Can You Trust Justin Trudeau?

Here we go again — the Red Book 3.0. Yet another build-up of Liberal election promises just like the ones we’ve seen before (though I admit the one about changing the voting system might be hard to dodge).

The most infamous, of course, was Jean Chretien’s, which he held high and waved at every opportunity in the 1993 election. Co-authored by Paul Martin, it promised the world as we would like it: strong communities, enhanced Medicare, equality, increased funding for education, an end to child poverty. You could almost hear the violins playing. But what turned out to be the most remarkable thing about the book of promises was the record number that were ultimately broken: all of them.

The only time you can trust the federal Liberal Party is when they don’t have a majority — and even with a minority government they have to dragged kicking and screaming to do anything that does not please Bay Street. This fact needs to be repeated over and over again in the next few months leading up to the election as political amnesia is a dangerous condition to take with you into the voting booth.

It’s been 10 years since we had a Liberal government and even longer since we had a majority Liberal regime. A trip down memory lane might serve as a curative.

The effect of amnesia as it relates to the Chretien regime (actually the Martin regime) leaves most Canadians recalling Martin as the deficit dragon-slayer, saving us from our profligate, self-indulgent, entitlement culture and getting us back on the road to solvency. A few will actually recall that Martin chopped 40 per cent off the federal contribution to social programs — but even that memory is diluted by another one: the legendary “debt wall” built exclusively of hyperbole and hysteria over the three years preceding the 1993 election.

But few today would credit the fact, documented in my book Paul Martin: CEO for Canada?, that the 1990s under Martin’s guidance was the worst decade of the century (except for the 1930s) in terms of growth, productivity, productive investment, employment and standard of living.

Unemployment was higher during almost all of Martin’s reign than it was as a result of the 2008 financial crisis.

But what is worse, this so-called liberal actually made it happen. It was a deliberate strategy, fancied up in policy terms as a commitment to “labour flexibility.” The social and economic carnage and the increased personal misery (an additional 300,000 unemployed) was staggering.

Yet because it was all couched in double-speak, Martin and the Liberals were never held to account. The finance ministry’s senior officials convinced Martin that the principal cause of unemployment was not low demand but unmotivated workers. The solution — make them more “flexible.” The best way to do that was to ensure that unemployment remained high. The finance department’s operating policy assumption (radical compared to the U.S. and other G7 nations) was that the “natural” level of unemployment was eight per cent — much higher than the five to six per cent that conventional theory suggested. But the spin never mentioned this number. It was always about keeping inflation below two per cent, extremely low given the country was barely out of a recession. The Bank of Canada worked closely with the government, increasing interest rates whenever unemployment went below about nine per cent.

The cost to the economy was brutal. The federal Human Resources Development Department calculated that Martin’s excessive unemployment cost the country’s GDP $77 billion just in 1993. Pierre Fortin, a distinguished economist at the Université du Québec à Montréal, calculated the radical policy cost the economy $400 billion between by 1996. A Canadian Centre for Policy Alternatives (CCPA) study calculated the total loss to all levels of government in foregone revenue and increased social security costs at $47 billion.

Martin pounded labour in other ways. He slashed UI eligibility and eliminated the federal government’s role in maintaining decent social assistance rates.

At the same time, he was making the largest cuts to federal spending in the country’s history — including a massive 40 per cent cut to Medicare, education and social assistance.

Throughout this period the Liberal a government and its cheerleaders in the media framed the exercise as “deficit fighting.” But according to then CAW economist Jim Stanford, had Martin simply frozen federal spending and allowed unemployment to drop to six per cent, the deficit would have disappeared just one year later than it did. Martin knew all of this but two years after launching his “labour flexibility” program he proudly revealed his actual goal in his 1995 budget speech to Parliament, announcing the massive cuts. He never mentioned the word deficit — because that was not his target.

All those cuts by Martin were intended, in his words, to “redesign the very role and structure of government itself. [A]s far as we are concerned, it is [the] redefinition of government itself that is the main achievement of this budget. This budget overhauls not only how government works but what government does.”

Martin’s biggest boast? “Relative to the size of our economy, program spending will be lower in 1996-97 than at any time since 1951.”

To guarantee his handiwork would not be challenged by any future government, Martin, in 2000, introduced the country’s largest ever tax cuts: $100 billion over five years with the vast majority of the total going to high income individuals and corporations.

Why is Paul Martin’s appalling record relevant today? Because Liberal and Conservative politicians with rare exceptions (like Stephen Harper) are largely at the mercy of their bureaucracies and the agenda of the economic elite at the moment. In Martin’s case he was easily manipulated by his deputy minister David Dodge, in spite of the fact that Martin had a reputation for being supportive of activist government. His first, 1993, budget actually increased spending.

One of the Liberals’ main election planks in the 1993 election was job creation. Supporting this goal was Martin’s junior finance minister Doug Peters — an exceptional economist with excellent standing on Bay Street having worked for the TD bank as its senior economist for many years before jumping into politics. But in the end Martin, a long-time corporate CEO, could not have made any other choice. Dodge just made it easy for him. Martin was a Liberal finance minister at a time of unprecedented corporate power and its merger with the state. His role was assigned to him before he even got there. (Dodge actually lobbied Chretien to appoint him.)

Liberal politicians, with few exceptions, are captive to their neoliberal advisors, bureaucratic apparatchiks and senior corporate power brokers as soon as they actually get into power. This political capture is a likely prediction for Justin Trudeau if he ever becomes prime minister. Martin was not a blank slate — he was sophisticated, self-confident, with strong personality and a well developed liberal vision. He lasted a year.

Justin Trudeau, the man/boy, seems to have never had an original idea in his life nor any discernible vision of the country that drives his politics.  No matter how long he is on the scene as a potential PM I cannot get past reacting to him as if he is an MC at a high school prom.

He is all artifice. More than any Liberal party leader in the past 35 years Trudeau is an empty vessel with little choice but to be filled up by his party’s corporate brain trust.

Bay Street desperately wants back into the game and the Liberals are their only option. While they have been given lots of goodies by Harper, they have been cut off from their historic role as the principal source of federal policy making. (Harper doesn’t care what they think.) In addition, the federal bureaucracy has been made to reflect the ideology of pro-business “efficiency” to such an extent over the past 20 years a genuine small-l liberal would have to replace most members to get any advice contrary to the status-quo.

Justin doesn’t have a chance. The promises he makes will not be his to keep.

Medicare and the retirement conundrum

There’s been lots of attention paid recently to the Canada Pension Plan and how to extend it, and news stories and commentary about how adequate or otherwise Canadians’ retirement situation will be. The sunshine boys over at the C.D. Howe Institute (a.k.a. the Isn’t Capitalism Wonderful Institute, or ICWI) reassure us that everything is fine and we should just ignore all the warnings. The author of one ICWI study observes: “Canadians frequently read that they borrow too much, spend too much, save too little, retire too early and live too long.”

Well, yes, they are told that because it is regrettably true. Personal debt levels are at a record high of 163 per cent of after-tax yearly income, savings rates are a small fraction of what they were in the 1970s and ’80s, and low interest rates (trying to goose a system that has now adjusted to goosing) has given them license to borrow madly off in all directions. According to a 2014 BMO Rainy Day report, “Three in 10 Canadians are living paycheque to paycheque or spending more than they earn… Forty-seven per cent of Canadians said they have enough to cover three months or less… One in five — 19 per cent — have less than $1,000.” The 2014 survey of employees by the Canadian Payroll Association (CPA) “shows more people are overwhelmed by their debt, are saving less and would face real hardship if their paycheque was delayed by a single week… Just over half, or 51 per cent, of the 3,211 employees surveyed by the CPA said it would be tough to make ends meet if their paycheque was delayed by one week.”

Between 1980 and 2005, the actual dollar (after inflation) increase in annual income in Canada was $52 — that’s right, just $2 a year. But I guess you could save that.

Enough about the brutal facts that everyone except the folks at the ICWI know about. Whatever is done with the CPP — however much wages may or may not increase and however we deal with the 17 per cent of mortgage holders who will be under water if interest rates go up two per cent — there is another elephant in the room. It’s called Medicare — or, if you’ve been paying attention, the threat to Medicare.

When actuaries and economists work out their retirement numbers, they do so with a bunch of working assumptions. But if the plan for Medicare designed by our prime minister is actually carried out (and the numerous other threats materialize), there is one very large assumption that will be patently false. Medicare allows everyone, including the one per cent, to lop off a big chunk from their retirement needs. In the U.S., private health insurance costs the average American family $15,000 a year — and even that covers only a portion of costs.

A U.S. study, “Get Sick, Get Out: The Medical Causes of Home Mortgage Foreclosures,” shows just how devastating sickness can be without public healthcare. “Half of all respondents (49 per cent) indicated that their foreclosure was caused in part by a medical problem.” The study also examined the impact of medical disruptions — large, out-of-pocket health payments, loss of work due to medical issues, and those tapping into home equity to pay medical bills. Sixty-nine percent of respondents reported at least one of these factors.

Medicare isn’t dead yet, you say. But for Canadians looking to retire in 25 to 40 years, given the trends it well could be. Medicare is under attack on so many fronts, and it will take incredible determination on the part of those who will need it to ensure it’s there when they retire. Yet younger generations — who face the greatest threat of losing public health care — don’t seem to think about it that much. They should — and before the fall election.

The number of vultures circling the most lucrative public service plum in the firmaments is truly scary. They are driven by the fact that there is almost nowhere else to invest the hundreds of billions of idle cash sloshing around in corporate coffers. The obscenely profitable private system in the U.S. is a powerful motivator.

The big five vultures anticipating the joys of feeding off Medicare’s carcass include a B.C. medical privateer’s legal challenge, a major trade deal, the public-private partnerships fleecing health budgets of hundreds of millions of dollars in excess costs in virtually every province, a new domestic services treaty, and lastly, Prime Minister Stephen Harper’s new, imposed health “accord” that will decrease federal contributions to the provinces by $36 billion over 10 years.

Dr. Brian Day’s challenge, based on the Charter of Rights and Freedoms, is perhaps the most frightening, because if he wins it will effectively constitutionalize the right of health care corporations to compete with Medicare. Researcher Colleen Fuller’s CCPA study, “The Legal Assault on Universal Health Care,” details how “Day wants the B.C. Supreme Court to legalize extra-billing, user fees and private insurance, creating an American-style health care system here in Canada.” In the U.S., in 2004, “health care regulation cost up to $340 billion out of a total health expenditure of $1.7 trillion. In spite of such high expenditures, fraud costs the U.S. health system $75 billion annually.”

The flurry of corporate rights agreements being pursued by the Harper government are also a threat to the viability of Medicare. The Canada-EU deal, the Comprehensive Economic and Trade Agreement, will immediately add at least $2 billion to drug costs in this country. The international Trade in Services Agreement (TiSA) now being negotiated in secret threatens to apply the deregulatory imperative of investment agreements explicitly to services, including health care. As Public Services International has pointed out, TiSA “would restrict governments’ ability to regulate, purchase and provide services. This would essentially change the regulation of many public services from serving the public interest to serving the profit interests of private, foreign corporations.”

But by far the most dangerous threat to Medicare is our prime minister, who loathes Medicare more than any other aspect of Canadian governance and democracy. Harper actually quit politics in the late 1990s to become the head of the viciously right-wing National Citizens Coalition — an organization founded in the early 1970s explicitly to fight Medicare.

Until 2014, Medicare in Canada received federal funding through a 10-year, legally binding accord negotiated by the provinces and the federal government, providing them with a six per cent increase every year. But what is in place now is a 10-year funding formula imposed on the provinces with virtually no consultation. Its increase per year is just three per cent, which means a loss of $36 billion over the 10 years. It is classic Harper — make a structural change whose bite is worse and worse as years go by. The underfunding systematically pushes provinces to cut and privatize.

Harper has abandoned all federal oversight or guardianship. There are no strings attached to the money. And the equalization aspect of the former accord is also gone, meaning increasingly unequal health care across the country and an erosion of the principle of universality. Lastly, the current funding formula not only brings the funding contribution of Ottawa to a record low 19 per cent, but it is not legally binding. If Harper wins the election, he could unilaterally chop billions from Medicare any time he chooses.

Some 40 per cent of Canadians can’t be bothered to vote in federal elections, mistaking ill-informed cynicism for sophistication along the lines of “they’re all the same.” I wonder if they’ll remember that refrain 30 years from now when they have to remortgage their house to pay their medical bills.

“Free Trade” Deals Put Profits Over Public Interest

Opponents of so-called free trade deals have always struggled with the question of why these international treaties don’t generate more alarm and vocal opposition from Canadians. These treaties, after all, trump all other Canadian authority to make laws — provincial legislatures, Parliament, the courts and even the Constitution. If, instead of being bored by news of another ho-hum “trade deal,” Canadians were told that a panel of three international trade lawyers would be reviewing all new laws and determining, in secret, which ones passed muster by meeting with the approval of their giant corporate clients, would they react differently?

That is effectively what all of these corporate rights treaties establish: extra-judicial rulings whose objective is to protect the profits against laws passed in the public interest. The clauses that allow such suits are referred to as investor-state dispute settlement (ISDS). This is not hyperbole — that is the actual, stated objective of ISDS: if a new law affects the expected future profits of a foreign owned company, it can sue the federal government for damages. And the decision is made by a panel of trade lawyers whose bias is, naturally, in favour of facilitating corporate interests — because that is who they normally work for. They aren’t environmental lawyers or labour lawyers or human rights lawyers. They’re trade lawyers. Foxes judging the right of other foxes to kill chickens.

Twenty years after NAFTA — the first free trade agreement to include ISDS — came into effect there are many examples of laws duly passed by legislatures in the public interest that have been ruled in violation of NAFTA. Some are more egregious than others — but they all challenge and assign financial penalties against laws that one government or another thought were important enough to implement.

According to Scott Sinclair with the Canadian Centre for Policy Alternatives, “Canada has been the target of over 70 per cent of all NAFTA claims since 2005. Currently, Canada faces eight active claims… Foreign investors are seeking several billions in damages from the Canadian government. These include challenges to a ban on fracking by the Quebec provincial government…” Canada has never won a case against the U.S.

The rate of challenges is increasing and the rulings are actually getting worse. In 2007, the Nova Scotia and federal governments rejected a proposal to create a huge quarry in an environmentally sensitive area important to local communities. The company won before a NAFTA tribunal and is seeking damages of over $300 million. But the reasoning was even more outrageous than usual. The company successfully argued that an environmental review panel relied on “community core values,” which company lawyers argued was unacceptable. Adding insult to injury, the panel ruled on the basis that there was a “possibility” the review panel’s decision might have been overturned in federal court. Effectively, the company just did an end run around Canadian environmental laws and the Canadian judicial system by going straight to NAFTA.

And what did we get for all this pain? By the late 1990s Canada had lost hundreds of thousands highly paid industrial jobs due to NAFTA. The trade numbers look even worse today. In our largest export market — the three NAFTA countries — Canada has steadily lost ground to Mexico. According to data from Bloomberg:

“In 1997, the United States imported twice as many goods from Canada than Mexico — an $82 billion gap. For the month of February 2015, this gap has narrowed to just $781.5 million.”

If the medicine doesn’t work, increase the dose. That seems to be the position of the Harper government on these corporate rights agreements. He has signed one with South Korea, and another with China (FIPA), shoe-horned his way into another, the Trans Pacific Partnership (not yet signed) and is still waiting for the European Union to decide on yet another, Harper’s most ambitious — the Comprehensive Economic and Trade Agreement or CETA. Harper also wants one with Japan but that country has apparently lost interest in continuing negotiations.

Trade and investment agreements were designed to be the quintessential globalization mechanism aimed at effectively erasing borders and making the nation state increasingly irrelevant — and impotent. But something happened to the globalization imperative in 2008. The economic meltdown suddenly challenged the notion that the only entity that could efficiently allocate capital (that is, make economic decisions for all of us) was the “market place” – a.k.a. global finance and its international institutions, the World Trade Organization (WTO), World Bank and International Monetary Fund (IMF).

The crisis demonstrated decisively that globalization and its neoliberal ideology simply could not deliver the goods. But there was no one with power willing to declare that the emperor had no clothes. Globalization has failed spectacularly but its momentum carries it forward despite the fact that for capitalism to actually succeed (that is, to grow) it needs the check on financial power that the states can provide. The continued lack of accountability of global finance weakens nation states’ capacity to respond to economic fall-out.

There are signs that at least a few countries are trying to get some of their governing power back from transnational corporations. The deal that Harper has pinned so much of his economic reputation on, CETA, is in trouble. Germany and France were the first to express grave reservations about the investor state dispute settlement provisions. They have now been joined by Austria, Hungary, the Netherlands (where the Parliament passed a resolution condemning ISDS) and the new left-wing government of Greece. The Harper government has implied that without ISDS the deal is off. We can only hope: CETA would give enormous anti-regulatory power to the oil and gas industry, increase Canadian drug costs by $2 billion a year and make it almost impossible for local governments to give preference to local suppliers.

The Trans Pacific Partnership may also be in trouble. In order to pass in the U.S., it has to be given “fast track” status by both the Senate and the House of Representatives. Fast track means that the deal goes to an “up or down” vote — it is either passed or defeated exactly as negotiated. Without fast track it is subject to hundreds of amendments, which would almost certainly kill it. The senate has passed fast track. The upcoming House vote is too close to call.

There are cracks appearing, however tentative, in developed nations’ free market consensus with some returning to the use of state powers. But no country seems as determined as Canada to jettison the powers of government. Unlike Australia, for example, whose previous Labour government stated it will not sign any trade and investment agreements containing an ISDS clause, Canada stipulates it won’t sign one without it. Given its appalling record of losses and even worse future challenges under NAFTA it seems that weakening state power is precisely what the Harper government intends. Canada loses against the U.S. on NAFTA challenges in part, simply, because the U.S. is an empire and Canada is not. Demanding an ISDS clause with Europe invites even more challenges from states that are far more powerful and will be investing more in Canada than vice versa.

The same is true in spades with the deal Canada has already ratified with China — the Foreign Investment Promotion and Protection Agreement (FIPA). This agreement breaks the mold by being even more lop-sided than other agreements in several respects — all of them making it more difficult for future governments to regulate investment by what will soon be the most powerful economy on the planet.

Unlike NAFTA, which can be exited with six-month notice, FIPA lasts for 31 years binding governments for the next seven elections. China will have an enormous advantage because the deal locks in existing restrictions and China’s “rules” are so arbitrary it will be extremely difficult for Canadian companies to navigate them or successfully challenge them.

As trade expert Gus Van Harten points out, given the size differential, FIPA is basically a capital-importing agreement as Canadian investment in China will be minimal. That means potentially dozens of huge Chinese state enterprises gaining access to the ISDS clause and challenging environmental regulation, First Nations rights and labour rights.

There are already many such investment protection agreements in place and there have been many dispute panel awards of over $100 million and two billion dollar-plus awards. These could make awards paid by Canada under NAFTA (approximately $190 million to date) look like stamp money.

Companies targeted with a hostile takeover often use a “poison pill” strategy to make their stock less attractive to the acquirer. What better poison pill for a right-wing libertarian prime minister than to tie the hands of future governments with a string of corporate rights agreements.

What to Do About Rogue State Israel? Boycott it

The CBC’s recent revelation that Conservative Public Safety Minister Steven Blaney has called for “zero tolerance” of criticism of Israel and that Canadian hate laws could be applied to those campaigning for BDS — Boycott, Divestment, Sanctions — against Israel is repugnant enough.

But the truly disturbing irony in this outrageous declaration is that the more fascistic and racist the Israeli government becomes, the more illegal settlements it builds, the more explicit its open contempt for world opinion and the more outrageous Netanyahu’s statements, the stronger is the support from the Harper government.

It raises the question: is there any action, including the actual expulsion of Palestinians from Israel and the Occupied Territories that Harper would not support?

The government now denies ever considering charging BDS activists with hate crimes. But there is no denying what Blaney said at the United Nations General Assembly in January, declaring that Canada is taking a  “… zero-tolerance approach to anti-Semitism and all forms of discrimination including in rhetoric towards Israel, and attempts to delegitimize Israel such as the Boycott, Divestment and Sanctions movement.”

Then-foreign affairs minister John Baird implied the same thing in the same month signing a memorandum of understanding with Israel promising to fight BDS — “the new face of anti-Semitism.”

When governments such as Canada’s and the U.S. provide carte blanche for virtually any action Israel undertakes, including the deliberate slaughter of civilians in Gaza, it simply signals to Netanyahu and his right-wing coalition allies that they have not yet crossed a Western democracies “red line.” This was confirmed this week in Netanyahu’s appointment of Ayelet Shaked, one of the most virulent racists in the Knesset, as justice minister (she has no law degree). It was an appointment that left most commentators open-mouthed — but in reality it was just more steps towards a red line no one is willing to draw. Another member of Shaked’s Jewish Home party was given the education portfolio giving the party enormous clout in running the West Bank.

On a July 2014 Facebook post Shaked called for the genocide of the Palestinian people: “What’s so horrifying about understanding that the entire Palestinian people is the enemy? … In wars the enemy is usually an entire people, including its elderly and its women, its cities and its villages, it’s property and its infrastructure.”

In the same post she declared war on Palestinian mothers: “They should go, as should the physical homes in which they raised the snakes. Otherwise, more little snakes will be raised there.” Under Article 3 of the UN’s Convention on the Prevention and Punishment of the Crime of Genocide, this kind of statement (“Direct and public incitement to commit genocide”) is listed as an act that is “punishable” under the Convention.

If she were a Canadian making these repulsive comments here she would presumably be arrested under Canada’s hate laws which the Harper government brags are amongst the toughest in the world.

Equally disturbing is the evidence revealing how Israel’s political elite legitimizes an overt racism amongst ordinary Israelis with such declarations: the repulsive Facebook post attracted 5,000 “likes.”

But back to the original Harper target — the BDS campaign. It was begun by a majority of Palestinian civil society groups on July 9, 2005 (a year after the International Criminal Court declared the Israeli separation wall illegal) with a request to their international counterparts “… to launch broad boycotts, implement divestment initiatives, and to demand sanctions against Israel, until Palestinian rights are recognized in full compliance with international law.”

For all the righteous indignation spewed out by the Harper government against the BDS campaign, the fact is that if western nations like Canada, the United States and the European Union were serious about forcing Israel to the bargaining table, a BDS campaign would not be necessary. Virtually every authority on the so-called peace process now acknowledges that it is dead unless something can make it in Israel’s interest to negotiate.

Israeli exceptionalism, backed by the financial and military might of the U.S.; demands of the Palestinians that they compromise on all their most important objectives before Israel will negotiate. In other words Israel will only negotiate after the Palestinians have given up virtually all their negotiating objectives.

Indeed, during the recent Israeli election Netanyahu declared towards the end of the campaign that there would never be a Palestinian state so long as he was prime minister. For most observers this was at once shocking and simply a clear statement of what Netanyahu had always made clear by his actions: his continued building of settlements throughout the West Bank, his refusal to consider (even in negotiations) East Jerusalem as the Palestinian capital, his stunningly brutal bombing of Gaza and his repeated insults directed at U.S. President Barack Obama regarding Israel’s responsibilities on reaching a peace a settlement.

Prime Minister Harper would have Canadians believe that criticizing Israel or boycotting it is inherently anti-Semitic. But you can see why he might want to back off actually changing the law. The spectacle of police arresting Jewish Canadians who support BDS and charging them with anti-Semitism is apparently too much even for the reckless Stephen Harper.

How does one determine if a campaign such as BDS is legitimate? The gold standard for such boycotts, because it was successful, was the BDS campaign against South Africa. Ironically, it was a Progressive Conservative prime minister, Brian Mulroney, who played an important role in the freeing of Nelson Mandela and the campaign to isolate the apartheid regime.

If apartheid was worthy of an international BDS campaign, then there can hardly be any argument that Israel, too, is a legitimate target. The similarities between the two regimes are frighteningly similar. Indeed many experts on Israel’s system of hafrada, or separation, claim it is far more brutal and deliberately humiliating than anything devised by the racist regime of Pretoria.

While Harper and his ministers have, in the past, railed against the use of the term apartheid to describe Israel’s treatment of Palestinians, some of Israel’s most revered leaders had no difficulty using the term.

Former prime minister Ehud Barak stated: “If there is only one political entity, named Israel, it will end up being either non-Jewish or non-democratic…. If the Palestinians vote in elections, it is a binational state, and if they don’t, it is an apartheid state.” Shulamit Aloni, who once served as Minister of Education under Yitzhak Rabin, wrote: “The state of Israel practices its own, quite violent form of apartheid with the native Palestinian population.” And in November of 2007, Israel’s then-prime minister Ehud Olmert said: “If the day comes when the two-state solution collapses, and we face a South African style struggle for equal voting rights, then as soon as that happens, the State of Israel is finished.”

No wonder Stephen Harper wants to bury the notion that Israel is an apartheid state — because it is actually far worse. South Africa never established the kind of brutal settlement structure that has existed in Israel for decades. While the races did experience separate “development,” white communities were not connected with special well-paved roads, which blacks could not use. As Shulamit Aloni described: “Wonderful roads, wide roads, well-paved roads, brightly lit at night — all that on stolen land. When a Palestinian drives on such a road, his vehicle is confiscated and he is sent on his way.” International law makes it the responsibility of the occupying power to provide civilian governance to those it occupies. Yet four million Palestinians are governed not by civil law but by Israeli military law, which is enforced by soldiers. Decades of the “peace process” have accomplished absolutely nothing.

Far from being an outrage and an expression of the “new anti-Semitism” the BDS campaign is a non-violent movement, which seeks to put a high financial price on the continued and flagrant violation of international law by a rogue state.

To participate, go to Canadian Boycott Coalition for Justice in Palestine/Israel. For a list of products to boycott go here.

The last word goes to Desmond Tutu, Nobel Peace prize winner and another prominent observer who has described Israel as an apartheid state: “Realistic Israeli leaders have acknowledged that Israel will either end its occupation through a one- or two-state solution, or live in an apartheid state in perpetuity. The latter option is unsustainable and an offence to justice. We learned in South Africa that the only way to end apartheid peacefully was to force the powerful to the table through economic pressure.”

Is a Liberal and NDP Coalition Inevitable?

Poor Justin Trudeau. During his infamous coalition flip-flop, he looked like a deer caught in the proverbial headlights. He just didn’t know which way to run. He’s still in the spotlight, and will be until he tries again to navigate the most vexing issue he is likely to face in the next six months of electioneering.

He and his brain trust know that this question is not going to go away. It’s going to hang over his head right up until the election. The civil society groups and others who cannot bear to even imagine another Harper government will continue to up the ante, and his dodging and bobbing will wear thinner and thinner.

The NDP’s Thomas Mulcair doesn’t much like the idea of a coalition or accord with the Liberals either, but he was smart enough to get on the right side of history on this issue precisely because he knew it wasn’t going away — especially amongst NDP voters. After showing little interest for ages, the New Democrat leader recently stated he was open to an agreement of some kind without specifying an accord or a coalition, pre- or post-election.

The advantage for the moment is distinctly Mulcair’s, as he gradually roles out policies which distinguish the NDP from the Liberals and the Harperites. The “interrogator” is already a superior politician. With a package of bold (or at least principled) policies, he could put Trudeau increasingly on the defensive.

If he is looking for some steel to put in his spine in this regard, he need look no further than the amazing rise of Rachel Notley in Alberta. Notley is in a dead heat with her rivals. And she has done it with policies the pundits have long claimed would be a death wish: reviewing royalty rates for oil and gas, withdrawing support for the Northern Gateway pipeline, freezing tuition fees, and increasing corporate taxes.

If Notley can pursue these policies in arch-conservative Alberta without being pilloried, then why can’t Mulcair capture voters’ imagination nationally with the same approach?

If the NDP is to do well, it has to capture a chunk of the progressive vote that historically went to the Liberals. Mulcair has made a start with his pledge to raise corporate taxes, to tax CEO stock options as normal income, oppose the Secret Police Act (Bill C-51), establish a $15 minimum wage, oppose the Northern Gateway pipeline and recommit Canada to a new Kyoto-type accord on climate change.

The more Mulcair follows this progressive track, the more Trudeau will eventually be forced to follow suit in order to keep his left flank intact. When — not if — Trudeau makes some strategic policy moves to undercut NDP progressive initiatives, he will also be eroding his only serious rationale for rejecting an accord: “There’s too many big issues on which the NDP and Liberal party have deep disagreements.” He goes on to mention trade, economic growth and the constitution differences over Quebec.

The only decisively different position is on Quebec. On trade, both leaders (regrettably) support most deals, but Trudeau supports the nefarious investor state provisions (allowing corporations to sue governments for lost profits) in CETA and other agreements, while Mulcair opposes them. This is the very feature which is now threatening to scuttle CETA, and Trudeau may have to reconsider his position.

But whatever the differences on these points, there are plenty of big issues on which the NDP and Liberals could co-operate — enough to form the basis of a post-election accord. For starters, there is one leftover from the Martin government that Trudeau might have trouble rejecting: a national child care program.

And there are others from the 2008 coalition agreement that should still form the basis of co-operation:

  • “Accelerating existing infrastructure funding and substantial new investments, including municipal and inter-provincial projects…
  • “Investing in key sector strategies…
  • “Facilitate skills training to help ensure Canadian workers are properly equipped to keep pace with the rapidly changing economy…
  • “We will work with our North American Partners to pursue a North American cap-and-trade market…”

There is very little separating the NDP and Liberals on these key policy areas. Indeed, the Liberals recently acknowledged that they might move away from the balanced budget obsession of the Harper Conservatives. In what seemed like a trial balloon, senior Liberals lauded a Toronto talk by Lawrence Summers (former head of the World Bank and Clinton’s treasury secretary) where he pitched the notion of “inclusive prosperity” — an overt attack on the austerity policies of Western governments. Trudeau and Mulcair are already in agreement on scrapping Harper’s income splitting and reversing the increase to the Tax Free Savings Account.

So the argument that the two parties are too far apart on key policies will become increasingly difficult to maintain, and the more Mulcair pitches the accord proposal (if he does), the more Trudeau will look like he cares more for his party than he does about ridding the country of Harper. Recent polling puts public support for a coalition at 74 per cent.

If the Liberals win a plurality in October, it is unlikely that any kind of formal agreement with the NDP is in the cards. But the outcome might look the same in any case. The Liberals always run from the left and — if they win a majority — govern from the right. But running from the left and gaining only a minority makes governing from the right much more difficult, especially when another significant party shares many similar policies as the NDP will.

The most interesting outcome, however, will be a narrow Conservative plurality and a minority Harper government. This outcome will beg for a vote of non-confidence and a coalition government of some description early in the new parliament. The legitimacy of such a move will be obvious. In 2008, there was a major barrier to the legitimacy of a coalition: the Conservatives were ascendant — gaining seats from the previous election, and the Liberals had taken a beating.

The idea of Stéphane Dion, the clear election loser, becoming prime minister was an easy target for Harper. But this time around the Conservatives will have lost seats and the Liberals (now at 33) will likely have tripled theirs. That makes a non-confidence vote and the formation of a new government far more legitimate. Then the question will rest on how badly Trudeau wants to be prime minister.

The coalition scenario is Trudeau’s best shot at becoming PM. If Harper wins a minority and Trudeau is leader of the official opposition, all his weaknesses will be on display: his intellectual shallowness, his wooden performance, his lack of believable passion on any issue. The longer Trudeau remains in that position, the more the Liberals risk losing ground to the Conservatives (with a new leader?) as they approach the next election. Trudeau will not want to be the third Liberal leader in a row to fail to become PM. He will need Mulcair to secure that post even if he is loath to admit it.

The best possible configuration after Oct. 19? Barring an NDP minority government, the best case scenario is as many NDP seats as possible. The more seats the NDP has, the more likely the coalition/accord scenario becomes. That, of course, will be up the NDP to achieve, and as the fear and loathing of another Harper government looms large they will be forced to play the coalition card ever more prominently. Polls this week have already seen the NDP draining support from the Liberals and show growing support for a coalition to supplant the Conservatives. The two results may well be connected.

What is maddening about our “democracy” is that ordinary citizens — who should determine their future — feel completely powerless to affect the change they want. But it doesn’t have to be that way. A number of civil society groups are putting unprecedented work into strategic voting efforts this time around. Prominent among them is Leadnow, a bunch of young, tireless, smart activists (with 400,000 followers) who are collecting pledges from thousands of Canadians — “people who have voted NDP, Liberal, and Green, first-time voters, and even some unhappy Conservative voters” — to work to elect the candidate with the best chance of beating Conservatives in swing ridings.

Leadnow founder Jamie Biggar states: “We’re showing the parties how people can work together across party lines for the common good, and we’re cooperating to overcome our broken first-past-the-post electoral system by voting together to elect the best local candidates who can defeat the Harper Conservatives.” History is made by those who show up. Tired of being on the sidelines? Sign the pledge.

Corporate Greed? Enough Already

A news story this week blandly described the perverse reality that is the current state of the Canadian economy. The headline read “Corporate profit margins at 27-year high and likely to stay there.” Pretty heady stuff if you took it out of context. But the context is everything: pathetic growth projections, record high personal debt, stagnating wages, hundreds of billions in idle corporate cash, a multi-billion dollar infrastructure deficit, a growing real estate bubble and a Bank of Canada chief who has no idea how to fix things. And, of course, a prime minister who thinks fixing things is heretical.

The headline describes the conclusion of a report by CIBC World Markets the gist of which is that not only has the profit margin hit a 30-year-high of 8.2 per cent (the historic average is less than five per cent) but the signs are that it is going to stay there: “profit margins are fully supported by the fundamentals.”

Ah, yes the fundamentals. The study doesn’t purport to make any ethical or moral judgments (or even economic ones for that matter) — it just states the facts. Indeed it doesn’t talk about the context of those facts at all, nor that this hyper-profitability might indeed be bad for the economy in general, for growth, for employees, families and governments. It’s as if the fundamentals were somehow God-given, having fallen from the sky.

But of course “fundamentals” don’t fall from the sky, they are the result of the actions of governments, corporations, individuals and other agents — some random, some planned, some unpredictable — like the crash in oil prices. Economists love to talk about fundamentals, but in this case they are related to a structural change in the profit rate: that is, a permanent shift from the below five per cent level to over six per cent — a 20 per cent increase. The key fundamentals, says the report: “globalization, innovation, lower cost of capital, high barriers to entry, and reduced bargaining power of labour…”

The report points out that the crashing Canadian dollar is a big factor but for the economy as a whole, for Canadians’ standard of living and for future investment it is the last item that matters: the “reduced bargaining power of labour.” Wages and salaries have been flat literally since 1980 and personal debt has tracked upwards in parallel as inflation ate into disposable real incomes. This is not sustainable for any functioning capitalist economy that depends on growth to survive.

Here are some of the consequences of a continuing high-profitability/slow growth scenario:

  • The rich will continue to get rich and income and wealth inequality will continue to grow. Stock prices will continue to rise, as corporations accumulate more and more idle cash, dividends will increase. According to the IMF Canadian corporations are accumulating “dead money” faster than in any other G7 country.
  • As increasing amounts of the wealth created every year accumulates in corporate coffers, personal debt, now at a record high of 163 per cent of annual income, will continue to rise increasing the already bloated profits of the big banks.
  • Corporations exist to make profits, not to invest for the sake of investing. What is the motivation to invest if your profits are at record levels and the bargaining power of labour remains low? According to the CIBC report, “No less than one third of Canadian GDP last year was produced by sectors with falling labour unit costs.”
  • With corporations relying on falling labour costs there is even less incentive to invest in innovation, training, or new equipment and technology to increase productivity.

Those costs — a reflection of labour’s weakened bargaining power — are not likely to increase anytime soon. The labour participation rate (the number of employable people working or looking for work) is at its lowest since 2000 — providing a reserve of workers that will continue to suppress pay. The economy produced fewer jobs in 2014 than at any time since 2009.  At the same time, corporations are on a binge of hiring part-time to avoid paying benefits. Partly as a result, Canada has the second highest percentage of low-wage jobs in the OECD.

Another CIBC study revealed that job quality is at its lowest level in 25 years. The bank’s job quality index has fallen 15 per cent since the early 1990s. The index “examines the distribution of full- and part-time positions, the gap between self-employment and the higher-quality jobs for paid employees, and whether full-time jobs were created in low-, medium- or high-paying sectors.”

Perhaps the key observation made by the report’s author, CIBC deputy chief economist Benjamin Tal, was that “The findings reveal a descending path in labour quality, a gravitational pull the study’s author warned will persist unless it’s addressed.”

Addressed by whom? He doesn’t say. But like any other economist, he clearly knows the answer. The structural nature of low quality, low paying and insecure work is not an accident of nature — it is the result of both corporate practices and government policies.

The so-called “labour flexibility” policies of the 1990s are still in place: the slashed accessibility to Employment Insurance, impoverished social assistance programs, and the abandonment of labour standards enforcement. Rather than addressing the issue of low job quality, the federal government has been exacerbating it with the Temporary Foreign Workers Program (TFWP), allowing hundreds of thousands of young people to work for nothing as so-called “apprentices”, and making commitments in trade agreements to allow companies to bring in skilled workers with none of the “red tape” involved in the TFWP.

Even though the TFWP rules have been abused, at least under that program there is supposed to be an assessment of whether Canadians can do the job before a foreign worker is brought in.  Under trade agreements, corporations have been guaranteed the right to outsource high paying jobs to foreign workers without any such assessments. According to the government’s own data, most of the foreign workers in Canada are here without any responsibilities placed on their employers to prove they tried but failed to find Canadians to do the job. For example, only one of the 14 jobs in the infamous Royal Bank example — where Royal Bank workers had to train their replacements from India — were brought in under the TFWP. The rest are likely to have got their positions through the intra-company transfer visas provided for by trade agreements. While the jobs outsourced through the intra-company transfer program are referred to as “temporary,” clauses in the program allow them to stay for up to seven years. The motivation appears to be pure greed: displacing highly paid Canadian employees with much lower paid foreign nationals.

Outsourcing expanded

The program was supposed to be limited to executive and managerial positions (applicants are supposed to have university degrees) but has rapidly expanded by exploiting a clause that says workers with “specialized” skills can also be brought in. Concerns have been expressed by insiders that companies are exaggerating employee resumes to expand the scope of their outsourcing.

No wonder Canadian graduates are having so much trouble finding jobs — the Harper government is determined to give them away.

As bad as things are they are about to get much worse. At the urging of the Canadian Services Coalition, a corporate lobby group, the multiple trade and investment agreements the government is intent on signing (or has signed) all contain sections allowing for such transfers. International Trade Minister Ed Fast boasted that the next generation of trade deals such as the Trans-Pacific Partnership will be much more ambitious about enabling the entry of foreign workers.

For sheer callousness it is hard to outdo the Harper government. But the academic cheerleaders for expanded trade agreements aren’t far behind. Shih-Fen Chen, with Western University’s Richard Ivey School of Business, opined that while the displaced Royal Bank workers would have a hard time finding other jobs, “Outsourcing is just international trade in the service sector and the rationale to support it is similar to the trade of manufactured goods.”

Well, yes that sounds about right, if the Harper government’s rationale in trade negotiations is to do to Canadian service sector jobs what NAFTA and other trade agreements have done to jobs in the manufacturing sector: outsource them.

At no time in the past 70 years have Canadian workers and their families been confronted with such a ruthlessly indifferent combine of corporations and the state. Neo-liberalism, the so-called freeing of market forces, is thus revealed as having no limits, ethical, moral or political to its greed and its contempt for society. And it has little to do with “market forces.” It’s simple corporatism.

Why is the West Spoiling for a Fight with Russia?

What are the consequences when elected governments make policy based on faith and imperial hubris instead of science and expertise? It’s a question that is forcing itself on the world as we watch the United States, Britain, NATO and the Harper government continue to up the ante in the confrontation with Russia over the Ukraine. There are real enough geo-political dangers in the world without actually creating them out of arrogance and ignorance but that is where we are right now and the consequences could be catastrophic.

Canada, Britain, the U.S. and the boys with their toys in NATO headquarters are looking for a fight with Russia. Throughout the confrontation and provocations these protagonists treat Russia as if it is some insignificant middle power that can be provoked with impunity. That is just dangerously stupid and stupidity is something the West can ill-afford given all its internal problems — economic stagnation, unsustainable inequality, collapsing infrastructure.

It is almost a truism that most politicians are, if not stupid, then woefully uninformed about the myriad of complex issues they have to deal with on a daily basis. Traditionally (going back millennia), it has been the job of the civil services to make them look smarter than they are — and they do that by rooting public policy in science and history. It is the job of professionals to bring to bear all the facts, nuances and consequences of policy initiatives. This is especially true of foreign policy and the nuanced determination of the national interest.

As I watch the Ukraine/Russia disaster unfold I am reminded of George W. Bush’s approach to formulating foreign policy. It was revealed in an article by Ronald Suskind in the New York Times magazine in April 2005. It was titled “Faith, Certainty and the Presidency of George W. Bush” and in it, Suskind quoted an unnamed aide to George W. Bush (later revealed to be the sinister Karl Rove). He wrote:

“The aide said that guys like me were ‘in what we call the reality-based community,’ which he defined as people who ‘believe that solutions emerge from your judicious study of discernible reality.’ … ‘That’s not the way the world really works anymore,’ he continued. ‘We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality… we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors… and you, all of you, will be left to just study what we do.'”

They did, of course, create their own reality — the hideous Iraq war and all that followed from it including, now, the crazed and spreading “discernible reality” of ISIS. Rove’s madness is a chilling description of the anti-intellectual roots of U.S. policy-making, which continues under Obama.

While Canada is hardly an empire, Stephen Harper clearly sees himself and his government as junior partners — indeed in terms of rhetoric Canada often goes beyond the U.S., rattling sabres it doesn’t have. Rove was referring to his own community as “faith-based.” Stephen Harper could be a charter member.

But the problem with faith is that it leads you down a single road without the possibility of reassessment — it provides a false certainty in a world where there is none. The consequence with respect to the Russia-Ukraine conflict is obvious — and was revealed in a British House of Lords investigation.

The report accused both the U.K. and the EU of a “catastrophic misreading of the mood in the Kremlin in the run-up to the crisis in Ukraine” which led to them “sleepwalking” into the crisis.

How could they have misread Putin so badly? How was it possible that senior politicians could have been unaware of the centuries-long relationship between Russia and Ukraine? Of the EU and U.S. promise in the 1990s that they would not expand NATO eastward? Of the fact Russia, too, has “national interests”? Faith in their own vision and disdain for their own advisors seems to have something to do with it. According to the BBC’s report on the Lords’ study:

“It blamed Foreign Office cuts, which it said led to fewer Russian experts working there, and less emphasis on analysis. A similar decline in EU foreign ministries had left them ill equipped to formulate an ‘authoritative response’ to the crisis. The result was a failure to appreciate the depth of Russian hostility when the EU opened talks aimed at establishing an ‘association agreement’ with Ukraine in 2013.”

British Prime Minister Cameron immediately rejected the conclusion of the report and doubled down on his crusader policy: “What we need to do now is deliver the strongest possible message to Putin and to Russia that what has happened is unacceptable.”

The crusader rhetoric doesn’t come just from the fevered minds of Harper, Cameron and Obama — the media and the punditry are mostly hands on deck, too. Even the normally rational, establishment magazine, Foreign Affairs (the publication of the Council on Foreign Relations — the unofficial custodian of U.S. foreign policy) has abandoned its role as rational foreign policy guidebook, according to economist Paul Craig Roberts, former treasury secretary under Ronald Reagan. In an article entitled “Washington Has Resurrected the Threat of Nuclear War”, Roberts is almost apoplectic in reviewing a Foreign Affairs article by a rabid Ukrainian nationalist who suggested Putin was about be brought down by internal revolt or, if not, then by an alliance of “North Caucasus, Chechnya, Ingushetia, Dagestan, and the Crimean Tatars.”

Canadian rhetoric is scarcely any more rational or in any way reflective of Canada’s national interests. It is all bellicose stupidity disguised as concern for democracy and sovereignty. And it’s mostly talk. Ukraine will need tens of billions in economic aid every year for a decade just to survive but the West has no intention of providing such largesse. We constantly encourage Ukrainian nationalism, mislead the Ukrainian people as to what we are willing to contribute and promote the false notion that Putin can be easily intimidated.

Talk of providing advanced weapons to the Ukrainian military is frighteningly irresponsible but the war-talk continues. We might expect that Canada would listen to others closer to the scene — like Germany’s Angela Merkel who is clearly alarmed at her English-speaking NATO partner’s recklessness. She stated on Feb. 7: “I cannot imagine any situation in which improved equipment for the Ukrainian army leads to [Russian President Vladimir] Putin being so impressed that he believes he will lose militarily.”

Harper and his senior partners seem to project the consequences of their pronouncements no more than a few hours into the future. They seem barely cognizant that there will be consequences to their actions and rhetoric. If the West and the corrupt and inept Ukrainian government (watch the parliamentary fist fight here) ever did end up in a war with Russia it would be over in two weeks. Then what would Harper, Obama and Cameron do? Will NATO invade to free the Ukraine and confront nuclear-armed Russia? Do our “leaders” have any long-term policy at all? Do they think it’s all just a game?

We rarely hear from military intelligence on these matters because by its nature only the government has access to it. But it would be fascinating to know what they think of this endless provocation of Russia. We now have, thanks to David Pugliese of the Ottawa Citizen, a window onto how the military felt about another reckless Canadian enterprise — the overthrow of Libya’s Moammar Gadhafi. According to Pugliese, just days before Canadian planes began bombing, the military warned the government: “There is the increasing possibility that the situation in Libya will transform into a long-term tribal/civil war. This is particularly probable if opposition forces received military assistance from foreign militaries.” They further warned that removing Gadhafi (a staunch ally in the fight against Al Qaeda) would “play into the hands of” Islamic militants.

The warnings were ignored. Then foreign affairs minister John Baird demonstrated the Harper government’s contempt for professional analysis and advice in his prediction of the future, declaring: “The one thing we can say categorically is that they couldn’t be any worse than Col. Gadhafi.” If by “worse” we mean a failed state, dozens of heavily armed militias fighting for control and ISIS now planning to use Libya as a launch pad for attacks on Europe then I guess Mr. Baird was wrong.

We are left to speculate what warnings the Canadian military are giving the Harperium regarding sophisticated weapons for the Ukrainian government.

You know things are really dangerous when one of America’s pre-eminent warmongers is worried about U.S. policy. Henry Kissinger recently wrote in The Huffington Post, “Far too often the Ukrainian issue is posed as a showdown: whether Ukraine joins the East or the West. But if Ukraine is to survive and thrive, it must not be either side’s outpost against the other — it should function as a bridge between them.”

Hubris and a contempt for analysis and history played out quickly Libya. There is still a chance that the world can step back from the brink in Europe. If it doesn’t we will know who to blame.


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