Harper wants to shut down Parliament again

The guy has no shame:

The Conservative government plans to shut down Parliament for two months, until after the Vancouver Winter Olympics, the Prime Minister's Office announced Wednesday.

The announcement triggered immediate condemnation from opposition MPs who labelled the Conservative government's move an "almost despotic" attempt to muzzle parliamentarians amid controversy over the Afghan detainees affair.

Prime Minister Stephen Harper's spokesman, Dimitri Soudas, said the government sought the suspension to consult with Canadians, stakeholders and businesses as it moves into the "next phase" of its economic action plan amid signs of economic recovery.

"This is quite routine but it is also important to give Canadians an overview of where we will be taking the country over the next little while," Soudas told CBC News from Ottawa.

From the CBC. I wonder what his motivation could be? Oh yeah...

Opposition parties have already warned that prorogation would disrupt the inquiry of a parliamentary committee looking into accusations that the government ignored warnings about the torture of Afghan detainees. Strategically, prorogation also prevents question period criticisms from the opposition parties during the Olympics.

Seriously, how much of this crap can he be allowed to get away with?

UK oil output falls 10%

Not good news for Britain, though it might at least force them to move towards alternative energy more quickly:

Oil production from, the UK Continental Shelf in the third quarter last year fell by 10% despite a total of seven new fields being brought onstream, providing further evidence that the UK can no longer rely on output from the North Sea.

From here, via Mega in this iTulip thread. I presume Norway is in the same boat, since they're on the North Sea as well. In any case, we can expect to see a lot more of this in the near future.

Future uncertain for McNally Robinson

This was one of the bigger shockers of the holiday season locally. The company seemed to be doing just fine, but evidently not:

Analysts believe the company that once famously stuck its finger in the eye of the book-retailing giant, Chapters Indigo, probably fell victim to circumstances beyond its control.

McNally Robinson Booksellers and the husband and wife owners, Paul and Holly McNally, had been heralded among the great entrepreneurial success stories in the province.

But in filing for bankruptcy protection, many believe the company succumbed to a combination of the sudden surge in e-book sales and an ill-fated foray into southern Ontario that coincided with a dramatic drop in consumer confidence in that region.

From the Winnipeg Free Press. Hopefully the remaining stores will stay open (and not be bought out by Chapters), but it's hard to say.

A rather important question goes unasked

This morning the substitute host on Information Radio interviewed a futurist by the name of Richard Worzel on how we can expect the world to look in 2020. The interview was not uninteresting, with Worzel making predictions about such things as how we can expect the economy to do (for what it's worth, he seems to think it will remain poor to very poor for a few years, take off midway through the decade, and then be booming with a possible commodities bubble and/or inflation), demographics (expect a lot more grey hair than today) and technological advances (more and better robots being the most striking). But he was utterly silent on the issue of climate change, or indeed environmental issues in general, and how these issues might be mitigated (or not). There was also no mention of peak oil. Furthermore, the interviewer failed to raise these issues with him either. I'm sure that if he'd asked, Worzel would have said something, so why did he not ask? I find it hard to believe that he simply forgot; perhaps he (or CBC management) thought it would be bad form to raise such a depressing issue during the holidays?

GSM security cracked

Looks like it's time to upgrade the standard:

A German computer scientist has cracked the codes used to encrypt calls made from more than 80% of the world's mobile phones.

Karsten Nohl and his team of 24 hackers began working on the security algorithm for GSM (Global System for Mobiles) in August.

Developed in 1988, the system prevents the interception of calls by forcing phones and base stations to change frequencies constantly. Most of the UK's mobile phones use the GSM system and the breach represents a potential threat to the security of mobile phone communication.

Nohl claims that armed with the code, which has been published online, and a laptop with two network cards, an eavesdropper could be recording phone calls within 15 minutes.

From the Guardian. This part is interesting:

The GSM Association, which represents the interests of the worldwide mobile communications industry, played down the security threat and said Nohl's activity was "highly illegal".

Not in Germany, apparently, but what about the US? Remember Dmitry Sklyarov? He got off, but only because the jury concluded that he and his company didn't intend to break the law:

"We didn't understand why a million-dollar company would put on their Web page an illegal thing that would (ruin) their whole business if they were caught," he said in an interview after the verdict. Strader added that the panel found the DMCA itself confusing, making it easy for jurors to believe that executives from Russia might not fully understand it.

I'm not sure if Nohl would be able to use that defense. It will be interesting to see what happens if he ever sets foot in the US...

ND may sue Minnesota over carbon tax

Interesting:

North Dakota’s attorney general said he expects the state to sue Minnesota over a plan there to tax carbon created by electrical generation.

After discussing the issue with the state Industrial Commission in a closed session this month, Attorney General Wayne Stenehjem said “It is very likely that we will be suing the state of Minnesota.”

At issue is a measure by Minnesota’s Public Utilities Commission to add a fee of between $4 and $34 per ton of carbon dioxide to the cost of electrical generation starting in 2012. The majority of electricity in North Dakota is generated by coal-fired power plants, which emit a large amount of carbon relative to other fuels sources. North Dakota officials argue that the move would place an unfair tax on electricity from the state and discourage its use by Minnesota utilities.

Stenehjem said possible legal action would relate to constitutional protections against restrictions on commerce between states.

From the Bismarck Tribune. Let's hope this gets tossed out of court...

The credit event horizon

Lately many employers have started requiring credit checks before they hire you. This has obvious and worrisome consequences:

Digging out of debt keeps getting harder for the unemployed as more companies use detailed credit checks to screen job prospects.

Out of work since December, Juan Ochoa was delighted when a staffing firm recently responded to his posting on Hotjobs.com with an opening for a data entry clerk. Before he could do much more, though, the firm checked his credit history.

The interest vanished. There were too many collections claims against him, the firm said.

“I never knew that nowadays they were going to start pulling credit checks on you even before you go for an interview,” said Mr. Ochoa, 46, who lost his job in December tracking inventory at a mining company in Santa Fe Springs, Calif. “Why would they need to pull a credit report? They’d need something like that if you were applying at a bank.”

Once reserved for government jobs or payroll positions that could involve significant sums of money, credit checks are now fast, cheap and used for all manner of work. Employers, often winnowing a big pool of job applicants in days of nearly 10 percent unemployment, view the credit check as a valuable tool for assessing someone’s judgment.

But job counselors worry that the practice of shunning those with poor credit may be unfair and trap the unemployed — who may be battling foreclosure, living off credit cards and confronting personal bankruptcy — in a financial death spiral: the worse their debts, the harder it is to get a job to pay them off.

“How do you get out from under it?” asked Matthew W. Finkin, a law professor at the University of Illinois, who fears that the unemployed and debt-ridden could form a luckless class. “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.”

From the New York Times. Now I can kind of understand the logic of the employers from a risk management point of view; besides the vague notion that it's a sign of your reliability, there's the idea that people who are in financial difficulties might have more of an incentive to steal or to take bribes. The downside, of course, is that if this becomes widespread it has the potential to create legions of people who can no longer get good jobs, whose talents are wasted and who end up on the dole or working as day labourers. For many such people, there will be no way out; once you've messed up your credit you'll have passed the point of no return. Unfortunately, this downside is what economists call an externality; it's not the company but society at large that pays the cost. Fortunately, some jurisdictions are trying to restrict this practice, but the support for this isn't universal. From the same article:

Last month, lawmakers in Hawaii approved a measure that generally allows an employer to review a credit history only after making an offer and requires the credit check to be “directly related” to job qualifications.

In California, Gov. Arnold Schwarzenegger vetoed a similar law. (New York law requires a background check’s findings to be related to the job, but it addresses criminal records and does not mention credit checks.)

Now I wonder what the Terminator was thinking? Perhaps he doesn't want to set a precedent in terms of telling companies how to make hiring decisions, or perhaps he thinks it would be good to establish a permanent pool of low wage workers to cut labour costs. Whatever he's thinking, someone needs to give his head a shake.

US Senator cites blacks as disadvantage for his state

Yikes:

"Throughout the nation there are going to be thousands more people enrolled in Medicaid and every state except one is going to have to come up with matching money," Graham remarks. "I have 12 percent unemployment in South Carolina. My state's on its knees. I have 31 percent African-American population in South Carolina."

Source (h/t jblaque). Perhaps he thinks that most of the other 69% of the state will approve. The sad thing is, he might be right; certainly most of his base won't be turned off by comments like that.

The last refuge of scoundrels?

Jim Prentice is accusing provincial leaders who were critical of his government's approach to climate change of "working against their own country". This is a good sign, because it indicates that the Cons are getting nervous. Indeed, Michael den Tandt thinks they could be in real trouble before long, thanks to the climate issue as well as the Afghan torture scandal. Interesting; we'll have to see how the polls look in the coming weeks.

The perils of just-in-time shipping

Just-in-time shipping is undoubtedly efficient. And in the last few decades it's become the norm:

Farmers, merchandisers and end users came to the sudden, collective realization that the world was entering another period of protracted oversupply in grains, a situation that is actually the historic norm in America [In 2009/10, they will come to an altogether different realization]. These events coincided with the growing popularity of the 'just-in-time' inventory management practices that had been honed to near perfection by Japanese car and electronics manufacturers during the 1970s. The combination of oversupply, ultra high interest rates and new business practices quickly turned the idea of owning extra inventory into financial heresy of the highest order. Accountants, bankers and MBAs descended on America's businesses to preach the gospel of wringing every last ounce of unnecessary corn, wheat, cotton, copper or wing nuts out of every conceivable supply 'pipeline.' To a large degree, the gospel of just-in-time inventory control has prevailed right up to the present - or at least into 2007.

Source. There's a problem, though, and that's that it makes a society prone to disruption. The same source makes an interesting point:

From year to year the new settlements of ancient civilizations ensured their continuity through one very important measure: the storage of surplus food crops, especially grain. This enabled them to withstand a bad harvest or even two or three without facing collapse.

What a supreme irony then that the sine qua non of civilization--maintaining a store of essential materials--should in our time be considered a source of inefficiency and waste to be avoided at all costs. The long tradition of saving for a rainy day (or as we will see, in our case, a drought-stricken decade) has now been rejected in favor of the so-called just-in-time revolution. For those who didn't get the memo, just-in-time inventory management means that everything needed for the manufacture of any good is delivered to the factory just as it is needed or nearly so. Inventory levels are kept at minimal levels which frees up cash for other purposes.

Food for thought, for sure. And what happens if there's a major disruption to the distribution network? This blogger thinks she knows, and it's not pretty:

The American Trucking Association presents a sobering view of possible consequences to a partial or complete interruption to our nation’s trucking business. You should take a few minutes and read the entire paper, but here is a brief summary of a possible timeline in the event of a truck stoppage.

Within 24 hours

• Delivery of medical supplies to the area affected by a disaster will cease.
• Service stations will begin to run out of fuel.
• U.S. mail and other package delivery will cease.

Within one day

• Food shortages will begin to develop.
• Without manufacturing components and trucks for product delivery, assembly lines will shut down, putting thousands out of work.

Within two to three days

• Food shortages will escalate, especially in the face of hoarding and consumer panic
• ATMs will run out of cash, and banks will be unable to process transactions.
• Garbage will start piling up in urban and suburban areas.

Within a week

• Automobile travel will cease due to lack of fuel. Without autos and busses, many people will not be able to get to work, shop for groceries, or access medical care.
• Hospitals will begin to exhaust oxygen supplies.

Thanks to Rajiv in this iTulip thread for these links.

Quebec blogger surprises by revealing he's a she

Interesting:

A well-known Quebec blogger has revealed she's actually a woman who took a male name because she suspected it would be better for her web-development and copywriting business.

Her decision proved correct.

James Chartrand, who operates the website Men with Pens, said that when she wrote as a woman, she struggled to get freelance jobs and found herself making less than minimum wage.

In 2006, the single-mother of two decided she needed a new start, and that included a new name — a male name. She chose the nom de plume James Chartrand, because it had a nice corporate ring to it, she said. The result was surprising, even for her.

From the CBC. Suggests that our culture hasn't advanced as much as we might like to think...

So they have some kind of a deal...

It appears that the Copenhagen climate talks have produced something or other:

Prime Minister Stephen Harper and other world leaders — including those from the U.S., China, India, Brazil and South Africa — are leaving Copenhagen with a compromise climate deal and a vow to work out the details.

Of course, "the details" is where one is most likely to find the man in the red suit. In this case, though, there's no need to wait for said details:

Harper called it a "comprehensive and realistic" agreement, while U.S. President Barack Obama hailed it as a "meaningful and unprecedented breakthrough."

However, the agreement is not binding and does not set new greenhouse-gas reduction targets. Instead, countries are to set their own emission-reduction commitments, which would not be legally binding.

So in other words, it's utterly meaningless, except as a way for the leaders to claim they've accomplished something. And yet, something good could still come of this; the leaders have in effect made a very public admission that they recognize the reality of climate change, which could force them to make some effort to actually do something about the problem. And then there are other possible spinoffs:

The US and Russia on Friday said they were close to an agreement on nuclear arms reduction after presidents Barack Obama and Dmitry Medvedev met on the sidelines of the Copenhagen climate conference.

Mr Obama reported ”excellent progress” towards a replacement for the Strategic Arms Reduction Treaty, which expired this month, while Mr Medvedev said a deal was “very close”, with only “technical details” to resolve.

Both leaders have pledged to sign a fresh accord leading to further reductions in nuclear arms, after cutting their respective arsenals to fewer than 6,000 warheads and 1,600 delivery vehicles under the previous Cold War-era treaty.

If only the climate talks themselves could produce such concrete results. Of course, 6,000 warheads and 1,600 delivery vehicles is still a ridiculous amount of firepower, and it remains to be seen what the new agreement will bring. Still, it's a clear step in the right direction, and there's already a precedent for agreeing to actual numbers. And if we are to face significant climate change, the fewer nuclear weapons there are, the better; things are likely to get ugly in the next few decades.

US spy drone videos 'hacked'

Pretty clever if it's true:

Fighters in Iraq and Afghanistan have been able to use low cost software downloaded from the internet to hack into live video feeds from unmanned US surveillance aircraft, a military official has said.

Speaking on condition of anonymity, a senior US defence official told the Associated Press the fighters could view feeds from Predator drones - the US military's eyes in the sky for intelligence gathering - but could not take control of the aircraft or jam its electronic signals.

The fighters reportedly used software that costs less than $30 to hack into the video feed from the drones.

From Al Jazeera.

McGuinty to borrow a page from Harris' book?

Sure looks that way:

The cash-strapped Ontario government is looking into the sale of all or part of its collection of Crown corporations, including the provincial lottery company and the retail monopoly on liquor sales, to raise cash to close a $24.7-billion deficit this year.

The Liberal government of Premier Dalton McGuinty recently hired two banks with experience in privatizations, CIBC World Markets Inc. and Goldman Sachs Group Inc., and charged them with writing a blueprint for possible privatization of agencies, investment banking sources said. The sale candidates include icons such as Hydro One Inc., the Ontario Lottery and Gaming Corp., the Liquor Control Board of Ontario and Ontario Power Generation, said the bankers, who asked to remain anonymous because the talks with the government are private.

The planned time frame for the initial study is short, just a couple of months, and then the government can decide whether to go ahead with any sales.

From the Globe and Mail. It seems awfully shortsighted to me, especially with things like Hydro and the LCBO, which are reliable sources of government revenue. To sell those would be choking the chicken that laid the golden egg. Indeed, it's noteworthy that even Mike Harris backed away from doing this, so hopefully McGuinty will do so as well.

Lillian Thomas for mayor??

Apparently she's going to run:

Veteran city councillor Lillian Thomas will run for mayor in Winnipeg's 2010 civic election.

Thomas (Elmwood-East Kildonan) made the announcement Wednesday morning, saying her 20 years of experience qualifies her for the top job.

The 60-year-old said her frustration with recent council decisions endorsed by Mayor Sam Katz spurred her decision to run.

Source. Her heart is in the right place, and her voting record on council is satisfactory, but I can't help thinking that this is simply because she trusts Jenny and Dan and votes the way they do. That's OK as it goes, but knowing who to follow does not a mayor make. But then, I don't think it really matters who the left puts forward this time. Katz is expected to run again, and Winnipeg hasn't voted out an incumbent mayor in living memory.

47 per cent back NDP with Selinger at helm

Let's hope they can maintain this:

Provincial New Democrats have a new skipper, but their popularity among Manitoba voters -- especially younger ones -- remains high.

According to a Probe Research/Winnipeg Free Press poll, 47 per cent of Manitobans would support an NDP candidate if an election were held today, compared with 37 per cent for the Tories and 11 per cent for the Liberals.

And, the NDP is even further ahead among Manitobans 18-34 years old, with 53 per cent support versus 29 per cent for the Conservatives and 12 per cent for the Liberals.

From the Winnipeg Free Press. Pretty impressive, all things considered. And the support under the 18-34 crowd is particularly promising.

How are the Cons going to get out of this mess?

Perhaps by proroguing Parliament again:

Rumours swirling around Ottawa suggest the Conservative government is thinking of shutting down Parliament until after the Olympics, killing some of its own bills but also ending the discussion of Afghan detainees that is nibbling away at Tory popularity.

“I have heard that from some of the public servants,” Liberal House Leader Ralph Goodale said Monday of a potential prorogation. “The word they are getting is ‘get ready to clear the decks. Anything that needs to get done before a parliamentary session ends, get it done.' ”

Conservative staff members said they also have received hints that a prorogation may be in the offing. But a spokeswoman for Government House Leader Jay Hill said his office “won't indulge the Hill rumour mill.”

The rumours suggest that Parliament would return in March, when the Games are over, with a new budget that could be used to provoke an election.

Source. Hopefully the electorate will begin to tire of this soon...

The Afghan torture scandal -- the plot thickens

Looks like another confidence vote could be in the works:

OTTAWA -- MPs headed off for their Christmas break Friday discussing the unmerry possibil­ities of everything from a court battle to a confidence vote that could bring down the Conservative government over the Afghan detainee issue.

The House of Commons adjourned late Thursday leaving a political cliff­hanger. The opposition parties voted to force the government to release all documents related to the detainees file -- uncensored -- to a parliament­ary committee. The parliamentary law clerk backed up the move, underlining the primacy of the chamber over laws passed by the government.

But a string of cabinet ministers dismissed the parliamentary motion, saying laws governing the classifica­tion of certain documents will govern their release. "We follow the law and the law is very clear that if there are elements of security, elements that could affect the security of our sol­diers or civilians, then information will be protected," Trade Minister Stockwell Day said Friday.

Justice Minister Rob Nicholson add­ed: "Officials have and will continue to provide all legally available infor­mation, and officials are following the laws that Parliament has passed."

It leaves the country potentially in the grips of another constitutional melee over which body should reign: Parliament or the government.

One NDP source said the Commons might be forced to rule the govern­ment in contempt of Parliament, which would eventually entail a con­fidence vote.

From the Winnipeg Free Press.

Dubai gets their bailout

Abu Dhabi waited till the last minute, but they've come to Dubai's rescue:

Dubai's government has said it has received $10bn from Abu Dhabi to help it repay an Islamic bond and fund the troubled property developer Dubai World.

The announcement on Monday came as Nakheel, the property development unit of the Dubai World investment fund, was due to settle the $4.1bn bond.

The move by Abu Dhabi follows weeks of uncertainty in Gulf stock markets prompted by Dubai World's request on November 25 for more time to pay $26bn in debt.

From Al Jazeera. Presumably, Dubai is "too big to fail" from Abu Dhabi's point of view, and the rest of the world seems relieved as well, given the reaction of global markets.

Carney urges prudence on debt

Notwithstanding anything I might have said or implied in this post, debt is something that must be managed carefully. It's rather difficult to run a household, much less an economy, without some use of it, but as we've seen lately it has a way of running away on people... and when it happens to a lot of people at the same time, the effect can be dramatic. Mark Carney, governor of the Bank of Canada, is urging caution in this regard:

Household debt is now the biggest risk to the financial system, even if it is not expected to climb to levels that could cripple bank balance sheets, the central bank said Thursday in its review of the financial system. It used a “stress test'' to show that rising interest rates between mid-2010 and mid-2012 would saddle a growing number of Canadians with unmanageable debt loads.

Mr. Carney, the Bank of Canada governor, who has guided monetary policy throughout the crisis, is relying on consumers to help drive a recovery juiced by his historically low interest rates. Yet he is also warning borrowers and lenders not to go overboard and to think about the consequences of hefty debt in an inevitable environment of rising rates.

It's actually a very delicate balance; discourage spending too much, and you choke off the recovery, but if you encourage it too much, all kinds of other problems start to present themselves. And either way, the government will likely have to assume a lot more debt to manage the immediate problem.

For what it's worth, I expect that Carney's prediction of rising interest rates in the near future will come to pass, and that in itself is reason for the average person to be cautious in this regard. I also expect that many governments will be forced to increase their indebtedness (which is already significant in some cases). Fortunately Manitoba has more wiggle room than most jurisdictions:

Premier Greg Selinger, delivering his first state of the province address on Thursday, exuded the steady-as-she-goes posture of the throne speech. Things are bad all over the world right now, Selinger said, but thankfully not quite as bad here in Manitoba.

He repeated the flat-is-the-new-up mantra he used on throne-speech day. He once again gave no indication that the worst consequences of a recession -- massive spending cuts, layoffs, tax increases -- will be seen here.

Critics may find this a massive rationalization. But to be honest, Manitoba's relatively stable, no-growth performance this year, and modest growth projected for next year, is looking better and better all the time.

So writes Dan Lett in the Winnipeg Free Press. Given that the other three western provinces are all running deficits, we're doing pretty well... so far. I expect we'll have to run one eventually, though.

"Interro-Gate" continues to haunt the Cons... but to what effect?

Well, General Walter Natynczyk now admits that at least one prisoner handed over to the Afghan authorities was tortured, The pressure for an inquiry is growing, so on the surface it least it would appear that the Cons are in a bind. But are they? Bruce Anderson certainly thinks so:

A while ago, I wrote that there would need to be more evidence to corroborate Mr. Colvin and a process by which that information came to light, in order for this issue to create political consequences. Both of those conditions have been met, and while Copenhagen, Christmas and the Olympics will all give breathing space to the government, the government is now faced with a risk-filled dillemma.

If an inquiry is inevitable, they should avoid looking as though they were dragged kicking and screaming into it. If they gamble that stonewalling will work, they may lose that gamble, and look like they cared too little about doing the right thing to safeguard the international honor of Canada.

On the other hand John Ibbison thinks there will be no long-term consequences for the government:

Objectively, the abuse of Afghan detainees is hugely important. Canadian soldiers and officials might have been complicit in violating the Geneva Conventions. Their political masters were cavalier, at best, or negligent, at worst, in how they handled the matter. Heads should roll.

But politically, this is an issue that doesn't resonate outside Ottawa. The revelations haven't moved the polls. The Liberals are in what is turning into typical disarray. Firing Mr. MacKay is the one thing Mr. Harper could do that would undermine his own party while helping to unify his opponents.

You think Stephen Harper is nuts?

I wonder. Ibbitson's article rings true in a lot of ways; the government can stonewall for quite a while, and as Anderson concedes, the timing of this is potentially quite convenient for Harper and his cronies, with first Christmas and then the Olympics as convenient distractions. But contrary to what Ibbitson implies, we're now seeing polls suggesting that Canadians don't believe the government's claims that they knew nothing of what was going on. How much effect this will have on people's voting intentions remains to be seen, though. And Michael Ignatieff hasn't got a whole lot of credibility on this issue either:

To defeat evil, we may have to traffic in evils: indefinite detention of suspects, coercive interrogations, targeted assassinations, even pre-emptive war.

He wrote that five years ago, in the New York Times.

A fresh take on deficits

We often hear that deficits are getting out of control and that we have to cut spending drastically, regardless of how much need there might be for that spending. But is it really necessary? Stephanie Blankenburg thinks not:

What to do about Britain's national debt and its annual government deficits in the here and now remained less clear. Had deficit spending not been once and for all discredited at the end of the 1970s? Was John Maynard Keynes really about budgetary spending in times of crisis or did he not rather regard fiscal expansion as a secondary tool to be employed, where absolutely necessary, alongside long-term monetary policies (low long-term interest rates) to keep business cycle fluctuations under control?

All true and valid. But for a hands-on perspective on current national debt and government deficits, it is well worth keeping in mind two basic points. First, the current deficit hysteria – to use Samuel Brittan's term – has no historical grounding. Britain's national debt currently runs at about 40% of GDP. Depending on who you believe and what parts of bank debt are counted as national debt, it is predicted to either stay close to 40% or increase to anywhere between 60% and 100% over the next few years. Between 1918 and 1961, UK national debt averaged well above 100%, remaining closer and, at times above, 200% for the best part of this period. What was achieved? Fascism was defeated and the foundations of a modern welfare state were laid. Since the mid-1970s, UK national debt has oscillated between 30% and 40%, at the beginning of the 1990s falling to below 30% for a few years. What was then achieved? Finance-led corporate capitalism rose to power, leaving behind an all but destroyed manufacturing sector in the UK, rising income inequality and, eventually, a financial sector in tatters. And last, not least, wars are being lost.

From the Guardian. Trouble is, it may be hard to sell the public on this idea, given the pathological fear of deficits that's been drummed into us for the last few decades.

Never forget...

Today is the 20th anniversary of the École Polytechnique massacre in Montreal. Devin Johnson has some comments; I don't have much to add, except that we should all take a moment to remember, and remind ourselves to work for change.

What makes a "star recession-beater"?

It's natural for a paper to spin the news about the local economy in the most favourable way possible. Take this example from the London Free Press:

London emerged as a star recession-beater last month, posting the steepest unemployment drop among major Canadian cities.

The jobless rate in London- St. Thomas -- a region hammered by the downturn, with thousands of manufacturing job losses -- fell in November to 9.9% from 10.9%. The national unemployment rate also fell, to 8.5%, with the addition of 79,000 jobs.

Now the first thing that jumps out is the fact that London remains worse than the national average. This data seems to come from the same source as that presented in this article, so let's have a look at this in a bit more detail. From the map in the CBC article, here are the cities in which unemployment actually decreased (sorry about the lousy formatting):

City November October Decrease
Windsor 13.5% 13.7% 0.2%
London 9.9% 10.8% 0.9%
Toronto 9.5% 9.6% 0.1%
Sudbury 9.4% 10.1% 0.7%
Thunder Bay 8.5% 8.8% 0.3%
Hamilton 8.0% 8.4% 0.4%
Ottawa 5.8% 5.9% 0.1%
Montréal 9.1% 9.3% 0.2%
Trois-Rivières 8.9% 9.2% 0.3%
Saguenay 7.6% 7.8% 0.2%
Sherbrooke 5.7% 6.4% 0.7%
Gatineau 5.4% 5.48% 0.08%
Québec City 5.3% 5.4% 0.1%
Abbotsford 7.8% 8.0% 0.2%
Winnipeg 5.4% 5.8% 0.4%
Regina 4.9% 5.1% 0.2%

So while the Forest City may indeed be seeing some green shoots, they have some distance to go before they catch up with many other cities in Ontario, not to mention much of the rest of the country. To be fair, I haven't shown the cities where the rate has increased, but even some of those still have a lower unemployment rate than London. Vancouver, for instance, has an unemployment rate of 7.5%, up from 7.3% a month ago, but still pretty respectable, and better than the national average. And of course, as noted previously, the unemployment rate doesn't account for people who have given up trying.

Of course, if this should turn out to be a trend, this would indeed be excellent news for London, but it could just as easily be a blip.

Bernanke on the role of a central bank

Ben Bernanke has an important job, so one would hope that he actually knows its function. It seems not. (h/t Atrios)

Climategate -- the best summary I've seen yet

Check it out:

Cheryl Gallant loses it again

Well, actually I don't think she ever had it, but check out her latest (from Hansard; scroll down to find the quote):

Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, CPC):

Mr. Speaker, on the weekend I had an opportunity to speak to a soldier from Canadian Forces Base Petawawa who had served several rotations in Afghanistan. He urged me not to go forth with an inquiry on this issue. He said that every time the Afghan deployment is debated in Parliament, it puts the lives of our soldiers in theatre at greater risk. He recounted that when the motion to withdraw from Afghanistan or to end the combat mission in 2011 was before Parliament, they were in a operation where they heard the insurgents on the radio saying to each other that they should kill as many Canadian soldiers as possible because we were debating this in the House of Commons and that when Canadians saw the caskets of soldiers coming off the plane it increased public pressure. They wanted the MPs to vote to get out of Afghanistan as quickly as possible.

I asked him if they listened to Al Jazeera while they were fighting at the front, so to speak, and he said, “No, ma'am. We heard this chatter on our coms”. So they had heard Taliban talking to one another, urging each other to kill as many Canadian soldiers as possible. He credits the leader of the NDP directly for the death of his best friend as a consequence of that.

Hat tips to thwap and Creekside.

So are we out of the woods yet?

In the last couple of days there have been a few good news stories about the economy. The US lost 11,000 jobs in November, which sounds like bad news until you read on and see that the pundits were predicting more than ten times that. Paradoxically, their unemployment rate actually dropped. The paradox is resolved when you realize that the unemployment rate is based on the number of people actively seeking employment... but more on that in a moment. In Canada, we had a net gain of 79,000 jobs. And gold is down, which is usually seen as a sign of improved confidence in the economy (or at least the value of the US dollar).

However, we shouldn't assume that it's going to be clear sailing from here on in. For instance, looking at the American stats, there's still a net loss of jobs... which implies that the drop in the official unemployment rate may be because of people who have given up looking for work and have gone back to live with their long-suffering parents. And the job stats do not necessarily reflect quality; if an auto worker is laid off from a $50,000 a year job, but two fast food workers are hired at $18,000 a year, that is a net gain in employment, but it isn't really a favourable economic indicator. Note too that retail sales on Black Friday fell short of expectations (don't get me wrong, I'm no fan of the crazy consumer culture that surrounds that day, but it is an indicator of public confidence). And on the international front there may still be some shocks awaiting us. Canadian Silver Bug reminds us that the Dubai crisis may not be the last, and identifies Japan, the UK, and Russia as potential trouble spots. And of course, a default by any of those countries would have dramatic effects on the global economy, which might mean big trouble ahead... although I suspect creditors might be willing to renegotiate things before it gets to that point, because they could stand to lose a lot from the secondary effects of such a default.

A real green shoot for once?

Seems a major alternative energy business is preparing to open a plant in Ontario:

KITCHENER – Solar module maker Canadian Solar Inc. is preparing to establish a manufacturing facility in Ontario that will create 500 direct jobs to take advantage of a provincial green-energy program that mandates local content.

The Kitchener-based company made the announcement this morning.

Canadian Solar, founded in 2001, said the new facility will be capable of manufacturing 200 megawatts of solar modules a year and will cost about $24 million to build. Site selection has begun and the first phase of operation is expected in 2010.

The company said in a statement the facility, once completed, will be one of the largest solar panel manufacturing plants in North America.

From the Record. Nice to see some good news for once. A bit odd, though, to see this:

Canadian Solar, which moved its headquarters to Kitchener earlier this fall, currently makes solar modules at plants in China.

And further down we see this:

Canadian Solar has been in business in other parts of the world since about 2001 and has built and installed solar modules producing about 500 megawatts of energy, mostly in Germany and Spain.

So a company that manufactures in Asia and sells in Europe has located its head office in Kitchener in preparation for expanding manufacturing to that area. Interesting. But there's a reason:

Under new local content rules, someone wishing to generate power under the program must show that the equipment and labour used to install the system consists of 40 per cent Ontario content for projects less than 10 kilowatts in size. Above that threshold, the required local content is 50 per cent.

Local content will rise to 60 per cent starting Jan. 1, 2011.

Canadian Solar has to make its projects compliant with those rules, so it wants to build a manufacturing facility next year in order to qualify for the Ontario content rules of 2011, Hammerbacher said.

So maybe local content rules aren't so bad after all, eh?

Liberals and Bloc vote with government on HST

Well, lots of people saw this one coming:

The House of Commons has taken the first step to allow Ontario and British Columbia to harmonize the provincial sales tax and federal GST on products and services.

In a 192-32 vote, the Conservatives, Liberals and Bloc Quebecois supported the ways and means motion amending the Excise Tax Act, one of the steps towards implementing the Harmonized Sales Tax. The HST bill itself is expected to be introduced on Friday.

From the CBC. To be fair, 28 Liberals missed the vote (see Blogging a Dead Horse for a list).

Interesting...

At one point former Winnipeg mayor Glen Murray was considering a run for mayor of Toronto. That would have been kind of interesting; I can't think of any other example of someone who's been mayor of two different cities. (OK, technically Mel Lastman was mayor of North York before Toronto, and Hazel McCallion was mayor of Streetsville before Mississauga, but that's not really the same thing). However, it's not to be, at least for now, because it seems Murray is shooting for Queen's Park instead:

The Ontario Liberals have found a gay political icon to succeed George Smitherman as the MPP for Toronto Centre.

Glen Murray, the former Winnipeg mayor and one of North America's pioneering gay politicians, will be the leading candidate for the governing party in a key downtown riding.

Sources told the Star, which first disclosed Murray's interest on Nov. 10, that the Canadian Urban Institute CEO will abandon his nascent campaign for the Toronto mayoralty to seek the Liberal nomination.

From the Toronto Star. I imagine he'll win, but it's too bad really; he has a half decent track record in municipal politics (better than any other Winnipeg mayor in recent memory, anyhow), but now he'll likely fall nicely in line with the Liberal party like a good little backbencher.

Climate sceptics get it wrong

Who's eating crow now?

The Global Warming Polilcy Foundation (GWPF) was launched by Lord Lawson, the former Chancellor of the Exchequer, last week to "help restore balance and trust" in the climate change debate.

The think tank was set up in the wake of the 'climategate scandal' that saw scientists at the University of East Anglia's Climatic Research Unit (CRU) accused of manipulating climate change data.

However it has now emerged that a graph used by the GWPF on its website was incorrect.

The graph, that shows global temperatures from 2001 to 2008, showed 2003 was the hottest year when in fact it was 2005.

The organisation have admitted there was a "small error" and have now corrected the graph.

However climate change scientists were quick to accuse the GWPF of double standards.

From the Telegraph.

Some more Roundup for those green shoots

The powers that be have been claiming recovery for some time, of course. Certainly things aren't as bad as some were predicting; the TSX is doing very well, and other North American and European exchanges have generally closed up as well, as of this moment. But many economists, such as Jim Stanford, are wary:

Now Statistics Canada’s GDP report for the third quarter adds to the consensus that the recession is over. Led by public sector stimulus, a surge in auto production (tied to the U.S. “cash-for-clunkers” program, now finished), and a steady expansion of the financial industry, real GDP eked out an increase of just under 0.1% (rounded up) for the quarter. “Annualized” (that is, raised to the 4th power), that means growth at an annual pace of 0.4% (again, rounded up).

Qualitatively, this is within the statistical error of margin of zero growth. So again, while it is more evidence that the free-fall in economic activity which occurred from last autumn through this spring has been (thankfully) arrested, this report does not remotely indicate that anything approximating a “recovery” is underway. So don’t pop the champagne just yet.

Here are a few cationary nuggets buried within the StatsCan report:

• Without public sector stimulus, GDP would still be contracting. Private sector GDP shrank marginally during the third quarter.
• Of course, the finance industry is the brightest light in the private sector — partying like the good old days since the markets turned around in March. GDP in the FIRE sector grew a full percentage point in the third quarter. By contrast, private non-financial GDP (what I call the private “real economy”) was shrinking at an annualized rate of 1.4 percent.
• A $1 billion boost in auto sector output (as Chrysler’s Canadian assembly plants came back on stream, and all auto exports were boosted by the U.S. incentives) accounts for 150% of the total expansion in Canada’s national GDP in the third quarter. So much for the Fraser Instutute’s claim that the rescue of GM and Chrysler was a gigantic waste of money. Never mind that it may not actually cost taxpayers a cent; without the auto turnaround, Canada’s GDP would have kept declining. I doubt that performance will be repeated in the months ahead.

Of course, whether the GDP is growing or not is hardly the ultimate arbiter of whether the economy is healthy, for all the reasons we know so well. But it is important. Yet even by this narrowest of criteria, we cannot say that the recovery has arrived. Without public sectior stimulus (both here and in America), and without the current rebound in financial exuberance (that is quite likely simply the onset of the next pointless boom-and-bust cycle), real GDP would still be falling.

The awkward thing is, if they don't keep up the stimulus, things could get dangerously out of control. On the other hand, if they keep it up for too long, they'll run into other problems -- inflation, deficits that can't be readily managed, and all that stuff. The thesis of the iTulip folks is something called "Ka-Poom theory" (I kid you not). What it is, basically, is that the current crisis will play itself out first with deflation or disinflation (the "ka") in which people sit on much of the stimulus money rather than spending it, followed by major inflation when the economy does recover and people start spending the cash they've been hoarding. I'm not so sure it will play itself out like that myself, though; most of the hoarding is being done by investors, so it will likely just go into long term investments rather than circulating freely through the economy. The situation has to be handled carefully, though.

It's worth noting that the current run the TSX is on is partly explicable by a flight from US dollars. The TSX is quite gold-heavy, and even setting that aside the Canadian dollar is seen by many investors as a potential safe haven, making Canadian-denominated stocks a good investment anyway. And the American dollar is making a lot of folks nervous:

During a recent visit to Tokyo, Timothy Geithner, the secretary of the US treasury, said that a strong dollar is "very important" to Washington, even as the American currency continued its noticeable depreciation.

This is a very curious statement as it seems to indicate that the US treasury is going to defend the dollar from any further slide in the near future. But this is highly unlikely as the US treasury does not have a history of intervening in foreign exchange markets.

It is true that the treasury's Exchange Stabilisation Fund (ESF) can be used to prop up the dollar, but it has never really been used for that purpose. The ESF, which right now has about $50bn, was originally created by the Roosevelt administration in the early 1930s to deal with currency upheavals as the Gold Standard was being dismantled.

The ESF was used only once in international financial markets and that was to defend the Mexican peso in 1994.

Therefore, the treasury's use of the ESF to defend the dollar can be ruled out.

In any case, it would take a lot more than $50bn to stabilise the greenback if there were to be a speculative attack on the dollar, like there was against the British pound in 1992.

Source. I wish the article went into more detail about why the Treasury won't use the ESF; the author implies that there's more factors at work than the fact that the fund isn't big enough to stave off the worst case scenario. Indeed, if it's no good for that, the sensible thing for the US to do would seem to be to use the fund now, to shore up the dollar before there's a big speculative attack.

The country that holds most of the cards, of course, is China. Thing is, they can't just dump their dollars all at once, or those dollars will depreciate before they can get rid of them all. So it's hard to say how this will play out.

If the US dollar does collapse in a big way, the effects on the world economy will be dramatic. Since they import so much energy, they'd be forced to buy that energy with depreciated dollars, which would limit their ability to buy cheap stuff made in China (or Canada, for that matter). But for that reason, a lot of people both in the US and elsewhere will pull out all the stops to avoid such an outcome. We'll have to see how things go...

Our government continues to shame us

George Monbiot says of Canada that "It is now to climate what Japan is to whaling":

When you think of Canada, which qualities come to mind? The world's peacekeeper, the friendly nation, a liberal counterweight to the harsher pieties of its southern neighbour, decent, civilised, fair, well-governed? Think again. This country's government is now behaving with all the sophistication of a chimpanzee's tea party. So amazingly destructive has Canada become, and so insistent have my Canadian friends been that I weigh into this fight, that I've broken my self-imposed ban on flying and come to Toronto.

So here I am, watching the astonishing spectacle of a beautiful, cultured nation turning itself into a corrupt petro-state. Canada is slipping down the development ladder, retreating from a complex, diverse economy towards dependence on a single primary resource, which happens to be the dirtiest commodity known to man. The price of this transition is the brutalisation of the country, and a government campaign against multilateralism as savage as any waged by George Bush.

Until now I believed that the nation that has done most to sabotage a new climate change agreement was the United States. I was wrong. The real villain is Canada. Unless we can stop it, the harm done by Canada in December 2009 will outweigh a century of good works.

From the Guardian. And yet the Cons still lead in the polls? Disgraceful.