Wednesday Night #1551

The Report

The discussion was enlivened by the arrival of the Greek contingent fresh from the Roundtable Analysis and Discussion on Greece and the Euro Debt Crisis — where do we stand and where are we heading?, organized by Ken Matziorinis.
On the death of a member of the Monegasque royal family, the Casino at Monte Carlo was closed for the morning of the funeral. From early morning, the long queue of visitors waiting for the noon opening of the casino consisted mainly, not of the young gentlemen in expensive suits that one normally observed gambling in the small rooms inside, but shabbily dressed, obviously less affluent men, resembling alcohol addicts, nervously waiting for the SAQ store to open. As humans, we all play the same game, more frequently for governance than for monetary gain, but it would appear that there are those who succeed at attaining both goals simultaneously.

Dysfunctional U.S. government
The decline of the Roman Empire causes one to reflect on the appearance of a dysfunctional U.S. government in which the 1787 guarantee that no single person would have absolute power, appears to be working against rational government towards a system that is broke and broken. One cannot help but conclude that Super Committee members, in going down to the wire on a deal that would have saved the people they claim to represent at least one and a fifth trillion dollars over ten years, are acting more out of self interest than national interest. It is possible, even probable, that the analogy is far from perfect, but service to the electorate appears to be becoming service to the individual or the group. As the 2012 U.S. election looms on the horizon, ordinary citizens are expressing their frustration with politicians of all stripes.
There is some concern among Wednesday Nighters that the influence of Tea Party which, more a coalescence of self-interest groups than a political party, has and will continue to move the U.S. in a direction that is not in that nation’s best interest. If voter turnout continues to rise (as has been the trend over the last elections) and if fewer are registered voters of one of the conventional parties, its influence may very well be exaggerated.

Republican prospects
Although Newt Gingrich is favored this week (it’s a very volatile contest) to lead the Republican Party into the 2012 election with Gingrich seen by many as the next President, Mitt Romney is preferred by some Wednesday Nighters who maintain the right to vote in the U.S. Others believe that if he is elected President, the Tea Party will hold Romney on a tight leash. Although from the Canadian perspective, Sarah Palin and the Tea Party seem unlikely players, they cannot be dismissed. It is claimed that Palin will rise again, more dangerous than generally foreseen and that although the Tea Party consists of a mixed bag of members, some with an evangelical view of governance, it cannot be dismissed because their members represent such popular principles as seeing income tax as unconstitutional, bringing America back to the Monroe Doctrine and minimal government. If enabled by legislative or influential power, they could have undue influence in imposing otherwise unpopular views on a government.

The market
Not unexpectedly, the stock market has declined mainly because of the American Thanksgiving falling on Thursday and inactivity until the following Monday and investors avoid being long over a four day hiatus. Bank stocks had a particularly poor day. It is anticipated that The new work week will see a return to what appears to be the current normal. Should this not happen it would be a reflection of negative events in both Canada and the United States.

Europe & the EU
Europe continues to go through a very difficult time. In Greece a large percentage of the population is suffering. Much of the manufacturing has moved out because of imposed austerity measures and the ease
of movement between Euro countries. France has decided to impose the most severe austerity measures in order to maintain their credit rating, as has Italy. The German government has issued bonds, but only sixty percent have been bought. With Italy, Greece, U.S. and Russia and two other countries holding elections in 2012, the crystal ball becomes cloudy. The Greek manufacturing sector has moved out of that country because of the current corrective measures, exacerbating an already difficult situation.
In effect, the world is struggling to recover from unscrupulous, although not illegal, acts by humans who have sought self gain at the expense of others, unmoved by the painful losses inflicted in the process on basically uninvolved individuals. There are and have always been predators profiting from the misfortune of others. The problem is that we have been living in a low yield environment and an exceptionally large amount of liquidity has fallen into the hands of the few.
A lot of people made money in the Greek crisis and are now looking for new prey, It is said that small people don’t have the knowledge. There has been little risk and no penalty suffered by the perpetrators’ of the crisis from which the western world is attempting to recover. The game may have been altered but the unwritten rules remain the same.
It is a sine quae non that the integrity of the European Union created by the 1991 Maastricht Treaty is vital to the assurance of a peaceful, prosperous European continent. In the absence of a political union, the question arises as to whether the wealthier European members have gained prosperity by exporting manufactured goods at the expense of the importing Mediterranean members and the means of leavening of any inequalities. The obvious solution would appear to be a fiscal as well as monetary union, said to have been on the agenda but sidetracked by the current financial crisis.

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The Prologue

Oh, dear!
After the delightful evening spent in the company of our beloved Fiona and good friend Michel Choquette whose “Someday Funnies” is now in print, we must regretfully admit that this is an Eeyore week.
The U.S. Congressional “Super Committee” has struck out in its efforts to agree to anything resembling a compromise package on the debt ceiling. Hardly surprising given the dysfunctionality of the current political climate in America, but we had retained a modicum of hope that reason might prevail amongst the members of this last-ditch group effort. We were wrong. As the National Post points out “It spent the last day before the conclusion of its appointed lifespan arguing about how to admit that it had failed.” The Christian Science Monitor adds: “The not-so-super committee that was supposed to figure out how to reduce federal red ink by at least $1.2 trillion is about to fail in its mission. Republicans refused to allow increases in tax rates, Democrats refused to allow big cuts in entitlement programs, and you can figure out the rest. So, now that the Hindenburg has pretty much crashed and burned, who is to blame? You guessed it: President Obama!” [at least according to Mitt Romney and no doubt all of his Republican wannabe colleagues] – so now what?

The Economist weaves the rise of the technocrats, the failure of the Super Committee, the EU/euro crisis and the disrepute of political parties and politicians into one bleak cloth, reminding us that “Technocrats may be good at saying how much pain a country must endure, how to make its debt level sustainable or how to solve a financial crisis. But they are not so good at working out how pain is to be distributed, whether to raise taxes or cut spending on this or that group, and what the income-distribution effects of their policies are. Those are political questions, not technocratic ones. And they will not go away just because a technocrat has been made prime minister.”

Across the Atlantic, amidst the changing of the guardia civil and the rise of the technocrats, EU turmoil continues. Kimon Valaskakis has just returned from Paris where he participated last week in the post-Cannes gathering of the G8-G20 Research Group post mortem and has published his remarks, The Perils of Austerity, on the NSoA website.
Briefly, Kimon contends that “Coming a week after the Euro Zone, EU and IMF imposition of yet harsher measures on Greece, shocked by the threat of a Greek Referendum and an Italian meltdown, the mainstream view went unchallenged. Evidence suggests that this strategy is proving to be both unjust and completely ineffective.”
A bright note on the otherwise gloomy economic scene is Sheila Arnopoulos‘ message following last week’s Microcredit Summit in Spain. “Microcredit and the social enterprise model especially could be a way forward out of the world’s current debt and greed crisis. There was discussion about the suicides in India in 2010 that received a lot of publicity, and that have given microcredit a bad name, but the result has been a push within the microcredit movement around keeping the social mission, building up transparency, as well as installing codes of ethics.” Sheila has also identified the subject for her next book: “Arab women — dynamic and doing things”. She will be home on the 29th so we can look forward to a full report as early as next week.
The Arab/Middle East world doesn’t offer much cause for cheer. There appears to be more and more proof of Iran’s (non-peaceful) nuclear ambitions. Canada has announced that expanded sanctions including nearly all financial transactions with the Iranian government and also add the leadership from the Revolutionary Guard to the list of people designated for sanctions (this seems a bit tardy). The world is increasingly concerned that Israel may be planning a preemptive strike. Canada’s fearless Defence Minister, Peter MacKay, says he plans to ask his Israeli counterpart Ehud Barak about reports that Israel’s leaders have discussed plans to attack Iran’s nuclear sites. We can imagine Mr. Barak’s illuminating response.
Syria, increasingly isolated, on the brink of civil war; while Egypt‘s interim government quit and the elections are in jeopardy; apparently the population is not content to live under yet another military authority.
On the home front, Peter C. Neuman, writes in what looks more like a promotional piece for his new book than a genuine op-ed, Walking wounded Grits have become the walking dead that “They once were a highly selective, self-perpetuating, relatively enlightened electoral band of brothers that reigned over the country longer than any other democratic movement, anywhere, anytime. That’s why it is no idle comment to speculate that Canada’s gods changed on election night last May, when the Liberal party’s walking wounded, became its walking dead.”
The Toronto Star, meantime, has latched on to a messy story about Pierre Karl Péladeau’s crusade, aided and abetted by some Conservative MPs, to bring down the CBC. More on the story here
Has anyone else been wondering what was going on in the CETA (Canada EU Trade Agreement) talks? One (very rare) account gives a few details: “Canada says the negotiations are progressing well, while the EU says there are still lots of problems. One of them, according to the commission, is the issue of supply-management boards for poultry, eggs, and dairy. Another on the EU side is pork and beef access for Canadian producers.  Of the problem areas, intellectual property will be handled last, as the EU continues to push Canada on copyright and patent terms on pharmaceuticals.”
Monday is definitely an Eeyore day for Jean Charest, confronted by the news that the northern Pessamit Innu are launching an international campaign condemning Quebec’s Plan Nord, saying it violates the rights of aboriginal people.
We are not convinced that Mr. Harper’s nature would allow him to admit to an Eeyore day, but perhaps he came close to one with the announcement that the Canadian Bar Association representing over 37,000 lawyers across the country has promulgated  10 Reasons to Oppose Bill C-10.
He may also not be enchanted with the report that,  “A handful of backbench Tory MPs have apparently developed spines and/or consciences, as there is growing internal opposition to the party’s rigid support of Quebec’s asbestos industry.”

Another note for your calendar: Kyle Matthews extends a personal invitation to attend a short CIC-sponsored event tomorrow evening (22 November) that will take place at the law firm Fasken Martineau. The event will feature a short presentation by Karen Mazurkewich, author of the Canadian International Council’s recent report on intellectual property rights. More information A short cocktail will follow. If you are interested in attending, please reply to Kyle at kylematt@alcor.concordia.ca
Finally, for our non-Eeyore moment:
CONGRATULATIONS to Alexandra Greenhill and her cohorts whose start-up website My best helper won first place in the competition to create a start-up company over a weekend. She explains: This is Global Entrepreneur Week and Vancouver is one of over 60 locations world-wide where groups of developers, designers and business people come together to create a new company over a weekend (see http://www.tippett.me ). Sounds impossible? Startup Weekend, the non-profit organization hosting the effort, has many examples of global brands that were born in just 54 hours.