Wednesday Night #1505

Despite the presence of an economist or two, the first Wednesday Night of the New Year was a convivial evening that combined serious and persuasive discussion with a quite cheerful  ambiance of good fellowship.

Age and save
In line with the topic of the global aging of the population, the early part of the discussion focused on the essential planning for post-retirement needs.
The culture of saving for the future has vanished from our society, possibly at least partly due to the invention of the credit card.  Unless one is self-employed, income protection is virtually non-existent in the private sector.  As stated by one Wednesday Nighter, The best pension scheme is to own a small business.  The vision of adequate, or more than adequate, secure, post-retirement income in the eyes of the younger employee becomes less so as one ages after having contributed for many working years.  The major factors resulting in this phenomenon appear to be real inflation (as opposed to published C.P.I. calculations), the cost of new technologies and increasing longevity.  Especially for those not self-employed the solution, too often neglected in favour of the excessive acquisition of non-essentials by wage-earners, is sagacious investment in dividend-paying stocks that accrue value in excess of the real rate of inflation.  For the majority of people now alive, the age that has, in the past, been considered too old to contribute to society has become a myth, but more logically, like puberty and pedagogical graduation and marriage, a new lifestyle with new opportunities.  As with any significant transition, success can only be assured by careful planning.

Canada
As Canadians become closer in their thinking with their American cousins, we tend to adopt more of their culture.  In the past some Wednesday Nighters have suggested that,  our political forefathers, rather than battling over the forty-ninth parallel, would have done well to draw the Canada-U.S. border north and south rather than east and west.  Indeed, the current government, having had its roots in the west has, in the eyes of some Wednesday Nighters, tightened its ties with the U.S. at the expense of Canada’s international  reputation. Possibly a contributing factor to the failure of Canada to win a Security Council Seat? Further speculation focuses on the influence of the political philosophy of the governing party; has it affected our traditional capacity to influence our international partners?
Moreover, there appears to be a disturbing trend towards ‘regionality’, with the government failing to consider national wants and needs above regional ones,  giving rise to fears of an eventual dissolution of the confederation while everyone is looking the other way.
Meanwhile, many wonder at Mr. Harper’s teflon coating. Despite some horrendous stumbles in the past year (think census long form), he continues to float above the issues and maintain tight control over his caucus and all government actions.
Partly this is due to the opposition parties’ weaknesses, amongst which is their ability (with the exception of the Bloc) to paint themselves into a corner.
The opposition does not appear to be prepared to provoke an election but claims to be prepared to do so following the presentation of the budget.  However, the prospect of a federal election is dim in view of the already-scheduled provincial elections — Prince Edward Island (Oct. 3) Manitoba (Oct. 4), Ontario (Oct. 6), Newfoundland and Labrador (Oct. 11) and Saskatchewan (Nov. 7).There is neither enough money nor enough volunteers to hold five provincial elections and a federal election in one season.
Meanwhile, a number of observers – both at WN and in the media, decry the practice of the Conservative government of including  legislation that should be properly elaborated and debated  in the budget omnibus bills, resulting in  such legislation being approved by default.  Indeed, it is claimed by the opposition that the government has fine tuned such tactics in order to bypass the will of the majority. Others ask the rhetorical question as to whether any other minority government would have acted differently.

The economy
Based on the current economic forecast, the economy is expected to do well but not as well as last year.  One relatively small glitch is obsolete capacity in Canadian auto and pulp and paper sectors.  We are and should continue to do well as long as we are able to export.  Unfortunately, in the U.S., homes are still being repossessed and pockets of bad economy still exist.
Growth in the emerging markets will continue for some time.  Taiwan is growing by fifteen to  twenty percent per year.  Canada, especially the western provinces, will do well, largely thanks to a continuing active commodity market.  The government is doing a good job keeping us relatively competitive by keeping the Canadian dollar below parity with its U.S. counterpart.  Canada will also gain at the expense of Australia due to the floods in that country.
The stock market
As for the stock market, the market itself is, like a bellwether, leading the economy  by six months.  We are now witnessing a positive movement and surprisingly, the market, appearing to pause, only started to slow down in the last few days.  The forecast is for a market meandering in a narrow range for the month of January.  Average length of a bull market is 45 months and the current one is only twenty-two months old so with the exception of the occasional glitch, it can be expected to continue to rise.
And in the U.S.
On the political scene, logic does not always prevail over the drive for popularity.  The financial situation in the U.S. is such that the only apparent logical solution would be the implementation of a value added tax (as proposed by President Richard Nixon and currently existing – in a small way – in Michigan and on automobile tires).  The myth that politicians  are the servants of the voting public appears to weaken, perhaps to vanish when unpopular legislation is ignored to the detriment of the nation.

Hungary
In May, 2010, Viktor Orbán, leader of the Hungarian Alliance of Young Democrats (FIDESZ) assumed the Presidency of Hungary.  Considered by some Wednesday Nighters as very charming but not terribly sincere, possibly with psychological problems  he is said to dislike probable successors and to be proposing that his two-thirds majority change the constitution in order to transform Hungary from a democracy to an autocracy.  The future appears to some expatriate Hungarians to look grim.  Hungary currently fills the rotating chairmanship of the European Union, which gives some concern to many, including European leaders.
There are fears for Germany, too,  where forthcoming elections could possibly precipitate a crisis, although it is doubtful that any European crisis would affect the euro or the union.

Sudan
Next week, a referendum will take place in Sudan over the wish of the (largely Christian) oil-rich south to separate from the (largely Muslim) North.  It is unlikely that Khartoum will accept the results of the referendum and the only country that has any strategic influence, namely China, is not expected to intervene.  Unfortunately, the tragic situation of the Sudanese has not appeared to have evoked the sympathy of the more favoured nations of the world as did, for example, Haiti.  Outsiders tend not to give money to what appears to be a thoroughly corrupt government, to the detriment of its inhabitants.

Judith Woodsworth and Concordia
Reverting to local matters, Wednesday Nighters, like many others, are mystified and discouraged by the recent departure of Dr. Judith Woodsworth from her post as president of Concordia University. To date there is no official explanation – let alone a satisfactory one – for her abrupt departure/dismissal on the eve of the holidays. By all accounts (including the press release announcing that she was leaving for ‘personal reasons’ – which she has denied), she was doing an excellent job. The role of the inner circle of the Board of Governors and the lack of transparency in the governance of the university are highly suspect. Coupled with the still-unexplained circumstances surrounding her predecessor’s departure and that of a number of Deans, this event can only harm the reputation and morale of the university. It is to be hoped that the Board will “come clean”, but the past lack of transparency augurs poorly for any change in the immediate future.

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The Prologue
Happy New Year to one and all – although judging from a number of the prognostications along with grim early news items, it may not be all that happy.
Of the latter, we note in particular the accession of Hungary to the presidency of the EU
Hungary Risks Image at EU Helm as Orban Increases Power Over Courts, Media
(Bloomberg) “The European Union’s charter calls for respect for the rule of law, human rights, economic progress and media freedom. Some in Brussels are wondering whether Hungarian Prime Minister Viktor Orban, whose country takes over the rotating EU presidency on Jan. 1, has read it.”, along with a number of voices led by Paul Krugman expressing considerable concern over the durability of the euro  (Be sure to read the comments below by Tony and Kimon).
In Africa, while the situation in the Ivory Coast is of grave concern, there may be hope for a (relatively) trouble-free vote in Sudan, although we cannot believe that the North will happily allow the oil-rich South to split. We applaud George Clooney’s initiative and hope it will contribute to avoiding the horrors that we have come to expect in Sudan.
Pakistan is again troubling and troublesome Governor’s killing sets off political powder keg in Pakistan
The never-ending Israeli-Palestinian debate continues.  Gwynne Dyer’s piece The vanishing two-state solution to the Israeli-Palestinian conflict may have escaped your attention – it’s worth reading, as almost all of what he writes is.
The newly-elected and decidedly fractious Republicans in Congress are already planning to repeal the Health care Bill before the State of the Union address G.O.P. Newcomers Set Out to Undo Obama Victories and the outlook for reasonable, reasoned, and civil discourse is pretty dim. (We confess to a positively visceral dislike for , but will nonetheless watch on Thursday when  Brian Williams Nabs First Interview With John Boehner As House Speaker.)
Amidst the gloom and doom regarding inevitable re-districting following population shifts away from the Northeast, Slate points out that The new census data may favor Republicans, but long-term demographic trends favor Democrats.
Here, the Canadian Centre for Policy Alternatives’ Hugh Mackenzie, Shauna Mackinnon, Bruce Campbell, Trish Hennessy, Jim Stanford and Armine Yalnizyan weigh in on the issues facing Canada in the years ahead. They flag the economy, social unrest, drift, democracy, dirty oil and corporate Canada as things to watch in 2011 and beyond. Looking into the crystal ball: 2011 predictions, while Canadian economy to slow, economists say and , speaking of corporate Canada, this item The rich get richer — Canada’s top CEOs made the annual salary of an average worker by 2:30 p.m. Monday, should bring on the revolutionaries.
Mr. Harper has tweaked his cabinet and Canada now has yet another Minister of Environment in Peter Kent (Tom Mulcair had some unkind comments but he cannot be worse than Rona Ambrose).
As always, CBC’s At Issue offers some entertaining – and sometimes thoughtful – views. We were pleased that Last week’s session answering viewers’ questions  started off with a question about the lack of civility in Parliament, posed by our friend Pascal Zamprelli.
That ends our brief tour d’horizon of the world – and we have overlooked many other events (including the inauguration of Brazil’s first woman president and the devastating floods in Australia) – and brings us to the issue that we believe will be the overriding concern in the years ahead: the aging of the world population. We have gathered a few thoughtful articles here and look forward to your comments and suggestions of more reading on the topic.