Wednesday, March 10, 2010

The Honourable Rahim Jaffer

Rahim Jaffer was first elected to the House of Commons as a 25 year old Reform party member.  He was considered a rising star by a Reform party eager to appeal to minority constitutents.

Mr Jaffer was different than most Reform/Canadian Alliance/Conservative MP's.  He was an immigrant, dark skinned and muslim.  It was good that a person of such a background could feel comfortable in those parties.  It would have been better if he had been more of a grownup.....but that may be a bit much to ask of a 25 year old.

He is no longer a Member of Parliament, having been voted out in 2008.  However he is very much in the news due to his arrest and subsequent events.  He was charged with speeding, exceeding the blood alcohol limit and cocaine possession.  The plea bargain resulted in a $500 dollar fine along with a guilty plea of careless driving.  The other charges were dropped.

The presiding judge acknowledged in his comments that Mr Jaffer had caught a "break".

As a private citizen, Mr Jaffer's obligations are different.  He doesn't need to speak publicly about what happened.  Nonetheless, some Canadians have some understandable questions.

1) Did he receive special treatment as a former Parliamentarion?  It was a provincial judge appointed by Ontario's Attorney General Jim Flaherty.  Mr Flaherty is now Finance Minister.
2) What happened to the cocaine possession charge.  Why was this dropped?

Mr Jaffer may not have to answer publicly but the people are understandably concerned.  If the cocaine possession evidence was suppressed due to police misconduct, then there is a public interest in knowing.

Some members of the Ontario Government should be speaking up now.  This does smell and looks like a privileged person getting special treatment.  It would be in the pubic interest to disabuse the public of such an impression......if indeed the facts support that view.

Monday, March 1, 2010

Bailout Folly

The runaway freight train of Government bailouts is nearing its logical conclusion.  Unfortunately, it will climax before returning to a point of sanity.

Over the last couple of years we witnessed the spectacle of taxpayer funds being used to prop up car companies building cars that the consumer did not want to buy.....or certainly not in sufficient numbers to keep the automakers in the black.

Equally obscene was the bailout of banks who were seemingly incapable of managing money.

Isn't a bank supposed to be good at managing money above all else?  Shouldn't the world's largest car company know how to build a car and make a profit at the same time?

The 'moral hazard' is coming home to roost in a most spectacular fashion as several entire countries are now on the verge of needing bailouts.  In the European Union, the so called PIIGS (Portugal, Italy, Ireland, Greece, Spain) are said to be in dire straits and will soon need bailouts.  Greece is in the worst shape and could default in a matter of weeks if they are not bailed out.

Now here is where the bailouts go from bad policy to downright offensive.  Greece has a mandatory retirement age of 63.  Any bailout of Greece would have to be spearheaded by Germany....mandatory retirement age of 67.  The German people are rightly asking why they are being asked to work to 67 in order to finance retirement for Greeks beginning at age 63.  The argument may oversimplify but is valid.

Some may have forgotten but the bailouts of the banks and GM/Chrysler have a similar problem.  The average assembly line worker at GM earns more and has better health care coverage than the average American by a significant margin.  Bank employees....nuff said.

So the question is this:  If you are a single working mom earning something close to the national average, how do you feel about some of your taxes going to safeguard the jobs of bankers and autoworkers who earn a lot more than you?  If that doesn't make you angry enough, then consider that since the bailouts were funded with  deficit financing, so that your son/daughter will be paying for these bailouts in the future.

Sunday, February 28, 2010

Miracle on Ice 2010

At the start of the preliminary round men's hockey game between Team Canada and Team USA, a Canadian fan held up a sign invoking Al Michaels' famous call at the end of the USA-Russia game at Lake Placid in 1980.

He asked "Do you believe in miracles" as the team of collegiate American boys defeated the Big Red Machine.

The sign asked "Do you believe in miracles".  Just below, it answered itself with a "NO".

For me Olympic hockey has lost much of its lustre since watching that famous upset at Lake Placid.  Canada won gold at Salt Lake City and as a Canadian I was happy.  However, there is something strangely uninspiring about the best team with the best players winning the tournament.

The USA defeated Canada in that round robin game 5-3.  However that fan was still right.  This was no miracle.  A solid Team USA filled with NHL players beat a star studded Team Canada filled with ......NHL players.  The Canadians were favoured but it was no shock and no disgrace to lose to this American team.

They will play again in the Gold Medal Game on Sunday.  These are the two best teams playing for the Gold and one of them will lose to a worthy opponent.  It will be no miracle either way.

For me the great sporting moment of these Olympics was captured by Joannie Rochette.  As many already know, her mother died of a heart attack shortly after arriving in Vancouver to watch her daughter skate in the Olympics.

A very emotional Rochette skated on and was third after the short program. She burst into tears at the end of her program undoubtedly thinking of her mother.  After the long program she did not move up but she skated well and captured the Bronze medal.

Joannie Rochette's bronze medal was the miracle on ice this time.  Watching her family and friends bursting with tears of pride as she stood on the podium it was clear that the colour of the medal did not matter.  In fact, I'm sure they would have been just as proud had she not won a medal at all.

A team of millionaire professional Canadian hockey players will win either a silver or gold on Sunday.  Our nation will weep if they fail to win gold and thump our collective chests if should succeed.

In a sporting sense, none of that will matter more than Joannie Rochette who reminded us that it's not whether you win or lose......it's how you play the game.  She won simply by playing on.

Bravo Joannie!!!

Tuesday, February 2, 2010

Voodoo Economics

During the Republican primaries leading up to the election of 1980, Ronald Reagan's economic plan was famously called "Voodoo economics" by his chief rival George H.W. Bush.

One of the central tenets of Reagan's plan was that tax cuts would raise the deficit in the short term but the resulting economic boom would eliminate the deficit as the economy outgrew the deficit.  It worked.....well kinda.   Economic growth was substantial but the deficit persisted.  What Reagan hadn't counted on was the boom in spending on entitlements.  The growth in entitlements was such a factor that the President who authored one of the biggest tax cuts in history ended up signing one of the biggest tax hikes in history to ensure that Social Security remained solvent.

Fast forward 30 years and President Obama has proposed a budget that totals 3.6 trillion dollars in spending.  This outflow of dollars exceeds the money coming in by a staggering 1.6 trillion dollars.  Putting this into terms that one can relate to, imagine a family with $50,000 in take home pay spending $90,000 per year.

Obama's budget proposal claims to cut the deficit from 11% of GDP to 4% of GDP in 4 years.  This is largely based upon rosy projections for economic growth.  In fact, economic growth accounts for 6 of the 7% that the deficit is forecast to decline.  Note however that his own projections show the deficits climbing ever higher towards the end of his second term as baby boomers retire and start drawing Social Security.

Such deficits are not only unsustainable, they are immoral.  Deficits represent a legacy of debt being passed onto our children and grandchildren.  We are impoverishing future generations in order to safeguard our standard of living.

So what should be done?  First off, do away with rosy economic projections.  Assume a recession or two.  Why are politicians always surprised that recessions come along?  Second make some hard choices on taxes and spending.  Raise taxes across the board.  Raise the age at which one qualifies for Social Security.  (The age of 65 for eligibility was introduced when the average lifespan was 67 years.  Now that the average lifespan is pushing 80, upping the retirement age is warranted.)

A balanced budget amendment should be introduced.  It could have some flexibility built in so that some stimulus can be introduced at times, however it should be a condition that stimulus spending can only come from past surpluses.  In other words, the government should put away for a rainy day.  I would ask proponents of the idea that governments should spend during recessions and run surpluses in boom times why we can't reverse the order.  Governments should first save money and then spend it during a recession.  When that money runs out, so should the stimulus.

These are very simple common sense ideas.  They are not likely to see the light of day in Washington or Ottawa.

Sunday, January 31, 2010

Canada's Fiscal Deficit

Canada stands alone amongst G7 nations as the only nation that did not bail out its banks during the recent financial crisis.  It was not because our banks did not get hurt by the Sub-Prime meltdown.  Several billion dollars in charges were taken by our banks and indirect effects hurt them as well.  However they were strong enough to withstand the storm without going cap in hand to the taxpayers.  Canadians should be proud.

Canada also went into the recent downturn with a history of budget surpluses.  Many proponents of Keynesian economics favour deficit spending during recessions coupled with surpluses during periods of growth.  Canada is the only member of the G7 to have practiced this.  The other nations all had deficits during the growth years.

Now that we are past the worst of the recession (according to some), it is time to ask how we dig ourselves out of this deficit so that we can start paying down our national debt before the next crisis hits.

Obviously stimulus spending will end.  However that is not enough.  The current government has cut the GST twice since taking office to 5%.  This was always a triumph of politics over sound policy.

There are only two ways to get the deficit back into surplus.  1) Cut spending massively 2) Raise taxes.

Spending will simply not be cut enough to make this happen.  Taxes must go up.  The question then is what taxes should go up.

On this point there is simply no debate as a matter of policy.   The GST is a consumption tax that is applied fairly and evenly.  It does not create disincentives to work and is most efficient in administration....especially since so many provinces have harmonized.

If the Tories want to show that they are reliable stewards of the nation's finances, they will bite the political bullet and raise the GST back to 7%.  It's the right thing to do.  Somehow i am doubtful that this will happen.

Thursday, January 28, 2010

No We Can't

It is remarkable how far Barack Obama's star has fallen.  One year ago he had a favourable rating of 70%.  Democrats, Republicans and Independents were hopeful that he did represent a change.

One year on Democratic leaning newspapers are struggling to conceal their disappointment over a year of relative inaction.  Some are openly critical.  The Toronto Star wrote that his administration is starting to get the air of a single term to it.

In the wake of the Massachusetts special election which reduced the Democratic majority in the Senate to 59-41, Obama urged his party not to "run for the hills."  This is astounding.  Losing a filibuster proof majority was simply losing a power that eluded every administration since early in the Carter administration.

Astounding as it was, he needed to say that.  The loss of Massachusetts means that every Democratic seat across the nation is in play.  California Democrats (who are used to being re-elected with token opposition) are planning to spend aggressively.  In past election cycles, Democrats did not need to use resources in California.  Bill Clinton in 96 and Al Gore in 2000 did not spend a single dollar in the state of California.  They didn't have to.  Millions spend to ensure the safety of Senator Boxer will not be spent on more marginal and vulnerable seats such as Majority Leader Harry Reid's seat in Nevada.

Faced with this changed landscape, Obama did what he does best.....he gave a speech.  Sadly that is no longer enough.  He has been in office for a full year and has little, save a Nobel Peace Prize, to show for his time in office.  If Obama is as smart as they say, then he will pivot quickly as Bill Clinton did after the elections of 94 lead to the rise of Newt Gingrich.

Obama needs to move to the middle. America is not a Liberal country.  He is out of step with his nation.

Thursday, January 21, 2010

Legal Mumbo Jumbo - Update

On December 14th i wrote of the English case of Munir Hussain who, along with his brother, chased down and beat a home invader with a cricket bat leaving the criminal brain damaged.  He and his brother were convicted and sentenced to jail terms.

The Lord Chief Justice has suspended the sentence of Mr Hussain and reduced the sentence of his brother.  He noted that he rarely sees defendants in such cases of the high standing that these two men had.  He ruled that mercy was justified.

It is just that Mr Hussain should not serve time in jail.  He and his family had been through a terrifying ordeal in which they were tied up and their lives threatened.  It is offensive that Mr Hussain is deemed worthy of 'mercy' for it should never have even been at issue.

The subjective concept of what is "reasonable" is littered throughout Common Law yet is never adequately defined.  What would a "reasonable" person do after being tied up along with his wife and children and having their lives threatened?  Is it "reasonable" to expect him to assess what is "reasonable" under the law in the minutes after the sanctity of his home was violated and the lives of his family threatened?

There is a proposal to change the legal standard so that people like Mr Hussain are only charged if their actions are "grossly disproportionate."  This is a sensible move since the judicial system seems to have a warped view of that which is reasonable and will engage in prosecutions that bring the administration of justice into disrepute.

Wednesday, January 20, 2010

Bush Redux

President Barack Obama is beginning to show a pattern of repeating the mistakes of his two least favourite Presidents of recent years.  His silence as he vacationed away after the attempted terror attack on Christmas day evoked memories of George H.W. Bush fishing at Kennebunkport as the nation prepared for war.  He has gone on to adopt George W Bush's successful surge strategy in an attempt to pacify Afghanistan.

Perhaps his biggest mistake (and also biggest copy cat move) was to declare that he had a sweeping mandate for change in the wake of an election victory.   After his 2004 reelection victory, George W Bush declared that he had "political capital" which he was going to use.  Friendly majorities in both Houses of Congress would pass Social Security reform enabling Americans to divert part of their Social Security contributions into privately managed accounts that could invest in the never ending stock market boom. (that is even funnier/sadder when you thing about it now)

After the elections of 2004, pundits talked about how Karl Rove had fashioned a "Permanent Republican Majority."  After the elections of 2008, pundits talked about the dispirited and disorganized Republican party which was a spent force and had lost its relevance.

Politics can be fickle because at its base it is all about people.   The American people had not changed all that much from 2004 to 2008.  By and large, it was the folks who put Bush into office who put Obama into office.  They hadn't changed who they were, they just changed their minds and reserved the right to change their minds again.

President Obama has now campaigned for his party's candidates in Virginia, New Jersey and Massachusetts. He is 0-3 in elections where his party had held the seat and only Virginia could be said to lean Republican.  The people are pulling him back towards the centre.

Obama and the Democrats should take heed of the message that is being sent.  At this point they insist that they will get slaughtered at the mid term elections if they do not pass health care reform in some form or other.  This might be true if Americans didn't have a health care system to begin with.  However, the idea that "anything is better than nothing", in a political sense, is just dead wrong.  The desperation with which the Dems will jettison any part of the Health Care reform package (ie.  universality, public option, abortion, etc) is really rubbing people (including Liberals) the wrong way.  It appears unprincipled and desperate.  The Democratic leadership seems to be saying that they'll win the mid term elections as long as they pass something that can be called Health Care reform.

Democrats have already started breaking ranks.  Senator Jim Webb of Virginia has already called on the Senate leadership to stop all Senate votes on Health Care until Scott Brown is seated.  As many as 11 House Democrats are said to be ready to vote against the Senate version of the bill.  That is enough to defeat the bill.

The Democrats should not wait until after November to hear the voice of the people.  If they do so, there will be fewer Democrats in Congress for whom it matters.  They should go back to the drawing board and adopt an incremental approach to health care reform.  If they can fashion a bill that increases coverage, reduces cost and red tape and improves health care overall, they will draw Republican support.

The Republicans are not allergic to Health Care reform.  During the Clinton administration's attempts to reform the system, The late Senator John Chafee sponsored a reform bill that many Liberals marvelled at for its constructive approach.  Very Liberal Senator Jay Rockefeller was especially effusive in his praise.

The people of Massachusetts have restored Checks and Balances in the short term.  This is a good thing.

Thursday, January 14, 2010

The Race Card already!!!!

http://www.thestar.com/news/world/haiti/article/750785--underlying-racism-infects-crisis-response-study?bn=1

Professor Saucier states that racism explains the reactions of many people to disasters such as Haiti and Katrina.   His study found that those with higher racist scores were less sympathetic to the predominantly African American victims of Katrina.  He further predicts that the reaction to the earthquake in Haiti might be an unwillingness to help....a "blind eye" if you will.

I don't think that I needed a University study to figure out that someone with racist attitudes might not have much sympathy for the plight of my relatives in North Korea.  I wouldn't expect much empathy for the victims of Katrina from a KKK sympathizer.  This is the sort of study that should be met with a collective "Duh"!!!!

Besides which it is not racist to naturally feel more empathy with those who you feel more kinship with.  I do think more about the suffering in North Korea than in Kashmir.  That being said it is a mark of a civilized society with empathy for his fellow man that we will not simply concern ourselves with tribal loyalties only.

Thus far, the reaction of the world to the disaster in Haiti has been admirable.  It is a race against time during which the first 72 hours are crucial.  World leaders have dispatched supplies and troops to assist in distributing aid in a rapid fashion.

Professor Saucier should hold his second guessing for a while at least.  Making such allegations as ships and planes race to save lives in Haiti is unseemly.

Sunday, January 10, 2010

Prorogue Parliament and the Senate while we're at it!

Critics of Prime Minister Harper's move to prorogue Parliament (again) miss the much larger point which is the dysfunctionality of our Parliamentary system.

It is a system where a minority government can effectively govern like a majority due to opinion polls that scare two of the three leaders of the opposition.  It is often said that the only polls that matter are those on election day....that is not true in our system where a governing party will dissolve Parliament when the polls are favourable and where opposition parties will decline to bring down a government that does not enjoy the confidence of the House of Commons when the polls because the polls say that the opposition would lose.

Our House of Commons doesn't need to be a "House" as the vast majority of members are irrelevant.  The math is very simple....if Harper wants to do something, all it takes is one of the three opposition leaders fearing an election to let Harper have his way.   We saw the irrelevance of the backbencher a year ago when the three leaders of the opposition decided to get together and anoint one of them (Stephane Dion) the Prime Minister.  This was unpopular with Canadians (who had decisively rejected that option).  This was unpopular with Liberal members who were preparing to dump their leader.  This was unpopular with Bloc members who could not forgive Dion's taunting letters on Separatism.  This was unpopular with New Democrat MPs as well.  After Parliament was prorogued, the united opposition fell apart and Harper was safe....now Jack Layton and Michael Ignatieff take turns propping up the Tories for fear of an election.

Harper did not win a majority the last time around.  The concept of the "confidence of the house" is the problem.  Why does losing a government sponsored vote mean that a new election must be held?  If Health Care reform fails to pass Congress, should Obama resign the Presidency and a new election held?  Or perhaps if Obama thought that the polls are favourable now, he will orchestrate a failure of a bill to trigger an election and give himself a fresh 4 year mandate.  Sound ridiculous?  That is exactly what Chretien did and what Harper did and what Mulroney did, etc,etc.

However silly this all sounds, it pales in comparison to the absurdity of our Senate.  During this prorogue, Harper will appoint Senators (as is his right under our current system) and will give the Tories the majority in the Senate.  So the Senate will swing from a Liberal majority to a Conservative majority.  Neither of these parties has managed with win a majority from the Canadian people since the election of 2000.

William F Buckley once said that Canada was saddled with the most feeble Conservative party in the English speaking world.  How sad that we now have the most feeble Liberal party in the English speaking world.

Our democracy is weaker for it however the people don't really seem to care.  Perhaps that is the real problem.