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)

Sunday, December 13, 2015

How bad is Newfoundland's Budget Crisis?

Newfoundland and Labrador is in the "mother of all" budgetary crisis. It is not a pretty picture. For those that don't quite get all the government lingo: a deficit is the annual loss caused by spending more than you bring in a fiscal year; the debt is the accumulation of all the money borrowed to finance those accumulated deficits over the years; operating budget is the base cost of running government operations in a year; capital budget is the cost of building facilities in a given year; and gross debt is the amount of all debt the government owes and must pay back. That's a bit of a simplification, but it does the trick.

Back when the 2015-2016 budget was crafted, the government projected $6,659,952 (billion) in operating expenses and $1,143,743 (billion) in capital expenses, for a total of  roughly $7.8 billion in expenditures. To fund those expenditures the government projected oil revenue to be $1,157,671 billion based on a base price of $62 (US) a barrel for Brent Crude. With oil at that level, the government predicted a $1 billion deficit. As a result of the recent election defeat of the government, a new deficit figure of $1.8 billion was released. In other words, the new Liberal government is saying the province has lost approximately $700 million in revenue.

The problem is things are much worse economically then they were at budget time. Oil has hovered at roughly $40-45 a barrel for most of the fiscal year, and has been trending downward (at $37.70 now). Yet, despite the collapse of the province's largest single contributor to revenues, the government has done...nothing. Here is a very illuminating example:

2013/2013 - oil revenue   $2.25 billion      Total government spending -   $7.6 billion

2015-2016 - oil revenue  $1.2 billion         Total government spending-    $7.8 billion

If that set of numbers shocks, well, it should. Now, that figure for oil revenue above was based on $62 a barrel. Just shaving off approximately 30% from that number for oil's actual prices, and we are down approximately $360 million - which leaves oil revenue for this fiscal year closer to $800 million. You have to travel back to the year 2007 to find a time when oil revenue was this low in recent history. In that year, oil was budgeted to bring in $996.5 million. The kicker is this: total budgeted spending for that year, including operating and capital, was $5.2 billion - $2.6 billion less than what is being spent today.

All of this takes on a pretty ugly picture when you consider that debt servicing charges (interest,etc on our debt) was budgeted to be $652 million this year alone. Furthermore, our combined capital and operational gross debt is now $13.9 billion. That is only $1 billion less than the perilous period of 1997-98.

So what can be done? Or, what has to be done? Both nothing and everything. The nothing portion is capital expenditures. The province can no longer afford any capital expenditures. Sound radical? Consider that capital expenditures have been in the $1.1 billion range for a few years now. That's no longer doable. That means: no new hospital for Corner Brook (or anywhere else); no new Waterford mental health facility; no new penitentiary; etc. In other words, any election promises that were related to these projects are out - they were never honest in the first place.

Raising taxes of all kinds and types will be the feature of the next budget. Sin taxes. Income taxes, Taxes on your taxes. You get the idea. However, even taxing all these areas, the government can only pray to come up with maybe $150 million, and that would mean huge personal income tax increases. After all, Ball just vetoed increasing the HST by 2%, which could have meant about $150 million for the provincial coffers. Still, that would have been a drop in the bucket for what's necessary to keep this government where its at.  Cutting civil service jobs has been ruled out by the Liberals. Salaries and benefits of provincial employees accounted for about $905 million in this year's budget. The salaries in the health sector and education sector are administered by the respective authorities. The word is they account for about 75% of the $4 billion that the province issues in grants to the authorities to run their health/education organizations.

It has to be a tempting, if not an absolute necessity, to review these employee expenses. The civil service is way too large for a province this size. The Liberals claim they will reduce it by attrition - which is a fancy way of saying once people retire they will eliminate those positions from the province's structure. Sounds great in the ideal world, but the budget crisis needs immediate heart surgery, not rehab. It can't wait that long.

Muskrat Falls is another one that must be looked at. The government has spent its part on the project already (not including over runs), so that $3 billion is gone from general revenues. However, Nalcor is holding $5 billion in investment accounts that it borrowed under the Federal Loan Guarantee. As far as I know that $5 billion hasn't been accessed yet. The province could cancel the Muskrat Falls project, work a deal with their new buddies in Ottawa to return the funds while avoiding default, and the gross debt of the province would shrink to about $8.8 billion. Such a move would dramatically improve the province's long term economic health, and perhaps forestall the otherwise inevitable credit downgrades coming our way. In addition, should Nalcor lose the current Quebec court case (now waiting for the Judge's decision as it was heard in October) Muskrat Falls annual revenue generation will drop by approximately 80% require a tripling of power bills to allow the project to break even year after year. All in all, Muskrat Falls needs to be the first victim of the financial sanity axe.

In summary, Dwight Ball is on the record as not wanting to harm the economy by instigating drastic tax hikes or mass layoffs. He's on the record as not wanting to shut down the Muskrat Falls project (he wants to "manage it better"). He's on the record for assisting iron ore companies to buy out other iron ore companies in Labrador. All these things are just pure fantasy. Complete non-sense. The truth is, bonding agencies will force the government to cut its spending - drastically. Banks will likely do the same. Newfoundland and Labrador was completely mismanaged during the years when oil revenues to the province numbered in the billions. Now, that luxury, as stupid as it was, is no longer available to politicians. Now the chickens have come home to roost. It's simple math. How bad is Newfoundland's budget crisis? It's systemic and it's catastrophic. That's how bad it is.

Thursday, December 10, 2015

On the March to World War III

As hard as it is to believe, and as hard as it is to comprehend, we are quickly moving toward World War III. It's strange in a way that the causes and signs of the impending war are wrapped like an onion - in many layers. This post is dedicated to unwrapping some of those layers, and giving people a point of reference for what's happening to their world before their very eyes.

1.  Economic Dominance equals Power.

Since the mid 1970's the US has dominated world power when it struck a deal with Saudi Arabia to have all world oil transactions conducted in US dollars. That caused currencies around the world to be valued against the US dollar rather than the previous gold standard. In recent decades the Russians and Chinese have positioned themselves to challenge Saudi's oil domination for exports and American domination in manufacturing and commerce. In 2010 the Russians and Chinese began aggressively pushing for a new world reserve currency that better reflected the strength of the world's economies (specifically the amount of debt countries carried).

After decades of  a cheap manufacturing/labour policy in China, the US had become a "fat cat" living on the glories of past economic discipline. Its national debt, much of it held by China, has come as a result of capitalism's weakest flank - the race to the bottom of the "lowest possible price". US corporations built their profits on it over the last 25 years, and the Chinese were only too happy to accommodate American corporations greed. China has now turned those profits, held in US dollars (in the trillions) into a weapon, or what is commonly referred to as the "Chinese Nuke". While maneuvering to have their Yuan installed as the world reserve currency, and thereby overtaking the US in economic and political dominance in the world, China has held the threat of mass de-dollarization , and a fire sale of US debt, over the Americans head.  In essence, the Chinese have placed the US, and the rest of the Western world in checkmate using capitalism - which is ironic considering it remains a communist country.

That leaves the Western world with two choices: 1. Accept that China and Russia have beaten them at their own game, and turn over world economic and political power; or 2. Engage China and Russia with the only possible advantage they still have - armed force.

2. Bi-Polar World

As a key part of its strategy to deny the US sole world power status, China and Russia have focused a great deal of their wealth on creating the "BRIC Alliance" or "Eurasia"(which I prefer). The core partners in this alliance are Russia, China, India and Iran. The lesser partners are Iraq, Syria, Cuba, South Africa, Argentina, and Brazil. Together they reflect the most demographically prolific regions in the world, which means they have the greatest markets to consume products, which further means that denying those markets to the West is fatal to Western trading and therefore quality of life and power. Having these regions trade together without the US dollar also necessarily relegates the US dollar to second place behind the Chines Yuan. The result is a bi-polar world. Two massive economies separated from each other - one built to grown and thrive on inter-trade and one destined to die from debt and lack of markets to support that debt.

A key developing feature of this new trading reality is military cooperation. Key to this is the gravitation of India into the Eurasian military sphere. Not only is Russia exporting its latest technology to China, India, and other Eurasian partners, but constant large scale military exercises between these countries have proliferated over the last few years. The relationships, both military and economic, now intertwine the Eurasian Community, and leave no doubt that their national interests lay with each other - not the West.

3. Might is Right.

The US is not reacting well to losing its international "top-dog" status. In fact, it has laid down the gauntlet - a bi-polar world is unacceptable. As it is incapable of attacking the Eurasian alliance financially, as to do so would immediately result in economic chaos for the West, it has chosen a military path in what can only be seen as a large scale, and very dangerous game of chicken. Notable challenges to Russia have included sponsored revolutions in Georgia, Ukraine, Syria, Iraq and to some extent former Soviet Republics on Russia's southern borders. Notable challenges to China have come in the form of economic warfare in Africa, and direct military and diplomatic measures in the South China Sea, and to a lesser extent South Korea. A large scale, but dubious economic challenge aimed at China is of course the "Trans-Pacific Partnership" (TPP) which excludes China, and is obviously intended to entice its neighbors toward the rewards of importing and trading with the American market.

Currently the epicenter of the "might will make right doctrine" is being played out in Syria, Iraq, and to a lesser extent Yemen. An escalating game of chess there is leading the "two solitudes" toward actual war. In a sense, it's a proxy war between Saudi Arabia and Iran - between Sunni and Shia. In reality, it's the purposeful use of centuries old hatreds between the two, with the goal of forcing either Eurasia or the West to accept the other's view of a "Brand New World Order". To that end, everyone is all in. Russia, despite having attempted to keep the conflict between the West and Eurasia on economic grounds (as its military is in rebuild mode with a finish date of 2020), has moved strategic and tactical forces into Syria. It has also promised to do the same for Iraq should the Iraqi government request it.

Turkey, a NATO partner, has shot down one Russian bomber, allowed ISIS forces to use its territory to conduct a "regime change war" against Syria, and now just days ago invaded Northern Iraq with a combat team of tans and infantry. According to the Iraqi government, the US has informed it that up to 90,000 Saudi troops and 10,000 US troops will be entering Iraq to "fight terrorists". In reality, both Saudi and the US have been accused of aiding, directly and/or indirectly, ISIS and other groups to overthrow the Shia governments of Iraq and Syria. Iran, the primary Shia power in the area, is already fighting in Syria, and would immediately enter Iraq, likely at the request of the Iraqi government, to fight any Saudi invasion of Iraqi territory.

In summary, it's quite easy to see where all this is leading - first the proxy powers and then the main powers. Neither side will blink. The die has been cast by both.

4. The Fall Out.

The result of the escalation we've seen is very predictable on the Middle East. Given the massive military buildup of Iranian and Saudi forces, we can expect so see a very quick and very deadly battle between the two. A battle played out from Iran to Egypt involving millions of troops, massive armour, and more importantly missile forces. While Saudi has the clear advantage in air forces, Iran has a clear advantage in missile technology to deal with them, so a land forces/ conventional war like early World War II is the likely result. In such a case, millions of fatalities can be expected. That is without the direct intervention of any super powers.

However, with Russia already in theater in Syria, and American bases scattered throughout the region, it would be naive to believe they would not be engaged. The clear advantage in such a scenario is to the Russians. Russia is closer to the area, so deployment of conventional forces there is much easier, and less fraught with intervention, than the US moving forces across the Atlantic or Pacific in large numbers. Also, in such a scenario, the US would have to deal with China on a stand alone basis in the Pacific area. Not an easy task considering China's conventional and strategic forces.

Then there is the "home front factor". In such a scenario Western Europe is bound to be drawn in immediately against Russia. It is very, very doubtful that western civilian populations have any stomach for war against the Russian people - no matter the sell to support it. Having lost untold millions in recent memory to large scale war, and the destruction of their countries, most Europeans are likely to rise up against such a proposition. Equally volatile is the American population. Notoriously inward looking, most Americans are consumed with their own country and have no stomach for foreign wars or any kind that involve casualties - let alone a war that would cause mass casualties in the US itself.

So, while the powers to be in the West maneuver toward world war, it is highly doubtful the population would support such an action. Conversely, the Chinese in particular have no such issues. The financial collapse of 2008 required 200 million Chines be sent back to their villages from urban centres in China, without so much as a peep. Such an action in the Western world would have resulted in revolt. So, that is the playing field. In all scenarios, the West can not win the battle it is formulating. It is unlikely that anyone would win from such a war, but it is certain that if there would be a victor that it will not be the US or the West.

5. What Should Happen.

In the ideal world, which could be this one, the West ought to admit economic defeat and take its place in a new bi-polar world. The rules of the game were set by the West, and the loss of that game ought to be accepted by the West. To change the rules to suit your own purpose simply destroys not just your credibility, but also that of the "world system" itself. History has ebbs and flows. Empires rise and fall. Economic systems collapse and are rebuilt. We know all of this from a simple study of our own recent history. It is the nature of the beast. To fight that result as if somehow your empire is more noble than any other of the past is arrogance beyond the pale.

The rationing of whatever resources the world has that we feel the need to consume has always been dictated by the efficient production and consumption of those resources - whatever the system. If the Chinese, Russian, Indian, etc countries are now in a stronger position to carry forward with that leadership in consumption, well, that's just natural selection really. They've shown discipline in consumption while we have not.

In the end, the only way to avoid what is playing itself out now in the world, the US and the West in general needs to accept that the Eurasian countries have worked their way up to likely dominate world trade and to some extent power. Perhaps it is a chance for all of us to renegotiate, or rediscover, the respect for sovereign nations and people that has been woefully discarded. Would that not make for a much better world for all of us? I believe it would. We don't need a Walmart to survive or be fulfilled.We do however need this planet.  


Tuesday, December 8, 2015

The Newfoundland Nightmare

Newfoundland's economic problems are all structural, and now those problems are all coming home to roost. The structural part is not new. In fact, they trace back to the "merchant" days here - which in many ways have not changed. A small group of select families have controlled everything from insurance to resources, and everything in between for centuries here. Looking through that prism it is easy to see "modern" Newfoundland and Labrador's key structural problems.

Everything that is worth anything is controlled privately. Now, pure economists or extreme capitalists will argue that isn't a structural problem, but rather the way it ought to be. However, a province with such a small population must have a revenue stream greater than more populated provinces in order to adequately support its operations. In Newfoundland's case, successive governments have sold that revenue generating capacity away. The province is at the point where its major streams of Crown corporation revenue, other than oil royalties, rests really in liquor and gaming, and to some extent Nalcor Energy/NL Hydro.

It is quite easy to see why NL Hydro and Nalcor are still in government hands. Firstly, NL Hydro is not a money maker. Its primary function is to generate power - not retail it (where the money is). In other words, taxpayers pay for the generation of power, and NL Power (Fortis Corp) sell the power at retail prices while avoiding the costly problem of infrastructure to produce it. It's a win-win for NL Power, and a lose-lose for the average citizen.

Another industry which should be nationalized, or never privatized as it was, includes the insurance industry. The provincial government sees almost nothing of the car insurance, house insurance industry revenues that regenerate annually.

Telecommunications is another example. There is no provincial phone/cable company that could generate annualized revenue for provincial coffers.

Now all this may sound a little socialist in its undertones, but the bottom line is all the worth while wealth of the province has been transferred from the public's hands. That means there is not sufficient cash flow returning to the provincial coffers to adequately fund a modern quality of life. This becomes glaringly obvious when the one gravy train,oil, falls on its face. That is exactly where we are at today, and where we keep finding ourselves in the future. Structurally there can be no other result.

However, it isn't just the "little" people that get hurt in this cannibalistic economy. Small and medium sized businesses, municipal governments, non-governmental actors, and even the provincial government suffer as well. Eventually the loss of revenue from the local economy results in: less consumption of goods and services; higher government taxes; and uneven business cycles. That makes economic activity and necessary governmental wealth unstable and inadequate. And all that combined puts Newfoundland and Labrador's economic and social existence on thin ice - which in turn results in out migration, which in turn makes the core problems even worse.

Eventually all this must come to a head and fail. I believe we are almost at this point now. With an accumulated deficit now reaching almost 9 billion dollars, and structural budget deficits of at least a billion dollars a year for the foreseeable future, there is no answer for this province's nightmare. Raising taxes further will kill whatever consumption economy is left here, while failing to do so will kill governmental activity. Cutting civil service jobs may make governmental activity somewhat more efficient, but it will also severely damage the one "stable" economic driver for consumption. In short, the economic elites in the province have managed to paint all of us into the proverbial corner. There are no immediate solutions left. Nationalization of key industries like power, cable and insurance would provide some long term stability, but would require putting out money now that the province doesn't have. All in all it's a nightmare - a Newfoundland nightmare to be sure.  

Thursday, November 26, 2015

It's Hard Being a Liberal Right Now


Normally, when your party is close to an electoral victory, a party supporter is quite happy with the state of affairs. That doesn't apply to me this time around. Back in 2011 when I joined the Newfoundland and Labrador Liberal Party it was a much different place. Back then a Liberal was a Liberal, was a Liberal. There were no Tories in sight. In fact there were very few Liberals in sight. It was the core supporters of the Liberals that came to meetings or conventions. A small core.The party rested somewhere around 14% in the polls.

Yet, it had soul. The people gathered had purpose and spirit. They were 100% against things like Muskrat Falls and duplicitous PC conduct. That was a principled group of people in it for the good fight. Today things are much different. It really began when Yvonne Jones decided suddenly, just before the 2011 election, to bolt and rather quickly become involved in federal politics in Labrador. There were plenty of rumours she had been offered a pay off to leave, but they were just rumours.

Then, with approximately 15 minutes left in the filing deadline, Brian Tobin faithful Kevin Aylward jumped into the race and filled Jone's place as leader.That was the first indication things were taking a backroom turn. Shortly afterwords a $10,000 a plate dinner in Toronto was set up by Tobin for Aylward to raise election funds. Mining interests in Labrador figured prominently, and their pitch for Muskrat Falls became a shove. Thereafter, the Liberal fight to halt Muskrat Falls began to whither.

Fast forward to today. Dwight Ball is now the leader, and with him has come an exclusive-type of leadership that centers on a very small circle within the party. Many Liberals, especially old-time Liberals, aren't happy with being virtually shut out of the Liberals "new vision" and campaign. There are whispers. Plenty of whispers. So many in fact that it has become hard to distinguish between genuine complaints of autocratic leadership, and not so upstanding attacks from internal leadership hopefuls like Bennett and Antle. Now of course all that will be denied from the highest mount, but it has become very real.

Layered upon the internal dissent of eternally ambitious people, is the stealth election campaign. Ball is doing his damnedest to dance around all the minefields laying before him. He hasn't been upfront with the people on the real state of the province's finances, even though an economics student with no access could clearly see the mess ahead. Instead, he has chosen to place power over honesty. Sad when you consider the people are jettisoning the PCs from power for the very same reason.

Yes, it's a sad state when the Liberal Party here is merely imitating the departing PCs. It's sad to see people like Paul Lane, disgraced stacker and fixer of on-line polls and radio shows, leave the PCs for the Liberals. It's harder yet to see him embraced. After all, wasn't he the most savage of all PC members and defenders? And that's just the tip of the proverbial iceberg. It's painful to watch the lawyers and law firms jockey for place within the Liberal Party. Down to a man (and woman), the vultures are circling for the crumbs that are left of what was an oil inheritance for the people of the province - now squandered.

Finally, as if by some Shakespearean twist, it was very painful to watch Ball offer empty promises, at best, during the last televised leaders debate. It had the aura of the future surrounding it. It had the leap of faith, even though you know full well there is nothing to have faith in, kind of feel to it. It had the "I'm taking power and I have no earthly idea how I'm going to fix this mess" kind of feel to it. It was disingenuous, and insulting to the intelligence.

Whatever the electoral result is come November 30th, one thing is crystal clear - there will be no Trudeau moment. The promise of a more just society isn't even on the cue cards, let alone the heart. There is no promise of "sunny ways". Nope, none of that. Instead there are tightly gripped jaw bones, fake smiles, red jackets, etc. You get the idea. The provincial Liberal Party, as it stands today, is a disheartening imitation of the PC machine it has ambitions to replace. Discarded are the lessons of the PC downfall by those that are tripping over themselves to grasp at the empty cookie jar. Man, it's hard being a Liberal right now.  

Monday, November 16, 2015

The Tyranny of the Majority

It seems that Newfoundlanders and Labradorians are on the verge of breaking the old rule : "Insanity: doing the same thing over and over again and expecting different results - Albert Einstein". Over and over again people vote en mass for one party, get royally betrayed and disillusioned, swap colours, and do it all over again for the other side. Each time huge majorities are given to the winning side, while the opposing side sits with a rump of 3-5 MHAs. The old saying is that power corrupts, and absolute power corrupts absolutely. Yet, here we go again.

According to all the polls the Liberals have between 70-80% of the decided vote. What that means is 40 seats for the Liberals, 0 seats for the NDP and ditto for the PCs. When that happens the Liberals must pick, from among their members, MHAs to sit as Opposition. Imagine that. We are just coming out of one of the darkest periods in oppressive government here, and yet we are prepared to set ourselves up for another.

Some of my fellow bloggers have railed against the NDP for bringing this matter to the public attention as an issue to consider when voting. Terms such as "fear mongering" are being thrown out there. Yet, isn't it just plain common sense? Of course it is. It's also good political strategy. Many people here say we want an effective opposition - just not from my District. That's another hang over issue from the political culture of "road politics" that still pervades the province's mentality.

The truth is the NDP are really the only party well suited for Opposition today. Firstly, and most importantly, they aren't the PCs. PC party politicians have been responsible for fiascoes ranging from massive overspending that's left the treasury bust, to unresolved questions over the killing of injured worker (and injured worker advocate) Don Dunphy in his home on Easter Sunday at the hands of Premier Paul Davis's good friend and bodyguard Sgt Joe Smyth of the RNC. They brought us Bill 29. They disallowed any meaningful public scrutiny of Nalcor. They created a financial albatross on Muskrat Falls. Just this year they committed to borrowing $2 billion to have a budgetary deficit of $1 Billion. Yet, as we all know, those figures were based on $63 barrel for oil. It's now $20 less than that. The list goes on and on and on.

Strangely, perhaps, it was the PCs own unbelievable arrogance that finally brought them down. It blinded them from seeing what they were doing was wrong. It led to an assault on the government by a few bloggers, and some local activists on radio shows and social media. A switch in the national political scene brought the death nail as Trudeau's arrival as Liberal leader 2 years ago marked the moment the decline began in a hurry. There is a lesson in that for Dwight Ball. It wasn't anything he did that brought an end to the Tory Tyranny. It was a combination of a hearts and minds war conducted by a few on the ground, and a final coup de grace with a switch in national fortunes. He would do well to commit that to the forefront of his memory.

With the PCs ruled out as Opposition, by any measure of common sense,  the NDP ought to be the default go to party. They are in some ways ideally suited given their roots in social activism and claim to represent the "working man". The next many years, let's just say the foreseeable future, this province is going to see public service cuts, spending cuts, and unemployment that it has not seen in decades - at the least. Given the way the PCs spent, and committed future funds, there is no realistic alternative. It will be a blood bath. A social voice is needed in those circumstances in any case. So, the need for an effective Opposition and an effective social voice should cause the people of the Province to elect at least a rump of an NDP Opposition - although somewhere around 10 or so seats would be better. The odds of this happening are in the hands of the NDP, and to some extent the Liberals. Ball ought to be cautioning people against a 40 seat landslide. I know that sounds politically iffy, but it also sounds statesmanlike and mature. The NDP ought to be selling the need for an effective Opposition, and one that is not responsible for the financial disaster unfolding in the Province. It's a no-brainer, right? I guess we will see if Newfoundlanders and Labradorians have learned much from the last 10 years, or whether they enjoy the tyranny of the majority - the absolute majority.

Monday, November 9, 2015

New Facts on the death of Don Dunphy

The tragic death of Don Dunphy has haunted me now for seven months. Don was a close friend on social media, and his plight at the hands of the Workers Compensation Board hit close to home. As a disabled veteran I could have faced the same life-long struggle if it were not for the fact that my injuries were sustained while serving the country in the army. But for the Grace of God... as the saying goes. Many of you will know that I've campaigned long and hard to get the truth out about Don's death - whatever that may be.

To show support for Meghan, Don's daughter, and to serve the memory of Don, my wife and I recently attended the March for Don Dunphy in Mount Carmel - his hometown. Afterwards Meghan and family invited us in for some coffee and biscuits. We had a good talk about Don, and the circumstances surrounding his death that night. The words were spoken in confidence as the details were not yet public. However, national columnist Michael Harris just released a story on Don where some of those details were exposed (here), so silence on those points no longer serves any purpose.

Fact #1

Sgt Joe Smyth, the Premier's personal friend and bodyguard, and officer in charge of internet surveillance for the Royal Newfoundland Constabulary (RNC) at the time, was the officer that shot Don Dunphy to death.

Fact #2

Smyth was alone at the scene for one half hour before other police forces arrived, and found wondering aimlessly around the scene.

Fact #3

Smyth did not write a statement on the shooting until two days after the fact.

Fact #4

Meghan was not allowed to view her father's body until two days after his death.

Fact #5

Premier Paul Davis spoke with Smyth BEFORE the officer had written his statement on the events surround Don's death.

Fact #6

Don was shot numerous times, including at least one shot to the forehead. He died at the scene and his body was not removed until 4:00 a.m. the next day - or roughly 14 hours after he was killed.

These are some shocking, absolutely shocking details of Don's death and the subsequent process. The fact that Paul Davis, the Premier of the Province, and former serving RNC officer with Smyth, would speak to him on the phone prior to Smyth writing his statement is beyond the pale. Given the recent revelation that RNC Sgt Buckle counselled a fellow officer to lie (here) the question becomes: Is the RNC corrupted? Whether it is or not, and whether Davis counselled Smyth or not, the bottom line is he spoke to an officer who killed a man before his statement was written, and that is an outrageous breach. One that should cause his immediate resignation as Premier.

Also, and extremely disturbing, is the fact the officer had two days to give a written statement. Aside from the fact that many details can be forgotten in two days, which is why a statement is normally done immediately, the time lapse gives the officer time to create a story to match the events should he be so inclined.

On a human side, it was very disturbing to learn that Don's daughter could not see her father's body for two days. According to her, the police said she could not see the body due to the Coroner's instructions. When Megan finally contacted the Coroner he stated there was nothing holding her back from seeing her father's body. Anyone who has lost a loved one knows that seeing the person's body is a critical part of the process of coming to terms with their death. This basic right was denied to Meghan for days, which I can only imagine must have been pure hell for her.

Of course it is now semi-public knowledge that Sgt Smyth, after writing his statement, and then sending an email that he had "no regrets" to his fellow officers (which was subsequently leaked to the media) hustled off to Florida for a vacation. As disturbing as Don's death was, and remains, to us all, the details thus far released are nearly as disturbing. One thing is for certain though, Premier Paul Davis must immediately resign as Premier, PC leader, and MHA. He has committed an inexcusable act by speaking with his personal friend and officer on the killing of a man without that officer first writing a statement on the events. That is how the truth looks so far in the death of our friend Don Dunphy.

Saturday, October 31, 2015

Death of the PC Empire in Newfoundland and Labrador

In 2011, when I left the Newfoundland Conservatives, their reign was supreme. A well oiled, impenetrable machine. A dynasty in the making. There was no other, and no other was in sight. Their popularity in the polls was hovering around 75%. They controlled all but 4 seats in the House of Assembly. It was a closed shop, and they went to great pains to keep it that way.

Four years later things have changed - sort of. In 2011 the Province had the worst, most oppressive access to information law in the country. Serious dissent now runs like the wind. People have become engaged and are forcing the political agenda in many ways. The PC Party has not. It simply has become worse at the tactics it used to suppress opposition and change in the Province. The people's core values have shifted, while the Party's tools of control remained entrenched in lip-service and really bad acting.

Four years later the Province has gone through five, count them five PC Party leaders - that must be a Canadian political record. Nothing remains of their "all-star cast" of Ministers that dominated the headlines of the Province. All that remains are the "Omega and the Alpha" - the "End and the Beginning". Current Premier Davis is the "end', and Stephen Kent hopes to be the "beginning". That is to say that while those forces that hovered within the PC Party shuffle over to the Liberal Party ever so quietly, people like Kent remain to be the caretakers that rebuild the PC Party after its defeat.

Yet, throughout its death spiral, the PC Party has operated itself as it operated the government - without accountability. There have been no lessons learned, because there has been no accountability rendered. There is a reason for that. Avoiding accountability of any type for actions has dominated Newfoundland politics, and in some ways Newfoundland culture for some time. What remains obvious to anyone who has been anywhere else, but cloaked within the political culture on the Island, is the immature way politics plays itself out here. Some have referred to it as "high-school politics". Others have been less generous. Whatever the case, it is the nature of the politics here that allows for a party like the PCs to do what they have done.

Let's call it the "It wasn't Me" mentality. It is always some other person, or organization, or province, or country's fault - never our own. To even suggest it was our own is to invite calls of "traitor". That's why politics here is referred to as "high school" or "immature", because adults take responsibility for their actions. The accountability allows them to grow and not repeat the same mistakes over, and over, while blaming others for all their short comings. The failure to accept criticism and mature is the birthplace of systemic immaturity. That's what we have here. The PC Party wasn't some kind of one-off government of despots. It was merely the latest reincarnation of a political culture that has refused to grow. It lies in the face of this place's 500 year existence.

The PC Party has not been able to change, because it doesn't know any other game. PCs aren't stupid. They aren't unusually corrupt. They are a product of their environment. The latest example being Davis's blaming of future cuts on the Liberals impending political victory. Ditto for his warnings to the Province's business community. "They will cut your jobs" he tells the unions. "They will take your customers money, and cause you to fail" he tells the St. John's Board of Trade. The reality is the actions of the PCs in power has left any future government no choice but to cut spending and jobs. Yet, Davis is already playing the "it wasn't me" card, and the election isn't even started yet. He is in fact laying the ground work for the same immature politics to continue a new cycle.

What we have here is not a "failure to communicate". What we have is a failure to learn. A failure to accept that: with great power comes great responsibility; accountability and accepting responsibility are the key stones of personal and systemic growth; and that public office is a sacred trust on behalf of your citizens. We see these things played out on TV and the Province's three radio shows every day of the year. They take different forms, and they involve different issues, but they are all related to the problems outlined above. Many suggest the Liberals will repeat the cycle, and be no different in their approach than the PCs were. In fact I would say that is the dominant opinion among people. What people fail to realize is the accountability for that lays with them. If no accountability is demanded for failings as they happen, then none will be voluntarily accepted. Therein lies the key.

So, while the PC Party twists in its death throws, and the Liberals quietly organize to take their place at the helm of power, it remains to be seen if either the people or the politicians have learned anything from their four year trial of fire. Time will tell.

Thursday, October 22, 2015

The King is Dead. Long Live the King

The oil world as we have known it is dead.

As the established market price setter, OPEC has reigned supreme internationally since 1960. In that year Saudi Arabia, Iran, Iraq, Venezuela and Kuwait founded the organization - known as the "Founding Members". In 1973, US President Richard Nixon signed an agreement with Saudi Arabia that in exchange for US protection, and arms, the Saudis would accept only US dollars in oil transactions. The other OPEC members then followed suit. All was well in the Kingdom.

Things have changed for three primary reasons. Firstly, China has risen to the point where it is now the second largest consumer of oil in the world. Secondly, the US with its fracking policies has now become the largest producer of oil in the world. Thirdly, Russia has grown to challenge Saudi Arabia's production levels. Three monumental shifts. Essentially the shifts have on the one hand structurally reduced the value of oil, and on the other hand have changed the demand cycle for oil.

Between 1973 and 1980, the US produced roughly an equal amount of oil as that of Saudi Arabia. However, from 1980 to 2009 US production dropped dramatically until the fracking revolution again placed it near Saudi production. At the same time Russia dramatically grew its production of oil just after the collapse of the Soviet Union in the 1990's, to the point that Russia shares top spot with the US, and Saudi.  

Then there were wars. The US and Saudi Arabia covertly and overtly attempted to either control or destroy the oil capabilities of Iran, Iraq and Venezuela (three of OPEC's founding members) by way of military force or revolution. For the most part these actions were successful to one degree or another. However, now all three have gravitated toward Russia and China for their economic well being. In a sense, this is another monumental shift to add to the three above.

That brings us to today. Russia and China have moved to eliminate the US as the controller of world-wide oil wealth. They have created a Eurasian trading community that speaks to the production of oil, and perhaps more importantly the consumption of oil.

In 2015, Russia and China began signing oil supply and purchase agreements that required transactions to be conducted in local currencies - not US dollars. That had the effect of increasing oil production and trading among the Eurasian bloc of countries. It excluded the US, but also Saudi Arabia, from oil market influence. For example, Russia signed agreements with Venezuela to swap Venezuelan oil for Russian consumer goods - not much different than the old Soviet model of international trading. China signed oil supply agreements with Iran. And so it goes.

That left the old King of OPEC, Saudi Arabia, out in the cold. In an attempt to restore its position Saudi Arabia increased production, along with the Americans, The resulting massive price per barrel decline had the effect of driving many countries into recession and/or hyperinflation (Venezuela). But, and it's a big but, the move failed in its objective. The Eurasian community, and its allies, simply turned inward and compensated each other by trading in their own currencies and products.

Hence the recent visits by Saudi royalty to Russia. On the face of it, Saudi is looking for Russian cooperation in Syria - ie: a departure of Russia from the Syria conflict. However, the real reason for the sudden Saudi diplomacy toward Russia is peace overtures in an oil war they have lost. Saudi is now a lonely supplier of oil running out of markets. Worse for them, the US now no longer needs them for supply and or control of OPEC. The new OPEC is in Eurasia. Specifically Russia.

What all this means for the world of oil is that the cartel days are over. The US stands alone as an oil force. Eurasia and allies stand alone as an oil force. Saudi stands alone with Kuwait and Qatar. It means that world oil prices will now be permanently depressed - likely well below where they rest today. It means an end to the boom of the expensive oil exploration and trade that fueled petro economies around the world - my own included. It's a new reality. Oil is no longer King, and it is no longer exclusive. So, while OPEC is dead, a new oil King has been anointed. That King without any doubt whatsoever is Eurasia.  

Tuesday, October 20, 2015

Canada's New Camelot

Justin Trudeau is the new Prime Minister of Canada - "designate" until official on November 4, 2015. He came to power on an upset, come from way behind wind for one reason - he promised to run deficits to make Canada more the Canada it once was. NDP leader Mulcair refused to permit a deficit in his campaign. By mid-September the NDP base, and soft support became quite agitated by his stand, and by September 29th the NDP's nose dive began. Mulcair was in essence out NDP'd by Trudeau, and people decided to vote for the "new NDP".

Trudeau's acceptance speech used colourful phrases like "hope", "positive change", and "sunny ways" which eerily echoed the dying days of much loved NDP leader Jack Layton. Strange days indeed. Be that as it may, Trudeau is being framed in a John F Kennedy - like light. Young, brash good looking, beautiful wife, beautiful children, even Catholic, and most of all "all things can be better in Canada". The question remains: "Can Trudeau be the JFK of Canada that the press is already framing him as?", although he is certainly laying that ground work himself. The young man who defeated the Nixon-like Prime Minister Harper.

He certainly has the personal capacity to be so. Wealthy, good looking, charming, and surrounded by a young and beautiful family. No question all those parts are there. He even has the spirit of his father over his shoulder. Pierre Trudeau remains a legendary personality in politics here - even in death (perhaps more so in death). The young man who grew up at 24 Sussex while his father Pierre made headlines at home and abroad as Canada's "happening PM", now returns to those hallowed halls where his own children will spend at least 4 if not 8-10 years growing up as he reigns over the country. The ghostly hand of Shakespeare could hardly pen a more expectant scene.

But, there remain major pitfalls for the young leader that he will have to wisely avoid in order to not meet that all to common tragic Shakespearean fate. The first is himself. It seems clear that statesmanship, or leader-like maturity, may be lacking. Flippant remarks that he will "tell Putin face-to-face " that he ought to but out of Ukraine. It's just an example of massively over playing your hand, and making yourself look foolish in the process. That type of bravado must be absolutely avoided at all costs in the future. Being a Prime Minister is serious business, not boxing in a ring.

Secondly, the people around him. Trudeau has made very public signs that he will delegate "deciding" to his ministers. Coincidentally, no doubt, the same leadership style his father championed - which is by the way our system of ministerial responsibility is meant to be conducted. He has for instance a number of military veterans in his caucus that can be Minister of Veterans Affairs. The retired General is the most high profile, and assigning him to the post would show his seriousness of addressing the veterans issues he promised to during the campaign. A serious stumble with veterans can be deathly - ask Mr. Harper.

Another potential problem for Mr. Trudeau is avoiding the hard line, ideologists in his party. One such person, who has had a high profile ride is Chrystia Freeland. A right wing, or "blue Liberal", Freeland goes way over board in her criticism of Russia - particularly in regard to Ukraine. Her vitriol borders on extremism. It is the kind of behavior that appeals to the Conservative base, but alienates and annoys average Canadians. Mr. Harper had a number of those in his caucus, and he paid for it dearly.

Finally, Trudeau has to get the cash from somewhere to pay for the promises he made during the campaign. No doubt he may look to the past and appoint Saskatchewan's Ralph Goodale to Finance Minister. That would make sense. A "Flaherty-like" character, Goodale would provide stability and comfort for the average Canadian. BUT, if the thought of increasing the GST back to 7% crosses the minds of Trudeau's brain trust - beware. At a time of recession, diminishing markets, etc, Canadians will be reluctant to take such a hike - especially in the "alienated" West. That could give rise to "another Trudeau is screwing us" and all that entails.

While Justin Trudeau aims to be the next JFK, knowingly or not, Camelot is a very hard thing to achieve and keep. JFK never had social media and 24/7 news to deal with. It was a different era in human history. Attempting to paint a modern Western country with that brush is possible, but fraught with complications. In any case, all the best to Mr. Trudeau and the Liberal Party as they attempt to return Canada back to the future, where most Canadians would like to be.  

Tuesday, October 13, 2015

Kurdish Roulette

Once again the Kurds find themselves in the middle of things. Back during the first Operation Desert Storm vs Iraq, the Kurds of Northern Iraq rebelled against Hussein and fought with the allies. There were promises made to the Turks that the allies would protect them, and guarantee their autonomy -  in Northern Iraq only. The US imposed a "no-fly-zone" on the airspace above the Kurds for awhile after the war, but, and it's a big but, they abandoned the Kurds on the ground. Hussein took the opportunity to exact severe revenge. In Desert Storm 2, and with Hussein defeated, the US established a state of autonomy for the Kurds in Northern Iraq. Turkey was unimpressed.

To understand Turkey's almost hatred of the Kurds it's necessary to understand that the Kurds claim the southern, mountainous region of Turkey as a part of their homeland. That home also includes Northern Iraq and North Eastern Syria. In other words, they are in the middle of it. Here is a picture of their "homeland":

From their autonomous area in Northern Iraq the Kurds have moved west, and into Syria. Ostensibly they are fighting President Assad of Syria, along with several radical Islamist groups. In reality they engaged an overly ambitious ISIS army that attempted to conquer their Iraq territory - until the US air force put an end to it. Now the Kurds fight with those same ISIS formations to overthrow Assad. But is their goal to overthrow Assad, or is it more like carving  North East Syria up, and adding it to their "historic homeland"? I suggest the latter to be true.

Turkey seems to understand this ambition extremely well. It has fought a decades old guerrilla-type war against the Kurds to keep its territory intact. Now, with the Kurds again working with the allies to topple another middle eastern head of state, Turkey has become very alarmed. So much so that today it released the following statement:

"The PYD (Kurds) has been getting closer with both the United States and Russia of late. We view the PYD as a terrorist group and we want all countries to consider the consequences of their cooperation."

In other words, the Kurds are an enemy of the state of Turkey, and cooperation/legitimization of their interests will be considered an act of war by Turkey. Now some may say that is reading into it too much, but consider the US response - the withdrawal of all Patriot missile systems from Turkey today. Those systems were meant to safeguard turkey from Syrian aircraft, but they also kept the peace (relatively) between Syria and Turkey during the 5 year old conflict. Now there is no such buffer. In another development today, it was reported Turkish forces, equipped with armor and bulldozers, entered Northern Syria. Right where the Kurds are. You get the idea. Turkey is putting its national interests first, which are defensive in nature, before those of its allies or adversaries - economic and otherwise.

Meanwhile, the Russians are faced with a predicament. On the one hand they have no beef with the Kurds, and perhaps even see the Kurds as being useful in the interim to fight other Islamic groups in Syria. Perhaps they have even done a quiet handshake deal with the Kurds to look after them with some territory in Syria if the Kurds play ball in saving Assad. That wouldn't be too surprising. The problem is that to keep that promise would mean going to war with Turkey - the 4th largest military in the world. All very complicated and messy. That means the Kurds become expendable at the right time, and there is all smiles around the table of great powers within the region.

That in a nutshell has been the nature of the Kurds dilemma for along time - too small a player swimming against a tide of geo-political interests that only match theirs on a temporary basis. Each time their young people lay down their lives in this or that conflict, with the ever lasting hope that a great power will deliver them their complete homeland as compensation, they get betrayed. The nature of the game known as Kurdish Roulette.

Tuesday, October 6, 2015

Danny Williams Harper Attack - Hello Kettle

Danny Williams is a man who just has no shame whatsoever. None. His recent attack on Prime Minister Harper was nothing less than character assassination. Nation-wide, public character assassination. Now for those that don't know, Williams is known for taking people to court for defamation when he feels the least bit incensed about comments regarding his actions that are less than flattering. He's even sued people for comments that were not directly made about him personally, but at society's elites in general - that includes our provincial newspaper at the present.

Nope, Williams has no shame. He accused Harper of being anti-democratic. That may well be true in a sense, but this is coming from Danny Williams, a man commonly referred to as being a "bully" during his terms as premier. A man who: attacked a local mayor for speaking out against his government; ejected a lady from a provincial advisory board for a joke she made regarding the size of his penis; threatened unions when his son was beat up downtown; and so it goes. Williams reputation was that of tyrant, albeit mostly loved tyrant due to fast flowing oil money. Under his government the legislature became a rubber-stamp committee, and any MHA that dared challenge or question his wisdom was gone (2 are now Conservative Senators). Under his government the worst access to information law in the country was used to deny, deny, deny information. A man who kept individual colour coded files on reporters in the province, and assailed radio hosts on live provincial radio.

Yep, Williams was no statesman as he now pretends to be. He was an absolute control freak, not unlike what Harper gets accused of. Yet, in the Emperor has no clothes style, Williams struck out at Harper for being divisive, manipulating unrest in Quebec and the rest of the country, and using a divide and conquer approach to politics. Pardon me? This from the man who loved to, no thrived on berating Quebec and using the tools of division as if they were child's candy. Check this video or this one just to get a taste of how Danny Williams loved to divide Canadians for his own agenda.Then there was the lowering of Canada's flag at all provincial government buildings when he couldn't get his own way on the Atlantic Accord.

Perhaps the ugliest of sins that Williams accuses Harper of, racism, can in fact be found on his own doorstep. Williams often used the term "true Newfoundlander" in his many public commentaries. It begs the question: what is a "true Newfoundlander". Is that some kind of coded racist language in itself? Is there a "false Newfoundlander"? Is it a shot at new arrivals to Newfoundland often referred to as "come from aways" or "mainlanders". Are they not true Newfoundlanders? Is this racism in the form of provincial nationalism? It sure sounds and looks that way.

The truth about Danny Williams sanctimonious interview on the CBC regarding Harper is that almost all, if not all, the allegations he made against the Prime Minister could just as easily be made against him. He calls Harper a nasty man, and that may be true and it may not, but one thing is for certain, Williams is known to carry a grudge and to be outright "spitey" as we say on the Island. No further evidence needed than his tirade against Harper even though the Conservatives stand to win not a seat in Newfoundland and Labrador. Yep, it's just a character assassination from afar, sent with love, from a man who knows no sin.

Friday, June 5, 2015

The Corruption Culture in Newfoundland's Politics.

I've been writing on the corruption within Newfoundland's governing circles for years. In fact, I did a series on potentially corrupt practices by Ministers of this government, and its predecessors in a multi-part series on this blog called "All the King's Men". I've exposed the fact that Ben Aissa, convicted and disgraced SNC Lavalin VP, was appointed to a SNC numbered corporation here in Newfoundland during 2007-2008 (during the period SNC was pushing a large LNG project and a refinery to be located in Placentia area), and which mysteriously was dissolved at the end of 2008 when both projects failed. That blog is here.

I've written on a scheme that paid the Innu people $5,000.00 per person days after they voted for the Muskrat Falls project to proceed. That link is here. I wrote on the Innu cabinet minister that figured prominently in that deal, and was then turfed from office over illegal campaign donations - mostly from Muskrat Falls contractors, or those associated with the iron ore mining industry that would directly benefit from Muskrat Falls. His campaign manager was just charged by Elections Canada over the issue. That story was here and here and here.

I've written on the Muskrat Falls contractors who've donated directly to PC Party and its MHAs, including corruptly disgraced SNC Lavalin here. I've even written on the law firms, primarily in Quebec, that have donated to the PCs and received millions from Nalcor and the government in fees over the Muskrat Falls project here.

Over and over again the same patterns appear. Over and over again they repeat themselves. The corruption culture in Newfoundland is beyond the pale. The latest scandal over Muskrat Falls is the realization that Nalcor hired a construction firm out of Quebec, whose owner has admitted to paying  off government officials for contracts with bags of money and free holidays. (here). Now, this morning, in an attempt to turn the channel quickly, Premier Davis is offering up a cancellation in the HST hike because oil is "high". Peculiar given oil rests at $65 a barrel, down from $110 just a year ago... strange for a government that relies on oil for 33% of its annual budget.

Truth is this government and Nalcor will do anything to suppress information, real information, on Muskrat Falls. It is absolutely submersed in corruption and more likely than not influence peddling. It's not a coincidence that firms like SNC Lavalin, Genivar, and now the latest Opron have ended up on the Muskrats Falls payroll. The payroll of Nalcor. All Quebec construction firms. All implicated in corrupt practices. Not "best practices", the term Nalcor likes to throw around like candy to justify its business dealings.

Indeed, corruption permeates our political system here. It is endemic. You scratch my back and I'll scratch yours. It's "just the way it's always been done". In fact, it is a disgraceful indictment of a culture that needs to suffer an immediate and inglorious death. It reflects negatively on all Newfoundlanders and Labradorians. Why? Because it has been allowed to go on for generations with not much more than a wink and a nod. This isn't the first corrupt government here. It's just the latest. The next government, and there will be a next government, best realize that the culture of corruption is detested and disgraced world-wide. We are no different.  

Monday, May 18, 2015

ISIS - Frankenstein or Bait?

ISIS, the Sunni Islamic militant force, is the birth child of a marriage between Saudi Arabia's regional ambition and the United States' geo-strategic interests. It's really that simple. It's ramifications are not quite so simple.

The Americans have always been aware that having Sunnis in charge of a country keeps the lid on things - to their benefit. It's been an ongoing theme now for almost 80 years. Saudi Arabia is the "world headquarters" for the Sunni sect. It has the strategic alliance with the US. It has the money because of that alliance, and it uses the money to arm itself and its Sunni allies. The same is true for Iran - with the exception of who is in charge since the Shah of Iran was overthrown in the late 1990's. There is a common thread throughout this history. It cannot seriously be denied. It's obvious. The United States lies behind Saudi Arabia, and American controlled Sunni governments are kept in power to preserve that alliance.

In recent times, there are two classic examples of Sunni leaders that were brought down by US military power at the behest of Saudi Arabia - Muammar Gaddafi and Saddam Hussein. Both challenged Saudi Arabia's control of the Middle East, and both were overthrown with the decisive assistance, or actual military intervention of the US. Each publicly stated the US would never overthrow them, because to do so would mean Al Qaeda would take over. Both were wrong. It begs the question, why were both so convinced that the US would not overthrow them and let Al Qaeda, a Sunni militant movement, take over?

The answer lies in US "strategic interests", not just in the Middle East, but beyond. ISIS, the new version of Al Qaeda, is challenging for control of Iraq, Syria, and Yemen. In Yemen, ISIS is fighting the Shia Houthi, who have overthrown the Saudi-supported Sunni leader there. In Iraq and Syria, ISIS is aiming for full control of both countries, and the overthrow of their Shia leadership. ISIS is even attempting to destabilize Hezbollah (Shia) in Lebanon, and challenge Sunni Hamas over control in the Gaza strip. In effect and reality, ISIS is the foreign legion of Saudi Arabia and therefore the US.

Now, people will say that ISIS is a threat to the West. That simply is not true. ISIS is a threat to Shia governments in the Middle East, and too-moderate Sunni governments, but has no chance of harming Western civilization. Some will sight the deaths in Canada and Europe at the hands of ISIS as proof that our civilization is under threat, and draconian laws are necessary to stop them. That simply is not true. In fact, all ISIS did was activate two people, in the case of France three, to conduct targeted hits in Western countries that caused fury - but no national damage. It was not there, then it was there, and now it is not. A bogey man so too speak. Enough of a scare that people would get behind their military intervening in Syria, Iraq and Yemen. Not enough to do any sort of damage whatsoever to the security of these Western countries. A slight of hand if you will.

It challenges the mind to think that the combined air might of Western countries could not reduce ISIS in Syria and Iraq into dust within a few weeks at most. It did so when ISIS went rogue and tried to take Iraqi Kurdistan in Iraq's north. ISIS was almost immediately stopped dead in its tracks. Of course, the Kurdish lands in northern Iraq have become almost a US protectorate - and US oil company haven. But, in the rest of Iraq, it seems the air campaign has almost no effect on ISIS operations.

Now, just yesterday the major Iraqi city of Ramadi has fallen to ISIS. And, today, thousands of Shia militia men are gathering to try and take it back. Ramadi is important for several reasons. Firstly, it is very close to Baghdad and provides a major base of operations for ISIS to attack Baghdad itself. Secondly, it is a major psychological blow to Iraq's Shia government and its people. Thirdly, and perhaps most importantly, it is a direct threat to Iran. It is a threat that Iran will no longer be able to ignore. Hence, Iran's Minister of Defence arrived in Baghdad today for "talks". Iran's allies in Yemen, Lebanon, Syria, and now Iraq are being seriously threatened by ISIS, on behalf of Saudi Arabia, on behalf of the US. Its back is now close to being up against the wall. If it fails to militarily intervene in Iraq decisively, and early enough, it risks having the ISIS hordes on its own border. If it does intervene now it risks a counter military intervention by Saudi Arabia in Iraq. It's all in the calculation. Unfortunately for the world, it appears now the calculations are pointing toward war with Iraq being the primary battleground.

So, is ISIS a Frankenstein created by Saudi Arabia, out of control, and allowed by the US, or is it bait to lure Iran into a decisive war and its ultimate defeat. One thing is certain, it's not both. ISIS is not a Frankenstein that once created has left the control of its master, and is rampaging across the Middle East out of control. No. ISIS is a tool to undermine Shia influence in the Middle East. To destroy it. To establish once and for all that Sunnis are to dominate power over all the Middle East, and especially the Shia. It's an ancient battle of the two Islamic sects. Each considers the other heretics. Each believes heretics must die. ISIS is a weapon. A weapon of mass destruction. An invitation to much greater mass destruction on a regional level, and then perhaps a global level. ISIS is bait to lure Iran into war, and then presumably Russia, China, India, etc. ISIS is also a weapon to lure the US into a war against Iran in the "defence" of Saudi Arabia. It's a playbook if you will for a world war.  ISIS is a weapon in the hands of men that don't want peace or stability in the world. In that way, ISIS is a menace to all of us.


Sunday, May 10, 2015

Nalcor Exposed

What's the old saying...people lie, the evidence doesn't? Welcome to the world of Nalcor, our illustrious provincially-owned energy company. And, the truth, or the evidence if you will, isn't pretty. If you want to glimpse that evidence yourself you can see it here in Nalcor's Report.

Here's the bottom-line:

1.  Nalcor is in default of the Federal Loan Guarantee;
2.  Nalcor's corporate debt is now over $10 billion;
3.  Nalcor already owes Emera over $300 million in power sales;
4.  Nalcor can't be sold/privatized for at least 38 years; and
5.  Nalcor can't build Gull Island for at least 38 years.

All these things might come as a shock to you, but in this post I'll detail the evidence.

First, Nalcor is in default of the Federal Loan Guarantee (FLG), and in a big way. The FLG requires that Nalcor have established "at all times" a Debt Reserve Fund (commonly known as "sinking funds") to, at "a minimum" cover interest payments for six months on its borrowings for the Muskrat Falls dam and transmission system, the Labrador/Island sub-sea cable link and the Maritime Link. As of December 31, 2014, or a few months ago, Nalcor had zero dollars in any sinking fund for the money borrowed to fund any of these projects. In fact, Nalcor has borrowed the full maximum $5 billion authorized by the FLG to fund the projects, and did so in 2013. So, in fact, Nalcor has been in default of the FLG for almost two years.

 Nalcor's long term debt now stands at $6,248,900,000. That's up from $1,222,200,000 at the beginning of 2013. Nalcor's total liabilities, as of December 31, 2014 stood at a mind-numbing $10.6 billion. $1.5 billion of that is money the Government has directly invested in Nalcor from the general revenue of the Province. $6.2 billion is long term debt. The rest is deferred payments, power/money owed to Emera on account of the Maritime Link, and so on. To cover all these liabilities, especially the long-term debt, we have sinking funds totaling  $267 million. Now, picture this, Nalcor actually withdrew $126.5 million from its sinking funds in 2014. In other words, Nalcor took money from its own funds dedicated to repaying its debt...instead of adding to it. In a further note, Nalcor has decided to refinance, rather than pay off, $425 million of Hydro's long-term debt when it comes due shortly.

Adding to Nalcor's debt problems is the ongoing commitment to Emera for the Maritime Link. Contrary to what many people may think, that 20% of "free" power to Emera has already kicked in. Nalcor is showing that as of December 31, 2014, it owed Emera $330 million dollars for "deferred energy sales", which means Nalcor owes Emera $330 million worth of power from the date the Maritime Link began construction - which means Emera is collecting that 20% in advance - even during construction. At that pace, Nalcor will owe Emera somewhere near $1 billion in free power by the time the power is switched on at Muskrat Falls. Which, of course, means Nalcor will have to dedicate the Maritime Link to solely giving free power to Emera for several years just to pay off the "banked up" "deferred power sales" it owes Emera on completion of the project.

In another strange, and definitely not publicized twist, Nalcor will not be able to build Gull Island for at least 35 years. The FLG states:

"4.8A Additional Debt: No additional debt may be incurred by the Borrowers during the term of the FLG (other than a $10 million line of credit, and additional debt to finish Muskrat Falls, the Island link, and the Maritime Link)

The there is the stipulation that Nalcor can not be sold during the term of the FLG:

"4.11 Change of Control:   ...There shall be no sale or change of control of Nalcor."

In other words, the taxpayers will remain on the hook for all Nalcor's debt until at least the end of the FLG - which is 38 years from now. No option. Stuck.

Combine all these financial facts on Nalcor with the state of our provincial finances, and it's evident this Province is financially...doomed. The gross provincial debt is now over $13 billion, and the government is projecting $5 billion more in borrowing over the next five years. That $5 billion is on the low side unless the government chops about 20-25% of its annual expenses - which is almost impossible in the near term. Impossible because those kind of cuts would take the Province from its current recession into a depression. With 30% of pay cheques in Newfoundland and Labrador being issued by the government, well, it's kind of obvious the impact those cuts would have.

Unfortunately, if Muskrat Falls is allowed to continue and the government remains on its current spending levels (or even close to them) this place is doomed to financial collapse in the not too distant future. It's simple math. All of this is of course predicated on Muskrat Falls coming in on budget and time. Should those two come off the rails, and many knowledgeable people have argued that has already happened, then that collapse is coming even sooner. Either way, it's coming. Look to 2016, after the provincial election, and the first budget to see just how bad it will be. Nalcor, like its birth parent, has acted in such a way as to sacrifice the economic well being of the Province and its people. Irresponsible, unaccountable, gross negligence.  

Wednesday, May 6, 2015

The People's Turn in Canada

Tuesday night was the revenge of the average person in Alberta. A modern day political slaughter that saw the now former Premier resign both his seat and his leadership before all the votes were counted in his riding. A "socialist" NDP government swept out the corporate-obedient PC's leaving just two "conservative" governments in all the provinces of Canada - Saskatchewan and in name only Newfoundland and Labrador. The casualties are obvious, as is the trend, but what's behind it all. That is the question.

The first factor is alienation. Voter alienation. People alienation. The Conservative agenda, of no deficits run government as if it were a business, trace back to the early nineties and Preston Manning's Reform Party movement - coincidentally also born in Alberta. Prior to that, deficits were a matter of fact in Canadian politics, and social programs were one of the key things that we defined ourselves by. How we look after each other and the less fortunate in society. Paul Martin took the idea of running the country like a business, rather than as a country, to the federal scene. He chopped and chopped until the provinces were forced to do the same, and before we new it we had "business-government". People began to view this new way of things as responsible. They equated it to their own lives and their own finances. Before we knew it we had not just "business-politics", but also "business-families". The promise was that if we followed this path that our country and our lives would reach some sort of Utopian balance.

Unfortunately, to quote some nefarious politicians from here, "nothing could be further from the truth". After 25 years of the "Manning doctrine" the finances of the country are no better than they were. Our household problems and family issues have not improved. What we've really become is a country preoccupied with survival and cold at heart when it comes to our own. We have become "rationalizers" rather than "visionary". There is no more advancement toward a just society, but rather a down ward spiral of the dog eat dog society that is so prevalent in our neighbor to the south. A cold place, with a machine-like existence, and no purpose other than achieving some elusive economic paradise. 

That's ending in Canada though. The idea that our only worth as a country is to be measured by deficit or surplus each year is slowly uncoupling. Harper kind of gets this. His platform for re-election this year is dishing financial breaks to two specific groups - the so-called rich and the so-called middle class. He's targeting their desire to have more income, as if that could somehow improve their personal happiness, in an attempt to tempt people to achieving that "elusive economic paradise". He's trying to prove that the Manning doctrine is working, and that the country is really to be measured by its bottom line rather than its values. It's a formula that has been successful up to now since the dog days of Preston Manning. But, those days are coming to a quick end.

The PC's loss in Alberta was not about the decline in oil prices. The truth is the PC's have been falling in voter support in Alberta since Ralph Kline left. He was popular because he represented the bold, brash, free spirit of the Alberta people. The ones that followed merely tried to maintain a political system for the corporate elites in Alberta, while virtually ignoring the wishes of their own people. Until last night, Alberta dared not cross the Rubicon. It dared not fire the maintainers. Now the seal has been broken, and the "unthinkable" has happened. It happened in the last federal election in Quebec as well. The "anti-business", "pro-people" party, the NDP, created a wave. The Orange Wave or the Orange Crush - which ever you prefer. 

Why? Because people are sick of being treated as widgets. It's that simple. Sick of being measured by the dollar. Sick of seeing the sick and downtrodden marginalized as if they were more burden than their relative economic worth. Sick of being treated as a commodity. Sick of having their hopes for the future superficially addressed. The list goes on, but essentially, people are sick of insincere people treating them like means to an end. By rationalizing our society to an economic standard we have rationalized our humanness in kind. It is this fundamental fact that has resulted in Orange Waves. It's not that the NDP are somehow the in thing. It's that the other parties have been type-cast as purveyors of the status quo. Interchangeable. Indistinguishable. Preston Manning clones that people have become sick of. 

Will that people's revolt happen this year in our province's election? You can take that to the bank - pardon the pun. Will it be the Liberals, who now lead the polls, that take the government? That's still not a guaranteed thing. The PCs falling is, but their replacement isn't. A great deal of that depends on how the Liberals conduct themselves as the "people's party". Will they be believable as champions of the people rather than champions of the business elite? Right now that is very questionable. Very questionable in deed. Will the NDP rebound, catch momentum, and become those champions of the average person? That's still to be determined too. One thing seems certain from last night - Harper's/Manning's view of Canada is under attack, and the PM should be seeing the Alberta victory for what it is - the People's turn.

Friday, May 1, 2015

I'm Sorry Russia

There is something very wrong, and possibly very evil going on in our world today. Aside from all the conflicts spawned by greed and the desire to control in our world, there is some all too real revisionist history happening. When people, let alone governments, try to recreate history it's an ominous sign. A sign of hatred. Of deep hatred. That's what is happening right now in our world when it comes to the Russian (then Soviet) victory over Germany in World War Two.

The Soviet Union suffered 25 million killed in World War Two. By comparison, the other allied countries suffered:

United kingdom           450,900
United States                418,500
India                         2, 087,000
China                       15,000,000
Poland                       5,700,000
Yugoslavia                1,363,500
Dutch East Indies      3,500,000

and there are many more.

The Soviet Red Army suffered the most military deaths of any nation in World War Two at 9,750,000. Almost twice as many as the nearest country, its enemy, Germany. The Soviet people, comprised today of Russia, Georgia, Ukraine, and Belarus bled the German army white. Of all the German military deaths of World War Two, 2,742,909 were caused by the Soviet army on the Eastern Front. By way of comparison, only 534,683 were killed by all other allies put together on all other fronts. In this way it's clear to see that the vast majority of the German armed forces were wiped out by the Soviets between 1941-1945. For that sacrifice the world owes the old Soviet Union, or Russia, Ukraine, Georgia and Belarus our undying gratitude. No question. To believe otherwise is to disrespect the sacrifice of a generation.

However, that seems to be all the rage these days in the West. And, I'm having a very hard time with that. There are a few reasons. First off, we owe the families, mostly Russian, our eternal respect for the generations of young men and women lost. The families broken to bits. The loves lost. The communities, towns, cities destroyed. They took the steel punch of German Nazism for the rest of us. We set foot back in Normandy when the German army was essentially already defeated. Secondly, to white wash the heroic struggle of the Russian people is to invite a repetition of the same savage crime. We preach this constantly with the Holocaust - rightly so. However, it's as if the greater sacrifice of Russia is somehow less and open to some sort of political interpretation. Lastly, it speaks to who we are, not who they are. It says we are so superficial, so petulant, that we can allow such a sacrifice to be degraded to suit our present political needs or wants.

That leads me to the Victory Day celebrations and parade in Moscow in about a week from now. Countries like my own (Canada), Britain, the US, etc are boycotting the celebrations and parade marking the 70th anniversary of the Soviet defeat of Germany. As a son of a vet who fought in that war against the Nazis I find this new Western revisionism very hard to swallow. As a retired infantry vet myself I am ashamed by it. The disrespect is unconscionable. It is dark and it is evil. It goes against everything I believe in and hold as dear. The West should hold its head in collective shame. Not just the leadership, but also the people. It's a disgrace. I'm writing this post just to let the Russian people know that not everyone agrees with this slight. Not everyone sees sacrifice through the lens of political expediency. That the sacrifice of your people is recognized and honoured by anyone with any education and knowledge of history - even though it was just a short while ago. Mostly, I just wanted to say: "I'm sorry Russia".

Thursday, April 30, 2015

NL Budget 2015 - Practiced at the Art of Deception

There are two words that come to mind after reading budgetary estimates for 2015 in this province: election; and deception. Actually there is a third - tragic. For starters, the biggest bomb of all is that our actual budget deficit for 2015 is $2,092,867 billion. Not the $900 plus million that's being thrown about in the media. Here's how it breaks down:

Total revenue for 2015 is projected to be:                      $ 5,757,328 billion

Current Account Expenditures for 2015:                    -  $ 6,659,952 billion
Capital Account Expenditures for 2015:                     -  $ 1,143,743 billion

Need to borrow for 2015:                                               $ 2,092,867 billion

Now the politicians are saying that capital spending is not a part of the deficit, but the fact is that it is. The University of Calgary just issued its report stating they saw the deficit coming in at $1.8 billion, so they were actually a little light. The government here likes to deceive people by saying this or that isn't included. Like, for instance former premier and finance minister Marshall's statement that the money allocated to Natural Resources, and then reallocated to Nalcor each year for the last three years does not contribute to the deficit. Yet, his estimates each year clearly show the transfer from the General Revenue Fund to the Department of Natural Resources. That number factors into the expenditures of the department. That is how it's accounted for.

The truth, according to the government's own budget estimates is that fiscal 2014 saw a cash shortfall of  $ 1,051,798 billion. In other words, the total amount needed to borrow for last year, and this year is approximately $3.2 billion - which will go directly to our gross debt.

Speaking of gross debt, that is the total money we owe and are making debt payments on, 2015 will see it rise to $13, 889 billion. In 2003, before the oil money really started rolling in, that number was $8,932 billion. This year we will pay just over $770 million in interest charges/debt expenses. In 2003 that number was $520 million. Revenue this year is projected to be $5.7 billion. In 2003 it was $3.7 billion. The total budget expenses in 2015 is projected to be $8.2 billion. In 2003 it was 3.6 billion. So, in other words, after 12 years of oil, and over $20 billion of oil revenue brought in, we are spending over 200% more annually to run the affairs of the province,with revenue that has only increased 65%. That's shocking. That's catastrophic financially. It's called structural deficits with huge debt accumulations.

It's no wonder that Standard and Poors warned the provincial government last year to shed the weight of the public pension plans or face a credit downgrade. They knew the government was heading into massive deficit, therefore added debt, and in order to keep that rating we had to cut the pensions loose.  Still, you can expect a credit downgrade imminently at this rate.

Now to the politics. The utter sleazy politics of deceiving your own people to further your political hopes. The PCs have scheduled an HST increase of 2% effective January 1, 2016, or about two months after the next election. They've pledged not to replace 20% of the public service as it retires over the next 5 years... the next five years. They've committed to an all day kindergarten starting in 2016..2016. In other words, none of the big hits or programs start until AFTER the next election. That way, the PCs are serving a budget up they hope won't immediately affect the pocket books of voters - ie: re-election. The horrific truth is that no matter what government is elected in November, 2015, a financial disaster never seen in modern time Newfoundland and Labrador awaits. The Liberals have already said they will cancel the increase on election, but can they?

2016 will not be much better, and likely much worse for the province's finances and economy. We are on the cusp of a provincial recession as it is. Almost 30% of all employees in the province work for the provincial government. They likely compromise about 80% of the higher incomes here. Keep in mind that 30% of residents here are too poor to pay any income tax. The PC's have said the government will have to borrow $5 billion over the next 5 years. That's just an outright lie. Just for starters, the federal loan guarantee is only now starting to kick in for Muskrat Falls. That loan requirement is at least $5 billion, and many experts suggest it could reach $8 billion in additional borrowing beyond the $2.6 billion the province has invested in cash. In fact, the federal loan guarantee won't kick in until at least 35% of the total project cost is paid in cash by the province. That $5-* billion has to be paid within 2 years for the 2017 first power date to be met. Then there is the minimum $750 million investment in Hebron which must be paid upfront. And so it goes. Considering the government is spending $1 billion a year more than it brings in just to operate government - not including fancy projects like Muskrat Falls and Hebron -  the next government is looking at massive cuts. A 2% increase in the HST will only bring in about $300 million at the most - if the economy remains at the level it is.

Unfortunately, the economy won't be remaining where its at now. Construction and real estate are falling rapidly. Oil companies are scratching development projects as the international trade war with Eurasia begins to heat up. It's worth noting that Russia is the number one exporter of oil and natural gas in the world, not Saudi Arabia, and they can hit us hard. Expect that to happen as the BRIC countries solidify their oil for food and the like trade deals with Russia and China. None of this is being explained in any way to the people of the Province. The real truth is we had a window, a ten year window, to reap as much as we could from our oil. We didn't. We squandered it in a money-mad drunk fest. Now the party is over. Was Danny Williams the best premier this province has ever had? No. He was the worst premier this province ever had. His actions have caused irreparable harm to the place and the people. That is the truth. The numbers speak for themselves. Don't believe the deception spun by the entrails of the Williams government. Realize that as a people we have been deceived in an almost unimaginable way.

Tuesday, April 28, 2015

RCMP bring in Ontario Investigator in Don Dunphy killing

There are two tragedies in the story of the killing of Don Dunphy by the premier of Newfoundland and Labrador's personal bodyguard - one is personal and one is societal. The personal tragedy is that of the Dunphy family, and especially that of his daughter Meghan. The second tragedy is the conduct of the government in this province regarding the investigation and of course the police conduct of the investigation.

Meghan's tragedy is of course the loss of her father. She didn't expect him to be gunned down in his own home just hours after having brunch with him on Easter Sunday. She didn't expect her Dad to be killed for tweeting. But it happened here. After the death of Donny Dunphy, Meghan turned to a cousin who is a practicing lawyer for advice on retaining a lawyer. Her cousin recommended Erin Breen - a lawyer in St. John's. The story takes a bit of a turn here, because Erin Breen had a conflict or two herself in representing Meghan. Firstly, and most obviously, Erin Breen was sitting on the Board of Directors of Nalcor Energy - the highly political crown energy corporation for the Province. It is an established fact that a person does not get named to Nalcor's Board unless they are a political partisan of the PC Party. Then there is the fact the law firm she belongs to, as a partner no less, is an established Tory law firm. In fact, the partisan nature of the firm caused a scandal over this . Beyond those facts, Erin Breen has donated to the PC Party every year since 2008 (check it out here) .

Now I spoke to Erin Breen on these matters and she claims the donations were  not made by her, but rather her law firm in her name. Does that really make any difference? Obviously her firm could not make those donations without her consent.  Then she informed me she had tendered her resignation from the Nalcor board as of April 15, 2015. However, by that time she had been the Dunphy's lawyer for well over a week. So, in my opinion, Erin Breen should not be representing the Dunphy family. That opinion jumped out at me when she made the statement that the tweets that brought about Don Dunphy's death were a "red herring". In fact, those tweets carried a direct link to the premier's office in the shooting death of Mr. Dunphy. A fact that carries potential legal recourse for the family to attain damages in a court of law. So, that was a red flag to me.

Now, the dueling controversies of the RCMP investigation and a public inquiry continue to dominate the story. The Minister of Justice in this province, Darrin King, insists he has no role to play in who investigates the Don Dunphy killing. He also insists that a judicial inquiry cannot be called until the investigation is over, and only then if he deems there are "unresolved issues". In other words, he's leaving the door open to not calling a judicial inquiry even though every person killed by the police in this province has resulted in a judicial inquiry. Of course, none of those had direct and public links to the premier's office. However, his story has a major hole in it on both fronts. Firstly, he can call a judicial inquiry, appoint a judge, and await the results of the investigation before allowing it to begin. And secondly, the RCMP is breaking its own policy by investigating the Dunphy killing.

The RCMP have a policy that it will not play any part in an investigation into a police-caused death it is involved with unless no other agency or force is available to conduct such an investigation. That's a fact - read the link. It seems obvious that any number of police forces or agencies, separate and apart from the RCMP and the RNC would be available to conduct a homicide investigation into the Dunphy killing. However, the RCMP is following the back up policy that "should no other force" be available, it can conduct the investigation under these conditions:

   "Where there is no such agency, cases will be referred to external police services,                   who can enlist independent observers to assess and report on the impartiality and                     independence of investigations. As a last resort, where neither a special agency nor                 an external police service are available, the RCMP will undertake investigations.                       However, an investigation will only be conducted by the RCMP after extensive                        screening of investigating officers for conflict of interest and an independent observer                will be appointed and a final review of the investigation will be conducted by an                        independent police service."

Given that the RCMP are involved in the special protection unit that guards the premier, and other VIPs, and given the fact they were involved in the visit to Don Dunphy's home (the extent of which is not firmed up yet), it would appear an extensive screening would have been needed for conflict of interest. Yet, they began the investigation of the shooting immediately - which would logically have provided no time for "screening". Also, an "independent observer" was not named to the investigation until days into the affair - contrary to RCMP policy. In effect, the RCMP is now compromising its good name by refusing to follow its own policy requirements.

That brings me to the latest news - not yet reported by media in the province. The family was contacted yesterday by the RCMP to advise it that an "Ontario private investigator" had been assigned to the Dunphy investigation. No public release of this information has happened yet. All in all, the Don Dunphy tragedy keeps getting more tragic, and more infuriating by the day. It is getting more and more clear every day that not only did the Premier's office contribute to the death of Don Dunphy by falsely accusing him of making threats via Twitter, but that some sort of white wash campaign is being conducted to make sure that those sins don't end up back on the Premier's door step. All in all, this entire situation is on the one hand an embarrassment of incompetence, and on the other hand a dark commentary on the state of justice in Newfoundland and Labrador.

Monday, April 20, 2015

Does NL need a new political party?

It's a refrain I've been hearing more and more lately: "we need a new political party". It's often accompanied by "the Liberals are no different than the PC's" or "they're all crooks" or "I can't vote for any of them". Different comments, but essentially the same message - people here are becoming deeply estranged from the existing political parties. It's not just voter apathy. It's more like voter disgust.

It's been slowly evolving over the last few years. The disengagement from the people. The lies. The attempts to cover things up. The secrecy. All of it has eaten away at people's trust in their government, and specifically the PC party like cancer on the bone. People began looking at the NDP as an alternative, and for a while Lorraine Michael was not just leading in the polls in this province, but she was the most popular opposition leader in Canada. Then, while she was on holiday, from the backrooms came a cynical attempt at a palace coup. When that failed, 2 MHAs left the party and eventually joined the Liberals after a "believable" time out period. People here turned on the victim rather than the perpetrators, and knocked the NDP and Lorraine Michael out of contention in the polls. The party fell and she fell.

The Liberals then became the flavour of choice. Like a great, hopeful wave people switched their preference to the Liberals - or so the polls say. The Liberals became confident, many so much it bordered on arrogant, and before you knew it the Liberals were indistinguishable from the PC's. The smell of power washing over them. The backroom interests cocooning around them. The money comforting them. They no longer had to stand for anything. They just had to remain silent and ride the wave to power. Then reality hit.

People started asking what the Liberals stand for. The provincial radio shows, at least one of them, began openly mocking the Liberal Party for refusing to let people know what they would do any differently than the reigning PC's. As time unfolded, it became shockingly clear to some that the Liberals were in fact not going to do much differently at all.

Two of the most recent examples of that trend are Bill 42, and the police-death of Don Dunphy. Bill 42 seeks to take 8 seats out of the provincial House, and bring the number of MHAs to 40 from 48. Almost all the lost seats coming from rural Newfoundland. The Liberals got together with the PC's in the House of Assembly, sometime during a late night session, and made a political deal to get the seat reduction legislation through. Now, people are up in arms about their districts being carved up like Swiss cheese, and the Liberals are practicing the line "wasn't me". Little do they apparently realize that they look absolutely foolish and pathetic as they now try and claim they never voted for the seat reduction, just the amendments (political deal) that allowed it to become law. You could almost feel a collective rolling of the eyes on the Island.

Then, the Liberals joined the PC's in decrying those that insisted on a judicial inquiry, over the killing of Don Dunphy by a member of the Premier's security detail, were simply playing politics - as opposed to what it really is - obvious accountability. Again, like Bill 42, the NDP came on the side of the people in demanding an inquiry be announced. After all, announcing a judicial inquiry will happen in no way impedes an investigation into Don Dunphy's death. It merely states what should be the obvious, and that is an inquiry will be held after the investigation is complete. Not might. Not maybe if we can control the outcome. So, the NDP is coming up like roses on these last two huge issues. Whether or not that will translate in the polls is questionable. A key problem for the NDP is their new leader. His rise to that position stinks badly of backroom politics as well. And, where there is a backroom game afoot, there is control. The new leader suddenly retired from head of the "fishermen's union", when he was near retirement in any case, just before Michael suddenly stepped down as NDP leader, after she just won a leadership review handily, and after stating she would lead the party into the 2015 election. The hands of the backroom are all over this.

So all this brings us to the question: Is it time for another political party in this province? The answer, to my mind, is yes. The problem is that the last thing people here likely want is more politicians. That's a convenient truth for the boys pulling the strings on the other three. However, the dilemma remains that if a different commitment to democracy and integrity is not somehow invented, then the province is on the brink of no-return. And, if you love this place, that's a very hard pill to swallow. It seems unlikely that integrity, honour and accountability can rise to the surface of these parties controlled as they are by a very small group of people within the province. Their goal is control. Control of the people, but more importantly to them - control of the budget. They want those public dollars going to their interests, their companies.

So, if a political party can be born in this province that is firstly committed to integrity, honour, and truth before agenda, then yes it's time for a new political party here. The breath of fresh air is badly needed. Otherwise, there may well be a complete collapse of the governing "order" here. Too many of the people who should be the gatekeepers on power here have been corrupted by self-interest. Ordinarily, they would have been weeded out before they got in to that position - for having that weakness. But, in a place where that group is so small, and so exclusive, the order has become too introverted. Too compromised. Eventually when that happens, no matter where in the world, that order collapses and social chaos results. That's why there's an order in the first place. Order is the cure for chaos. However, order in a democracy comes from a firm set of rules that exclude "self-enrichment".That is to say, those with the real "influence", not the politicians, must be disciplined beyond self-enrichment. That hasn't happened here. Perhaps the real need in Newfoundland and Labrador isn't a new political party. Perhaps the real need is for a new set of Gatekeepers with the discipline to do their duty responsibly - for the best interests of the people, not their own.