Saturday, April 30, 2016

Only In Your Dreams

Old myths die hard. One of them is the wild delusion of Canada as an "energy superpower."

First problem. A superpower, by definition, calls the shots. When it comes to oil production we don't call the shots. When it comes to the highest cost/highest carbon of the ersatz petroleum products, bitumen, we absolutely don't call the shots.

Sure we've got vast reserves of bitumen. Doesn't make a damned bit of difference.

In the world of oil there are two types of nations. Camp A would be the Middle Eastern producers with their fields of conventional "sweet crude" oil that can be produced, in some cases, for $3 a barrel. Those are what you can fairly call energy superpowers. They call the shots. We're feeling that right now.

Then there's Camp B which includes us. We don't have massive reserves of oil of the Middle East quality. We go after the grotty stuff that has to be mined and boiled out of the ground. That's the costly stuff.

Our oil bounty depends, as we're seeing today to our distress, on the willingness of the real energy superpower to manipulate world oil prices high enough to cover our costs and leave us a small profit - around $50 a barrel, depending on how you cook the books. We can't compete unless Camp A makes the market price we need. Economics 101.

The Saudis game the markets, they always have. That was the whole reason that OPEC was founded. It was for a collective of oil producers to exercise monopoly control. The Americans learned that in the 70s with the Arab oil embargo.

We shun monopolies as uncompetitive affronts to free market capitalism but not in this case because we, particularly Alberta, saw a magic carpet ride to vast riches and general prosperity. We became the home of the "blue eyed sheikhs."

The problem with belonging to Camp B is the constant worry about margins. The Camp A types can tolerate much lower oil prices than we can bear. To them, a 30 dollar a barrel price still yields profits. Not so for the Camp B types.

As margins narrow for the Camp B crowd, we succumb to the temptation to cut corners in order to prop up an industry that turns unviable. Otherwise the energy producers might just close up shop and pursue opportunities elsewhere. What does this corner cutting look like? Ask yourself why those massive tailing ponds in Athabasca have been left to threaten one of the world's great freshwater resources, the Mackenzie River watershed. Why aren't they getting cleaned up?

Why are Alberta and Saskatchewan unwilling to refine bitumen on site? Why do they insist instead on marketing hazmat dilbit through hazmat pipelines incapable of safely conveying their toxic sludge?

A lot of this corner cutting really comes down to externalizing costs by shifting risks elsewhere. That risk is offloaded onto other provinces by putting their wilderness, their rivers and their coastal ecology at risk, essentially free of charge. These miscreants don't even pretend to have the technology much less the infrastructure to clean up a spill or the wherewithal to properly compensate those they might injure.

The arrogance of these pricks in Edmonton and Saskatoon and Ottawa is appalling and, yes, I'm referring to Rachel and Brad and Justin too. Whenever I see someone like Brad Wall utter the word "tidewater" all I can think of is backpfeifengesicht (a face badly in need of a fist).

What these leaders are doing is an act of reckless endangerment. They have no right to inflict that on us, none. We don't exist to help them maintain the pretence that bitumen is economically viable. We, however, have every right to defend ourselves and what is ours, against them and their predation.

Post script: I was motivated to write this after enduring the cringeworthy spectacle of Saskatchewan's Brad Wall whinge about "tidewater" followed by Rex Murphy's slobfest over the petro-calamity also known as Newfoundland and Labrador.

What's That in Erdogan's Hand? Oh Yeah, It's Europe's Balls.

You gotta give him credit. Turkish strongman, Recep Erdogan, knows it doesn't matter how much he's reviled so long as he has his critics by the balls. In this case that would be Europe.

The Euros may look down their noses at the Ottoman thug but they know that they need Erdogan to staunch the tsunami of refugee/migrants desperate to escape the Middle East for the safety of, okay let's face it, western Europe. That's where the good jobs are, so they think.

And so the EU and Erdogan have reached a deal but it's one in which Turkey holds all the aces.

Erdogan is unpopular at home. Turkey stands on the brink of its own civil war. Recep needs goodies to hand out to his supporters and that comes in the form of visa-free travel to Europe.

Ankara's logic is simple: Given that Turkey is solving Europe's refugee problem, the country's 79 million people must be provided with visa-free travel to the EU, even if Ankara hasn't yet fulfilled all 72 of the conditions set out by Brussels. That's the price. Europe must turn a blind eye.

It's likely that it will do so. On Wednesday, the European Commission is expected to make a decision on whether to move forward with the visa liberalization process and there is much to suggest the EU executive will decide in favor. During a meeting on Wednesday of this week, members of the Commission agreed that if Turkey fulfilled as many of the 72 conditions as possible between now and then, that it will make a favorable recommendation. Sources with knowledge of the Commission proceedings said the number of outstanding conditions would have to be single digit in number. "The count will take place on Wednesday." So far, Turkey has met around 50 of the demands.

Out of the frying pan, into the fire.

Merkel and other western leaders are in a double bind. The concessions to Erdogan may be their best, perhaps only hope of staunching the wave of migrants and refugees but the arrival, even if on "temporary" terms, of large numbers of Turks could play into the hands of extreme rightwing groups.

The question now is how far Europe is willing to go in its self-denial. It's likely the European Commission will provide an answer next week. "It's not possible for Turkey to fulfill the criteria 100 percent. We know that," says one German official with knowledge of the negotiations. The official says the situation will not ultimately be black or white -- it will be gray. "It's like when you tell your kids that you will take them on vacation if they great straight A's," says another EU diplomat. "Are you really going to cancel if they get a B?"

But what if there is also an F or two in there? One of the points of contention is a Turkish anti-terror law so broadly defined that it makes it possible for Erdogan to go after anyone he decides to label as a terrorist, even journalists who report critically about him. Inside the European Commission, some believe this law gives a "blank check" to Turkish security agencies to do as they please. Parts of Turkish law are also inconsistent with the European Convention on Human Rights.

Erdogan's strategy is that of agreeing to many of the conditions. But he has done little in a few, decisive areas. It is a course of action he hopes will make it as difficult as possible for the Europeans to turn away from their visa pledge. When a 20-person EU delegation traveled to Ankara to negotiate the details of the visa deal, around 60 well-prepared Turkish specialists were waiting for the Europeans. They addressed issues like combatting corruption and altering laws against money laundering. For the last four days, there has even been a daily video conference between Commission representatives and Turkish government experts in order to clarify problems.

This is one case where "the devil you know" might not be the preferred default option.

Wake Up, Canada. Australia Calling.

You don't read much about it but Canada is a big juicy target for landgrabs by foreign corporations.

A couple of years ago Argentinian officials were alarmed to discover an attempt by a Chinese company to purchase a vast swathe of prime ranch land. The government moved to block the sale. The Chinese investors did an end run by purchasing a controlling interest in an Argentine company that owned the coveted lands.

Now it's Australia's turn.

The Australian government on Friday blocked once and for all a bid that would have seen a chunk of its land the size of Ireland — or more than 1 percent of the country's total landmass — sold to a private Chinese company.

The company at first seems like an extremely unlikely contender to become not only Australia's, but the world's, biggest private landowner. It's called Dakang, and it was once a struggling pig-breeding firm until it was bought in 2013 by Pengxin Group, a Shanghai-based company mostly involved in real estate.

But ever since a massive tainted milk scandal effectively shuttered China's domestic dairy industry in 2008, companies there have been seeking to source dairy products from overseas, and Pengxin has been particularly pioneering, if not very successful, in the endeavor. In September, New Zealand nixed its plan to buy one massive farm there, and Pengxin subsequently canceled its plans to buy 10 more in the country. The company has bought vast farms in Argentina, Bolivia and Cambodia.

You might never know it by anything you've heard from a Canadian government over the past 20-years but the world is rapidly entering an era of severe food insecurity. Foreign land grabs plague Africa and Southeast Asia. South America has been targeted. New Zealand was targeted, now Australia. We're ripe for the picking.

China is in a mess. It has severe water shortages and a good bit of what water does exist is industrially and agriculturally contaminated, unfit for human consumption and unsuitable for growing crops. China also has a major soil contamination problem, the result of smokestack emissions, especially arsenic, cadmium, mercury and other persistent heavy metals.

Local climate change impacts compounding other forms of environmental degradation can endanger domestic stability. If your ability to feed your own population is undermined, you have to find that food somewhere and your supply has to be both adequate and reliable. That means you have to control the land.

It's time we had another one of those "adult conversations" Catherine McKenna recently spoke about.

Friday, April 29, 2016

The World's First "Buy Before You Fly" Warplane Explained

It's customary when a country buys an ultra-expensive bit of aerial kit to get all the contenders for the contract to bring their warplanes to one place for a competitive fly-off. They go head to head in exercises to determine just how well they perform and hold up in a full range of mission scenarios - air defence, air superiority, tactical strike, ground support, precision bombing, patrol, the whole deal. Each contender is graded on each category. Points are also given for the reliability of the aircraft, how much time it takes to turn it around, how many missions it manages to fly each day over the length of the exercise.

The world's costliest and most controversial light bomber is the only warplane that doesn't "do" competitive fly-offs. That's because it does a few things somewhat better than the others but far more things considerably worse.

Just getting airborne is one of those things that the F-35 doesn't do terribly well. At a recent mock deployment of six of the Lightning II warplanes at Mountain Home AFB in Idaho only one was able to boot up its software on a readiness exercise. One out of six was able to answer the bell. That's 600-million dollars (USD) of warplanes to get just one F-35 into the air.

“The Air Force attempted two alert launch procedures during the Mountain Home deployment, where multiple F-35A aircraft were preflighted and prepared for a rapid launch, but only one of the six aircraft was able to complete the alert launch sequence and successfully takeoff,” Gilmore wrote. “Problems during startup that required system or aircraft shutdowns and restarts – a symptom of immature systems and software–prevented the other alert launches from being completed.”

Perhaps more troublesome for the F-35 program, overall, is the fact that software stability seems to be getting worse. U.S. Marine Corps F-35Bs loaded with an earlier version of the software are reportedly the most stable, enjoying up to eight hours between “software stability events,” military lingo for glitches in one of the aircraft’s computer programs. The Marine Corps has already declared its F-35s combat ready, though Gilmore acknowledged that in real-world combat the F-35B would require assistance acquiring targets and avoiding threats.

So, if the Americans can't get the damned things to work at home, what are the chances they'll allow the F-35 to be put to the test abroad for "small order" customers such as Canada? There are some things you just don't do in public. Testing the F-35 is one.

But these are glitches and, of course, the manufacturer and the US military have for years been assuring everyone that they'll all be sorted out in due course only they've been saying this for years and still, today, here we are with more of the same old, same old.

And let's remember, the F-35 is getting old. Its design is closing in on 20-years. The programme itself began in 1994. The Lockheed prototype was selected for production in 2001. Even today there's no expectation that flight testing will be completed before 2019.

Meanwhile the adversaries that the F-35 could conceivably be needed to attack have looked at America's 20-year old idea and figured out ways to counter it, including with stealth warplanes of their own design.

John Ivison may still sing the praises of the F-35 but, then again, he writes for the National Post which means his credibility is genetically impaired.

Trudeau's Betrayal

To Murray Dobbin, Justin Trudeau is looking more and more like Stephen Harper with each passing month. C-51, BDS, the TPP and so much more. But it's the venal Saudi arms deal, to Dobbin, is the icing on Trudeau's cake:

...the stunningly stupid decision to go ahead with a $15-billion sale of light-armoured vehicles (LAVs) to Saudi Arabia has the potential to expose Prime Minister Justin Trudeau as a phony.

You could hardly design an issue so perfectly fitted to reveal a government with a progressive public face contradicted by a ruthless disregard for human rights. It raises the question of whether the spin doctors simply misjudged the extent of public revulsion or whether there is something deeper going on. Is it really just about jobs or is there a hard-nosed commitment, inherited from the Conservatives, to a backward Middle East foreign policy?

Foreign Affairs Minister St├ęphane Dion has been severely damaged by his performance on the Saudi arms sale file. First he said the government couldn't get out of the contract, claiming it was legally committed by the Conservative government's actions. That was not true.

Dion compounded his credibility problem with another misleading claim that he was following Canadian law in signing the export permits.

After a Globe and Mail editorial accused him of hypocrisy for approving the sale, Dion attacked the newspaper, claiming that "the Foreign Affairs Minister may block the exports permits at any time if there were serious evidence of misuse of the military equipment." That is, presumably, after our LAV's have been used to attack civilians.

According to Belkis Wille, Yemen researcher for Human Rights Watch, "The Saudis have used such vehicles to violently suppress peaceful protests in eastern Saudi Arabia in 2011 and 2012."

Is there a "reasonable risk" that it will do so again? Everything we know about the new and far more aggressive regime in Riyadh today says yes. In January the regime executed 47 prisoners (most by beheading) on a single day. The regime executed 151 in 2015 -- the most in 20 years.

The Saudi government described those on Jan. 2 executed as "terrorists," but the law defining terrorism includes anyone who demands reform, exposes corruption or otherwise engages in dissent or violence against the government. We don't know how many were executed for acts of violence and how many for "dissent."

And, Dobbin notes, Trudeau has shown himself faithfully Harperian when it comes to Israel:

Trudeau supported a Conservative resolution that would have the government "condemn" any advocacy for the BDS (boycott, divest, sanction) campaign for Palestinian rights. He also opposes the European Union's new initiative that require products from Israeli settlements in the occupied Palestinian territories to be clearly labeled. And there seems to be little if any movement on Trudeau's commitment to re-engage with Iran.

In short, so far, Trudeau's Mideast policy looks disturbingly like Harper's.

It is the same and again we're reminded that the son is not the equal of the father, not remotely. He seems to more closely resemble the guy we just threw out.

Wow. Greenland's Summer Melt Starts a Month Early - With a Bang !!

Imagine a cubic kilometre of ice water. That's a gigatonne, one billion metric tonnes of water. Here's the kicker - in a single day. It happened on the Greenland ice sheet this month. See the blue spike below? Scientists couldn't believe it was true - until they checked.

"Everything is melting", said Aqqaluk Petersen, a resident of Nuuk, Greenland's capital.

The heatwave, Greenland style, added to other evidence that the top of the world continues to warm about twice as fast as the rest of the planet.

"Greenland is really the big show when it comes to ice melt," said Matt King, Professor of Polar Geodesy and an ARC Future Fellow at the University of Tasmania. "It's probably losing as much ice as all the small glaciers around the world combined, and probably more than Antarctica.

"Greenland is being eaten away from away from above and from the edges."

Arctic air temperatures have risen about two degrees since the 1960s. Ocean temperatures are also warming, thawing Greenland glaciers in contact with surrounding seas.

Since satellite records date only from the 1970s, some natural fluctuations may be in play, he said. Still, Greenland's early April warmth was consistent with other signals of a warming planet.

"Such a big spike in melting so early is in complete agreement with what you'd expect when we heat the atmosphere so much," Professor King said, referring to the impact from humans burning fossil fuels and releasing other greenhouse gases.

Trump Attracts Some Very Ugly Supporters

She came to America with her parents 26-years ago to escape from anti-semitism in Russia. Since then Julia Ioffe has established herself as a journalist writing for the New York Times Magazine, Foreign Policy, The New Republic and other news outlets.

However a recent profile of the next former Mrs. Donald J. Trump, Melania, Ioffe wrote for GQ, has earned her a barrage of anti-semitic hate mail from Trump supporters.

Here are a couple of photos she's received:

The sender of this one advised her to swallow her diamonds.

The next one came with the message, "they know about you."

Someone reaches her by phone playing Hitler speeches. Last night she got a call from a business, Aftermath Services, enquiring about "homicide clean up" she had ordered.

Dear Ms. McKenna, Don't Be Shy, Spread the Word

Canadian EnviroMin, Catherine McKenna, is onto something. She says the key to dealing with climate change impacts on the Arctic is to have "real conversations" with the Innu who inhabit the area.

Hmm - real adult conversations - what a fabulous idea!! Kudos to you, Catherine McKenna. Bring it up next time Justin Trudeau gathers all those men and women - you know, the cabinet - and tell them they should try doing the same thing, having adult conversations with all Canadians about what is and is going to be affecting their lives and their children's lives. And, remember, the "adult" part means no lying. Sure it's going to be hard but you have to tell the truth.

Or did I get that wrong? Are "real conversations" only for the Inuit? Do the rest of us have to keep making do with an endless stream of bullcrap from Ottawa?

McKenna's "real conversations" teaser paled compared to her counterpart, US interior secretary, Sally Jewell's more pointed assessment that climate change spreading through the Arctic cannot be stopped and countries with northern populations will have to prepare for "climate refugees."

Really? Well, who knew? Oh, everybody - okay.

Do you ever get the sense that, while Harper just denied everything or acted as though challenges such as climate change were irrelevant, this Trudeau government prefers to play dumb, naive and then, eventually, surprised by oh so determined to act - maybe, somehow, at some point. It's kinda hard to miss that hazmat pipelines are a bigger priority than climate change with the government of the day, just like the government of days past. On that one, Ms. McKenna has already played the "national  unity" card to get herself and Mr. Trudeau off the hook.

Thursday, April 28, 2016

A Cautionary Tale - Oil's Days are Numbered

Sorry, Rachel. Sorry, Justin. Sorry, Brad. The heyday of high-cost, high-carbon oil is drawing to a close. Not your fault. You just happen to be stuck with the filthiest, costliest faux oil there is in a world market awash in cheap, lower-carbon oil.

There are plenty of places around the world where they just pump good old crude oil right out of the ground. They don't have to mine it. They don't have to boil it out of the ground. They don't have to "upgrade" it and mix it with light oil and heat it just to get it moving through special pipelines.

The Saudis have loads of that good crude oil, "sweet oil." Yet they know that oil's days are numbered, even for their stuff. It pains me to suggest that we might learn a thing or two from a group as odious, even barbaric as the Saudis but, hey, they might just be the canary for our bitumen mines.

The Saudis peered into the future and what they saw convinced them there was no time to waste, they had to break their dependence on oil revenues. They even used the word "addiction." And so they've set a target of 2030 to be independent of oil revenues. That means a transition to a post-oil economy and in an almost breathtakingly short time frame.

Meanwhile, Michael Klare suggests we've hit a form of "peak oil" - on the demand side, not supply. Just as all this unconventional energy from fracking fields, bitumen mines and seabed wells is flooding the markets, demand is stagnating. That, in turn, leaves those who are blessed with fields of low-carbon, low cost conventional oil with the market whip hand.

Klare contends that the recent OPEC summit in Doha shows that the days when western producers could count on Middle East oil solidarity to prop up prices are over.

It is hard to overstate the significance of the Doha debacle. At the very least, it will perpetuate the low oil prices that have plagued the industry for the past two years, forcing smaller firms into bankruptcy and erasing hundreds of billions of dollars of investments in new production capacity. It may also have obliterated any future prospects for cooperation between OPEC and non-OPEC producers in regulating the market. Most of all, however, it demonstrated that the petroleum-fueled world we’ve known these last decades -- with oil demand always thrusting ahead of supply, ensuring steady profits for all major producers -- is no more. Replacing it is an anemic, possibly even declining, demand for oil that is likely to force suppliers to fight one another for ever-diminishing market shares.

On the structural side, global demand for energy had, in recent years, ceased to rise quickly enough to soak up all the crude oil pouring onto the market, thanks in part to new supplies from Iraq and especially from the expanding shale fields of the United States. This oversupply triggered the initial 2014 price drop when Brent crude -- the international benchmark blend -- went from a high of $115 on June 19th to $77 on November 26th, the day before a fateful OPEC meeting in Vienna. The next day, OPEC members, led by Saudi Arabia, failed to agree on either production cuts or a freeze, and the price of oil went into freefall.

The failure of that November meeting has been widely attributed to the Saudis’ desire to kill off new output elsewhere -- especially shale production in the United States -- and to restore their historic dominance of the global oil market. Many analysts were also convinced that Riyadh was seeking to punish regional rivals Iran and Russia for their support of the Assad regime in Syria (which the Saudis seek to topple).

The rejection, in other words, was meant to fulfill two tasks at the same time: blunt or wipe out the challenge posed by North American shale producers and undermine two economically shaky energy powers that opposed Saudi goals in the Middle East by depriving them of much needed oil revenues. Because Saudi Arabia could produce oil so much more cheaply than other countries -- for as little as $3 per barrel -- and because it could draw upon hundreds of billions of dollars in sovereign wealth funds to meet any budget shortfalls of its own, its leaders believed it more capable of weathering any price downturn than its rivals. Today, however, that rosy prediction is looking grimmer as the Saudi royals begin to feel the pinch of low oil prices, and find themselves cutting back on the benefits they had been passing on to an ever-growing, potentially restive population while still financing a costly, inconclusive, and increasingly disastrous war in Yemen.

...Until very recently, it was assumed that the demand for oil would continue to expand indefinitely, creating space for multiple producers to enter the market, and for ones already in it to increase their output. Even when supply outran demand and drove prices down, as has periodically occurred, producers could always take solace in the knowledge that, as in the past, demand would eventually rebound, jacking prices up again. Under such circumstances and at such a moment, it was just good sense for individual producers to cooperate in lowering output, knowing that everyone would benefit sooner or later from the inevitable price increase.

But what happens if confidence in the eventual resurgence of demand begins to wither? Then the incentives to cooperate begin to evaporate, too, and it’s every producer for itself in a mad scramble to protect market share. This new reality -- a world in which “peak oil demand,” rather than “peak oil,” will shape the consciousness of major players -- is what the Doha catastrophe foreshadowed.

At the beginning of this century, many energy analysts were convinced that we were at the edge of the arrival of “peak oil”; a peak, that is, in the output of petroleum in which planetary reserves would be exhausted long before the demand for oil disappeared, triggering a global economic crisis. As a result of advances in drilling technology, however, the supply of oil has continued to grow, while demand has unexpectedly begun to stall. This can be traced both to slowing economic growth globally and to an accelerating “green revolution” in which the planet will be transitioning to non-carbon fuel sources. With most nations now committed to measures aimed at reducing emissions of greenhouse gases under the just-signed Paris climate accord, the demand for oil is likely to experience significant declines in the years ahead. In other words, global oil demand will peak long before supplies begin to run low, creating a monumental challenge for the oil-producing countries.

This is no theoretical construct. It’s reality itself. Net consumption of oil in the advanced industrialized nations has already dropped from 50 million barrels per day in 2005 to 45 million barrels in 2014. Further declines are in store as strict fuel efficiency standards for the production of new vehicles and other climate-related measures take effect, the price of solar and wind power continues to fall, and other alternative energy sources come on line. While the demand for oil does continue to rise in the developing world, even there it’s not climbing at rates previously taken for granted. With such countries also beginning to impose tougher constraints on carbon emissions, global consumption is expected to reach a peak and begin an inexorable decline. According to experts Thijs Van de Graaf and Aviel Verbruggen, overall world peak demand could be reached as early as 2020.

In such a world, high-cost oil producers will be driven out of the market and the advantage -- such as it is -- will lie with the lowest-cost ones. Countries that depend on petroleum exports for a large share of their revenues will come under increasing pressure to move away from excessive reliance on oil. This may have been another consideration in the Saudi decision at Doha. In the months leading up to the April meeting, senior Saudi officials dropped hints that they were beginning to plan for a post-petroleum era and that Deputy Crown Prince bin Salman would play a key role in overseeing the transition.

We know from prince Salman's announcements over the past week that Saudi Arabia has instituted a post-petroleum plan with ambitious target dates. The Saudis will continue to supply conventional crude that costs them just $3 per barrel to produce but woe betide high-cost, high-carbon heavy oil such as Athabasca bitumen.

When the Saudis, who can stay in the oil game far longer than we can ever hope to last, are moving to build a post-petroleum economy what conceivable argument is there for Canada constructing hazmat pipelines intended to stay in service 40-years or more? Are Canada's leaders, federal and provincial, so bereft of vision that they're incapable of imagining how we go ahead after the heavy machinery of Athabasca falls silent?

It Was Always Just a Matter of Time

Even Republicans are beginning to lose their taste for climate change denialism. According to Scientific American this is big news. Hardly.

The Achilles' Heel of climate change denialism is that it pits empty belief against scientific fact. Belief is a product of faith, not fact. It involves a willingness to believe something for the sake of believing. Scientific fact does not demand nor even invite belief. It is evidence based, verifiable. Challenge is welcomed as a means to advance knowledge.

Climate change denialism was never more than a sucker's bet. Science shows that the reality of climate change impacts are occurring and they're worsening. Even in the most latitudinally advantaged countries this manifests in severe weather events of increasing frequency, intensity, duration and destructiveness. It is irrefutable in both the change in global temperatures, ice loss and sea level rise and the rate of those changes. Denialism cannot stand against what must be felt and endured.

We are already living with the impacts of just 1C of warming above pre-industrial levels and warming is not only continuing but it's accelerating. We know that those impacts are not linear. Big changes happen abruptly more often than not and they tend to be irreversible. For example, there are parts of the world that are getting dangerously near "wet bulb 35." This marks a point of rise in both humidity and temperature at which the human body can no longer cool itself through perspiration and evaporation and death ensues.

Climate change denialism was never more than a carefully engineered delaying tactic. The fossil fuelers were well aware of global warming and the effects of greenhouse gas emissions for at least three decades and probably more. As far back as 1970, Imperial Oil knew that GHGs would have to be regulated. That's getting on to half a century ago. Big Fossil is only doing what Big Tobacco did, using the same techniques pioneered by RJ Reynolds and other cancer merchants.

So it shouldn't surprise anyone that increasing numbers of Republican voters and Republican legislators are abandoning climate change denial. The only surprise is that it took them so long.

Donald Trump Really Doesn't Get It

Donald Trump sees America as the selfless benefactor of the world.  In his worldview, America gives, everybody else takes.

The Big Orange Behemoth figures that, if he wins the White House, he'll change all that, balance the books with other countries, especially America's allies. Trump's policy has a name - "America First."

It sounds like a plan - until you turn your mind to some things Trump doesn't factor in. There's America's constantly growing foreign debt. Then there's America's perpetual balance of trade deficit. Then there's America's mortal reliance on the US dollar as the world's reserve currency. Put them all together and you've got a double edged sword that America can only wave around at its own peril.

Every month America buys more than it sells. It imports more than it exports. To do this it borrows money - from foreign lenders.  America can keep this going, year in and year out, because it buys and sells and borrows in greenbacks, the US dollar, which happens to be the world's reserve currency. So long as the rest of the world remains content that the US dollar should be the world's reserve currency, the country that prints those dollars and decides how many of them there should be can live beyond its means by recalibrating those means as and when it likes.

America's role in the world, the one that Trump thinks everyone else should pay for? That's a big part of why the world puts up with the USD as its reserve currency. If America starts bullying the rest of the world, pretending that it's a victim of this arrangement of convenience, it could encourage the discontents to demand a new reserve currency, perhaps one anchored in a basket of leading currencies - the dollar plus the yen plus the yuan plus the euro, all of them averaged out. The Saudis have already floated this idea. So too have the Chinese and the Russians mutter about it from time to time.

A reserve currency not slaved to the US dollar would be calamitous for the US and for world commerce generally but not uniformly. America would be hardest hit but countries with large holdings of American debt would also suffer from a plunge in the value of the greenback against other currencies.

Putting America back on a pay-as-you-go footing would be painful. A world no longer governed by America's monetary policy could be less predictable. But we're already embarked on an unpredictable mid and long-range future. Even the end of the fossil fuel era triggers great unpredictability. There has always been upheaval whenever the world has transitioned from one energy source to another whether it be sail, coal or oil. Climate change will be another, probably even greater than the energy transition. Resource shortages, especially freshwater, and other drivers such as overpopulation - all of these forces factor in to deny us much certainty for the future.

Maybe this is the worst possible time for America to be flirting with a bombast like Donald Trump.

Wednesday, April 27, 2016

Let's Give the Conservatives a Hand In This Their Moment of Despair

Pity the Conservatives as they face their rudderless future. They don't know to whom they can turn. Their panic is such that a good many of them would welcome the return of Stephen J. Harper, a.k.a. Beelzebub, the Prince of Darkness.

I don't like to see people suffer, not even Cons, and so earlier today I tried to put my mind to finding them a solution.

How about Preston? Sure he's old but he could handle half-days, three weeks a month.

Mulroney. No, not Bryan, Ben. He doesn't seem to be going anywhere past that E Canada TV gig. You can't pretend to be one of the kids forever. Eventually that just gets creepy. No?

How about Christy Clark? As a British Columbian all I can say is, "please, oh please!" Maybe we can throw in a gently used NDP leader or two to sweeten the deal. They make great bookends and they've never even broken a sweat.

Okay, okay - here's one. How about the still undead John Crosbie? He must have a good year, 15-months left if the Tories are quick about it.

This one may seem to be coming out of left field but what about Tom Mulcair? He'll soon be looking for work and he's what you could politely call "omni-partisan."

Hmm.. half-days.. days.  That's it! Stockwell Day. He hasn't done anything of consequence for years and you know that his mind is an immaculately clean slate.

Okay, kids, that's my list. It's limited only by my imagination. There must be more. Who would you recommend? How about names and reasons. We could do up a list, maybe take a poll, and send the results along to CPC headquarters.

Weigh in now. I know we're working from the shallow end of the gene pool so the options are limited. If you can't come up with any additional names, just mention who you would vote for and why.

A Noble but Futile Effort

They're the backbone of human rights organizations in Canada. They've written an open letter to prime minister Justin Trudeau calling on the Liberal government to rescind its approval of the Saudi death wagon deal.

There's a snowball's chance in hell that Trudeau will budge but it's proper that these humanitarian groups put it on record. It's a millstone that Trudeau and his party can wear the next time they try to convince us to support them. It'll be one of many.

Top Republican Kid Diddler Gets-15 Months

The defendant is a serial child molester, Nothing is more stunning than having ‘serial child molester’ and ‘Speaker of the House’ in the same sentence.

With those words, US Federal District Court judge, Thomas Durkin, sentenced former Republican House Speaker Dennis Hastert to 15-months in prison.

Apparently Hastert slipped off the hook on the child molestation offences due to the Statute of Limitations but he was caught for how he structured banking arrangements to cover up payments he made to members of a wrestling team he coached decades earlier.

In the image above, Hastert appears on the right. The other two are just unindicted war criminals.

Another Reason Why the Demise of PostMedia is Way Overdue

There it is, right on the National Post. "'An Unequivocal Act of Integrity' - Harper's lawyer defends former PM's role in Duffy Affair."

The Ottawa Citizen's Ian MacLeod introduces us to the man who vouchsafes Stephen Harper's integrity, Toronto lawyer Robert Staley.

Apparently Mr. MacLeod didn't follow the Wright-Harper scandal or the Duffy trial very closely, perhaps not at all. It seems he didn't look at the documents that were piled up before Justice Vaillancourt at the trial or the messages (emails, letters, memos, etc) that were written by and to Harper's lawyer. Those documents didn't have Harper's make-believe-lawyer Robert Staley's name on them. They had Harper's actual lawyer Benjamin Perrin's name on them. That's because the lawyer who was involved - the fellow who advised the principals, who negotiated the deal with Duffy's solicitor, who sat in on the meetings, who consulted on strategy, who documented everything, was Benjamin Perrin. It was, likewise, Benjamin Perrin who "punched out" and hightailed it back to Vancouver when the scandal broke out.

But, most importantly, and for obvious reasons omitted from the PostMedia newsfiction, was Benjamin Perrin's take on Harper's integrity revealed in a statement Perrin issued during the last election declaring Harper "morally unfit to govern." I guess he saw things a bit differently than Robert Staley. Of course he would. Perrin was actually there.


For your amusement, here's the text of my email exchange this morning with PostMedia's Ian MacLeod:


Do you just pull this stuff out of your ass? What else have you got up there?

There were many documents before Justice Vaillancourt that were written by or to Harper’s lawyer only that wasn’t “Toronto lawyer Robert Staley.” The name on those documents was some Vancouver guy, oh yeah a law professor, by the name of Benjamin Perrin. You might remember Perrin from the last election when he released a statement denouncing his and, apparently, Mr. Staley’s former client, Stephen Harper, as “morally unfit to lead the country.”

Is this piece your idea of journalism? Is this the standard to which you aspire? I so hope not.

MacLeod's retort:

Well then Mr. Staley, whose article and affiliation with Harper is in papers across the country today, is attempting a massive fraud on the nation in broad daylight.

Either that or you are an arsehole.

I pick the latter.

Fair enough, Ian. There are plenty who agree with you.

Justin, Don't Say You Weren't Warned

A word of caution for the prime minister of Canada - Don't even think about it.

"It" is the loathed Northern Gateway pipeline initiative designed to transport hazmat sludge, also known as dilbit, from Alberta across the seismically active mountain and river wilderness of northern British Columbia to the pristine coast at Kitimat and then onward to Asia via the Douglas Channel and the treacherous waters of the Johnson and Hecate Straits.

Trudeau said he would never allow the Northern Gateway to go through yet the industry shills who constitute the National Energy Board seem to have other ideas.

The project was thought to be dead -- finished off by a Liberal campaign promise to restore a long-standing moratorium on oil tanker traffic off B.C.'s north coast.

But recent comments by federal Transport Minister Marc Garneau have opponents gearing up to fight the controversial pipeline proposal again.

Speaking to Bloomberg News, Garneau was quoted Monday as saying that the government still hasn't "worked out" what a moratorium on tankers actually means. The article also quoted Garneau as saying it is "premature" to say the Northern Gateway is dead...

Of the 230,000 votes the Conservatives lost across Canada, 150,000 were lost in B.C., mainly in ridings that touch salt water.

And when Trudeau issued mandate letters to his new ministers last November, he earned big headlines and praise from environmentalists for including a moratorium on tankers in his instructions to Garneau.

Some observers contend the Northern Gateway business is a ploy, a scare tactic, so that when that route is officially killed off, British Columbians will be complacent to the Trudeau government's go-ahead on the southern, Kinder Morgan pipeline expansion.

Why hasn't Trudeau cleaned up the National Energy Board, perhaps the most pro-industry regulator in Canada? I guess he's too busy heading to Washington to sign Canada up for a greenhouse gas plan his actions in the west show he has no intention of honouring.

Tuesday, April 26, 2016

Will Justin Toss Us in Shifty's Jails?

It reminds me of the Bismark running at top speed trying to break out of the Denmark Strait to reach the target-rich North Atlantic hunting grounds. Only this time the threat isn't some German battleship but a pipeline giant, Enbridge, making for the waters of the northern British Columbia coast, trying to break out to the open sea.

Our Bismark is the Northern Gateway, a massive pipeline project designed to convey hazmat heavy oil, dilbit, from the Tar Sands of Athabasca, across British Columbia's wilderness mountains and rivers, to the coastal port of Kitimat an onward in lumbering, heavily laden supertankers through the Douglas Channel and across the treacherous waters of the Hecate and Johnson Straits to Asia.

Trudeau assured us the Northern Gateway was a non-starter under a Liberal government. We took him at face value and enjoyed a feeling of reprieve. Since then we've watched as this prime minister has shown himself spineless on the hard issues - the Saudi arms deal,  the Energy East pipeline, the expansion of Tar Sands production, the TPP (by all appearances) and now, by some accounts, even the Northern Gateway pipeline to boot.

We should have seen it coming when Trudeau did nothing to rehabilitate the rigged National Energy Board, dominated as it is by energy industry shills appointed by Harper. I'm sure if he'd felt the need for a National Energy Board in service to Canada and the Canadian people instead of the Calgary Petroleum Club and the Communist Party of China, we'd have a new board by now. We don't.

Likewise we've heard nothing of Trudeau dismantling Harper's pipeline security goon squad comprising local police, the RCMP and CSIS charged, by the federal surveillance state, with monitoring legitimate, democratic dissent and tracking individuals thought particularly noteworthy. This taxpayer funded security/intelligence brigade holds a twice annual briefing/intelligence dump for its counterparts in the energy giants. Not hard to figure out whose side they're on and it's certainly not that of concerned Canadians.

As the National Observer reports, word of the Northern Gateway resurrection has reawakened opposition groups once again, ready to stand up to Big Fossil and a federal government in its service.

"You need to understand nothing has changed in terms of our opposition — it’s steadfast, solid, and deeply-entrenched," Grand Chief Stewart Phillip of the Union of BC Indian Chiefs told National Observer. "Governments are known to be quite often inconsistent, but we’re not." Phillip was speaking of the Enbridge Northern Gateway Pipeline proposal.

"We’re committed to our lands and territories, particularly protecting and defending our rivers and streams from catastrophic pipeline ruptures or tanker spills."

In a Bloomberg article published on Monday, federal representatives refused to release specifics on Trudeau's pledge ban on tanker traffic in northern B.C., and would not confirm that Northern Gateway, is in fact, dead.

Before his election last October, the Liberal leader promised the pipeline “will not happen” on his watch if he became prime minister, but Thomas-Muller argued his lack of clarity on tar sands expansion is a flashback to the government secrecy of Stephen Harper's administration.

This is all part of the shell game that the federal government of Canada under Trudeau continues to play from the Harper days,” he explained.

“The Liberal government has been really effective at spinning messages and confusing things with the whole pipeline debate in the country, and I think we’re seeing a bold hypocrisy with the recent international signing of the Paris accord, which included our own prime minister committed to a 1.5-degree target and still talking about building pipelines.”

It was one thing when we talked about having to resort to civil disobedience to block the Northern Gateway. We saw that behind that, our enemy was Harper. That'll change if we have to reinstate those plans yet again. If Trudeau goes back on his word, if he tries to betray us, this time our enemy will be Canada.

A Little More Honesty Than We're Ready For

Ah, screw it. Let's just throw in the towel.

That's the pitch on climate change and Canada's bitumen bounty from CBC business scribe, Don Pittis.

The nub of the difficulty comes down to the seemingly inevitable conflict between the economy and climate change. The question the Liberal cabinet must ask itself is how much economic and political sacrifice it is willing to make to adhere to its international climate commitment.

There's a bigger question we must all ask ourselves. Is fighting climate change even possible, or to put it another way, are the economic sacrifices for the Canadian economy so great that we must ignore climate commitments and worry about jobs?

It was actually an op-ed in the Globe and Mail that made me focus on the question. The writer effectively proposes that despite the potential cost of "a warming planet and catastrophic climate change," economic growth demands that we continue to pump out carbon. Trying to do otherwise is futile.

For those who believe what the vast majority of scientists say — that climate change is caused by the industrial process of liberating millions of years of geologically trapped carbon into the atmosphere that will cause irreversible, "catastrophic," destruction to the planet — the economic case against climate change seems much more difficult.

The arguments are not new, but they come in a category that seems to say 'it's awful but there is just nothing we can do about it' and that optimism around limiting climate change is well-meaning but misguided.

This gloomy inevitability is supported by arguments that demonstrate our hands are tied, that economic growth can only happen in the presence of growing fossil fuel use, that if we stop some other country will just produce more, or that we have already gone too far and are doomed no matter what we do.

...If the scientists are right, then the carbon age must pass. And one or the other — African farmers or Alberta oil workers — will have to suffer economic consequences. The question is merely do governments have the political support to take action now or do we have to wait for some sort of greater crisis to concentrate people's minds and really prove the danger.

It is self-defeating to look at a global problem from a purely local perspective as Pittis and those he references obviously do. It is far worse to truncate the issue to the here and now, the next 10 to 15-years, and weigh it in that narrow, impossibly brief, "what's in it for me?" context.

We need to accept climate change as a global problem, one in which Canada is not so much advantaged as less disadvantaged, less vulnerable to climate change impacts than most other nations. We may have to accept some consequences: retreat from the rising sea; severe weather events of increasing frequency, intensity, duration and destructiveness; a certain degree of economic and social dislocation. That, however, will pale compared to the dystopian future we are bequeathing to less latitudinally-advantaged, poorer and more vulnerable nations and their people around the world. If we faced what they face - apocalypse - we would not be having this rather craven, heel-dragging debate.

Even within our own narrow context we need to see climate change in a wider field of view. It's not just about us, you and me. It's about our kids and the kids they may have and just how hellish a Canada we leave to them. For a lot of what they've got coming, the horse has already left the barn. They will have to adapt to damage and loss we have caused and cannot realistically hope to undo.

Here's the thing that you won't find mentioned in the funny papers, the business section. We still have in our power the ability to make the future vastly worse than it need be. Let's duck the subject - kaching, kaching. Let's drag out the "debate" about the reality of climate change - kaching, kaching. Let's fiddle with some false equivalency between our ease and comfort and prosperity versus their survival with their interests very heavily discounted to near irrelevance - kaching, kaching. Tally it all up. Your granddaughter will pick up the tab.

A Glimpse Into ISDS and Free Trade Deals that Aren't

There's a powerful and growing argument that globalization has failed - long ago - and that the free trade deals it spawned evidence that the concept has been hijacked with what was supposed to be a win-win arrangement (more jobs, good wages) transformed into one in which only a very few win and many now lose.

Free trade deals that were supposed to benefit nations and their populations now instead serve the interests of transnational corporations and those who run and own them.

Free trade, as it was sold to unwitting publics around the world, was supposed to be based on reciprocity. You got as good as you gave only there was supposed to be a lot more giving and a lot more getting and so everyone would prosper and be happy. That was the idea - until corporate giants spotted their opportunity to turn the idea to their service.

There is no reciprocity between governments and corporations in free trade deals. Rights and powers, incidents of state sovereignty, are basically surrendered in the name of facilitating trade.

What governments seem to ignore is what my dad taught me many years ago - rights and freedoms have real value, often a monetary value, that is especially tangible to those who would deprive us of them. Whether it's yielding the right to levy tariffs or duties or giving up the power to enact legislation vital to protecting national interests in areas such as environmental protection, that's a one way street.

So how do corporations extract value out of these sovereign powers laid at their feet? They have a tool. It's called ISDS, a term that's embedded in these free trade agreements. ISDS, Investor State Dispute Settlement, the term itself is a misnomer. It could more aptly be named IDS, Investor Dispute Settlement. It provides rules by which investors, the corporate side, can hold governments and their peoples to account if they do things that somehow impede trade - ridiculous things like legislating carbon emission cuts or clean water or wage requirements, that sort of thing.

The Guardian offers an instructive lesson in ISDS that arose out of the EU-US free trade deal, TTIP, and one of the world's fossil energy giants, Chevron. To the American oil giant, ISDS was more than a way to protect its investment. It was a handy tool to intimidate governments and their regulators. Who needs to punch if the constant threat will suffice to make the other side cower? (Warning: the next sentence is extremely awkward)

Environmentalists have long-warned that the Transatlantic Trade and Investment Partnership’s (TTIP) investor state dispute settlement (ISDS) commercial courts risk a regulatory chill, with governments backing away from measures limiting fossil fuel extraction for fear of lawsuits. But this is the first time that a major oil firm has corroborated their fears.

Details of the US oil company’s lobby drive in Brussels two years ago emerged as EU and US negotiators sat down in New York this week to begin a 13th round of talks aimed at securing the TTIP deal. France and Germany have both previously said they want the access to ISDS removed from TTIP.

“ISDS has only been used once by Chevron, in its litigation against Ecuador,” say the minutes of a meeting in April 2014 between unnamed Chevron executives and European commission officials, which the Guardian obtained under access to documents laws. “Yet, Chevron argues that the mere existence of ISDS is important as it acts as a deterrent.”

Chevron has explored for shale gas in Romania and Poland in recent years, though it has since withdrawn the shale projects in both countries. The company is currently pursuing a $9.5bn suit against Ecuador’s government at an ISDS court in the Hague, for allowing indigenous people to sue the firm - for the same amount of money - over allegedly illegal practices dating back more than 20 years.

“This document [the minutes] shows that the power to use investment arbitration as a shackle on environmental regulations is a key reason why multinationals like Chevron defend them,” said Cecilia Olivet, a researcher at the Transnational Institute and member of the presidential commission auditing Ecuador’s bilateral investment treaties.

Pressure on public budgets means the mere threat of a multi-million dollar international arbitration lawsuit can make governments reluctant to implement social or environmental protection measures that could affect the interests of foreign investors.”

New Zealand postponed plans to introduce stricter rules on cigarette labelling in 2013 after lawsuits by Philip Morris International against Uruguay and Australia in ISDS tribunals.

The city of Hamburg agreed to relax clean water rules in 2011 after an arbitration investment suit by Vattenfall, while Canada reversed a ban on the toxic chemical MMT and agreed a $13m payment in 1998, as a result of an ISDS claim by Ethyl.

Indonesia also granted the mining company Newmont an exemption to laws requiring local processing of raw materials before export in 2014, to settle an ISDS arbitration suit.

Peter Kirby, a partner in the Canadian law firm Fasken Martineau described ISDS tribunals as: “a lobbying tool in the sense that you can go in and say, ‘OK, if you do this, we will be suing you for compensation.’ It does change behaviour in certain cases.”

A powerful yet almost never mentioned reality that argues against any trade deal with ISDS trip wires is the duration of these deals and the rapid changes that our world is undergoing - economically, environmentally and geopolitically. With all this uncertainty, what risks do governments expose their people to in a 30-year deal that is premised on a state of affairs that is entirely unknown, uncertain? How much more deeply entrenched will corporate power become as these changes overtake us? How will the already inadequate balance between corporatism and state sovereignty deteriorate over the term of a 30-year ironclad deal? Are we and our children being sold into a commercial form of indentured servitude? Where are the protections? Where are the escape clauses? Is everybody asleep in the locomotive?

Erdogan Parodies? That's Already Been Done

Just sayin'

And, coming soon:

Just When Dion Needs All the Help He Can Get

It's been one hell of a 2016 so far for our foreign affairs minister, Stephane Dion, as he's had to repeatedly defend Canada's sale of $15-billion (now closer to $12-billion thanks to the fall of the loonie) worth of high-tech death wagons to the Saudis. He's been squirming so hard you could literally hear the sweat roll down the crack of his butt cheeks. It wasn't pleasant.

Hang on, Stephane, help is on the way. By help, I mean the Saudis themselves. They've been doing their bit too, making sure that their dutiful allies get a little cover. How? Easy, by blocking UN efforts to expose ongoing Saudi war crimes in Yemen. From Foreign Affairs magazine:

Saudi Arabia and its Sunni-majority Persian Gulf allies don’t hold a single seat on the U.N. Security Council. But you’d hardly know it: Over the past year, they have wielded their diplomatic clout like a major power, shaping the 15-nation council’s diplomatic strategy for Yemen and effectively suppressing U.N. scrutiny of excesses in their 13-month air war against the country’s Shiite rebels.

An examination of Saudi Arabia’s Yemen diplomacy provides rare insights into the ways a vital U.S. ally has been granted a privileged perch at the world’s most powerful security body. Working through its military allies — principally the United States, Britain, and Egypt — Saudi Arabia has succeeded in blocking actions to restrain its military conduct and highlight humanitarian costs of the conflict.

“They are able to shape discussion on Yemen even when they are not in the room,” Akshaya Kumar, the deputy director of U.N. affairs at Human Rights Watch, said. “They are able to really maintain a one-sided approach to the Security Council’s handling of the situation in Yemen and particularly relating to their abuses on which the council has been silent.”

Make hay while the sun shines, Steffie, because this Saudi smokescreen may not last for long. Already the Americans and the Brits are getting a little antsy about their role in facilitating the Saudi attacks against Houthi civilians, including the supply of cluster bombs to renovate Houthi villages.


Before leaving the subject of Canada and Saudi Arabia's human rights, Vice News has an important story about how the Saudis's execute juvenile offenders.

Monday, April 25, 2016

What Do the Saudis Know that Justin, Rachel and Brad Haven't Figured Out?

The rulers of Saudi Arabia want to wean their government off its dependence on oil revenues by - wait for it - 2020.

One part of the plan will see shares sold in state-owned oil giant Aramco to create a sovereign wealth fund.

Announcing the reforms, Deputy Crown Prince Mohammed bin Salman described his country as being addicted to oil.

The Vision 2030 plan, he told the Saudi-owned Al-Arabiya news channel, would ensure "we can live without oil by 2020".

Oil has made Saudi Arabia a major economic force. But it comes at a cost. The short-term problem is the volatile price of crude oil, which is now less than half what it was in mid-2014. Saudi Arabia has deep pockets.

It will not go running to the International Monetary Fund for financial help, something another oil exporter, Angola, has done. But the Saudi reserves are eroding and with almost three quarters of government revenue coming from oil, the price fall is making itself felt.

For the long term, international efforts to combat climate change create huge uncertainty about demand for oil in the future. Oil will not lose its dominance of the market for transport fuel in the next few years, but further ahead the outlook is unknown.

Saudi Arabia, of course, has massive reserves of low-cost, low-carbon conventional crude oil and yet they want out. Here in Canada, our political leadership, federal and provincial, intends to double down on development of the highest-cost, highest-carbon unconventional oil on the planet.

Update: Foreign Policy has more on the Saudi plan to diversify their economy.

A Prosecutor Asks the Wright Questions

The National Observer's, Sandy Garossino, a businesswoman, journalist and former Crown prosecutor has done a brilliant job of wading into the aftermath and stench of the Duffy trial to ask the "Wright Questions" that cannot be left unasked, unanswered.

Over at iPolitics, Michael Harris offers an even longer list of essential questions.

Justin Trudeau may prefer to close the book on the Wright-Harper affair, this possible conspiracy, but we deserve answers and if those answers do reveal a national police apparatus gone rogue and political institutions that can no longer be trusted then we deserve action.

The Keynesian Devolution of America

There are, in progressive circles, many disciples of Keynesian economics, the theories of legendary British economist, John Maynard Keynes. Some see it as the necessary path to a Middle Class renaissance in Canada.

A somewhat contrary view is taken by another very progressive economist, James K. Galbraith, who, in his book "The Predator State" contends that the Keynesian horse has left the barn and America has entered an era of Keynesian Devolution. Galbraith uses this term to describe, "the transfer of the power to borrow and to fuel economic growth from the public to the private sector. It is from the Keynesian devolution, public borrowing privileges gone private, that the household emerged as the prime motor of American growth.

This is something quite new: an economy sustained by institutions providing, in the main, human services and drive, in the main, by the accumulation of personal and household debts and a corresponding rise in asset values. It is a system that can emerge only in a world where the country in question is released from one of the age-old obligations of all countries: the obligation to pay for the goods it consumes with the goods it produces, of like value. The growth of imports in such a system will exceed that of exports, barring the discovery of new natural resources to exploit. Therefore, for good or ill, the country will be obliged to issue and accumulate external debt - to borrow from overseas. That is the American case... And for the system to continue, two conditions must be met. First, there must be a willing holder of the resulting external national debt. Second, the system cannot be allowed to collapse from within. This means that attacks on it from those who see the opportunity to become very rich in the easiest possible ways, by preying on the public sector, cannot be allowed to get out of hand.

The history of the past three decades has often been written as a struggle between the spirit of Milton Friedman and the ghosts of Keynes and Franklin D. Roosevelt - between the market and the state. The Reagan revolution was successful primarily in forcing changes in the way people thought and spoke: it resurrected Adam Smith and Friedrich von Hayek, and established a new church of the free market...  But with respect to the major New Deal institutions of middle-class social welfare policy, Reagan barely changed the facts on the ground. Social Security came through those years with its benefits mostly intact.Medicare and Medicaid continued to grow.

...Overall the New Deal survived Reagan quite intact, and the economy recovered - partly led by housing, partly by technology, partly by military spending. This was not because the conservatives around Reagan succeeded but because they had failed.

Those who describe themselves as political conservatives but who are mainly interested in power rather than in ideas drew the lesson. They adapted. They quietly dropped any serious adherence to their own past ideas. Rather than defeat the system, they decided to join it. And to turn it to their own purposes. Without saying a word.

And so Galbraith lays the foundation for the rise of the Predator State in which the system of free trade was re-jigged. Instead of increasing trade, creating more well-paid jobs it became a vehicle for outsourcing jobs, relocating production to low wage/few questions asked jurisdictions and transferring both economic and political power out of the middle class to the elites, in turn facilitating their "capture" of the political process at the direct expense of liberal democracy.

Today the bulk of global trade is no longer in products of trade - resources, end goods or services. Today it is primarily in money - currency, financial instruments, shares and bonds. This is what Galbraith means when he writes that they have taken trade and "turn[ed] it to their own purposes. Without saying a word."

Galbraith succinctly describes this in the opening paragraph of the next chapter of his book:

What did this new class - endowed with vast personal income, freed from the corporation, and otherwise left to the pursuit of its own social position - set out to do in political terms? The experience of the past decade permits a very simple summary explanation: they set out to take over the state and to run it - not for any ideological project but simply in the way that could bring to them, individually and as a group, the most money, the least disturbed power, and the greatest chance of rescue should something to wrong. That is, they set out to prey on the existing institutions of the American regulatory and welfare system.

Do you recall how billionaire Warren Buffet responded to denunciations of the Occupy movement as inciting "class warfare"? He replied that the protesters weren't waging class warfare. The class war had been waged years ago. It was over. His side, the elite, won it hands down. The Occupied people were arriving at a war they had already lost.

To the Liberal Loudmouth: The Only Thing that Ties Attawapiskat Suicides to Freedom to Die in Dignity is Your Medieval Religious Superstition

No, your Eminence, this is not Assisted Suicide.

It's a terse post from the Liberal Loudmouth: "Makes sense. Assisted suicide vs. Attawapiskat. Untie that knot, if you can. Don't know how Ottawa can reconcile assisted suicide with crisis at Attawapiskat."

Untie that knot? Sure, be happy to. The only knot is in the murky Catholic superstitions that bind this character's supposedly enlightened mind.

Yes there is a serious and troubling suicide/attempted suicide problem in Attawapiskat. Members of that remote First Nations community have been attempting to commit suicide at alarming rates. We must act to relieve their suffering and end this wave of attempted suicides.

The government's legislation addresses a much different problem. It's a distinction that any genuine progressive should have not the slightest difficulty grasping.

What this joker dismisses as "assisted suicide" has nothing to do with suicide. It's not choosing death over life. It's not choosing to end a viable life. This legislation is an attempt to provide compassionate relief to a different class of people - the terminally ill. They are dying and that is anything but of their own choice. It's specious to mock them by pretending otherwise. It's vile to ignore their reality. It is abjectly demeaning of people who want nothing more than to die with dignity and compassion. It's inhumane, monstrously so to deny them that choice, to condemn those among them who face a protracted and agonizing death. And, the most monstrous part is to invoke your religious superstitions and your make-believe deity as justification.

"A World Full of Fact-Resistant Humans"

That's what Satyajit Das sees when he looks at Earth today, a world full of fact-resistant humans. The Indian-born, Australian banker, academic, and author is featured in the latest Tyee discussing the post-growth world economy that will soon be on us and, with our resistance to facts generally, how this will hit us sooner than you imagine.

I think the last 50 to 60 years were quite odd in terms of the longer run economic history of the world. Now, we face a series of challenges. Some are financial and some are non-financial. But, they are all linked. The first challenges I would list are financial and economic, built around excessive debt. The sum of global debt is about three times GDP. If we had interest rates of three per cent on average, the global economy would need to grow annually, over the long run, by roughly nine per cent just to service it.

Policymakers and most people have decided it's just too difficult to deal with. For now, they ignore it. But these things can't be ignored forever. Not only did we borrow, but we also promised ourselves government services, like elder care and health care, which haven't been fully paid for. These will have to be paid over the next 20 to 30 years.

...The planet is now full of fact-resistant humans and we don't want to even acknowledge climate change. We're experiencing extreme weather conditions which impact on the costs of world operations, in terms of insurance, food production, and many other things.

And there are a whole series of other problems for economic growth, like the demographics of aging. Also, improvements in economic productivity and rates of innovation have generally flattened off.

We also face geopolitical uncertainties, some of which are going to become more heightened with fights over food rights, water security, and energy security.

But, the thing that dooms us to an age of stagnation is that we do not want to confront any of this. We currently have a model of dealing with these issues, which is counterproductive. We can loosely call it the extend-and-pretend model. We tend to defer the problems, pushing them into the future, often in financial terms.

The whole model of quantitative easing, low interest rates and government spending, does not actually solve these underlying problems. For example, climate change summits tend to defer the problem rather than confronting it. All we're doing is piling these problems up. And as we do this, the problems get bigger.

Das mocks what he calls the Davos Man narrative that preaches perpetual economic growth while ignoring the key factors that have driven growth since the outset of the Industrial Revolution, especially population growth. Think of it as a bit like driving a car down the highway only with the windows blacked out.

Sunday, April 24, 2016

Congratulations, John, But Don't Spend It All in One Place

Stephen Harper's most loyal journalistic lickspittle, John Ibbitson, just pocketed the $25,000 Shaughnessy Cohen prize for political writing for his biography, "Stephen Harper."

The award was announced just days before Justice Charles Vaillancourt exposed Harper and his inner circle as nothing more than a pack of craven thugs.

So, what's in Ibbitson's book? I'm not even sure I'll go for it when it hits the dollar table next week but maybe I - for that matter, perhaps everyone - should just settle for Bob Rae's review of the book from last August.

After all this is the Globe & Mail's Ibbitson, the one who floated the fanciful notion of a permanent "Harper Revolution" that could never be undone. Of course when Ibbitson wrote that bit of fiction he probably couldn't foresee how Harper's legacy would be dismantled by the Supreme Court of Canada striking down the unconstitutional bits, by Justin Trudeau's reforms starting to even Canada's political key, and by Justice Charles Vaillancourt's indictment that reduced Harper's legacy to ashes.

If you want to get a copy of Ibbitson's Harper best not delay. They'll probably start pulping them sometime next week.