Excited Delirium

To Finally Bring Down the Harper House of Cards?

The Helena Guergis affair is just the last of an incredibly loooooooooong line of scandals that keep flying in the face of our federal leaders.

And yet, somehow, they manage to weasel their way out of issues and back into talking about the insanity of ‘more crime bills’ or ‘economy economy economy’.

The list is far too long, but here’s a quick stab:

• Guergis
• Jaffer and his various ‘business interviews’ and promises to connect people with the PMO
• Lisa Raitt’s mishandling of the world’s limited isotopes
• Maxime Bernier’s ‘forgotten’ documents and the links with the mob
• Let’s not forget ‘Diamond’ Jim Flaherty’s surprise reversal on Income Trusts, literally dissolving billions in retirement assets for seniors and others overnight
• Thousands of political appointments to various public offices, poisoning the public well for decades
• Promises to reform the Senate while stacking it conveniently with inexperienced celebrities
• Fake cheques promoting the CPC using Canadian taxpayer dollars
• Endless 10-percenters as junk mail, costing Canadians tens of millions of dollars per year (mainly to pick childish fights with other leaders)
• The links with the mob of almost all infrastructure spending, particularly in Montreal
• Breaking one’s own law to have a forced election on a fixed date
• Massive investigations into spending irregularities with the last election
• The Chuck Cadman bribery scandal
• Maple Leaf deaths, potentially a result of attempts to deregulate the industry
• Voted repeatedly as the world’s worst environmental destroyer
• Issues related to people in Stephen Harper’s inner circle releasing details about Obama before the US election
• Crimes against humanity with the Afghan detainee issue
• Complete mismanagement of the country’s economy (largest deficit ever created in Canada – ever) and creation of a permanent structural fiscal deficit.

How many scandals constitute ‘enough’?

All it took was an inflated marketing scam with the Liberals to have them turfed.  I know … it was enough to show our disgust with the Liberals.

And yet how many more people have to die / get ripped off / be booted from Cabinet or just plain f*** up in order for Canadians to finally stand up and demand an election so we can dump these clowns?

Have we all lost our minds?  When people promise accountability and economic action and yet deliver the complete opposite, why are we not going to the polls?

In an interview with the CTV (does he ever talk with the CBC?), Stephen Harper has indicated that he will not rule out a carbon tax, simply because he’d be more than happy to drop his pants for the US (again).  This is a complete 180 from his original position that destroyed the Dion Liberals in the 2008.

Brilliant.  Sycophantic slippery Steve has lied to us again.

In fact, we’re all about to be ‘Harpooned’, much like Baby Boomers and other savers were Harpooned when the Conservatives killed the value of Income Trusts back in 2006.

We’re all going to eat the cost of carbon capture and carbon sequestration all so that the companies in Alberta can continue to belch out unprecedented volumes of crap.

Yay!  I can’t wait until the next election.  Please Santa.  Please bring me an election for Christmas

I was reading the letters to the editor in the Toronto Star this morning and one Dan Skrobot of Toronto succinctly and perfectly described the Harper Sales Tax [square bracket additions are mine]:

Isn’t the HST just more Conservative downloading?  Mike Harris still haunts us, but this time with the protege Jim Flaherty pulling the strings of a desperate Ontario government.  The lesson here is who gets what in this deal, and why all the pieces in the Conservative puzzle are starting to fit into place.  Harper and Flaherty first decide to buy our votes with a GST cut [of which we got no benefit except an unprecedented deficit], then a home reno tax cut [which has only served the purpose of people who can afford renovations], and billions more in stimulus spending to the point of no return in structural deficits [which has somehow translated to the largest marketing campaign for a government ever seen on this planet].  The only answer is to increase taxes, but if tax cuts equal votes, then the reverse doesn’t fir their master plan, so they turn to struggling provinces to raise the tax for them.  Harris-style mismanagement of our finances, plus a desperate Ontario willing to accept a bribe ($4.5 billion) to raise taxes means lower provincial transfers down the road, leaving more for the Conservatives to clean up their fiscal mess or buy more votes.  The brilliant part is that Harper’s ethically challenged party will be rewarded and Dalton McGuinty’s patsies will be sent packing.

I’ve said all along that the provinces should avoid anything that the Cons offer to them to make the HST work.  Why?  Because you simply can’t trust a Con that offers money.  It’s not in their DNA to give money, but to take away.

I’ve also said many times that the Harper Sales Tax will create tectonic rifts between all Liberals in the country, particularly in BC and Ontario, as they wrestle with the conundrum of rapidly rising deficits and short-term monetary offers to do the evil work of the Harper Regime.

Apparently, the folks who aren’t big on manipulating our economy are OK with what might be the most manipulative credit in Canadian tax policy history.

Really?  The Home Renovation Tax Credit is bad?  How so?

Let’s take a deeper look:

1. It encourages spending, not saving.  The only way we’ll ever truly recover from our economic state is to re-learn how to respect our money and save it.
2. It favours a narrow class of citizens in this country.  Tax credits help those who have a substantial income from which to deduct these credits.  Hundreds of thousands of people are unemployed or barely getting by in Canada and a tax credit of this nature does nothing for them.
3. The $1350 maximum credit is similar to marketers who advertiser ‘get up to 60% off’.  You’ll be lucky if you see a fraction of that amount, regardless of what you spend on your house.
4. Most people will not be able to afford to put the full $10,000 into their homes and you just have to know there’s going to be a catch even at that level.
5. It encourages expenditure on a wide array of frivolous items (eg. swimming pools).  If we had not cut back on the GST, most of my arguments would be moot because we’d be making it back on our consumption tax (which I think should be higher, by the way).
6. It encourages the creation of debt for those who can’t afford to take advantage of the program, but who don’t want to pass up on a ‘great opportunity to get money back’ on their taxes.  This is horrendous economic policy because, as I said, we should be encouraging saving, not spending.
7. It favours home owners and home owners only.  People who rent – generally those who live in large urban areas – will not get ANY benefit from this program.
8. While I don’t have the numbers, because it favours owners over renters, it likely disproportionately benefits voters in rural areas – the power base of Con politics – as opposed to those in urban areas.  (I’d have to see numbers to make a statement on suburbs because I think there’s just as many renters as owners.)
9. It favours one industry and one industry only – home renovation.  For a group of people that regularly say that they don’t want to play favourites (ie. the Cons and their economic policy), this is a pretty odd way of sticking to your guns.  If you didn’t want to play favourites, you’d just have a one-time, no holds barred tax credit without conditions on where the money should be spent.
10. Because it favours an industry that is generally dominated by men, it’s sexist.  Most unemployed females will not benefit from demand generated by this tax credit, unless maybe they’re check out girls making minimum wage at the Home Depot.  Hardly what I would call economic stimulus.
11. It IS discretionary as to what investments are eligible.  Things like furniture – which generate oodles of jobs in Ontario – are not eligible, when they should be.  (I know … this is similar to #9).
12. It’s temporary.  After spring 2010, the program will turn to vapour, what will we do to stimulate the economy?  Where’s the long term plan?
13. Because it encourages overkill in one industry, we’ll see a pendulum-like swing in excess demand turning to excess supply.  This time next year, there will be a glut of unemployed contractors (believe it or not if you’ve ever tried to get a good one).  Also, for those who legitimately need to make changes with their houses (eg. a new furnace after the old one broke down), good luck getting a GOOD contractor in the next few months.
14. It encourages contractors who previously made cash to emerge from the underground economy.  This is actually a bad thing because I believe in the underground economy.  The less money that makes it to Ottawa, the less money that gets wasted on big blue cheques going to religious schools.
15. It’s not green.  I’m not saying everything should have a green spin to it, but it’s just good politics to offer green incentives when everyone wants them.

The core of the issue here is that this is bad economic policy.

We should be spending this money on green technology, Internet innovations and other ‘industries of the future’ and not just hammers and nails.

The HST, or Harper Sales Tax (OK … Harmonized Sales Tax) will punish a lot of folks, but no group will be hurt more than the BC and Ontario Liberals.

On the surface, they’re being told it’s a good thing.  The Cons have given the veneer of entering discussions with the provincial leaders in good faith and on a non-partisan basis.  They’re even offering financial incentives to ease the transition.

I smell a plot.

I mean, when the Cons at the provincial level won’t touch this with a 100-foot pole, why should anyone?  If I were running the Ontario government (which, thank god, I’m not) I’d be running for the hills!

Let’s strip it down:

• Harper won his first whiff of power by promising two things:  an investigation into the Liberal Sponsorship Scandal (frighteningly similar to the eHealth scandal with McGuinty) and the reduction of the GST by 2 full points to 5% (with lots of grandstanding and promises of reduction in cost of living).
• Since then, Harper’s come through on his promise, but we all know he’d like to reduce taxes more, especially the cursed GST, given that he’s an anarchist and libertarian that doesn’t want any government at all in our lives.
• However, once you reduce it from 5% to a lower level, you might as well ditch it.
• Harper won’t do that because the corporate world wouldn’t be able to hide the decrease in unchanged prices (I mean, did anyone really enjoy the full benefits of saving $0.02 on an ice cream cone or other mundane daily purchases?).  They would actually have to decrease prices.
• Instead, he needs a bigger base to hack away at, which would ultimately be the HST.
• He’s now got 13% to play with instead of a mere 7.
• Ontario and BC will be hosed royally and will be told they’re out of luck once the transfer of sales tax power is surrendered.

I’m not going to deny that exporters need every iota of support they can get in today’s world, but this will not help the Ontario government support its infrastructure in the long run.  When they’re tax revenue is slashed by the Federal Cons, they will have no choice but to slash their budgets as well.

We will then get the Harris years by proxy.

What do you think?  Am I being a little too suspicious?  Do we have evidence that this will be done without harm to the politicians at the provincial level?

In addition to the tens of billions waiting in the wings, the Conservative government seems to be obsessed with getting Parliamentary approval on a $3 billion slush fund that’s been set up as an ‘instant’ response to Canada’s dire economic situation.

I’m going to start this blog by making a prediction.

I predict that the Conservative government with Stephen Harper at the helm does not have a future.

Fragmentation is pulling these people apart from a number of angles.

• They’re finding it impossibly hard to keep abortion off the mainstream discussion list.
• Green energy and cap-and-trade is a reality from their biggest client – the US – and they can’t adjust to it.
• Give it a little time and some of the uglier elements with the party will likely rear their heads (I’m reluctant to say ‘white power’, but it’s the first phrase that comes to mind).
• Finally, too many people are out there now questioning the multiple Sybil-like personality switches of our industrious leader (from schoolyard bully to blue-sweater light-weight to tough-talking anti-Obama-ist)

They’re falling apart and yet they continue to lead like their hold on power will never end.  It leaves me mystified and maybe a little frightened.

An example of this hubris?  The tough talk we’ve had to endure for the last two weeks concerning the $3 billion slush fund that they’ve set for spending on projects with fewer or no environmental reviews to them.  The school yard bully has graduated to high school thug.  It’s our way or  the highway, that, incidentally, we won’t build for you unless you’re a FOCer (Friend of Conservatives).

Why is this such an arrogant thing that Canadians should be concerned about, particularly those Canadians and contractors that might be getting these lush contracts from the federal government?  Because when the Conservatives lose their clutch on power in this country, there’s going to be a shit-storm of remediation and auditing going on by a government that gives a damn about where and how taxpayer dollars are being spent.  And when that level of scrutiny comes knocking on your door, you’d better pray you did everything in your power to keep at least 3 to 4 steps removed from the Conservatives because you’ll lose everything.

You should also take the environmental high road, despite Conservative disdain for all things green.  Consumers are too smart, much better informed and watching these people closely to let things slide.

If you don’t believe me, think about the reputation of the companies that were involved with the Liberals AdScam project.  They all got burned and they all went down with the ship.  Of course, some might be doing so on exotic shores, but I think you can catch my drift.

So, I guess the moral of my blog is this:  If you’re lining up at the Conservative trough, think twice.  Tying yourself to a sinking ship could be very bad for business (especially if you’re a Liberal).

The January 27 budget is leaking faster than a flatulent elephant after eating a tonne of beans.

More and more details come out every day, and yet the Conservatives don’t have the courage to present it in the House of Commons.

That said, we’ve seen many trial balloons about several topics and the one that we’ll probably have confirmed at the last minute will be a wide array of new tax cuts.

Just as a reminder, the last ones didn’t work.  I’m still waiting for my two cents from the GST cut and now we’re paying the bill for effectively transferring 2% of all transactions in this country to the pockets of corporations instead of our governments.

And the corporate tax cuts have lead to a whopping volume of new jobs, haven’t they?  Oh yeah … they haven’t .

You see … there’s a reason for this.  Canada is in large part a transplant, subsidiary economy.  We’re whores of our natural endownments, junkies for more investments in primary production and victims of our own resources.

We certainly have lots of manufacturing as well, a great percentage of which is controlled not by Canadians, but by Americans, Europeans and other international decision makers.  They say, we do.

And that gets me to my central thesis:  with so much foreign ownership of the Canadian economy, what’s the point in cutting corporate taxes?  When we cut corporate taxes, all we do is enrich the treasuries of other countries.  We need to find creative ways to fund our own economy and future, thank you very much.

If anything, we need to consider greater taxes for those companies that simply come here to extract and leave holes in the ground, swelling tailings ponds and an abundance of nuclear waste.

In the interest trying to avoid being blind to my own ideology, I could be convinced of tax provisions in one area:  those that protect small businesses.  Let’s say we have a tax exemption for any company in this country that employs 20 people or less and/or has revenues less than $1 million per year.

Another suggestion might be special terms (particularly with respect to property taxes and lease rates) for small businesses that establish themselves in downtown or central areas.  This would clearly favour the creative class, as we tend not to do much manufacturing in our cores.

A reduced tax burden for the people that make a difference in our day-to-day living.  I could live with that.

Rex Murphy, host of the national CBC show called "Cross Country Checkup", is asking Canadians tonight where they should spend their money.

You can all hang up.  I have the top 10 answers.

1. Stop spending any more money on fossil fuels or things that burn fossil fuels.  It’s stupid.
2. Understand that we have an opportunity to institute structural change:  invest in green and invest lots.  Renewable fuels & energy.  Solar retrofits & geothermal installs.
3. Infrastructure, but think in terms of "downtown" and the future.  Light rail transit.  Bike lanes in green spaces.  Fewer roads outside of the core.  And for the city of London (where I am), several over/underpasses so the city doesn’t get choked off by trains.
4. Cut spending on defense to balance any potential deficit spending.  The $500 billion that is planned by the Harper government has never come into question and should.  Why do we spend that money on enterprises that, in large part, aren’t even Canadian?  Because we’re stupid and we’ve bought into the ‘feat factory’.
5. Spend a minimum fixed dollar amount on every single city with a population that’s greater than 100,000 people.  I suggest $100,000,000. Those that have been spending their money wisely can invest in new projects or reducing property taxes.  Those that don’t can at least avoid slashing desparately needed social programs and public infrastructure.
6. Spend a pro-rata amount for cities larger than 100,000 people.  The more people, particularly that are in your downtown core, the more money you get.
7. Stop insisting that projects be given to the private sector first.  It’s a sure way to add 20-30% to the bottom line and cost of new projects and it’s a waste of public money.
8. Make a massive public investment in the communications network.  Bell Canada is doing a very poor job of running it, so Canada should have a new and exceptionally efficient public pipe that anyone can use without being throttled or facing lack of net neutrality.
9. Create a massive public investment in co-ops, non-profits and socially responsible organizations that are committed to the future of this planet.  If it’s not part of their mandate, they don’t get a cent!
10. Fire at least 18 Senators.

There.  Easy.  Now go to it, Jim!

Financial bailouts are doing nothing to remedy a global economy that is facing a structural reckoning.

As evidenced by the Government Accounting Office (GAO) of the United States, massive amounts of the bailout funds are simply being funnelled to offshore locations. Full story here .

One day, people will wake up and say "why are we giving more money to the people who are creating the problem?"

That said, the people who have created the economic crisis are still calling out for more tax cuts and more favourable policies towards corporations.  Not paying their fair share isn’t enough.  They don’t want to pay anything .

I read this Times Online article a couple of times, hoping to find that they were being silly.  I thought I came close, but kept stopping when I read this:

Assuming interest rates are reduced to about 1 per cent today, it will make little difference to savers if they fall all the way to zero. To all intents and purposes, income from bank accounts will be reduced to nil.

The next logical step, although it may be politically controversial, would be to do the opposite of what the Tories suggest. Instead of reducing taxes on interest payments, the Government could tax all bank deposits and other risk-free savings . This would create a negative risk-free interest rate, encouraging savers either to invest in property, shares and other productive assets – or simply to save less and consume more. In either case, the result would be more consumption and physical investment, less unemployment and faster recovery from the slump .

In the absence of a savings tax – and even Mr Obama would probably balk at anything so controversial – there are plenty of other measures to boost consumption and investment. Most obvious are direct government spending on infrastructure; public guarantees and subsidies for business loans or home mortgages; or tax cuts and handouts, especially for those on low incomes who tend to spend all their money. The beauty of such policies in a world of zero or near-zero interest rates is that they are effectively cost free. In the present environment, extra public borrowing does not displace private employment or “crowd out” business investment.

There are plenty of objections to ever-increasing public borrowing, not just fairness and efficiency but also the moral hazard of creating a culture of state-dependence. But in a slump, when the alternative is business bankruptcies and longer dole queues, these objections make little sense.

If you’re from the Time Online or you’re Anatole Kaletsky (the author), can you please tell me if you’re serious?

If not, allow this rant:  Why is it that you people JUST DON’T GET IT?  This is not all about consuming our way over the hill, like we’re a bunch of ants trapped by a mudslide of honey.

This – this financial ’situation’ that the world’s ‘brightest’ and ‘best’ have unleashed upon us – is all about defiance.  Defiance when told I have to spend my hard-earned savings on crap that is made in some Gulag somewhere all to the benefit of some crap company that’s based in Georgia or Arkansas.  Defiance against being told that the solution is to relinquish the only method of control:  financial power and influence.  Defiance against caving in to CEOs that make as much in a few minutes as most people do in a year, especially when being told that you have to make concessions in order to continue to be employed to keep making more piece of crap cars that no one wants.

Ugh.  "Saving" is the cornerstone of an efficient capital generating system.  Without savings, you have no mass capital.  Without mass capital, you have no investments.  Without investments, you have no jobs.  Without jobs, you have no income.  Without income, you have no way to generate savings.

Do you get that it’s a cycle, or should I repeat myself?

Numbnuts.