Friday, February 14, 2014

Does the National Post’s John Ivison work for Harper’s Ministry of Truth?

When Harper came to power he constructed, with copious amounts of taxpayer dollars, a Ministry of Truth comprised of 4,000 communications staffers.

Their job is to script what Con ministers and MPs say to the press to ensure they “stay on message.” They also stonewall and propagandize access to information requests from the media, as well as muzzle government scientists.

Apparently John Ivison is among their ranks. When Jim Flaherty surprised pundits and Conservatives alike by coming out against a social-con income-splitting scheme — which the Cons promised during their 2011 campaign (after the budget was “balanced”) — Ivison tried stuffing the last 3 years of party history down the memory hole.

Not only did he claim the promise was never made, he also said Flaherty and Harper were against the scheme all along.

I must commend Ivison on his highly disciplined use of “double think.” Big Brother … er … Harper must be pleased. I can just imagine all the party faithful repeating to themselves over and over: the Conservative party is against income splitting; the Conservative party was always against income splitting…

Monday, February 10, 2014

Flahery’s ‘major’ infrastructure plan

Flaherty claims that Tuesday’s budget will contain money for “major” infrastructure projects. But it’s pretty obvious what his real infrastructure plan will be:

  1. Commit a piddling amount of money stretched out over a 10-year period that doesn’t begin to tackle the $125B infrastructure deficit racked up over the past 30 years of cheaponomics.

  2. Ensure half the money includes spending commitments the government has already made.

  3. Spend millions of taxpayer dollars promoting it in ubiquitous “Economic Action Plan” ads.

  4. Eliminate all the funding and brag the he saved taxpayers billions in wasted spending.

This is just more proof that the rest of the developed world is crazy: why have government that represents a majority of voters when you can get a dictatorship the people don’t want and didn’t vote for?

Sunday, February 9, 2014

Disgusting Ford flag rant actually electioneering

Rob Ford was outraged over the Canadian flag at Toronto’s city hall being replaced with the rainbow flag to support gay athletes at the Sochi Winter Olympic games. Of course, Ford knew that wasn’t what actually happened. The Pride flag was put up on the “courtesy poll” which the City of Toronto flag usually flies on.

Ford puts up a Canadian flag in his office window to fake protest the Pride flag temporarily replacing the City of Toronto flag.

So why the fake mix up? It actually has to do with our corrupt and antiquated voting system, First-Past-the-Post.

Ford is beating the war drum to get right-leaning “Ford Nation” supporters fired up for the fall election. He may only need 35 to 40% to win, so the objective is to unite the voting block and ensure they show up to vote.

Andrew Coyne explains the strategy:

When a candidate needs only a small slice of the electorate to win he has little incentive to make himself less obnoxious to the rest; indeed, he has every incentive to amp up the us-and-them rhetoric, the better to lock down his support.

If we had ranked ballot voting — which would require that Ford earn support from a majority of voters — he would be sunk. All his disgusting rhetoric would unite the vast majority against him, removing all chances of him getting reelected.

Conclusion

It’s absurd to put politicians and governments in power the vast majority doesn’t want and didn’t vote for. That is the very opposite of democracy.

Frankly, I hope Ford wins in 2014. As he thumbs his nose at voters and makes a bigger ass of himself on the world stage, maybe we will come to our senses and realize how important a democratic voting system is to a democracy.

(BTW, keep an eye out for Harper using the very same tactics as the 2015 election draws nearer.)

Wednesday, February 5, 2014

Falling loonie is actually a benefit for most Canadians

From 2003 to 2008 the loonie skyrocketed, rising 60% in value. If you were rich it was definitely time to break out the champagne. All your wealth magically increased by 60% and you didn’t have to lift a finger or take the slightest amount of risk.

But what happened to average Canadians who spent all their time and money in Canada? Nothing.

Prices remained the same

According to Mike Moffat, the price difference remained the same. In 2003, Canadians paid $1.20 CAD for an item that sold for $1 US in America. After 2008, when the dollar reached parity, Canadians still paid $1.20 for an item that sold for $1 in the US.

With a 60% increase in value, prices should’ve come down dramatically. That would’ve caused deflation. But they didn’t.

Moffat tries to claim the Bank of Canada is the culprit: that its 2% inflation target kept Canadians from benefiting from a rising loonie. But the fact is he didn’t do his homework. From 2003 to 2008 the BoC didn’t increase the money supply or lower interest rates to offset deflation. Their policy actions were in line with the US Fed, which was to actually raise interest rates to counter inflation.

Falling loonie: same thing — nothing

The same thing happened when the loonie plummeted from 74 cents to 65 cents US, from 1997 to 1999: that is, nothing.

We should’ve seen an increase in prices that caused inflation. But what really happened? Inflation was 1% — lower than the 2% inflation target. We actually experienced disinflation.

So what’s really going on?

For the most part, it’s simply a case of supply and demand. When the dollar rises, purchasing power goes up, but so does demand. That means businesses can get away with charging more in US dollars. (Business charge the highest price the market will bear.)

When the dollar falls, purchasing power drops, but so does demand. That means businesses have to move more inventory to make the same profit — at a lower price in US dollars.

So that’s why average Canadians never see any difference.

Conclusion

Right-leaning Canadians are bitterly complaining that the falling loonie means “everyone will take a pay cut.” But in reality, only the well-off will suffer a loss. But they are not really suffering anything, because it was all free money to begin with.

According to the OECD, the value of the loonie should be 80 cents US (based on purchasing power parity.) A dollar at parity means exports are 25% more expensive and labor costs are 25% higher. That means businesses close up shop and move south of the border. That’s why the economy shed 500,000 good-paying manufacturing jobs and Canada went from a 2% GDP trade surplus to a 3% trade deficit.

An overvalued loonie is actually bad for the economy and bad for Canadians. It has a long way to fall before it can be considered “weak.”