Wednesday Night #1319

Written by  //  June 13, 2007  //  China, Herb Bercovitz, Reports, U.S., Wednesday Nights  //  1 Comment

Isn’t the summer weather lovely? So lovely in fact that we are having a very hard time concentrating on serious matters (although last Wednesday’s discussion provides plenty of food for on-going thought).
After all the build-up to and frenzied reporting of the G8 Summit, the Economist tells us that this week’s news will likely include:

—Israel’s choice of the Labour party’s new leader: Ehud Barak
—The result of the first round of the French parliamentary vote and what that means for the second round, however the conclusion seems pretty well foregone. The best news is, of course, the resounding rejection of Jean-Marie LePen’s awful National Front party.
—Next Sunday’s meeting of European foreign ministers prior to the European summit [aren’t we all becoming a bit weary of summit this and summit that?] of the following week. They will try to find agreement on reforming the European constitution – any bets?

President Bush is back from his personal triumph – visits to Albania and Bulgaria where he is, apparently a great hero. We surmise the inhabitants don’t read much of our press. Now he has gone to work in an attempt to salvage his immigration bill. It’s ironic that the one decent thing he has tried to do seems to be the only one that will be defeated by some senators of his own party.
To nobody’s great surprise, despite threats from Atlantic Canada’s MPs, the federal budget was passed today. Now would all those badly-behaved children please take recess?
And it wouldn’t be summer without a soupçon of scandal, so now we have the turmoil over former Lt. Governor Thibault‘s expenses … it seems the lady may have been double dipping.
Poor Pierre Marc Johnson, the enquiry into the collapse of the Laval overpass seems to just go on and on and on.
Public consultations are starting on Mayor Tremblay’s $8.1-billion, 20-year transportation plan. We look forward to hearing an informed opinion on this topic before the end of August when briefs are to be presented.
Wall Street continues the bumpy ride that Ron Meisels (watch for him on Report on Business Wednesday night at 7) and Jacques Clément referred to last Wednesday. ”It’s partially an excuse to take profits, but there are also some legitimate concerns that if bond yields get high enough, they will present an attractive alternative to stocks, and that higher interest rates will reduce private equity activity,” said Edward Yardeni, president of Yardeni Research Inc. Wasn’t he the one who kicked off the panic about Y2K?
Oh Yes, the final episode of the Sopranos on Sunday evening. Were you all watching? We have never enjoyed an addiction to the Sopranos, having graduated from Star Trek to Who Shot JR and later (much later) West Wing, but we sympathize with all those who were left on tenterhooks at the end of the final show.
Indeed, it must be summer if we devote space to a television show we never watched.
BUT, before we become completely jaded, we must call to your attention a most remarkable piece in today’s National Post by Jonathan Kay in praise of Al Gore and Bono. It is a very generous tribute whose sentiments might more readily be found in the New York Times. We applaud Mr. Kay and the sentiments of his conclusion ” They have done, in other words, what just about every man alive, in his deepest egocentric reveries, secretly wants to do. I’m not a card-carrying environmentalist or humanitarian. But I am a man. And so whatever your politics, I hope you’ll understand why I think what these two men have done is pretty darn cool.”

The Report

Montréal Charter of Rights and Responsibilities
How often it takes someone “from away” to teach us about our own society. The Mayor of Atlanta, who is in town for a conference, said at a reception this evening that one of the things she most admires about Montreal is the creation of the Charter of Rights and Responsibilities , a creature of the Tremblay administration that came into force on January 1, 2006, and that no-one around the Wednesday Night table had ever heard of, leading us to think that it does not apply to de-merged cities. The Atlanta Mayor praised the Charter for emphasizing that with rights go responsibilities, a fact that is much overlooked when rights are claimed.

Public image
How much have colour photography, digital technology and other technical advances changed the way we view our heroes, villains and elected representatives? William Lyon Mackenzie King, possibly the blandest, most uncharismatic personage ever to serve as Prime Minister, held that office for over twenty-one years, the longest serving Prime Minister in British Commonwealth history. Some cynics claim that charismatic President John Fitzgerald Kennedy’s greatest gift to the world was having left this world before having left office. Prior to live television debates and news clips, personal appearance seemed, perhaps unjustly, of less importance than accomplishment.
In the current world, the favoring of homegrown couture by women in the public eye (Jackie Kennedy, Princess Diana, Mila Mulroney, Adrienne Clarkson and the current Governor General, to name a few) is lauded as an appropriate promotion of national designers. But, oh dear, the Right Honourable Stephen Harper should take a page from the ladies’ book. Why does our Prime Minister have to look, in the words of one Wednesday Nighter, as though he bought his suits from a Canadian Tire catalogue? Previous prime ministers have been well tailored and some elegant. When they appeared as Canada’s leader, we were not ashamed. Like it or not, in the minds of the multitude, the sartorial skills of a political leader may be seen to reflect the stature of the country that he or she represents and Canada does not deserve to appear dowdy on the world political stage. There are those who might even say “dress a man like a [hick] and he acts like a [hick]”.

The former Lieutenant Governor and the auditors
Waste seems to be pervasive at all levels of government – as we are too often reminded, but it is the expansive expenditures of the local representatives of our Head of State, the former Governor General of Canada and former Lieutenant-Governor of Québec, that are criticized.
In the latter case, The money, used for “family get-togethers, trips and shows,” double-dipping when she claimed expenses from Ottawa that Quebec had already paid and extravagances, like a $12,000 one-day fishing trip in the Gaspé region, were detailed in reports by both the federal and Quebec auditors-general notwithstanding the probability that the sums spent over a ten-year period represent but an insignificant fraction of the money spent with little scrutiny by elected and appointed representatives at all levels, and senior management officials of crown corporations.
Madame Thibault is not accused of hiding or disguising her expenses, yet it is she, rather than the person or persons authorizing and/or reimbursing the expenses, who bears the blame. In today’s corporate and government world, the motives for such accusations are manifold, including casting a bad light on the opposition that made these appointments, or possibly as one would expect of an Auditor General, a genuine concern for good governance of sums from the public purse. It is to be hoped that the latter was the case although the as-yet-unanswered question remains: who authorized the expenses and how to explain their complicity, disinterest or inadequacy in doing so.
Happily, The Right Honourable Michaëlle Jean seems to have thus far escaped any such condemnation and appears to be validating the much criticized position that she holds by enhancing Canada’s image abroad, her principal mandate. Presumably also, the barn door will be firmly closed by Mme Fraser.

Stéphane Dion’s unpopularity
Federal Liberal Leader Stéphane Dion is certainly no George Clooney, but according to various anecdotal evidence from across the country, he has charmed most Canadians (with the exception of a good number of Quebeckers) he has met. Incomprehensibly, his handlers have insulated him from a large percentage of potential voters, citing a perceived incomprehensibility when he speaks English. Obviously, the more he is told that he is incomprehensible, the more nervous he will be about speaking English, and thus the self-fulfilling prophecy. We profoundly wish that someone would have the good sense to arrange for him to be immersed in English-speaking Canada throughout the parliamentary recess to restore his self-confidence and with it the fluency we witnessed at Wednesday Night.

Canada’s decline among developing nations
The North American Free Trade Agreement and increased commodity prices leading to the viability of the Alberta Tar Sands, have given Canada a great chance to be on the front line of technology and sustained development. But as the Conference Board of Canada reports this week, Canada is sliding into mediocrity.
Canada is an uneven performer, according to the new report card that benchmarks Canada’s performance against that of leading OECD countries across six broad domains-Economy, Innovation, Environment, Education and Skills, Health and Society. With one “A,” three “B”s and two “D”s, our mediocre overall standing confirms the message the Conference Board has been reiterating for the last decade: Canada is not keeping up with the top performers in the new global economy.
Most startling and important to Canada’s competitiveness and sustainable prosperity is the “D” grade on Innovation, where Canada ranks fourth to last in the 17-country comparator group. Our only “A” grade is earned in Education and Skills where, despite our ability to deliver a high quality education to children and youth, a large percentage of adults with low level basic skills and literacy remain underserved. Additionally, we do not stimulate enough students to complete post-graduate degrees.
Unfortunately, although Canadians have created technological advances, their general lack of entrepreneurial drive leads them to sell that technology rather than develop it. Unless changes are made and educational and governmental incentives provided, we remained doomed to continue to avoid exploiting the opportunities provided us by nature, geography and human ingenuity. Although David Dodge has expressed concern that it is the aging population that will ultimately affect Canada’s prosperity , it would seem that lack of leadership combined with a stifling regulatory regime and a generally risk-averse mentality are more at fault.
There are times when new technologies do not translate into immediate exciting applications. Face-recognition technology turns analog images into digital, an interesting but as yet not highly exciting concept. It is, however, used in England, where street cams are common, to identify and keep track of known criminals in their daily life.

You Can’t Take It With You
The complexity of our taxation laws grows constantly with never an attempt to simplify and rationalize. Nowhere is this more obvious than in the area of estate and estate planning in order to avoid death taxes as graphically illustrated in the recently updated book You can’t take it with you by Sandra Foster. It’s worth remembering that whatever you may deem to be an equitable sharing amongst your heirs can be quickly and mercilessly put asunder by the tax department.
Government grabs are not confined to Canada; if one has property or assets in the U.S., be assured Uncle Sam and all is nephew and niece states will have their fingers in the pie. We sometimes look enviously at the tax structure in the U.S., but even there, there are pitfalls. The idyllic State of Connecticut has a tax structure that is highly favourable to the living, but its residents are resigned to moving away before they die if they want to preserve anything for the next generation. Furthermore, the U.S. taxes world assets,- not really an incentive for people to save. Regardless of the intentions expressed in a will, wherever you live or die, governments have first dibs on your life savings.

Ships and sealing wax, cabbages and kings – but bees and cell phones?
Not only do we thoughtlessly attack the delicate balance of the world’s flora and fauna by over fishing, destroying trees and poisoning the earth, but we systematically ignore the interdependence of the diversity of species, including the most destructive of all, homo sapiens.
It interested us but did not disturb us too much when stories emerged of the disorientation of aquatic mammals caused by submarine sonar equipment, but serious concerns are now being raised around the world over the mysterious and rapid reduction (referred to as Colony Collapse Disorder, or CCD) in numbers of honeybees Apis mellifera, so necessary for pollination of crops (Three-quarters of the world’s 250,000 flowering plants – including many fruits and vegetables – require pollination to reproduce.). While the decline in the bee population was reported as early as October 2004 (National Geographic ), it has now made it to the pages of The Economist.
A German study causing quite a furor “suggests that radiation from widely used cell phones may mess up the bees’ homing abilities by interfering with the neurological mechanisms that govern learning and memory. It also appears to disrupt the insects’ ability to communicate with each other.”
However, it seems more likely that increased use of pesticides is the villain Whatever the cause, we can anticipate rising inflation especially in the price of food, an expensive bond market and other as yet unforeseen misfortunes, the product of Man’s ingenuity and avarice.

The economy (See Jacques Clément’s Report on the economy)
The Shanghai Bubble
It’s pretty clear that the Shanghai stock market is a bonafide bubble. It’s up 50% ytd after rising 130% in 2006, and, according to The Economist, 5 million new Chinese brokerage accounts were opened in April alone, 2/3 more than during all of last year. It has long been recognized by globalization experts around the world and at Wednesday Night that the world’s financial markets are more closely interlinked than ever before; trouble in one market will quickly spread to all markets.


One Comment on "Wednesday Night #1319"

  1. Diana Thébaud Nicholson September 28, 2007 at 6:15 pm · Reply

    Sarkozy published a book before he was elected.In it, he argues that a reform-minded government cannot do its major efforts sequentially, because taking the heat will make them run out of energy by the middle of year two. (Also my experience in Hungary.) The recommended procedure is to start a frontal attack on all issues at the beginning. Is that doable, in view of the fact that the reformers usually wish to be reelected? Professor Antal (Tony) Deutsch

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