Wednesday Night #2228 with Peter Berezin

We were struck by the paucity of references in any media this year to the 22 November anniversary of JFK’s assassination. Among our cohort and our elders, the date used to trigger precise memories of where they were when they heard the news – in the same way other generations respond to 9/11. Will 5 November 2024 become the symbol of irrevocable change for the current population? There are many indications that it could and might.

Trump Trade & Tariffs
In November 26, 2024 Heather Cox Richardson, analyses Trump’s Tariff ‘proposal’, and its consequences.
“Today presented a good example of the difference between governance by social media and governance by policy.
“Although incoming presidents traditionally stay out of the way of the administration currently in office, last night, Trump announced on his social media site that he intends to impose a 25% tariff on all products coming into the U.S. from Mexico and Canada “until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump claimed that they could solve the problem “easily” and that until they do, “it is time for them to pay a very big price!””
The headline of Jeremy Kinsman‘s latest Policy article says it all: The Trumpian Tariff Trolling Has Begun (see Long reads)
Trump vows new Canada, Mexico, China tariffs that threaten global trade
Is there a possibility that Trump’s actions will encourage a unified Team Canada approach including provincial premiers and opposition leaders?
As we write, Trudeau and the premiers are holding a virtual meeting with Deputy Prime Minister Chrystia Freeland, Public Safety and Intergovernmental Affairs Minister Dominic LeBlanc and Canada’s ambassador to the United States, Kirsten Hillman.

Trump’s picks for cabinet members and senior administration executives continue to be mostly outlandish and often alarming. For example, the Stanford doctor who opposed lockdowns will now head the N.I.H., the world’s premier medical research agency, with a $48 billion budget and 27 separate institutes and centers. Among the most alarming is Tulsi Gabbard, Director of national intelligence, overseeing 18 spy agencies. We can be thankful that Matt Gaetz took himself out of the running for AG. That brief interlude served to remind us how important the vetting process is, but will the Trumpians observe the procedure?
Gaetz’s time as Trump’s AG pick was short-lived. But it taught us some lasting lessons.
Gaetz dropping out doesn’t mean Trump’s next choice for attorney general deserves less scrutiny. It actually means the opposite.
On Wednesday evening, Robert Reich published The Big Shakedown “According to a report submitted to Trump by several of his attorneys, Trump adviser Boris Epshteyn — the man who coordinated legal defenses in Trump’s criminal cases and has been a powerful figure in the Mar-a-Lago palace intrigue transition — asked potential appointees to pay him in order for him to promote them for jobs in the new administration.”

Peter Berezin will join us on this U.S. Thanksgiving Eve. As Canadians observe the frenzied activity across the border, what we can be most thankful for is not living in the U.S. with President-elect Donald Trump, his truly awful Cabinet picks and the intended demolition of American government and governance. (A concerned citizen’s guide to Trump’s threats to the Constitution)
Highlights of The Risks of a Fiscal Crisis, Peter’s most recent Strategy Report:
• Rising government debt in the US has heightened the risk of a fiscal crisis. If interest rates stay where they are, the US primary budget balance would need to improve by nearly 4% of GDP to stabilize the debt-to-GDP ratio.
• The good news is that bond yields would probably fall if the US government were to bring down the budget deficit, thus allowing for a somewhat smaller fiscal adjustment. The bad news is that many of Trump’s stated policies would lead to larger, not smaller, deficits.
• That said, interest rates are much higher now than during Trump’s first term. This means that Trump may need to rely more on tariff revenue than investors are currently expecting.
• He may also allow Republicans in Congress to repeal large parts of the Inflation Reduction Act (IRA), while permitting sharp cuts to social spending.
• Social spending has a bigger fiscal multiplier than corporate tax cuts. Consequently, even if the federal budget deficit were to rise over the next few years, aggregate demand could still weaken in response to shifts in fiscal policy. With state spending already set to decline, bond yields would probably fall.
• While government debt is very high in Japan, interest rates remain below nominal GDP growth, which reduces the odds of a crisis. In China, the challenge is to shift the debt burden from local governments to the central government. In peripheral Europe, debt-to-GDP ratios have declined over the past few years but remain dangerously elevated.
Bottom Line: Higher interest rates will increase the pressure on governments to trim deficits. In the US, the Trump administration will rely on tariffs to partially pay for tax cuts, while also delivering deeper-than-expected social spending cuts. This will result in lower bond yields over time.

His former BCA colleague, Marko Papic posted on LinkedIn:
” Investors are trying to price a combination of complex policy outcomes. From trade and tariffs to fiscal policy and tax cuts. … This is where I depart from the standard practice among sell-side strategists. Fancy-schmancy math over-complicates the macro reality, which is often quite simple. The market will anchor to the one policy where it has the highest conviction that policymakers will be able to both pursue and deliver on promises.
In President Trump’s case – now that he has no constraints in Congress – that is fiscally stimulative policy. My highest conviction view on how the market will internalize that reality has been a bond market selloff, which has already occurred. It may have more room to run, once investors start to digest where deficits are going. … the main question from clients this week [is]: Who will be the next Treasury Secretary? As one astute bond investor told me today, “I don’t remember the last time that the choice for the Treasury Secretary mattered as much.” Yeah. Me neither. At least not for the US. For Brazil, Argentina, Mexico, South Africa, Malaysia…
The very fact that my clients are desperate for insider-baseball answer to the question of who will be America’s ‘Finance Minister’ …tells you that we are on knife’s edge when it comes to how much further macro unorthodox the market will take.

By the time the COP29 Baku Climate Change Conference wound down on 24 November, pretty much everyone was disillusioned. Politico Eu summed it up: “the summit ended in farce and recriminations. Well over a day after the scheduled end, with food sales cut off and supplies exhausted, bitter diplomats struck a deal to send $300 billion per year by 2035 to help poor countries fight climate change. The sum was considered so insufficient by some recipients that when the chair of the talks brought down the gavel, an Indian delegate was frantically running to the stage in a vain attempt to collapse the talks entirely.”

We are cautiously optimistic about the Israel-Hezbollah ceasefire that took effect Wednesday morning local time, according to a timeline laid out by US President Joe Biden, after Israel and Lebanon agreed a deal to end the more than year-long conflict. …Biden said the deal “is designed to be a permanent cessation of hostilities.” He said he had spoken with the leaders of Israel and Lebanon, and that both countries accepted the US proposal “to end the devastating conflict” between Israel and Hezbollah.

We confess that until we heard the news of the anti-NATO, pro-Palestinian riot, we were unaware that the 70th iteration of the annual NATO Parliamentary Assembly was being held in Montreal. Despite lots of media and political noise (Canadian politicians condemn ‘anti-Semitism’, ‘anarchy’ at Montreal protests), it seems that the ‘riot’ was a pretty tame affair by Montreal standards as Toula Drimonis sums it up. Still, a city that prides itself on its reputation as  a venue for international events and gatherings  does not need this damage to a public image already scarred by the war on Anglo institutions and international students.

‘Autonomous’ health-care: Quebec group turns to astronauts in new pilot
Amidst all the Santé Québec missteps, it is a delight to applaud this initiative
The West Island Regional Health Agency has launched a pilot project, opening an innovative Teleheath Station in a local community service centre (CLSC).
The project was inspired by medical initiatives used by the Canadian Space Agency.

Events
November 29, 2024 11:00 a.m. EST
“Canada on the World Stage” (Online for Post media subscribers)
In National Post talk, columnist Tasha Kheiriddin will speak to former foreign affairs minister Peter MacKay about the Liberal government’s approach to foreign affairs, in particular, what appears to be its priorities and goals, as opposed to those of the former Harper government, and how these changes have affected Canada’s global image and its relationships with longstanding allies.

Must watch
With thanks to Peter Frise: Trump’s Cabinet Picks: Loyalty Over Experience By Peter Zeihan
Donald Trump’s cabinet appointees are rolling in and let’s just say they’re not the A-team, but what did we expect?

Buy Now! The Shopping Conspiracy is the newest must-see documentary on Netflix. Jonathan Romney’s review in the Financial Times:
Buy Now! is not just about the mechanisms of modern hucksterism. It also examines the results of the addictive consumption and excessive production that drive each other in an ecologically catastrophic vicious circle.

Long reads
Jeremy Kinsman: The Trumpian Tariff Trolling Has Begun
The question every leader at international gatherings since Nov 5 – the Rio G20, COP 29 in Baku, and APEC in Lima – has privately asked the others is “How far will Trump try to go to “make America great again?” Now, Trump has given his first clear indication, by vowing to impose a unilateral 25% tariff on all goods exported to the US by America’s NAFTA partners, and an extra 10% on America’s nominal economic nemesis, China, putting all three top US trading partners in the same adversarial basket.
The Strongman Fantasy (text and audio)
And Dictatorship in Real Life
By Timothy Snyder
Strongman rule is a fantasy. Essential to it is the idea that a strongman will be your strongman. He won’t. In a democracy, elected representatives listen to constituents. We take this for granted, and imagine that a dictator would owe us something. But the vote you cast for him affirms your irrelevance. The whole point is that the strongman owes us nothing. We get abused and we get used to it.
Why the Past 10 Years of American Life Have Been Uniquely Stupid
It’s not just a phase.
By Jonathan Haidt
Haidt explains how social media, once widely viewed as a boon for democracy, devolved to a force that has exacerbated the dysfunction of American politics—and suggests three reforms that can help democracy remain viable in the digital age.
(The Atlantic) The story of Babel is the best metaphor I have found for what happened to America in the 2010s, and for the fractured country we now inhabit. Something went terribly wrong, very suddenly. We are disoriented, unable to speak the same language or recognize the same truth. We are cut off from one another and from the past.
It’s been clear for quite a while now that red America and blue America are becoming like two different countries claiming the same territory, with two different versions of the Constitution, economics, and American history.

The Social Determinants of Dementia: Canada Needs Collective Action to Prevent a Public Health Crisis
Dementia is a debilitating condition that currently affects more than 750,000 adults from all Canadian provinces, their caregivers, and society as a whole due to its impact on the health care system and the economy. With an aging population, the number of Canadians living with dementia is expected to rise dramatically — more than double, to 1.7 million people by 2050 according to the latest Landmark Study from the Alzheimer Society of Canada.
While there is currently no cure for dementia, there are risk reduction strategies that can be implemented to slow down this rise by delaying, or even preventing, the onset of dementia. Even delaying the onset of dementia by as little as a year would make a massive difference in the number of new cases, which would alleviate the burden on caregivers, the health care system and the economy. While some actions can be taken by individuals to reduce their own risk of dementia, a population-level approach would likely have a greater impact on the total burden of dementia in Canada.
Canada has developed a national strategy for dementia in response to the WHO Global Action Plan on the Public Health Response to Dementia. This strategy articulates principles and main objectives that should guide the actions of governmental, non-governmental, and community organizations working on dementia. Prioritizing a population-level approach (area of focus 2.4 of the national dementia strategy) to prevention is essential to ensure that the human right