Wednesday Night #1458

With the guidance of Kenneth Matziorinis, Dr. Ioannis Bougas and other experts, so much of the evening was devoted to a discussion of events in Greece and the possible consequences for other vulnerable economies (known as the PIGS) of Europe that the related topics of governance and political events in the U.S. were left unaddressed until another occasion.

Reflected in the declining value of the Euro, the European Union is currently in the midst of its greatest crisis since its inception.  At first sight, Greece’s current financial crisis is not that great in absolute terms and appears to be no worse than that of Canada’s in 1980, yet it threatens the integrity of the Union.  Although Greece is not alone, the European problem also touching Spain, Portugal Italy and Ireland, with high debt ratio, high deficit, it finds itself in a most critical position that, in theory could result in the collapse of the Euro zone and other deeply indebted countries in the world.  In fact, however, Greece, with its current financial problems, constitutes a microcosm of the global financial crisis and the recent decline in value of the Euro.  The Greek government’s unwillingness, as yet, to take the necessary measures to solve the problem, appears to have exacerbated it and made the implementation of corrective measures extremely difficult, while increasing the government’s popularity with the voting public.  The incredible paradox of this young twenty-first century is that it is so-called Communist China that has emerged debt-free and wealthy in the face of the current democratic world’s troubling debt crisis. (Related must-read Greece suffers from ‘credibility deficit’
Some analyze the situation in a different manner, pointing to the 1943 to 1949 Communist revolution that did not succeed, but led to a left-leaning government in Greece that increased debt to an unsustainable level.  The communist influence is said to remain strong among the media to this date, causing the country to be virtually ungovernable.  However some Wednesday Nighters point to Canada’s 1980 financial crisis during which the electorate, on hearing about and accepting the details of the situation were prepared to face the required belt tightening and see no reason why the population of Greece would not do the same.
The European Union’s birth was made possible largely through the willingness of a prosperous Germany to virtually guarantee the success that it enjoyed.  Angela Merkel is no longer willing nor able to subsidize its survival.  In the longer term, the existence of the European Union has proved invaluable and Brussels is certainly aware that failure to resolve the problem by issuing a guarantee of credit, might very well lead to the collapse of the European Union.

Thanks to measures previously taken and the possession of a wealth of natural resources, Canada is in a relatively good position, but other countries, including the United States, Argentina and others, could conceivably see themselves in a situation similar to that of Greece and other countries in the E.U.

The near-bankrupt situations in California and the provinces of Québec and Ontario, because they are part of a larger entity, do not represent a situation similar to that in the PIGS countries because, unlike constituent countries of the European Union, the provinces and states are integral parts of a nation and so cannot, themselves, affect the national credit or threaten the existence of the entity of which they are a part.  However, the situation in Québec is said to be otherwise not unlike that of Greece, although the province is shielded from international action by the federal government.  The need for the E.U. to evolve into a true national federation has become increasingly obvious.

The degree to which the human psyche is predictable is reflected in the accuracy of forecasts of the fluctuations in the stock market and the degree to which the cyclical nature of the market reflects its frailty.

The market rose towards the end of 2009 until mid-January this year, at which time corrections started, following the publishing of fourth quarter earnings.  Wednesday Night Market Mavens predict up-down corrections up to mid-February and a rising market until August of this year.  Banks appear to be going through a consolidation phase rising to a breakout.  Gold is predicted to rise starting in April.  Despite positive indicators, the future is not yet clear, but the crystal ball should clarify with the passage of time.

Some analysts predict a further devaluation of the U.S. dollar and the increasing importance of gold.

T H E   I N V I T A T I O N

An evening of geopolitical and economic events for all. No, no conversation about Sarah Palin and the Tea Party Convention.Governance and Democracy are much in the news these days, unfortunately more often because of their respective flaws and failures than their successes. The question arises: do good governance and democracy go hand-in-hand? Kimon Valaskakis has for some time pointed to the myths of democracy – the infallibility of the people; the supremacy of direct over representative democracy; the peace-loving nature of democratic countries; and the correlation between national and global democracy.
Facing increasing opposition to his health care bill, despite making bipartisan overtures,  President Obama  now plans to convene a half-day bipartisan health care session at the White House to be televised live, a high-profile gambit that will allow Americans to watch as Democrats and Republicans try to break their political impasse. Obama Plans Bipartisan Summit on Health Care Americans can watch their democratic system at work – or not.

Greece, the inspiration for all democracies, although not necessarily a pure democracy in its original form (universal suffrage was NOT included), is now replacing Turkey as “The sick man of Europe”. The country’s financial problems (“triple deficit”-big budget and current-account deficits, plus a soaring public debt) are compounded by fraudulent accounting methods and a corrupt tax system (See The Economist). Kenneth Matziorinis will share his thoughts and recent conference on the topic. [Updates on EU and European Council]

Canada in 2010  too appears to be enjoying a democratic deficit – Parliament prorogued and an unhealthy controversy over events at Rights & Democracy , for example and before these events, there were those proclaiming Our Democracy is Broken: How do we fix it?

Recent election results in the Ukraine appear to have been achieved democratically, but the background of the new president leaves room for serious concerns about the governance that he represents. More

China with seemingly little care for either democracy or governance is thriving. Or is it? When will China lead the world? Don’t hold your breath.  

China and its New Place in the World Conference Report – Guy Stanley has developed his own thoughtful paper on what Canada’s policy vis à vis China should be. We can only hope that powers beyond Wednesday Night will listen to him.

India with its breathtakingly chaotic democracy, confounds and thrives.

And then, there is Israel ….   

We could do a tour du monde, with classic examples of the Good, the Bad and the Ugly ranging from Argentina and Brazil to Afghanistan, Iran, Nigeria, Somalia, Yemen, and Zimbabwe, but the former offer their own rough and tumble versions of democracy and governance while there is little chance that the most constructive advice would be followed in the latter.

Is there a case for Global Governance and how to achieve it?

 Haiti , on the other hand, offers a unique opportunity to consider how the world could cooperate to reconstitute a state blessed with intelligent democracy and good governance. It is undeniable that a number of powerful nations have contributed throughout Haiti’s history to keep it from succeeding [Haiti: The Pearl of the Antilles and The hate and the quake] and now, with the devastation wrought by the earthquake, there is a real opportunity to bring a vibrant state to life – but how? Suggestions have ranged from Conrad Black’s plan for Haiti  which suggests that “The economic and administrative government of Haiti should be put in trusteeship, administered jointly by the United States, Brazil and Canada, with Canada as chair. It should have a mandate from the Organization of American States as well as the United Nations. Neither has clean hands, but this has to be an internationally sanctioned operation”, to some form of associate-state status with the Dominican Republic.