Wednesday Night #1564

With the presence of Imran Ahmad, the new Vice President (Francophone) of the Liberal Party, and his wife Sofia, the topic of the reinvention of the Liberal Party was inevitable and generated intense discussion and some very cordial disagreements.

It may be an unpalatable truth, but anecdotal evidence indicates that at least some electors in some ridings that have elected neophyte N.D.P. members appear quite satisfied with the outcome as the new MPs are making genuine efforts to reach out to all their constituents.
At times, we tend to forget that homo sapiens, although superficially tame, is as much a predator as Panthera Leo in the political arena and any weakness is immediately exploited by the opposition.  The LPC is currently licking its wounds, analyzing the unprecedented change in voter choices and coming to terms with the idea that admiration for the devotion and input of a seriously ill but charismatic leader was only one – albeit important – factor in the election results. Much blame must be attributed to the top-down approach adopted by the Party over the past years and its failure to articulate the meaning of “Liberal”. The list of Liberal Initiatives, drawn up by Warren Allmand,  offers the framework of what Liberals stand for.
As the LPC licks its wounds, there are many encouraging developments including the large turnout for the Ottawa Convention, the number of young people who attended, and the election of a number of fresh, new and younger faces to the Executive of the Party.
There is still a long way to go before the traditional mindset of The Natural Governing Party is traded in for a “nothing-is-off-the-table” attitude towards policy discussion; most important is the rebuilding of the numerous riding associations that are structure-less, member-less and destitute. To rebuild will take a new approach: consultation with the grassroots along with the experts; finding out what people want rather than handing down policy statements that appear/are irrelevant. Most important is that people be heard rather than told what their needs are, that all expressed needs and desires be listened to and acknowledged.
The creation of the Supporters category [for some, the jury is still out on whether this is really an effective way to develop new people and new ideas, but everyone is disposed to at least give it a try] is indicative of a new attitude: you don’t have to be a card-carrying Liberal to participate in our debates. Becoming proactive members of the community and working with community organizations on issues that affect all constituents is key to rebuilding. More focus is needed on the demographic group of 18-45, which is not engaged, but worried about the future, in terms of coping with personal debt, raising young families, caring for aging parents, etc. Sustainability is also an issue for this group in Quebec.
Nothing is off the table, however a number of Wednesday Nighters emphasized that whatever is discussed must be viewed through the prism of Liberal values and considered in light of over-arching national needs as well as regional and local ones.
That Quebecers  supported a leftist party led by an Anglophone over separatist-leaning  Francophone candidates speaks loudly for the evolution of the political desires of Canadians, as does the accelerating shifting of the population to the West. Quebeckers do not trust the Liberal Party – it will have to regain that trust, especially in rural Quebec. Montreal may be the economic motor of Quebec, but it is only one factor and certainly not a monolith. The LPC will have to adjust to reach out effectively to many different ethnic communities, know their leaders, understand their issues – something at which the Conservatives and Jason Kenney have been singularly successful.
Francophones across the country have been neglected as focus has been on Quebec since the rise of separatism – presents an opportunity for Liberal Party. By the same token the Anglophone minority in Quebec has been taken too much for granted in the past and needs attention.

Liberal/NDP cooperation
Most Wednesday Nighters are opposed to talk of any merging of the two opposition parties on the basis of the message it would send to the voter – throwing aside principles in order to defeat a political enemy. What happens afterwards – how do you trade policies for principles?

The Long-gun Registry
The debate on the long gun registry continues.  Those opposed to the Registry talk about the cost and the fact that neither the Dawson nor the Polytechnique killings were carried out with long guns.  Those favouring the Registry point to the fact that guns of all sorts have the same purpose, namely, to kill.  It is suggested that a compromise could be reached by making the gun registry part of the automobile registry, cutting the cost of a separate registry but making it much easier to track these potentially lethal weapons. However, more to the point, why does everything have to be an either/or situation? Couldn’t those opposed have adjusted to context? Even if one agrees with the principle of the Registry – and not all Wednesday Nighters do, citing the needs of farmers, first nations, scientific expeditions, etc. – there were many irritants that should have been solved years ago.

The latest on the Tar Sands
The publication in the highly respected Nature Magazine of a study by Andrew Weaver has created consternation among environmentalists, but its conclusions have been misconstrued in media reports. “Not everyone has bothered to read the paper, which takes the more nuanced view that while the oilsands add little to the world’s carbon footprint, they are a significant enabler of fossil fuel addiction.” … The point is there is more coal than bitumen.
To some, Professor Weaver was simply doing what scientists do -speculating. The timing of publication is unfortunate however, and his conclusions have been and will be misinterpreted and misused. It was also noted that he is NOT an advocate for expansion of the tar sands, which he has made very clear in interviews.
Because carbon-based products have historically been the most efficient means of meeting our energy needs, the health and environmental effects of carbon-based energy sources, most especially coal, have been accepted as a necessary evil.  More problematic than coal, however is bitumen which is also dependent on natural gas.  Carbon-based fuels, accepted by most as having an adverse on both health and environment, are unlikely to be replaced because they are such a compact energy source and Man’s appetite for energy increases constantly.
EU ruling
The proposal to label oil from tar sands as highly polluting will be voted on in Brussels on Thursday by officials from member states, part of the delayed implementation of an EU fuel quality directive adopted in 2009.
Update:
[Canada has threatened to take the EU to the World Trade Organization if it singled out that type of oil as worse for the environment than others. But the European Commission, the EU’s executive branch, contends that science justifies its proposal.
The proposal – which was kicked upstairs to the Council of the EU on Thursday – would be a revision of the EU’s Fuel Quality Directive, which sets a mandatory target for fuel producers and suppliers to reduce the carbon emitted by fuels by 6 percent from 2010 levels by the year 2020. The proposal, while it would not have banned oil from oil sands from being imported into the EU, would have assigned it a bigger carbon footprint than average crude oil.
However, opponents of the proposal say that, in practice, that would amount to an import ban. More]
One Wednesday Nighter commented that trade law doesn’t usually look at methods of processing.

The market
The market is bullish, due to liquidity, and the fact that portfolio managers have realized that too much liquidity in portfolios is not career-enhancing. The market also appears to have tired of the European debt crisis and seems to be ignoring further adverse news from Greece and Portugal.  Hi-tech stocks are said to be undervalued and despite 2012 being an election year in the U.S., the market appears to have not been influenced by that event.
As to the Canadian market, we can expect a short drop in commodity prices because of effect of sanctions on Iran. While this appears to be counter-intuitive, the reasoning is that the sanctions may lead to conciliatory comments/actions, and thus to a drop in oil price. What about the Israel effect vis à vis Iran? “The market doesn’t [care] – we have survived Greece, Italy, etc. Portfolio managers have realized that too much liquidity in portfolios is not career-enhancing.  Hi-tech stocks are tremendously undervalued. People want to get into the action. U.S. politics have an influence – as it looks very doubtful the Republicans will win, no major upheavals are expected. Market due for a pause. Interest rates will not rise as policy is to fuel the economy. We might see commodity inflation. Rare earths are plentiful but extraction and processing problematic.

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Prologue
So many different directions we could take this week …

The Middle East: Syria, Iran, Israel
As worries mount, one of the more intriguing news items is Iran warships enter Mediterranean … via the Suez Canal for the first time since 1979; apparently they were previously on station at Jeddah. No-one seems to know what the flotilla is intended to do, other than “show Tehran’s ‘might’ to regional countries”, but it seems obvious that they will be showing at least the flag off the coast of Israel. The situation in Syria continues to deteriorate (if that is possible) and the visit of Chinese Vice Foreign Minister Zhai Jun doesn’t seem to have improved matters beyond the statement that China now supports the Arab League proposals  any more than the previous week’s visit by the Russian Foreign Minister. Israel’s intentions regarding an attack on Iranian nuclear capabilities continue to preoccupy anyone with a soapbox. One of the more reasonable voices is that of Fareed Zakaria , while another gives 5 reasons for attack and 5 reasons to avoid war with Iran.   Rachel Bendayan is just back from a trip to Turkey; although it was a holiday, we feel sure she will have some observations to share.

China pundits are a-flutter in the wake of Stephen Harper’s trip to China (the best commentary we believe is Diane Francis: It’s time for Canada to play trade hardball) and the visit of that country’s leader-in-waiting, Xi Jinping, to the U.S.  Insofar as the latter is concerned, so far the only development seems to be an agreement that more American movies will be allowed in to the Chinese market.
Then off went the inscrutable Mr Xi,  presumably via the polar route, to arrive at Shannon just in time to reiterate China’s support for Europe as it addresses the debt crisis. He is not alone, according to the China Daily. China’s leaders have been all over Europe promising backing for the Eurozone, mutual investment, business cooperation, etc., etc. One cannot help but wonder what they are saying to their European counterparts behind closed doors about tolerating the unruly citizens, notably in Spain and Greece who insist on protesting their governments’ policies. There are sure to be more such protests following Monday’s meeting of the Eurozone finance ministers , which we do not expect to produce any more creative solutions than usual. What a pity the views of the “Wednesday Night Economists Caucus” do not prevail. The Perils of Austerity would have been understood long ago.
Please note that the Journal of Wealth Management has recently published Kenneth Matziorinis’ paper Is the ‘Euro Bond’ the Answer to the Euro Sovereign Debt Crisis? What Outcome Can Investors Expect Out of Europe?

The U.S. and Canada
The circus continues and even Fidel Castro has unflattering comments, lambasting the Republican presidential race as the greatest competition of “idiocy and ignorance” the world has ever seen. Charges and counters continue over religious freedom and federal and healthcare mandates (we still wonder what were they thinking?). The payroll tax cut extension passed and its benefits will continue to be hotly debated  However, for us the most intriguing  development is the news that two Supreme Court justices suggested Friday that the court reconsider its 2010 Citizens United decision  – what are the implications for the current election? How would the Super PACs give back all that money?

This week’s Economist targets Over-regulated America — The home of laissez-faire is being suffocated by excessive and badly written regulation and Forbes jumps into the fray pointing out that while the Economist story targets the difficulties of compliance with the Dodd-Frank Bill, the same criticisms can and should be leveled at Immigration regulations, concluding that regulation “takes money away from productive uses in the private sector and reduces the overall economic welfare of the nation.”  Hard to argue with.
While we would attribute other motives to the attempts by the Harper government to accelerate approval processes for environmental programs, perhaps concern for over-regulation might be one of the underlying motives for the repeal of the Long-gun Registry and possibly the Wheat Board?  But then, how to account for detailed provisions of  the Crime Bill, or most recently, the introduction of  Bill C30, or the Protecting Children from Internet Predators Act (Original title:  INVESTIGATING AND PREVENTING CRIMINAL ELECTRONIC COMMUNICATIONS ACT), which critics refer to as the On-line spying Bill (when they are being polite)?

Whatever the motives of the Harper government, we must agree with Chantal Hébert’s recent comment on At Issue (we are paraphrasing) that the Conservatives have not learned that with a majority government, comes the obligation to stop bullying and start persuading. We believe that would be a first step towards reducing the venomous quality of the rhetoric we witness both inside and outside the House. And perhaps would even create an environment where all political parties would at least try to eliminate the current mentality of settling of accounts at all levels. When will politicians and party hacks realize that the people are very, very tired of the constant internecine warfare? That could account for a number of voters who stayed away from the polls on May 2^nd.

This may appear to be an odd way of introducing this week’s guest, Imran Ahmad, the new Vice President (Francophone) of the Liberal Party, but we believe that he may share some of our concerns. Imran, who will be joining us with his wife Sofia, was born, educated and lived in Montreal for some 30 years. In 2006, he moved with Sofia to Gatineau, where he worked for Lieutenant-General The Honorable Roméo A. Dallaire. He completed a master of laws at the University of Ottawa and went on to clerk for Justice Edmond P. Blanchard at the Federal Court of Canada, the Competition Tribunal and Court Martial Appeals Court in Ottawa. In 2008, Imran moved to Calgary where he worked as an attorney at Bennett Jones LLP and subsequently relocated his practice with the same firm to Toronto. His interview with The Equivocator gives a great picture of what he hopes to achieve in his new role and we look forward very much to having him and Sofia with us.