job creation, and the loss of hi-paying jobs, largely replaced by minimum wage jobs with which people could barely make ends meet. 

To my mind this reflects a mindset that many on the left employ when thinking about public policy and the economy. While they definitely care about the welfare of 'the people' the left, and I am looking at you NDP, generally forget the concepts of individualism, personal responsibility, choice and that the concept of 'wealth' does not end at a nation’s borders. My problem with Conservatives, conversely, is that they lack a true care for those who are unable, for whatever reason, to manage their own affairs be those personal or business concerns.

Let me further explain. Conservatives (by definition if not always by practice) generally think that everyone should ‘pull up their bootstraps’, ‘get off their asses’, ‘quit their whining’, rely on their family for social support (even orphans) and generally look after themselves without 'government handouts' and a 'welfare state.' Conversely, those on the left of the political spectrum believe that no one or at best, very few of us, are able to make good decisions, adjust, adapt, re-learn or ‘double their efforts’. They often overlook the fact that certain people’s circumstances are also the result of a record of bad choices and decisions – one ought to be comfortable just because; the sun will never set on their economy. 

I am simplifying. To be clear, I am also sticking to economic issues. Our Canadian Liberal Party is not without fault but the grassroots definitely reflects a desire to facilitate those who are able to do as well as they can - they sky's the limit. At the same time, we believe (or at least this liberal does) that there are people who need varying degrees of assistance, from fully supported living to a minimum national income policy that ensures senior's incomes are augmented to a livable standard. Regulation on business ought to be firm but ought to also allow for innovation, competition and wealth generation for shareholders - this is a mixed economy after-all.

On a Macro-economic level, I firmly believe that the wealth of the world is more important than wealth at home and that protectionism harms Canadian businesses more than it hurts them.  As a developed nation, we ought to be proud that the jobs that are being created in Canada are either very high paying or are service-oriented. And let's not overlook the role of the individual.

Let's go back to the viewer's comment. A socialist looks at 'the working class' as a whole, not as a collective of individuals. Each person has the ability to take various steps and make assorted decisions to improve their lot, whether that be growing within a job or by seeking new employment opportunities. You might say skills are an issue and I agree. However, as I age, the worries of the past seem to fade - As one ages,  one's skills and experience similarly grow, maturity improves, work ethic and productivity generally increase and hence the value of one's labour naturally increase. For example the coffee server becomes the chief barista and eventually moves on to store manager and perhaps even to district manager. If the coffee server does not see advancement in the future, choices are available, particularly in an open labour market with competition. 

Perhaps my fictitious Barista realizes she really enjoys food service and decides to go back to school to become a chef. Government ought to facilitate that through education, training and apprenticeship programs. But Government ought not to mandate 'lifetime job security' for the Barista either as that would truly disserve everyone from the customer to the lowly newbie coffee server. This is the flaw of considering the labour market as a whole, instead of as a collective. I recall in High School having a similar lack of faith in the individual's ability and responsibility to make healthy decisions - be they financial, education, social; whatever.

And let’s not forget the Barista’s Asian counterpart. As Canada's relative wealth increases, we also see a massive growth in the worldwide economy. On CBS’ Sunday Morning, Alan Greenspan stated that on a worldwide basis, 200 Million people had been pulled above the poverty level in a relatively short amount of time though I can’t recall exactly how long – under his tenure as Chairman of the US Federal Reserve perhaps. That is a staggering number. At the same time, while Canada and the US have enjoyed steady growth many of those nations that truly required economic success to provide the basic necessities of life and to pull them forward towards the 21^st Century, have seen huge economic growth.

Is there a concentration of capital occurring to some degree? Yes, and that is a concern. However, to disregard the sharing of wealth amongst the global community is to allow your socialism to end at national borders - "Workers of the white world unite?" Instead of concentrating on those nations that are ‘stealing’ our jobs and trying to organize workers there, improve working conditions and regulations in those countries, fat, western Labour organizers sit and whine about the loss of jobs. Why not advocate for tougher environmental regulations in those countries to ensure developed nations can compete? Too often, labour concentrates on keeping an old order instead of adapting to change and ensuring that change benefits them.

Economics is about action and reaction, cause and effect, supply and demand. The entire basis of monetary systems is the value of human labour. In the west, we have allowed wage rates to grow for low-skilled jobs producing cheap goods that we consume in excess. It's no wonder then that low-wage jobs are moving to labour markets with cheaper labour. However, the wealth that we generated previously has allowed our labour market to become much more educated and highly skilled. We in the west also enjoy something that those in developing nations know little of: Leisure time. Lefties place no value on this. Does a Mexican labourer, driving a rivet for $15/less per hour have the cottage, boat and 4-weeks of vacation that the Ford Talbotville worker has? Yeah....right.

Now, I don't want to just pick on the left. I think that government should provide for those who need to transition or who must make difficult choices with respect to employment opportunities. Workers should be protected on worksites through regulation, for instance. Apprenticeship and training programs should be accessible and affordable for those facing tough times.  I don't believe in a totally open labour market without a minimum wage and minimum wages ought to keep pace with inflation through CPI-pegged annual or bi-annual increases.

In an open labour market, the worker ultimately has the most power because they can sell their services to the highest bidder. Some regulation is needed to ensure minimum standards by job class so that un-skilled labour does not under-price skilled labour, though workers also benefit by being able to out-bid other labourers as well – limits on competition obviously limit competition. Individualism also says each labourer has the potential to improve skills, seek new experience and increase the value of their labour. 

Health care in all forms must be provided to all Canadians regardless of their ability to pay for it. That is our true competitive advantage and we should do all we can to preserve it.

As you know, I do believe in a strong role for government but I do generally believe in the success of open markets. I believe in a strong social safety net, balanced budgets, Public Private Partnerships with good concession agreements, training programs and worker supports, public health care, user fees, full cost accounting and sustainable development. I believe in innovation to tackle the problems created by old thinking. I believe in experimentation with public policy and in overcoming the fears that prevent positive change. Adapt or die.

Senator Joe Biden, the Media and Personal Credit

This story is making me laugh so I simply had to blog about it!

CNN is running a story about Joe Biden which includes a review of some of his work on the Senate Finance Committee and votes in the Senate for laws that would make it more difficult for people to declare bankruptcy. It's also important to note that he was one of 84 Senators that voted for the bill - not a squeaker by any means.

Some 'consumer advocate' - what is that anyway, someone who helps people spend more money consuming more bobbles I suppose - is part of this story and says something to the effect of "by making it harder to declare bankruptcy, he made it harder for people to keep their homes." The issue is that creditors want their money and if you owe it and can't pay, you're presumably forced to liquidate your assets to pay your creditors. Oh, what a horrible consequence...you borrowed too much, you couldn't pay for your debt and you had to sell. Not seeing the problem? Me neither.

If you've ever watched CNN's (and most media outlets) coverage of the credit crisis you will know that people like Lou Dobbs advocate for low-interest loans to the highest risk borrowers - even when they take out a 5th Credit Card. Now these same commentators (is incompetentator a word) turn and wonder why the US economy has suddenly gone in the pooper! Where does personal responsibility over spending and debt come into this whole discussion?

To take it one step further.... Today I heard that John McCain proposes to lower Food prices! hahaha...This poor old man has no clue. Unless he cancels all Ethanol programs to relieve the pressure on grain markets, while also magically inventing a solution to the energy crisis and climate change while also lowering Gas Taxes and eliminating Earmarks, and nationalizes the American Food Supply (how is this Conservative?) he hasn't a chance of lowering food prices. It's preposterous and they just flashed it up on the screen as one of his promises without blowing a hole in it right then and there.

Forget all the petty stuff about Palin. McCain is a populist liar who has now sold his sole to the Republican Party. Any sense of Maverick is gone. You know when Karl Rove says you're going to far, you really have gone to far.

This is a bit of a rambley blog but the point is this: McCain is lying his pants off, about his own plans and about his knowledge of the economy, his relationship to lobbyists, about Palin's experience, about his family's longevity (his father died at 70)...the list goes on - while Biden makes a gaff here and there but has an impeccable record and is a genuinely likeable guy.

So...Senator Biden voted on behalf of the many, many employees of Credit Companies that live in Delaware (doing his job) and voted for American responsibility over personal choice and personal accounatability over budgeting and personal spending and to keep a reasonable amount of credit and spending - a balanced approach.

Unfortunately, Americans somehow still refuse to believe the following: Democratic Presidents have had much better records - at war, at peace, with the economy, with the size of government. Their failures are their ability to win elections and to sound too high-minded and get off their core arguments.

Gas Price Insanity! The debate maddens me...

Today’s blog asks some questions about Gas Prices.

My question's are:

"Do you support Higher Gas Prices at the Pump"

"Do you support higher Transparency in Energy: Oil, Gas, Electricity and Taxes"

"Is Higher Gas the Inconvenient Truth or the End of Suburbia or both"

"Would you support a ban on interviews conducted with people who just filled their tank?"

There are many more to be asked. As you may be able to tell, I believe that we still get a great deal in Canada and the US when it comes to Gas Prices and Gas Taxes. Actually, that's not really opinion but fact. Compared to Asia and Europe, we get a bargain at the Pump. We also pay more for Milk, Coca-Cola, Coffee and bottled Water. All of those products also depend on Cheap fuel to be manufactured and brought to market. The documentary 'The End of Suburbia' laments the death of the $5 Caesar salad. 

There are a number of factors that create confusion and frustration: In the 70's there was a scare of shortages. Then for 30 more years we had cheap Gas. What gives? There is a lack of transparency at the pump. Remember those stickers that told you where your Gas dollar went? I don't think they're there anymore. Few people know accurately how much they pay per mile, how much they consume, the cost of their travel (there are many externalities in Transportation) or the subsidies they receive to drive - people still erroneously believe they pay the full cost of private travel or that road capacity has no cost.

We are told by industry groups that there is enough Oil and Gas in North America for the next 60 years if we just drill it but people like T. Boone Pickens also say that this is not the sole answer and that we must immediately start converting cars to clean Natural Gas. Industry Lobbies also pay millions to convince us and our legislators of their case. And Al Gore and David Suzuki tell us we certainly can't wait to start the move away from Carbon-based fuels given the Climate Change crisis - nor is it sustainable environmentally, economically, socially to continue the way we have.

No one likes prices going up. However, populist politicians are now spouting things like: The spike in Gas is as much as we paid for Gas in the 1970's. Well, inflation alone has meant a huge increase in the value of our dollar in the last 30 years which deflates this argument pretty quickly - in Real Dollar terms, its not that large a spike. But politicians are like Movie Theatres - every new release has to be the biggest ever regardless of inflation! Are we stupid for buying these politicians or are we simply pavlovian dogs wagging our tongues and drooling when they fight Big Oil?

I haven't even begun to talk about how cheap gas has subsidized suburban sprawl which in turn has made most of the complainers totally dependent on cheap gas. I guess, someone told these people at some point that Gas would always be cheap and there was some guarantee of a good life and a right to drive in the passing lane at all times. Parking should be free too right? Any amateur economist (myself included) can tell you the first rule of economics is that there are NO free lunches!!

Further complicating this debate the fact that we in Ontario have under-invested, perhaps even de-invested in Transportation for 30 plus years and that we have massive needs for new infrastructure and it becomes even more fun. Most public opinion surveys will tell you this: voters prefer user fees over general tax increases. Therefore, to increase road repair, increase public transit (which benefits drivers and trucks) we must draw even more from drivers, not less. At the same time, the public demands transparency in funding systems, reduction of gridlock, better road maintenance and fairness.

Every day there are media stories about record prices - and yet demand is still going up. We live in a free market economy but even if we didn't, we'd still have to deal with the natural economic laws of supply, demand and equilibrium price. We've seen gas sell out when the price was low. We still see line-ups as price goes up. There has been an increase in North American transit ridership but since we are allowing it to happen to us we have not pre-invested in public transit to accommodate new capacity.

However, here is where some of our Federal and Provincial politicians are also slightly dishonest with us. Gas Tax revenues (those that aren't flat per litre excise taxes) go up with the price of Gas as do Corporate Income Taxes (unless they enjoy loopholes and shelters.) So the government should be able to invest in alternatives that get people off of their addiction - kind of like the concept of legalizing and taxing drugs to pay for treatment programs!!! These would include alternative fuels, conservation, public transit, ride-share incentives, etc.. After all, we all pay for our roads through property taxes whether we own a car and drive it every day or sit at home and watch TV. 

I don't have all the answers. I do love debate. If you have ideas, please share them politely. I know this is a hot issue and hits many people in their emotional strike zone - their wallet! I am lucky but have also made a choice to live in a neigbhourhood close to downtown and to drive less than 400k/month. I know others might not be so lucky. Please share any info you have about Oil and Gas, about the amount of refining capacity in North America, about how much you pay per km for roads, insurance and gas, and any other info and opinion related to this topic.

Earmarks 101 - Pork Barrells or Democracy in Action

As the US elections heat up I thought I'd write a short primer for my Canadian friends and delve into the issue of Earmarks. What are Earmarks? Are they controversial and if so, why are they controversial? And of course I will try to add my own brand of political humour and opinion.

An Earmark is defined by Wikipedia as: congressional provisions that direct approved funds to be spent on specific projects, or that direct specific exemptions from taxes or mandated fees. Earmarks can be found in both legislation (also called "Hard earmarks" or "Hardmarks") and in the text of Congressional committee reports (also called "Soft earmarks" or "Softmarks"). Hard earmarks are binding and have the effect of law, while soft earmarks do not have the effect of law but by custom are acted on as if they were binding. Typically, legislators seek to insert earmarks which direct a specified amount of money to a particular organization or project in his/her home state or district.

Like most governments, bureaucrats in the United States prepare annual budgets that contain essential program-based spending. Most of these programs are carried forward and this "Base Budget" contains nearly 90percent of US Government spending. In 2007, Congressional Earmarks totalled 10.4 Billion dollars. These funds include umbrella contracts that approve ongoing purchases and that may or may not be accessed in a given budgetary year. These funds include money for normal capital upkeep of well, the Capitol. Often programs that have become ineffective, bloated or simple failures continue to have funding allocated. The Base Budget is the Bureaucrat's budget. Earmarks are one way that politicians (and by extension electors) can influence the political process. In fact, controlling purse strings may be the single-most important way that politicians and bureaucrats exert influence and power.

To give you an idea of what might be funded through an Earmark, the company I formerly worked for had a strategy to identify a source for a Federal Earmark to run a demonstration project of our Road User Charging system. Our product is innovative but potentially too expensive for a local government to pursue alone. Federal programs have all been directed to a program authorized by President Bush's Secretary of Transportation Mary Peters. Bureaucrats therefore held sole discretion over the redirection from their original, publicly approved intent. Given the President's flailing popularity numbers one wonders how legitimate that practice is (as much as I like Secretary Peters.)

While a famous Earmark was directed towards a bridge 'to nowhere' (I thought Ketchican was a huge tourist destination - maybe the Americans are using a Hunter S. Thompson Fat City-strategy to keep people away from Alaskan cruises, but I digress) most are for much smaller projects that might not be a top priority but definitely have public support and/or value. Another proposal getting heat is Senator Arlen Spector's attempt to get $100,000 for the United Jewish Federation of Pittsburgh for a 'Naturally Occuring Retirement Community. Hilary Clinton came under fire for her support of aWoodstock Museum. Senator Patty Murray of Washington has drawn heat for a $150,000 grant for the Northwest Electrical Industry Joint Apprenticeship and Training Committee for expanded training capability, acquisition of training equipment, and to meet the need for skilled electrical workers. I know: How dare they?

So...here's the gist. Many people figure that Earmarks are bad simply because they are not pre-approved by a bureaucrat. But America is the world's greatest democracy, or so we're reminded daily. If bureaucrats ultimately control the spending of tax dollars though, what is the role of the elected representative? Rules of conduct and procedure often preclude politicians from getting directly involved on their constituents' behalf relative to government decisions to refuse funding. Abuse of such rules lead to things like the Canadian Liberal Party's 'Sponsorship scandal.' We're therefore left with a number of questions.

What is the role of the politician? Is it to simply set rules? Or is the ability of a politicain to reward those who support them a legitimate power? Is it legitimate, within a larger budget/financial control system, for a politician to nominate a local cause or project to receive federal funding above what may have already been allocated? I would argue that it is legitimate for a politician to advocate (including moving Motions and earmarking) for causes and projects they have previously and openly supported. It is the role of the larger democratic institution to decide if the funding for that project is appropriate and in the interest of the larger population. Obviously, an Earmark for Iowans against all other Americans probably should not be funded by the US Congress. But an Earmark for Iowa Corn Farmers for Ethanol Alternatives is probably in the National interest, particularly if their research led to a reduction in the dependence on foreign oil and a ton of other positive effects.

I do not buy the argument that Earmarks are not made appropriately procedurally. A procedure exists and it is up to the politicians to know the rules and to do what they can to eliminate specific earmarks they don't agree with - not to eliminate earmarks wholly, throwing the babes out with the Hot Tub water.

So, now that you've read this you're hopefully with me...what's the big deal?

There is no big deal. In fact, the biggest deal about Earmarks is how overblown this issue has become. Politicians are tilting at windmills and its causing them trouble. Governor and would-be Vice President Sarah Palin is a great example. As Governor, she was trying to accomplish things for her citizens who pay taxes to the federal government. Now, as a 'Straight Talking' Republican, she is opposed to earmarks. This is a classic example of the problem with people painting Earmarks as 'Good' or 'Evil'. One woman's junk...

So...that's enough for now - I'm trying to keep blogs short and plentiful. Feel free to post comments as I don't have all the answers and always learn from other perspectives.

Greens in the Debate

I'm torn about letting Elizabeth May into the Canadian Federal Debate but don't think this should be the issue it is - in other words, no skin off my nose whether she's allowed-in or not. Here's my thinking:

1. The Green Party do field candidates in every riding. But so did the Rhinos in the 70's and early 80's and surely other parties such as the Communist Party, at some point fielded candidates in every riding. So I don't know that this meets the test either way - there's no slam dunk.

2. The Green Party hasn't won a riding in Canada in any election. This is a clear fact that makes it easy to keep them out. It's a no-brainer. I cannot be convinced that not being in a debate has eliminated their ability to win a seat - I think bad policy and a muddled message have done that.

3. The Bloc is allowed in so why not let the Greens in. Exactly. A regional party who's aim is to disband the country is permitted in the National Leaders debate, even though they don't field candidates outside of Quebec. So...it's not like the debate has  a record of holding high requirements for entry.

4. They let Preston Manning in prior to Reform winning seats. Again, precedent stands - what's the big deal?

5. Too many cooks spoil the broth. Harper versus Dion and Duceppe and Layton and May !? Sounds like a law firm not a debate. Imagine all the squalking - If she gets in, May win the whole thing  be polite and by not saying one word out of turn.

6. Further splintering of the Left only helps the Tories. This is my own personal reason. I don't see much of a difference between the Liberals and the Greens except for the Liberal brand which has been tainted but has a hugely rich history as the Party of Lester B Pearson and Pierre Elliot Trudeau. The Greens are a mix of bitter ex-New Democrats and Liberals as well as an odd collection of libertarians and those who just wish they lived in Europe. Instead of changing existing parties by involving themselves, supporters of the Greens like an imaginary world where there are no conflicting interests and that we build all new policy consultatively.

7. This is actually where I prefer the American system. In limiting to 2 parties and independants, each party is forced to accomodate a wide-spectrum of views within, rather than be out-flanked. Both parties must accomodate viewpoints driven from the grassroots - this is how the Republicans have become a Big Government party while the Democrats have become about efficiency and centrist economic policy. I'm not saying that's what we need but without electoral/legislative reforms (ie without proportional representation) more parties will lead to unstable governments and more elections, not that I have an objection to elections per se.

I think Dion is being fair again - which will hurt him again unfortunately and plays into Harper's strategy to convince people that there would be two Liberal leaders at the debate. The Liberals should not concede ridings to the Greens - even to their leader. We ought not to flood May's riding with workers and money but we should field a candidate. Ceding ground says that the Liberals are not the Ruling Party and are not convinced that their plan for Canada is the best one. As a Liberal, I say let May stand up for herself on her Party's own two legs - once they find them.

So in my classic style, I've outlined some of my main issues with the National Leaders debate and the decision to not include Elizabeth May. I can't decide what I think but I'd love to hear comments.