February 4th 2020
Jason Kenney has made an arbitrary decision that will impact the lives of every Albertan. He wants a balanced budget by 2022. It will not happen and he knows it.
But make no mistake: it is arbitrary.
As I mentioned in an earlier post, Alberta’s net debt is one of the lowest is the developed world at just 11.8%. ($43.7 billion). It is rising – it rose by over $7 billion since Kenney took over, but it is still modest by any standard – Ontario is over 40% and Canada is 30.5%. Given that Alberta, as measured by GDP per capita, is one the wealthiest places on the planet, context matters. Net debt as a % of GDP is higher for every G7 than it is for Alberta (Japan, for example, is 153% and the UK is 80.8%).
There are two primary reasons for the level of debt: we spend more than we take in revenues; and (b) we do not seek the kind of revenue we could, given the state of corporate and individual finances. We have both a spending challenge – efficiency, effectiveness and spending growth – and a revenue challenge.
Kenney’s basic economic strategy is to stimulate the economy to create economic growth and job growth. He is doing this by focusing significant corporate tax give-aways ($4.7 billion) to already profitable firms and by lowering both corporate taxes and eliminating the carbon tax (except for large emitters). This is unlikely to work for a number of reasons: (a) a variety of studies show that investment and hiring decisions are based on a larger range of factors than the tax regime – education, health, infrastructure, innovation eco-system and competitive environment are bigger factors; (b) recent evaluations of trickle-down economics by both the IMF and a range of researchers who have looked at the US Trump tax give away have concluded that they had no impact on employment or investment. While it is early in the Kenney autocracy, job losses are growing in Alberta and have been since Kenney became Premier. Alberta has higher levels of unemployment than other higher taxed jurisdictions in Canada.
Having given away significant revenue opportunities and increased the debt by $7 billion, Kenney has also foregone other options: (a) a sales tax where each 1% of such a tax would yield $1.6 billion and 8% would produce $12.8 billion in annual revenues – enough for Alberta’s needs when added to existing revenues; and (b) raising oil and gas royalties – currently industry keeps 96c of every $1 in revenue which is close to being the lowest rate of oil and gas royalty rates anywhere in the world, we could increase this significantly and still enable significant levels of profitability for most projects (some projects would close, but they exist only because they are in effect subsidized). Indeed, if we were to do both of these things which are in the public interest then we would have a balanced budget by 2022.
But we need to look at another feature: unfunded liabilities. One in particular is glaring – the costs of cleaning up the 3,406 orphaned wells is currently estimated at over $30 billion while assets available for this work are just $227 million. This, according to the Auditor General, is an unfunded liability. It could in fact be much higher, especially when other oil and gas clean-up problems are added into the pile – as much as $260 billion. Whether we look at this optimistically or pessimistically, it cannot be pushed under the carpet and action is needed.
So, what to do. Three suggestions: (a) stop the nonsense of trying to balance the budget by 2022 and develop a responsible fiscal plan; (b) manage expenditures while still meeting the needs of Albertan’s – debt is not a bad thing; and (c) increase revenues through taxation and royalty changes.
Alan Dershowitz used to be an outstanding, insightful lawyer and a law Professor at Harvard – admired by many for his clear thinking, especially about constitutional law. But now he is a hack who can obviously be bought. His arguments at the impeachment pantomime and reality TV show in the US Senate were bizarre. If taken seriously, his reading of the law empowers the President of the United States to do anything he or she wants if they regard it to be in the public interest. Stormy Daniels must be quacking in her stockings and heels. He will now pardon Paul Manafort, shoot someone in the Oval office, annex Mexico and ban Barrie Manilow (which may not be a totally bad thing). As he begins to do all the things his staff told him he couldn’t do he will simply say: “Alan Dershowitz said I can, and its legal!”. Trump always wanted to be a dictator / King. That’s why he paints himself orange.
In the US, a bloke called Des Moines who lives in Iowa and owns a chain of pubs called the Caucuses (I think I have this right…) reckons that Mayor Pete should be the Democratic nominee. Trouble was, Des couldn’t organize a piss up in a brewery. Counting votes after nine pints turned out to be more than Des could manage. The whole thing (which will be come to be known as the Iowa Cockups’s) will help defeat the democrats in November – they appear to be incompetent! My money is on Ivanka doing her dad in and claiming the top prize in the name of the public interest (Alan Dershowitz said it was legal). Des’s circus now moves to New Hampshire (which Trump thinks is in the Great State of Kansas, which is near the Kremlin).
On Tuesday night, the Trumpkin gave a speech to congress on the state of union station – he said it was wonderful and the best union station since Lincoln. He told lies, half-truths and spoke nonsense for seemingly ages knowing that he was on a winning streak. One of his lies is that the economy of the US is the greatest it has ever been. This is true for the top 1% and some of the next 9% but is not at all true for most Americans. The US has more people living in poverty than China, even though some of these poor people have jobs. The US is also in the midst of changing from a democracy to an autocracy and the US is failing to care for a great many of its people, especially in Puerto Rico and the deep south. The union is falling apart and the country has no functioning democracy. It also has concentration camps full of children and is taking active steps to enable climate change. It’s sad to see.
The Coronavirus claimed its first victim outside of China when a man in the Philippines died last week-end. Another has now died in Hong Kong. There are now over 24,000 cases around the world, including Canada. The advice remains the same: wash your hands frequently and stay at home if you are ill. It is worth noting that currently reported cases of the flu worldwide exceed 130,000, with Canada and the US reporting by far the most cases (China is pretty close). You should also get the flu-shot if you haven’t had it. Flu is more likely to kill you – get the shot!
A man in London was shot dead after he stabbed a woman who was merely close to him and then he stabbed one other person. A third was injured during the fracas with police. He was under surveillance by armed police, having recently been released from prison where he was being held for terrorist offences. Borish Johnson has promised to tighten the law. He may want to look at the fact that several such convicted terrorists are about to be released from prison early – for “good behaviour” and for serving just half of their time.
The 54th Superbowl – a strange kind of entertainment with the odd bit of what the American’s call football (they clearly have no idea) – took place on Sunday for no apparent reason (it’s a really dull way to spend a Sunday afternoon). The 49Er’s and the Chiefs were competing for a big bucket of lard, a ride on a bus and a fancy ring. Though the Chief’s won, the real winners were all those companies who advertised at the half-time. Ivanka wasn’t playing – she was busy filing copyrights and patents in China.
Brexit day came and went rather like diarrhea. However, many suspect that the next stage of Brexit – the negotiation of a trade deal with the EU and the final exit arrangements – will be more like piles.
Meghan and Harry seem to have disappeared, rather like the “l” in the key word in this statement: “my stomach is flat!”. Apparently, they are now house hunting in Los Angeles, having realized that Canada is simply too wild and crazy (you’ve been to Kitsilano!) and they can get better edibles in LA. They are looking for sense and sensibility (or is it pride without prejudice?). Meghan’s mum lives in LA and Meghan’s new contract for voice over work with Disney takes her to LA. Meghan will find it easy to pop over to Ellen’s studio to do her long awaited interview. LA looks to be home for now. No more sushi hunting, bacon bashing and whale-watching. Poutine may also be off the menu.
In Alberta the UCP Government released a report which suggested that the Government could “save” up to $1.9 billion in healthcare costs by reducing the provision of health care and not paying for many services – getting sick people to pay instead. The Minister of Health said that every penny saved would be ploughed back into the health care system – which is another way of saying that he will make the cuts but pretend that he hasn’t (this is what the UCP government are doing in education). A key component of this Baldrick-like cunning plan is privatization, which in health is known to both increase costs and increase wait-times. So we’re headed for more nonsense. Can’t wait for the School Choice Act and the nonsense that we will see there.
The Oscar’s are coming up this week-end. If the Golden Globes and BAFTA’s are anything to go buy (deliberate misspelling), we pretty well know what will happen. Joachim Phoenix will rant, no one will be surprised and Brad Pitt will make a joke about being single. We can also expect some reference to the lack of diversity – no Welsh or Latin, no films about lions eating carpets and definitely no films made by a woman director (as Rebel Wilson said at the BAFTA’s – “they haven’t got the balls!”). It is an issue.
The victorious and unhinged President of the United States ranted yesterday for sometime in a weird and magical speech following his acquittal by spineless GOP Senators (with the exception of Mitt Romney) from charges at his impeachment reality show (not really a trial – no witnesses, no documents).
He made several false claims, told lies and started to target his enemies. He disparaged Nancy Pelosi, Adam Schiff, Mitt Romney and the corrupt FBI. He called the Russia probe a “witch hunt” making everything about him. Facts don’t count any more. Nonsense and half-truths do.
He is emboldened and determined. He feels not just vindicated, but invicible. Not just acquitted, but never guilty of anything ever. He is demonstrating that he cannot learn and shows no understanding of what his role really is. He is becoming more autocratic while also showing that he is more deranged than we previously thought.
He will, however, win in November so we have another four years of this nonsense to put up with. The damage he will do to the global understanding of democracy, the rule of law, peace and the global economy will be substantial. None of the Democrats running for the nomination show any sign of being able to beat him, though Bloomberg might simply buy the Presidency (not a bad thing, given the alternative).
We are witnessing something remarkable. I hope historians and political analysts are documenting the patterns and impacts, not just the stupidity. We need analysis.
The US Democratic National Committee is doing everything it can possibly think of to make sure that Trump is re-elected on 3rd November 2020.
First, they permit a very large number of candidates to engage in a public brawl for close to a year in the name of enabling “an open field of candidates”. Nice idea, but very distracting and an effective way of helping the party fracture. A smarter, faster process would help.
Second, they permit anyone with a lot of money – Stayer and Bloomberg – to parachute into the race as democrats and make rule changes to enable them to join a race that is already running.
Third, they permit Iowa to become a poster-child for incompetence. The more one looks at the deployment of the technology (the app that wasn’t) – and I am CEO of a company that has built apps and deployed them – the worse the story gets. No rigorous testing in a safe environment; no field testing before deployment; no training in its use. Awful. The result: a mess that is nothing more than a free gift to Trump.
Fourth, they keep changing the rules as to who can participate in the Town Halls (amongst the most boring spectacles created since the broadcasting of a log fire). It is as if they are trying to find the right kind of entertainment rather than focusing on policy development.
Fifth, there are now strenuous efforts to prevent Bernie Sanders from winning the delegate count, assuming that he manages to secure sufficient delegates at the convention. Given that they rigged this the last time so as to ensure that Hilary won, it seems like learning from past mistakes is not high on the DNC agenda.
Finally, the DNC seems to more like a brokerage and money laundering operation than a political organization focused on policy options and challenging the GOP. Bankers run the DNC and are vying to ensure that Biden (who clearly cannot beat Trump and would be a gift to the GOP) wins (“it’s Joe’s turn!”).
Trump is on track to win a second term. It should be clear to the DNC that there is a hunger to focus the opposition and focus not so much on the President’s flaws (we already have a six volume catalogue) but on the “this is the work we will do to make the US a compassionate, successful and less aggressive nation”.
Rush Limbaugh, the hate-speaker and nonsense peddler with a radio show, was given the highest honour possible for a civilian from the President of the United States. He got to go to the oval office, sit with the orange one and then, during the State of Union Station address last week, was given the Presidential Medal of Freedom. Rush has done for democracy what Goebbels did for truth – spread lies, half-truths, conspiracy theories and nonsense. Rush trains Trump in so far as this is possible.
President Trump has gone rogue. Tweets from this deranged orange man now determine policy in the Justice Department. One day the prosecutors in the Roger Stone case – he was found guilty on all counts – asked for a nine year sentence. The next, following a tweet, the Justice Department indicated that they would resubmit for a much lower sentence – possible around 5 minutes. Three of those directly involved in the case have resigned, as should the Attorney General (but he won’t). Meantime, Mitch McConnell has been awarded Russia’s highest honour – The Medal of Freedom.
Former Vice President Joe Biden, who can’t beat an unheard of like Mayor Pete or a veteran like Bernie Sanders for the democratic nomination, still says he can beat Trump in November’s presidential election. Give it up Joe. Time to put your feet up (take the foot out of the mouth first) and rest and write a memoir or watch a movie or two. This is his third time trying to become President of the United States. Will someone get him off the stage before he falls off it.
Germany is beginning to enter a period of political uncertainty. Angela Merkel is stepping down as Chancellor and was to be replaced by the mild mannered but smart lady Angnegret Kramp-Karrenbauer – known as AKK (not KKK). However, the dear lady has resigned following the decision of party of her party to form an alliance with a right wing (read near fascist) party in Germany known as the AfD (not KKK). She saw this as a sign that no one took her position seriously – she had repeatedly repudiated any suggestion of such an alliance between the AfD and her own CDU. Some chaos will ensue.
In Ireland, the recent election looks likely to lead to the replacement of the first gay Taoiseach, Leo Varadkar – a key figure in enabling Brexit agreement within the EU. As is the case in many EU countries, work is now in progress to form a ruling coalition which could take months, as three parties emerged with roughly the same number of seats. Sinn Fein, the republican party, won more votes than ever before and is now trying to form a coalition government (it just lost out on being the largest party by one seat). The most stunning thing about Ireland – other than its simply a great place to visit and the people are gifted and naturally funny – is the economic recovery and near full employment achieved since the 2008-9 collapse. The challenges the new government faces relate to funding and management of health care, a growing number of homeless and rents rising faster than pay. A few pints of Guinness will help with these issues.
Borish Johnson is exploring the idea of building a bridge between Portpatrick in Scotland and Larne in Northern Ireland. It will cost around £20 billion. It is part of a plan to revitalize Britain’s “periphery” through infrastructure investment. It will be a bridge too far. We can also expect confirmation that the controversial HS2 trainline inter-connecting various cities in the North to London with a super-fast train, now under construction despite massive cost over-runs, will be completed sometime around 2031-2040 at a cost of over £110 billion. This too will be a low estimate – its already gone off the rails.
Johnson will also make major changes to his cabinet this week – new hinges, doors and handles and a big coat of shellac. More specifically, he will move Ministers out and will find new ones to “play” in the movie Brexit 2. He approached Madonna (Minister for Really Annoying People), Wayne “The Rock” Johnson (Brexit Enforcer) and Meghan Markle (Minister for Distraction) – all of whom turned him down. We can’t wait to see who he manages to keep, lose and add.
In Canada, the cannabis industry is facing a funding crisis. Following legalization, hopes were high that people would get high more often and that profits would soar. This thinking has gone up in smoke, as demand is either flat or shrinking while costs increase. Edibles are one hope for the industry, but a bigger one is medical cannabis. The second largest cannabis company in Canada – Aurora in Edmonton – has just lost its CEO, written off part of its balance sheet and laid off 500 people. It’s a fantastic opportunity to transform the sector using smart technology and to enable growth of through new lines of business and profit. I doubt that the struggling companies will see it that way.
Another royal was thought to be coming to live in Canada. Peter Phillips (son of Princess Anne) is separating from his Canadian wife Autumn Kelly (who is Canadian). She may come back home, though early indications are they she will stay in the UK to help support their children. Maybe she could cut a deal with Meghan and Harry and share a very large house.
14th February (Valentines Day)
There will be lot of pubic hair shaved (one estimate is 20,000 tons). A lot of bubbly (cheap) wine drunk. A lot of meals half eaten and flowers everywhere. It’s that commercial event called Valentines Day when we are all supposed to acknowledge romance and love and get passionate, preferably with someone we know.
I gave up on this a long time ago. After forty-nine years of marriage (soon to be 50) and being nearer to 100 than 20, I am not being suckered into this. It is not a sign that I don’t care about the good lady or respect her or admire her or love her. It is a sign that there are better ways to demonstrate this all the time than go big on a single day and be a real pain in the arse the rest of the time.
Indeed, the secret to a long marriage or relationship is precisely that. Never get overexcited or show too much passion on a particular day and none the rest of the year.
There is a great line in an early scene in the sit-com “I Didn’t Know You Cared” (written by Peter Tinniswood and first shown by BBC in 1975) when, coming back from his wife’s funeral, Uncle Mort is asked what he’ll miss most about his late wife. He says “she was a marvel at pointing that there chimney!”. Precisely. Focus on what matters most. He also pointed out that she fell off a trolleybus – “if she hand’t been killed it could have been fatal!”.
Clearly, this is not a day for doing nothing at all about the fact of still being together despite all the odds. We shall have a quiet celebration. Perhaps we will share an eclair or, if we are feeling wild, a glass of sherry (or two). But I shall not fall for commercial trap of spending a fortune. I am certainly not shaving “below”.
Let’s take a walk around the world and see what is happening…
The Coronavirus (now rebranded as COVID-19 to make it sound like a diet pill) reaches a new milestones of 2,000 dead and 75,000 cases just 1,000 of which are outside China. I have started drinking Budweiser and washing my hands with Lysol. This is getting serious. But my old friend and colleague Dr. Lorne Tyrell is on the case – one of the world leading virologists and a winner of the Killam Prize. I feel better already. Lorne developed effective treatments for Hepatitis B.
The British Labour Party leadership election is getting nasty. A big brouhaha over transgender issues, name calling and infighting. This will go on for some time – the outcome will not be decided until April 4th. Sir Keir Starmer, Rebecca Long-Bailey who has a short temper and Lisa Nandy (who doesn’t eat at Nando’s) all want to become the new (and hopefully sane) Jeremy Corbyn. Best of luck. Their main job: saving a party which has completely lost the plot from its own self-destruction.
Three people dropped out of the race to become the democratic party candidate for the US Presidency – one of whom no one really knew was running! Senator Michael Bennet, who secured just 1% of the vote in New Hampshire, saw the red light and parked his bus. Andrew Yang – variously described as an entrepreneur, philanthropist and lawyer – also dropped out. He was actively promoting universal basic income for all Americans (the subject of his book The War on Normal People). The other is Deval Patrick, former governor of Massachusetts. Let us hope Joe Biden takes the hint of such a poor showing in both Iowa and New Hampshire (not to mention doing badly in general) and joins the dropouts. What a dreadful process – just handing Trump gift after gift after gift.
Harvey Winestain, former film mogul and predator, is yet to be found guilty of rape and sexual assault – it seems to be taking the NY jury a long time. He also faces four similar charges on the West Coast of the US. Going from mega movie mogul to prisoner 47251985 will be quite the script. His former movie companies Miramax and The Weinstein Company are no more. Over seventy women have accused this replica of a human being of sexual misconduct or assault. We need to have some real compassion for his former wives and his five children. But he should get no sympathy. Maybe he can spend time with Bill Cosby.
It’s Pardon and Clemency week at the White House. If Trumpkin can spell your name and has met you once, your free. Michael Milken, DeBartolo, Rod Blagojevich and eight others are all pardoned or received clemency. If you need a pardon, just send a donation to the Trump re-election campaign or ring Roger Stone. Expect more pardons by the day. Next pardons are all those who were “caught” and found guilty as a result of the Mueller investigation. He may also pardon Hannibal Lechter.
We’ve had Brexit, Megxit and Wexit and now we await Merxit – the departure from the leadership of Germany of Chancellor Angela Merkel. Her political demise has been predicted before, but the sudden resignation of her chosen successor is leading to renewed speculation that she will go earlier than expected – sometime in 2020 rather than in 2021 as planned. Her CDU’s party’s popularity is falling as is her ability to lead both Germany and the EU. A true Merkeldämmerung. Leaving early would allow her successor to settle in and build a reputation – something critical for the next German election.
The European Union is facing a new future without Britain and already tensions are high over the budget for 2021-2027. The UK’s departure leaves a massive hole in the EU finances and the battle is on to settle who will pay what in the €1.094tn budget the President of the EU is seeking. Britain’s share would have been €75 billion – almost the cost of the HS2 rail links.
Pope Francis declined to invite women into the deaconhood and instead reinforced the view of previous Popes that women have a special place in the church and should be able to conduct a range of church activities, but none involving the sacraments. In a statement called Querida Amazonia (Beloved Amazon) he makes his views clear – the offering of the sacraments remains the sacred domain of men. The Pope was responding to a request from South American bishops to let them ordain women as priests and to let priests marry. So much for his liberal views. As usual, he is vague, and the document will be interpreted in a variety of ways. At least John Paul II and Benedict were explicit: no means no.
The Queen must be wondering what can go wrong next. The Earl Snowden, son of Princess Margaret, is to divorce his wife of twenty-five years, Serena the Countess of Snowdon. The Earl, better known as David Linley and as Chairman of Christie’s and owner of Linley’s furniture. He is 24th in the line for the throne. She has, however, told Meghan and Harry that they cannot use the phrase “Sussex Royal” in their branding. Since H&M is already taken, they are now looking to rebrand. Goop is already taken too. Suggestions on a postcard to Meghan and Harry, Vancouver Island.
Sjoerd Groeskamp of the Royal Netherlands Institute for Sea Research has proposed a response to the rising sea levels in the North Sea – which could get serious over the next 300 hundred years. He wants to build barriers between Scotland and Norway (300 miles) and between England and France (100 miles) for a cost of £20 billion at current prices. Given the spending spree Borish is on, he might have a chance. I can see a new walking tour – over the sea to Norway!
Let’s take a walk around the world and see what is happening…
In Canada there is a dispute over whether or not the Prime Minister should use the full force of the law and forcibly remove protestors who are blocking railways on ancestral lands – Wet’suwet’en territory. The protestors are protesting the building of pipeline carrying liquid natural gas (LNG) within British Columbia. It is a complicated matter, not least because the Prime Minister is in no position to instruct the RCMP as to what to do (its not how the police work). The elected tribal council have accepted the pipeline. But some hereditary ancestral chiefs have not. In part this is a dispute within the First Nations community, but it affects us all. We all know that the actions of the protestors are illegal. This multilayered conflict will not be settled by military style action – in fact, such action would lead to more radical protests. It is being negotiated between sovereign nations (something which many Canadians seem to have difficulty getting their head around). But it is upsetting large numbers of people and having a real impact on the economy, since the movement of goods and people by rail is halted and rail workers have been laid off. Whatever happens will not be good news.
This protest is feeding a westlessness that is feeding the Wexit movement – the voices that want Alberta and Saskatchewan to separate from Canada and form a new country (Westeros?). Helped by uninformed rhetoric (Trudeau is the enemy, Ottawa is a bust), no one loves us, what is poutine anyway?), conspiracy theories and a belief in nonsense economic policies, the alienation of the West (except BC) in Canada is growing. The most recent example of westlessness is the release of the Buffalo Declaration by Alberta MPs – a manifesto based on perceived grievances and a large amount of nonsense. Alberta was waiting for the federal government’s decision on the Teck Mine: a non-viable proposition that depends on $75/barrel oil and $20 billion of new investment in unconventional oil. Not going to happen now that Teck has withdrawn its application since it didn’t see a pathway to raising the $20 billion given Alberta and Canada’s climate change management strategy. The Wexiteers are already blaming the Feds ignoring the billions in subsidies to oil and gas coming from Ottawa every year (app. $3 billion) and the fact that the Feds bought and are building a pipeline.
Teachers in Ontario went on strike on Friday 21st February – challenging the Ontario government to deal with worsening conditions of practice. Premier Doug Ford is one of those attacking the whole idea of public education and the role of professional teachers. Given his own failure in education he seems to be seeking to break the union, destroy the professionalism of teachers and enable privatization. We can expect something similar in Alberta.
Roger Stone, friend of the President and a real dubious character, has been sentenced to 800 years in prison. Sorry, got that wrong – to 40 months (3 years and 4 months) and a period of 24 months of probation He was found guilty by a jury of criminal offenses, including lying to congress and threatening a witness. He will likely be pardoned by the Trumpkin who now claims he is the Chief Justice Officer of the United States. Trump will try and lock up the judge who was following the sentencing guidelines over which she has little choice.
A republican is running for the leadership of the democratic party to take on a democrat who now leads the republican party. Mini Mike Bloomberg has spent over $350 million on his conversion therapy and it seems not to be working too well. Every democratic debate seems to be a gift to Trump. We will see how things stand on “Super” Tuesday (March 3rd), but Bernie looks to be leading overall. The banker supported DNC don’t think Bernie can beat Trump – meaning that they hope he doesn’t. Meantime, Trump is bemoaning the fact that Parasite won best film at the Oscars since it is a foreign film. So was 1917 which was tipped to win – it is from Britain.
Vladimir Putin is running for President in the US. He’s not stupid though, he is using a puppet to stand in for him. Interestingly, the puppet is unaware that he is a puppet and thinks he is a stable genius. He also speaks in tongues. To cover his tracks, Putin has his puppet denying that he is involved and distracting us all by a variety of comedy routines, such as the State of the Union Station address and offering pardons to Julian Assange. Putin has done this before. This time he’s serious.
Meghan and Harry claim that the Queen has no legal right to regulate the use of the term “royal” outside of the UK. Excellent. The Royal House of Murgatroyd and Her Royal Highness Her Indoors Who Must be Obeyed hereby declare today Royal Alberta Day.