Wednesday Night #1403

Written by  //  January 21, 2009  //  Herb Bercovitz, John Curtin, Reports, Wednesday Nights  //  No comments

Growth is not the Holy Grail. What if we changed the nature of our society and everyone reduced their level of expectations

Despite the serious nature of the topics, the general ambiance was one of levity, no doubt sparked by everyone’s curiosity regarding the identity of the mysterious Montreal billionaire (we didn’t know we had any left) involved in the (rather messy) alimony dispute with his long-time partner, whose legal bills are being paid by Herbert Black. [Martin Patriquin: A billionaire, the law, his Brazilian ex]

Omar Khadr
As Canadians we, as well as many Americans, decry the conditions under which prisoners have been kept in  Guantanamo and many urge our Prime Minister to repatriate Omar Khadr. This sentiment has nothing to do with whether or not Khadr is innocent. He was captured as a youth, forced into the militia by his father, captured by the Americans, brought to Guantanamo, allegedly tortured and after five years of incarceration, was to be brought to a trial that has now been delayed by another four months.  This would certainly qualify for the popular definition of justice denied.  What is obviously wrong with this scenario is that
–          His guilt has not been established, thus denying him timely access to a trial.
–          Even if he had thrown the grenade, one must question under what circumstance is it illegal to throw a grenade at an enemy soldier bearing a rifle.
–          His youth and personal history have not been considered. (Debatable)
–          He is to be tried by his accusers, not by a jury of peers, the touchstone of our judicial system.
An equally valid truth, however, is that
–         The Guantanamo process was wrong, but Guantanamo is not.  Khadr was not being tried as a soldier but as a islamist terrorist whose basic truths are completely opposed to ours.  To release the detainees would threaten our national interest.
–          Donald Rumsfeld and Dick Cheney are thought by some to be perpetrators of war crimes, but few if any would recommend the same treatment for them as has been imposed on Guantanamo prisoners.
–          Having kept them prisoner over an extended period of time without due process, the question arises as to what to do with 350  potential or established terrorists now seeking revenge, once released.
–          Having failed in their mission and the potential danger arising from the presence of the released prisoners, neither their country of origin nor many other countries, if any, would be prepared to accept them.

This paradox has not evaded President Obama who is determined to close Guantanamo. He understands that the system was wrong.   He has demonstrated his fairness, determination and decisiveness, and will probably bring those held prisoner there to a rapid, fair trial that respects American values. In light of these developments, Prime Minister Harper’s decision to not intervene for Khadr’s repatriation and public reaction to it hinge on a number of perceptions including whether or not Khadr, by becoming a terrorist has in effect renounced his right to a Canadian passport.
The solution proposed by one of the more cynical among us
After any intelligence has been wrung out of the terrorists,  a Canadian intervention should propose that they be given the necessities, including a parachute, flown in  one or more Canadian Hercules over appropriate Islamist countries of their choice (Afghanistan, Pakistan …) and dropped to make of themselves what they will – somewhat as conservation societies release animals into the wild – , thus avoiding a media frenzy, and the costs of trials and imprisonment.
The exception to this ‘humane’ proposal would be Khalid Sheikh Mohammed, the confessed mastermind of 9/11. A public, broadcast, trial would serve an educational purpose for today’s youth and, like the Adolf Eichmann trial, allow people around the world to see the ‘face of evil’.

The world financial crisis
The world is attempting to defeat the current recession using the same tools as were successfully employed by Franklin Delano Roosevelt.  It has not worked to date and some Wednesday Nighters believe that throwing money at the problem will not solve it.  The strategy worked then because consumer debt, shaky mortgages (only 20% of the people owned their homes) and powerful unions did not then exist and legal barriers had been established between banks, insurance companies and investment houses.  These barriers were fudged during the Clinton regime, and George Bush and Allan Greenspan gave everyone access to easy money.  The bailout money provided today is perceived to be rewarding in large part, whether consciously or not, the perpetrators of the problem.  The current problem should have been foreseen.  It was a slippery slope, temporarily interrupted at the end of the last century by the upward flight of the dot coms.
The industrial sector that fuelled the recovery of the great depression no longer exists, but has been largely exported to foreign countries currently being hit second hand by our financial problems.
Singapore, where there is no safety net, is being hit very hard and mainland China is currently experiencing rising unemployment mainly caused by diminishing exports, fallout from the developed world’s problems. Workers, who have no social safety net, are responding to factory closings with civil disobedience – an unheard of  situation.
The assembly line increased productivity, helping to make us more productive, hence prosperous.  The current situation, however, has much more to do with money machinations than productivity; its origins lie in the repeal under Bill Clinton (Robert Rubin) of the Glass-Steagall Act of 1933 which clearly drew the line between commercial banks and brokerage operations.   As it becomes  increasingly evident that money has been the main cause of the problem and will probably not fix it, expectations must be lowered as the current standard of living regresses.  The only stimulus that it is believed would work until a new productive technology emerges is guaranteed annual income (harking back to the Nixon era) which could secure people and stimulate modest spending. Senator Hugh Segal has raised the argument that a large group of civil servants is about to retire offering the first-ever opportunity to dismantle the administration of the social safety net. This could also, open the doors to ridding the country of the ‘Nanny State’ mentality, thus freeing up additional monies for important core issues.
Every politician appears to be convinced that he has the obligation to do something, unfortunately the easy way is to print money, thereby increasing inflation. Some Wednesday Nighters predict that beyond 24 months, all the initiatives and supports will end up in an inflationary spiral.
Whatever the solution, it is evident that, regardless of mid and long term consequences, even more money must be pumped into the financial system, which will raise accusations of supporting the ‘fat cats’, but  without a functioning financial system, the problem will not be solved. Banks must return to what they were set up to do: take in money and lend money. It is not outside the realm of possibility that the banking system might have to be nationalized, as is virtually the case in the U.K.
A fine balance must be established between spending and taxes.  In Sweden in the ’70s and ’80s, incomes were impressive, but the incredibly high income taxes motivated capital and people with high incomes to move to countries with a more favorable tax climate, thus exacerbating the problem.
A not inconsequential footnote to the current problems is the interconnectedness of Goldman Sachs executives and the levers of both finance and government including Cereberus which owns 80% of Chrysler and 51% of GMAC. It is a murky story involving a who’s who of political figures.

Is infrastructure the answer?
Building infrastructure is being promoted as the way out of the deep hole that we have dug.  In our rush to begin that process we tend to forget that if we do not innovate in infrastructure with an eye to the future, we will rapidly be left with obsolete infrastructure and increased debt. The Turcotte Yards is a case in point. There are proposals being developed to incorporate high-speed rail technology as a complement to traditional highway. New technology must be developed. Electric powered high speed trains should be developed as well as more modern roads. And, in the light of the most obvious limitations in the medium and long term supply of fossil fuels, nuclear power should be developed to support the additional electrical power infrastructure.  Although infrastructure appears to be the planet’s current lifesaver, there is a limit to the number of workers and machinery available.  House retrofitting makes sense because people spend money productively, stimulating the local economy while upgrading existing structures.
The record of development of new technologies by Canadians, although rarely publicized, is impressive and if properly marketed can serve us well.  We must remember that the economic impact of Canadian development in this area is masked by the cost of our national investment in health care, appearing on the national balance sheet as a public expenditure as opposed to a far greater cost borne privately by individuals in the U.S.

Melting glaciers
The collapse of the Antarctic’s Wilkins ice shelf is not of itself a serious problem for the rise of sea levels as 90% of an ice shelf is already in the water, but what they do is to retain the glaciers on land which can then melt, possibly over the next two to three centuries, although their behavior is non-linear and difficult to predict. In Greenland, there is an acceleration of  glacier melt [In 2007, U.S. scientists discovered that water from melting glaciers, draining from a 5.6 square-kilometer lake on Greenland’s ice sheet, reached a peak flow exceeding that of Niagara Falls. Bloomberg
Postscript: Ponds of melted ice water accelerating decline of Arctic ice sheet
Scientists have discovered that pooled, melted Arctic ice is responsible for the advanced rate at which the northern ice sheet is melting. Scientists had predicted an average loss of 2.5% per decade since 1952, but the ice sheet has disappeared at a rate of 7.8% per decade — an acceleration exacerbated by the melt ponds. The Guardian (London) (2/18)

T H E  P R O L O G U E

 Just in from a friend of our West Wing colleague, Alexandra, this wonderful addition to our vocabulary:
“Our kind and brilliant 16 year old daughter believes that each person on this planet can make a difference. So I listen carefully when she speaks. On election night, during those uncertain hours before the polls closed, I heard her riffing on the word ‘Obama’ in Spanish, until she finally produced this exultant shout: Obamanos!  We instantly recognized the birth of a word.  Obamanos, we reasoned, is the third person plural imperative of “obamar”. We defined it as: ‘to express or inspire exultant hope.’  I offer up this word to you as a New Year’s gift.  May you be obamado.  May you obamar those beside you.”

Yes, Yes, THE story is the Inauguration. The world is breathless. As we write, it seems to us that the greatest anticipation (perhaps this is our déformation professionnelle) is about the Inaugural Address and the fact that the President-elect may be writing his own speech. We cannot remember so much excitement about the content of any speech, let alone its language – it smacks of Moses and the Tablets. An enthusiastic friend in Boston writes: “Yes! ABC news, Stephanopoulos to Gibson that yes, despite having some excellent speechwriters, the words are Obama’s alone. It is soooooooooo exciting! A president who can think! A constitutional lawyer trained at Harvard who can think and write and act and talk all at the same time! Astounding!” We can look forward to months if not years of parsing each and every phrase, and we can start on Wednesday Night.
Beyond the form and content of the speech (and of course Michelle Obama’s wardrobe), speculation focuses on the multiplicity of challenges that will be piled on the President’s desk from the moment he arrives in the Oval Office. Along with the financial crisis and stimulus package(s), come foreign affairs with the Middle East high on the list, especially now that Israel has presented the new president with a cease-fire in Gaza. A small spat may be brewing between Hillary Clinton and Joe Biden, [Biden comments create distraction (Politico)] but we believe that President Obama will be able to manage that. What we were interested in was an under-reported element of Hillary Clinton’s statement at her confirmation hearings:
”In the battle of ideas, she said, the United States would go on the offensive implementing President-elect Barack Obama’s pledges to open “America Houses” in cities across the Arab world. These facilities, fashioned after a Cold War-era program, would have Internet libraries, English lessons and stories about Muslims in America. An initiative labeled “America’s Voice Corps” would recruit young Americans with language and public diplomacy skills to speak with and listen to people in the area. Completing the package would be a Global Education Fund to provide $2 billion for primary education around the world. But, she said, there would not be a return of the independent U.S. Information Agency.” Clinton’s Goals Detailed (Washington Post)
Everyone has advice for the new President, but one of the more appealing suggestions comes from Dr. Richard Muller, author of Physics for future presidents who pointed out in a Quirks & Quarks interview that President Obama will be expected to quickly grasp a lot of complex issues, but he also needs to have a firm understanding of basic physics. From terrorism to energy to nuclear issues to global warming, he will be called on to make difficult decisions that all require a core of scientific knowledge. Good point.
Wednesday Night is noted for its wisdom. Let us put together our own advice to the new President. Now that he is being allowed to keep one Blackberry [Obama won’t give up BlackBerry – are you watching RIM stock and advertising??], maybe he will listen to us – Stephen Harper certainly doesn’t.

Non-Inauguration news for your consideration:
Hans Black’s excellent piece in the Gazette “Happy days are not here again”
Complementing Hans’ opinion piece is grim news from Singapore Singapore government may dip into reserves
Gazprom is due to start the flow to Ukraine and Europe again, according to Reuters
Conrad Black has lost bid for clemency from almost-ex President Bush
UK move to boost cash supply and more from The Economist
Britain paved the way to unconventional monetary policy in Europe when the government gave the Bank of England authority to create money and buy various private sector assets Read more »
Gaza War Divides Arab Governments From People
Turkey is renewing its push for EU membership.
Michael Ignatieff: any deficits incurred in the upcoming budget must be temporary ….
As the world hails Barack Obama, we cannot ignore the newest American hero with the unlikely name of Chesley B. Sullenberger III [Miracle on the Hudson]
Other notes:
We are just back from the screening of John Curtin’s latest documentary Fly Me to the Moon: Fateful Attraction – don’t miss the broadcast on CBC’s Doc Zone Thursday, Jan. 22nd at 9 pm or CBC Newsworld, Saturday, Jan. 24 at 10 pm. Wednesday Night’s OWN Mark Roper stars – now you will have to see it!

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