Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.
Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Wednesday, November 26, 2014

The Death of the PC Empire in Newfoundland and Labrador

Seven by-elections later, without success, the ruling Tories in Newfoundland and Labrador resemble the old Iraq war slogan "shock and awe". Last night it was clearly visible on the faces of the defeated candidates and the cabinet ministers that campaigned on their behalf. It's not that they don't understand what's happening to them, it's just that they don't understand what happened to them.

For the PCs all roads lead to Muskrat Falls. After previously sacred Danny Williams got his Muskrat Falls deal he resigned - mere weeks later. That shattered the "God" image so carefully crafted. The population was left unstable as if it had lost its father, and its foundation had been shaken. Such is the danger of iron man rule - all men are mortal.

Then there was the viscous battle on the airwaves and in the social media over the wisdom and value of the project. The PCs hired expensive communication firms, and stalled requests for information on the project. When that strategy appeared to crack the Tories turned to their normal practice: legislation. They created Bill 29 to amend the Access to Information Act.  Typically that would be shuffled off as no big deal. It's not as if the public are filing access requests. However, the press, smelling a rat, went ballistic. Muskrat Falls opponents and the opposition parties grabbed onto the issue, backed by the press, and even forced a multi-day filibuster. More importantly the image was sealed. The PCs couldn't sell the bill as just normal legislation, and the public began seeing it as an act to cover-up Muskrat Falls dealings. That was when the trust was violated.

Thereafter the PCs, generally speaking, lost public trust in their word, but not necessarily in the project. Newly appointed leader Dunderdale and her team, which included Williams' brother, decided to attack the Muskrat Falls opponents rather than address the core public trust issue. She termed opponents as "nay-sayers, known critics of the government" etc... Her arrogance, and that of her colleagues, was so palpable the public became repulsed. When the PUB refused to give the project an unfettered endorsement, the PCs went crazy with indignation - including Williams who derided not just opponents, but also the PUB. It was war in a way. The problem for the PCs was their guns were focused in the wrong direction. As distrust grew, the people began taking opponents accusations seriously, and so an attack on the assertions of proponents began to be an attack on the people themselves.

It always was, and remained a battle for hearts and minds. The PCs refusal to alter their strategy of arrogantly attacking those opposed to their vision, and instead addressing the core issue of trust, resulted in a solidification of the view that "the PCs were out of touch". A natural result when a government can't see the core issue and instead shoots the messenger. So great was the vitriol that Dunderdale became almost detested by the public. The PC caucus decided their poll numbers were bad enough to fire Dunderdale, and they did just that. However, by this time, the public considered them, rightly so, as all infected by the same affliction - arrogance.

As if to emphasize the point the PCs, led on the outskirts by Williams, attacked leadership candidate Bill Barry (a reformist-type candidate) and coronated a pro-Muskrat Falls businessman - Frank Coleman. At one time an endorsement by Williams would have guaranteed a candidate acceptance among the public, but this time it back fired. The endorsement hung around Coleman's head like a guillotine, and in the end the blade came down. Coleman's company, HVP, was quietly released from a money losing government contract in Labrador, and the $18 million dollar performance bonds that were meant to guarantee it. After months of agony, and accusations "Danny's Man" was simply implementing "Danny's Will", Coleman resigned before he was even sworn in.

That led to another leadership race, after the first one was quietly swept under the carpet like it never happened, and Paul Davis was anointed the new PC leader. Davis immediately came under scrutiny for political ties to his old employer, the RNC provincial police. At the core of the issue were campaign donations that were banned by the RNC Act. (to this day the 2013 Political Contribution List has not been released publicly - although it has been ready for 7 months I'm aware of). Furthermore, an apparent political deal reached between himself and perennial political opportunist Steve Kent still hung in the air as Kent was appointed Deputy Premier. The public smelled the same-old Tory contempt for democracy that had its roots in the Muskrat Falls battles, and Davis was labelled. Then came consummation of another apparent political deal when Senator Manning's (a Davis leadership supporter)  niece was appointed to cabinet as an unelected Justice Minister.

Every action has a reaction. Every move the PCs made over the last four years did the exact opposite of what they intended. They reinforced the perception created by the Muskrat Falls battles that secrecy and power were the poison of choice for the PCs. They never adjusted from having a front man that could sell ice to Eskimos. They never saw the effect of the 5th column that battled them at every turn over Muskrat Falls. They never realized that the core issues with Muskrat Falls would stick and become the core issues against the government. There are none so blind as those that refuse to see. So it went with the PCs. All their roads led to Muskrat Falls.















Wednesday, November 12, 2014

Liberal-ly speaking

I've been wanting to write this post for along time. How to say it? When to say it? The time seems right now. In 2011 I left the PC party as the government it represents was so corrupt I could no longer bare associating myself with it. Others will say it was poor sportsmanship. Some have suggested political opportunism, as if leaving a Party at 75% in the polls for a Party at 14% in the polls was opportunism. No, the real reason was as stated - principle. Then the poor old Liberals looked like a rag tag band of warriors at best. Fighting the good fight, but hopelessly outgunned by a PC machine flooded with corporate donations, and generally ridiculed by the provincial media. That was then and this is now.

Three years later, and five leaders later, the PC Party twists in its death throws as it desperately avoids the fate of all tyrants. Now, the Liberals are the top guns and the media ridicules the PC's. So is the circle of life I suppose. But, what does the Liberal Party hold for the citizens of Newfoundland and Labrador when the inevitable election day comes next year?

My father was a life-long Liberal - to be sure. He campaigned to Liberal prime minister Louis St. Laurent for a unique Canadian flag. He submitted his own design for the same under Liberal Lester Pearson. He loved Pierre Trudeau. My family was a truly Liberal family. However, I've often wondered what he would make of the "modern" Liberals.

Gone are the days of the "Just Society", or important constitutional matters and nationhood. Gone is the focus on individual rights and freedoms. Missing in action is Canada as the friendly broker between combatants. Hopelessly ignored are the right of the Aboriginal peoples. All these things that once defined being Liberal have been discarded for "being a better Tory than the Tories". There is no word of a just society, or respect of the individual. There is primarily one focus - out doing the Tories as "managers of government". ie: who can spend the least. In an onslaught of extreme right wing ideology, the Liberal Party is now suffering an identity crisis. It is no longer what makes the Party Liberal. It's now about what makes the Party not Conservative. It has allowed its own identity to be dictated by its foe.

The provincial Liberal Party appears to be no different. Three years since 2011, and three leaders later, the Liberal Party's identity here is hardly distinguishable from that of the ruling PCs. Gone are the days of just three years ago when the Liberals stood in their place to fight Muskrat Falls tooth an nail. Gone is the determination to stop the project, and protect the average person from the impending financial assault the project necessarily would bring. Now it is simply a matter of managing the assault apparently. Barely visible among the Liberal candidates are the determined group that fought so hard to bring real change for the people. Real change being a definitive change to the corrupt political culture in the province, and the resulting responsible government that would bring. Instead, we have Nalcor bred candidates like Cathy Bennett (who has been promoted to Finance critic), and Grand Falls-Windsor Mayor Al Hawkins who the Tories appointed to Nalcor's Board only a short while ago. We have perennial establishment hangers on like Siobhan Coady ( big promoter of Alderon), formerly rabid PC and anti-Liberal Paul Lane, and so on and so on.

Instead of being the Party to transform Newfoundland and Labrador, the Liberal Party is looking much like the one it aims to replace. That may seem unduly harsh, and it may in fact be too harsh as the days are early, but the signs are not promising. It reminds me of the last election when, as a Liberal candidate, I found myself face to face with a salt of the earth man in the lower ends of Random Island. His main question to me: "Are you blue or red?". At the time I remember thinking surely their must be more on this man's mind than what colour my party is. Surely he must be concerned about the difference beyond the colour of our flags, but he wasn't. Perhaps therein was a pearl of wisdom.

With a now closing window before the next election, and by-election win tallies replacing serious vision, the question is are the Liberals to be any different than the Conservatives? Is it to be "Liberal Tory, same old story?" I don't know is the honest answer. My heart says no, but my brain is leaning yes. And, that really angers me. At a time in our history when we need a principled and visionary approach, the same old "pragmatism" appears to be reinventing itself. Where are the declarations on democratic reform by the Liberal Party? Where is the policy to eliminate the practice of corporate and union political donations that corrupt our democratic process? Where is the policy to determine how to halt Muskrat Falls until all the legalities are dealt with, not the least of which include: the Water Management Agreement; the Hydro-Quebec lawsuit; the Nunatsiavut lawsuits; and the Nunatukavut lawsuit. Where is the very real question of provincial debt and structural deficits? Where is the duty to our fishers. Where is a coherent, and humane approach to the fastest aging population in the western world - ours?

It's the silence that disturbs me. The silence and the familiarity of the actors entering the stage. Not many would expect the provincial Liberal Party to be "Trudeauesque". The federal Party isn't managing that yet. However, their should by now be a very clear vision toward the critical issues. The prevailing thought should not be: "silence is golden". The prevailing visual should not be a party consumed with winning, but rather a Party confident in winning based on its vision and principles - not on winning by default. Not winning, because we are not them. Not winning simply to replace one set of actors with another. The greatest betrayal of all is the Party that purports to be change, but simply carries on in the same manner - ie: Obama.

My hope and prayer is the Liberal Party defines itself, and commits itself, to being the agent of change that fundamentally improves the lives of its people - both politically and economically. Perhaps it is just that - a hope and a prayer.











































Wednesday, October 29, 2014

Sliding toward Deflation

Think of the world as an engine designed and built to run in a certain way, and at a certain speed. The fuel of the engine is growth.  The chemistry of the fuel is debt. Then imagine one half of the world (the developed countries) running at full speed for 60 years, while the other half of the world (Asia, Africa, and South America) idling. Because our half of the world has been running full speed, we have used the most debt to power our engines, and the world economy has built itself around that fact. Now imagine that so much debt has been used to fuel the engine that it is almost depleted. Meanwhile the other half of the world is just warming up its engine and has plenty of potential debt to consume. What is the logical consequence? One falls while the other soars.

Now superimpose the unfolding China/Russia/BRIC economic order that is forming to reflect that reality. Let's call it the "New Club". Roughly designed to resemble the Soviet days of trading between countries to the exclusion of others, the New Club is rapidly building a new engine. One that attempts to capitalize on each countries strengths and satisfying each countries needs. If that sounds familiar consider Karl Marx's famous borrowed slogan " From each according to his ability, to each according to his need". Essentially, this is the new slogan of the New Club. China has the currency and the manpower. Russia has the natural resources, technology, and the know how. India has the population and science. South America has specific resources. Africa has population and need.

Together, these countries are forming a new world order. They have combined resources to create a new IMF that will compete with the old western IMF to loan money to areas like Africa and South America. They will control the debt that fires those engines. Russia, China and India (almost 50% of the world population) have entered into formal agreements to use their own currencies to pay for resources from each other. They are excluding the US dollar from their market place as an economic foundation. Making it obsolete. They are reaching deeply into Africa in fierce competition with the US to develop that continent as a place to do business. They are quickly becoming the savior for many South American countries who have tapped out their debt in the Old Club and need a rescue line.

Of course, when one grows the other dies, and the other would be the western world, or the "Old Club". Our ability to consume and pay debt has over reached its maximum. That is reflected in the over valued prices we pay for everything compared to what would be paid for the same object in the Club. In some European countries that has led to such things as inter-generational mortgages on homes. In the US it led to the "housing bubble" in 2008. The price we pay for fuel, compared to the actual price per barrel on the international market, is a good indicator of how skewed the economic reality is. While world oil prices plummet, prices at the pump don't. They stay artificially high. The same can be said for the stock markets. They are valued at more than their 2008 pre-crash worth, despite the indebtedness/under-performance of the corporations listed on them. In other words, there is a space between where they should be at in pure economic terms, and where they exist today. An artificial bubble. An artificial economy. Prices inflated to try and maintain our way of life, our government coffers, and our debt.

While there was only one game in town, that game of artificial economy could be maintained to one degree or another. There would be cyclical recessions to try and balance debt vs income vs prices from time to time, but the system could carry on. But, more dollars printed to maintain that growth created inflation in prices.Our system continued to grow fed on inflation rather than real economic wealth. We created a society based on the artificial. Now we are facing a New Club that, for the most part, will not. As the two realities start to compete the Old Club will lose market share for its products, and a glut will create deflation. 

As sales slide, and corporations within the Old Club try to adjust their production downward, each country's GDP begins to shrink - in other words deflate. That leads to serious consequences for an economic order built on growth fueled by debt. A good current example of this is Germany's recent slide. Germany is the economic engine of Europe, and as its GDP continues to fall so do the hopes of the rest of the continent. Another good example is long term bond costs. Muskrat Falls financing was secured for 50 years at less then 3% interest. Indicative that the banks understand what is coming. What else can explain that length of commitment for such a small return on investment. Perhaps one of the most clear examples of things to come is the Brazilian company Rio Tinto. While North American iron ore mines close, scale back or simply don't develop, Rio Tinto is increasing production by 25%. All these corporations compete on the international market, yet they have two starkly different approaches. Perhaps the key to understanding  this is one corporation is in a BRIC country, and a strong m,ember of the new club, while the others are stuck in the old. 

There are signs all around us if we choose to really see them. The world is changing - for the better for some, and the opposite for others. Reality, or deflation as a measure of it, is coming sooner rather than later. There is really no way for governments to prepare for it financially. Instead, and perhaps a very real indication of intent, police forces through out the western world have been armed like military organizations. Like the banks, our governments see the inevitable deflation of our economies, and understand the social chaos that must follow. At that point order will take precedence over rights. It will be a new world for the Old Club.