How Harper, Trudeau and Mulcair are Steering Canada Toward a Cliff

Canada went through the 2008 Great Recession and fared better than most of the developed world.  It turns out Harper didn't have enough time to let Canadian banks off their leashes to run wild like their American and European counterparts.

When the widely predicted (Krugman, Roubini, Stiglitz et al) crash came in 2008, some thought it foretold the end of the Bubble Economy fueled by casino capitalism and crony capitalism.  America surely must have had its fill of the madness that brought it the Saving & Loan scandal, the Enron/WorldCom scandal, the Dot.Com bubble, the Sub-Prime Mortgage bubble and the securitized mortgage fiasco.   The idea of this lunacy carrying on was almost inconceivable.  Perhaps not.

What is a bubble anyway but a means of redistributing wealth.  Take the Dot.Com bubble as an example.   Start-up companies that had maybe a handful of employees and virtually no economic activity, no actual sales and no recorded profits, were given truly enormous valuations.   Many of these companies would go down to the basement and print shares that they would use to buy similarly worthless companies.  It was a corporate capital Ponzi scheme that was shamelessly proclaimed by Wall Street investment houses to herald the "new economy" and people were lining up to throw their retirement money after the next big thing.   By the time the bubble burst, all that retirement money was safely in the accounts of the guys who had stayed busy churning out all those worthless shares and who now had time to count their windfalls while waiting for the next big bubble thing.   Wealth was redistributed.   There were winners, big winners, and a vast field littered with the corpses of the countless losers.

Government should have seen what was going on.  It almost certainly did.   The investment houses had to have known it was a total sleight-of-hand market.  Yet no one sounded the alarm.  No one warned the gullible investors who kept being told of this awesome "new economy" that they could never quite understand and had to simply take on faith.  To the contrary, government and the financial industry were complicit in the fleecing of the population.

Government and the financial sector were just as complicit in the global meltdown of 2008.   The U.S. government sat by and did nothing, said nothing, as Wall Street indulged in a thriving "credit default swap" business, flogging insurance policies that were divorced from any means to honour them if they were called.  And so these "too big to fail" investment houses facilitated another enormous transfer of unearned wealth and let it fall to the taxpayers to bail them out.

In criminal law we're generally deemed to intend the logical and foreseeable consequences of our acts.  If you walk into a crowded lobby, pull out a gun and fire, killing some total stranger, you're deemed to have intended to kill that person.   What then of a government or investment house complicit in the unearned, even wrongful transfer of wealth from the many to the advantaged few?  Is there not some culpability there?

We're now in the midst of a new bubble, the Carbon Bubble.  What are actually sub-prime assets, coal and other high-carbon fossil fuels, remain on corporate books at unrealistic values and continue to be traded at grossly inflated prices.

Our federal and Alberta governments are doing everything in their power to forestall the day when Athabasca bitumen becomes a "stranded asset."   Backed by Trudeau and Mulcair, Harper is treating the Tar Sands as simply too big to fail.   Hence the race is on to get dilbit pipeline access to the west coast and supertankers plying coastal British Columbia waters in the blind hope that will keep Athabasca from sinking as it has in the past.

Harper, Trudeau and Mulcair all have what philanthropist fund manager, Jeremy Grantham describes as " an unwillingness to process unpleasant data.  ...They are using incredible ingenuity to steer their way around facts they do not choose to accept."

Yesterday's joint announcement by Beijing and Washington sounds like a Sword of Damocles hanging over Athabasca's tarry head.   Both countries want to move away, as quickly as possible, from high-carbon fossil fuels and into renewable and alternative energy solutions.   These are our two biggest bitumen target markets and both of them are proclaiming that high-carbon fuels are endangering the Earth.

The agreement could impact Canada and the growth of the oilsands where companies predict their expansion will triple their greenhouse gas emissions by 2020. This expansion is largely dependent on the building of pipelines such as the Keystone XL to Texas, which remains a hotly contested issue in the U.S. where it has become the symbol of the struggle for strong action on climate change. Public hearings on the pipeline open in Nebraska Thursday.

If the U.S. and China significantly ratchet up the level of climate action, “that would give the lie to the Harper government’s claims that its policies are in line with those of other developed countries,” [Alden] Meyer [spokesman for the Union of Concerned Scientists] said. “We’ll have to see how this plays out, of course.  Talk is cheap, but the US-China statement, in particular, heightens expectations for something significant later this year.”

The U.S-China statements contrast sharply with those made by Revenue Minister Joe Oliver who claimed last week that “some scientists” say action on climate change is “not urgent” and that "there is no problem."

Canada is being overtaken by events at a time when we have a Parliament, on both sides of the floor of the House of Commons, detached from reality.   Harper is the worst, hands down, but Mulcair and Trudeau aren't that much better.