Will There Be An Election in the Fall of 2025?

Short answer: No.

Not so short answer: Anything is possible when it comes to politics but no.

I resolved to stop commenting on the day-to-day silliness of politics in this country awhile ago but the current speculation about a Fall election is just too ridiculous for me to ignore.

The budget will be released on November 4 and the idea it will be defeated and a snap election will occur as a result is getting some media play. This is not surprising of course. Such speculation is worth more than a few eyeballs staring at screens and newsprint and a few clicks on the internet. Or to put it another way it is good for the news business.

The crux of the speculation is the media stating the government is indicating they do not have the votes to pass the budget and the opposition has not stated whether they will support it. Very serious stuff until you apply just a little critical thinking. We have a minority government so, by definition, it does not have the votes to pass the budget on its own. As well, since the budget has not yet been released the opposition parties are not going to decide how they will vote just yet. They will posture and try to maneuver for short-term political advantage but that is to be expected and nothing extraordinary.

So when the budget is released does it mean they will decide to vote against budget and trigger an election?

Well let's look at it from the perspective of all of the parties.

The honeymoon for the Liberals is over, but only by a few weeks, but the honeymoon for Mark Carney continues. He is still the most popular and trusted politicians at the federal level. In our increasingly Americanized politics, where party leaders are the main focus over party and policy, that gives the Liberals a huge advantage. To put it another way, the Liberals do not want an election but they are not afraid of having one. None of the other parties can say the same.

The Conservative Party is lead by a leader who has been severely damaged by the events of the last 6 months. That is something that Conservatives and the media just do not seem to want to admit. Pierre Poilievre lost an election everybody believed he was going to win less than a year ago, losing his own seat in the process. Yes, his party picked up seats but they were unable to prevent the Liberals from gaining seats too, almost to the point of achieving majority government status. Mr. Poilievre is going to need time to rehabilitate his image, if he can and assuming he comes through the leadership review in January, before he challenges for the PM's chair again. He will only get one more chance to do just that so he will want much more favourable conditions before taking that chance.

The NDP is in an existential crisis. They are leaderless, beyond broke and have no party identity to speak of. An election now would result in two outcomes. They would lose what remaining seats they have and be wiped out as a political force at the federal level. Or they would pick up a few more seats, maybe getting back to official party status, but they would be so deep in debt that they would need to declare bankruptcy leading to their elimination as a political force at the federal level in a year or two. Either way, an election now would lead to their destruction. They need time to choose a leader, renew their party and make some money. An election now would prevent all three.

The Bloc cannot gain anymore seats in Quebec. They are at their high water mark. However, the Spring election showed them that they can lose seats in Quebec. So they find themselves in a position where an election will not benefit them with a larger seat count and where an election right now runs the risk of them losing seats. For the Bloc the status quo is in their best interest, at least for now.

So none of the opposition parties are really in a position to fight an election. Their risk of losing more is higher than their chances of making gains. As well, if you add the displeasure voters would have with having to go to the polls less than a year after doing so in the Spring it increases the risk. The election would be fought on who triggered the election and if they vote against the budget it would be a hard sell to say anybody else besides the opposition parties would be responsible. That would provide the Liberals the opportunity to secure the majority they just missed in April.

So in the end the government will table their budget, the opposition parties will shit on it, because that is what opposition parties do, but they will find a way not to defeat the budget in the end. The budget will probably not have any poison pills. It will be different from budgets the Trudeau Liberals used to table but not egregiously so. In the end one of the other parties will say they can support it and that will be that. My guess is it will be the Bloc.

Of course, this assumes that the opposition parties have remotely competent political strategists working for them. If not, then all bets are off.

   

Book Review: The Next Age of Uncertainty

This is a book by Stephen Poloz, the former Governor of the Bank of Canada, that was first published in 2022.

As the title indicates the author argues that the interaction of the five "tectonic forces" of an aging population, technological innovation, increasing personal debt, income inequality and climate change are going to lead to greater economic volatility and uncertainty in the coming decades. He argues that average economic growth with decrease from the current average, that interest rates will be low and that inflation will be more volatile, increasing and retreating much more regularly than it has in the last 30 years.

In the book he describes each of the tectonic forces and he describes how they will impact inflation, jobs, housing and government fiscal policies. He then goes on to suggest ways to reduce risk and mitigate the impacts of the interaction of the five forces.

Some of his suggestions are rather intriguing. Arguing that the current model for buying and mortgaging houses has its roots in the Great Depression he suggests that a new model could be implemented. Instead of the borrower paying off a mortgage alone over the usual 30 years he suggests that mortgages could be structured so that the mortgage is not paid off, the bank will be a partner in the mortgage, accruing some of the equity for the bank while the mortgage holder would receive the bulk of the equity for themselves. In essence the bank would be a co-owner of the house, where the mortgage owner essentially pays rent to the bank, but accrues equity for the future. When the borrower decides to sell the house they will take their share of the equity and the bank will take their share. The author argues that such an arrangement would lead to lower monthly payments, less foreclosures and the ability for more people to be able to afford to buy a home, since they would not be paying off a set amount of money during a set mortgage duration but would be paying the bank for as long as they own the house, whether that would be 5 years or 50 years. It is an intriguing idea and it could very well mitigate the current situation where young people are more and more finding it difficult of afford to buy a home.

One of his other ideas is also intriguing, namely that companies will play a role in assisting their workers in mitigating the risks of the interaction of the five forces. Arguing that the aging population will make it more difficult for companies to hire and retain staff they will have to invest more in keeping them. He further states that companies are more and more adopting the environmental, social and governance (ESG) model as they move to meet the demands of an increasing number of investors who make investment decisions with it in mind. It is interesting that he seems to agree with Mark Carney who essentially argued the same thing in his book Value(s). I am not convinced that this will happen but his argument to support his assertion is a good one. We will have to see.

The most disappointing part of the book is he argues that companies will have to take on the role of helping their employees handle the risk of future volatility and uncertainty because central banks and governments will not have the capacity to do so. He argues that interest rates will be well below the current historical average average so room to maneuver of central banks in cushioning the impacts of that uncertainty will be limited. Since the main lever central banks have is changing interest rates that is consistent with his argument. However, while highlighting the impacts of income and wealth inequality he completely dismisses the idea that governments should raise taxes on the wealthiest. He argues the economic dogma that doing so discourages innovation and is actually counter-productive in raising revenue. Interestingly that assertion has never been tested so it is disappointing that he argues it without providing any real evidence or data to back it up. It is just a matter of faith.

He argues that one way to reduce inequality is a universal basic income (UBI). However, he again doubts its feasibility because of the limited fiscal capacity of governments. Again, higher taxes on the wealthy could be the solution to that.

One thing this book did was help me resolve an issue that I have had with free trade for some time. Anybody who has read this blog before knows that I am not a fan of free trade agreements because their negative impacts on the losers from those agreements. However, I have to acknowledge that free trade does have some positive benefits. I had issues trying to square that circle and this book helps with that. In essence, free trade does lead to great economic benefits but it takes decades for them to be felt throughout the economy. However, it also has great negative impacts on those who work in industries that cannot compete with the same industries in lower cost jurisdictions. That often leads to job losses and economic upheaval for many almost immediately or at least a very short time after free trade takes effect. Further because programs to assist those losers are often token jokes that do not actually help those who lose their jobs it can lead to generational poverty for them. If a parent loses his job, cannot find another with the same wages and benefits of the one he lost, he will have a hard time helping his children in getting out of the poverty trap he finds himself in. In other words, if you are having a hard time making ends meet, for an extended period of time, you are not going to be able to send your kids off to college or trade school to give the opportunity to get out of poverty.

That is my issue with free trade and its proponents. They can truthfully claim that it eventually helps the economy but not before disrupting lives in the short-term, often leading to generational poverty. Their indifference to the losers of free trade is one of the reasons why the backlash towards it, in the last few years, has taken hold. The losers of free trade have found champions and they are systematically dismantling the free trade system that took decades to build.

The Next Age of Uncertainty is a fascinating book. Its central argument is sound and some of its proposed solutions are fascinating and deserve more study. However, it is disappointing that the author does not seem willing to consider all of the potential solutions, including more government intervention in reducing income and wealth inequality.

Extremism Breeds Extremism

Charlie Kirk was an asshole but he did not deserve to die. On the other hand, I am not going to lament his death and I will admit a part of me believes the world is a better place now that he is gone. By the way I thought the same way when Rush Limbaugh finally decided to leave our presence.

What Mr. Kirk, and many like him, did not understand is that his extremism and the rhetoric that grows out of it always leads to increased extremism where political violence becomes much more commonplace.

I have said it before in this space that the political extremism we are currently seeing from the right will produce a similar movement on the left. It is only a matter of time.

Yes it would appear that Mr. Kirk's murderer is not a "lefty" but is instead another right wing nut job, which is something else these right wing extremists seem not to understand. Extremism does not just breed extremism on the other side of the political spectrum it also breeds it on their side. You see, the rhetoric being spouted by the like of Mr. Kirk creates those who begin to believe that the likes of Mr. Kirk are too moderate and therefore have to be removed so that their views can take over as the "mainstream" of their movement. Because you see, extremism does not tolerate "debate". There is no middle ground to be agreed upon so the only solution is to eliminate your opponent, whether they have views diametrically opposed or whether their views are similar to the extremist but they just do not meet a given purity test.

So buckle up, Mr. Kirk was probably only the first one to fall unless the US can somehow step back, which they will not be able to do. Others, on both sides of the spectrum, will suffer the same fate as Mr. Kirk soon enough.

Some might say that I am describing the beginning of a civil war but that is not really the case. Yes, extremists on both sides of the political spectrum will probably target each other and those who they consider not to be true believers but I doubt it will degenerate into general violence. 

My "optimism" on the civil war front stems from two factors. The number of extremists at the edges of the spectrum are not that many. Yes, they are loud, motivated and have social media available to give the impression that they have more power and influence than they have but the vast majority of Americans do not believe what they do and when the violence hits a critical mass the wave of revulsion from those non-believers will destroy the extremists' causes. We are not there yet but that time is coming. The second factor is the geographical location of the two extremes. Right-wing extremists are in rural America while the left-wing extremists are going to come from deeply urban America. If the rural folk try to "invade" the urban strongholds of the urban folk they will be crushed and vice versa. 

So in the end, we can probably expect more events like the murder of Charlie Kirk, with increasing frequency, but a general war between the two extremes in the US is highly unlikely. As well, we can also expect that the violence between the extremes will not abate for quite some time. We are probably just seeing the beginning. Maybe, just maybe, by the end of this decade, we will begin to see the extremism fade into history.

The US's Decent to 2nd World Status is Almost Complete

Let's go through the check list for the US:

• The US is a rich country but its wealth is concentrated in the hands of a very small elite while the rest of its citizens are poor, often desperately poor - CHECK
• The government almost exclusively makes policies for its own benefits and those of the very small elite - CHECK
• The judiciary has lost its independence - CHECK, although lower courts in the US still seem to have some independence all of their decisions eventually make it to SCOTUS, which is firmly in the pocket of the President
• The leader of the government is concentrating power in his own hands while those who are supposed to prevent that either ignore it or are being coopted in that effort - CHECK
• The media has been capture by the government and is no longer completely free - CHECK, this is not completely true for all media but all main stream media has been. There are other media which are free but they are just voices in the wilderness.
• The government has an in-house propaganda organization - CHECK, Fox would probably push back on that characterization of their relationship with the government but let's be real.
• The leader of the government is becoming more authoritarian - CHECK
• The leader of the government is using his office to enrich himself, his family and selected supporters - CHECK
• The leader of the government calls in the military to quell dissent - CHECK
• The country has little influence on international relations and is dependent on much bigger players for what influence it does have - HALF CHECK, the US is still the richest country in the world with the most powerful military but there is no doubt the trend is for countries to insulate themselves from what power it has left
• Elections, if they take place, are not free and fair - NOT YET CHECKED, we will have to wait until 2026 to see whether we can check this one off.

Memo to Mark Carney

You can support every oil and gas initiative proposed by the Alberta government until the cows come home and you will realize absolutely no political reward for it. That is guaranteed. Criminy, your predecessor bought a freaking pipeline and the Liberals were shut out of Alberta during the subsequent election.

However, supporting these initiatives will cost you votes in places that you cannot afford to lose support, namely Ontario and Quebec. You would be giving a moribund NDP a great gift, leading to a split in the progressive vote in Ontario and a Conservative victory.

By all means, support the removal of internal trade barriers. Support the development of energy corridors that will allow Canadian electricity to flow east and west, instead of south. Hell, support railway corridors and high speed rail in such places as the Windsor-Quebec corridor and between Edmonton and Calgary if you want to initiate grand Canadian infrastructure projects. However, do not support pipelines, they will not help you politically and there is no business case for them. They may provide some jobs for a short time but they will be huge white elephants that will suck funds that can go towards projects and programs that will actually help Canadians in the long-term.

Oy Vey! Iran is Showing More Strategic Acumen Than Israel

Surprising no one the United States attacked Iran a few nights ago. They dropped a few bunker buster bombs on three nuclear sites and went home.

I was wondering how Iran would react and I suggested they would be smart not to, instead focusing on Israel. That would have been the best strategic move.

In the end they attacked some US assets in the Region but not before announcing the time, place and nature of the strikes to the Americans and the host countries. In other words, they launched a token retaliation and then went back to pounding their true enemy in this conflict.

It should be obvious that the US cannot really hurt Iran unless they commit much more than what they are willing to commit, including ground troops. That could get lost in the heat of the moment and then the Iranians would play into the hands of their primary enemy by shifting their focus to attacking a country they have no hope of defeating.

They did not do that. We in the West are made to believe that Iran and Israel's Arab neighbours are backwards boobs, completely out of their league with regard to taking on Israel and the US. Iran just proved that they can think strategically.

Too bad Israel has lost that ability.

The only saving grace for the Israelis is Iran does not have any ability to destroy the state of Israel. But then again Israel does not have the ability to destroy Iran. So instead they will continue to pound each other until they exhaust their ammunition. 

They will eventually stop and start to rearm for the next round. The key difference is between then and now the Iranians will acquire nuclear weapons, which the Israelis will be unable to prevent because they wasted their efforts in a pointless conflict this time. 

Iran has had the ability to manufacture nuclear weapons for a couple of decades. They have not done so up to now and took steps beyond being part of the Non-proliferation treaty to prove that they were not making them and allowing outsiders to keep making certain it stayed that way. By just sticking to the status quo Israel could look forward to having a nuclear monopoly in that region for the foreseeable future. They blew that. 

I stated in my previous post that Iran cannot lose strategically in this conflict. The only way they might have lost that advantage was to allow themselves to become embroiled in a war with the US. They have avoided that so now it is just a matter of ending the current conflict and preparing for the next one.

PM Netanyahu and his Government Really are that Blind

We are less than a week into the war between Israel and Iran and something about it has jelled, even when how the rest of it will play out is still unclear. It would appear that the Israeli government completely underestimated the ability of Iran to hit back at their country.

Which is really astounding.

Iran is a country with more than 10 times the population of Israel. It has about 100 times the geographical area, with all sorts of access to natural resources within the country and from other parts of the world (sanctions be damned). It has been preparing for war with Israel for over 30 years, basically since the Israelis bombed one of their nuclear facilities in the 1980s. Further, their good friend George W. Bush eliminated their only threat of land invasion in 2003 when he destroyed Iraq as a functioning country. So, Iran has had the luxury of exclusively preparing for war with Israel since then. It should surprise no one that they did so with a sense of urgency and are now more than capable of hitting back at Israel with enough force to hurt them.

Now Israel finds itself in a situation they have not been in since 1973. An enemy that can hurt them as badly as they can hurt that enemy. As well, since they cannot use their ground forces to bring this conflict to a conclusion they will have to continue to endure the pounding they have been receiving.

The fog of war prevents us from knowing the full extent of that damage. However, there is no denying that there are videos coming out of Israel showing Iranian missiles raining down on them with increasing frequency. The war has become a battle of missile attrition. The Iranians have a limited number of missiles they can fire but the Israelis have a limited number of missiles with which to intercept them. As well, it appears that the Israelis have to use three interceptor missiles to take down one Iranian missile, on average. If that is the case it would seem that the Israelis are burning through their defensive missiles at a faster rate than the Iranians are using theirs.

Now the Americans are involved but they are irrelevant. They cannot stop the Iranian onslaught any more than the Israelis can. Sure they can use some special munitions to try to take out Iranian nuclear facilities but that does not help prevent the continued destruction of Tel Aviv.

If the Iranians are smart they will ignore the Americans and focus on Israel. All the Iranians can do to the US is threaten some US servicemen in bases around the Persian Gulf. They can do real damage to Israel however. This would have the added benefit of showing the US just how powerless and irrelevant they have become in the Middle East.

So how does this impact things in the medium to long-term.

First, the Iranians are going to acquire nuclear weapons, either by making them themselves or by buying them from the Chinese or Russians. They currently do not have them because if they did they would have announced that to the world, mostly to inform the Israelis that they now live under a Mutual Assured Destruction situation. Incidentally, that is why the Israelis want to prevent the Iranians from acquiring them. They have a monopoly on nuclear weapons in the region and want to keep it that way. They have just guaranteed that they will lose it, probably before the end of this decade.

Second, the Iranians and much of the rest of the Global South are going to move towards aligning themselves with the Chinese. Their influence on the global order will increase at the expense of the United States and the West.

In the short-term it is a race to see who will run out of missiles first. If it is the Israelis they will have no choice but to ask for the cease-fire and the old aura of invincibility of the Israeli military, security and intelligence services will take yet one more hit. If it is the Iranians then they will suffer some short-term pain but that will not impact their relations with their allies.

Really, the Iranians can suffer a tactical defeat during this war but not a strategic one. Regardless of how the fighting finally stops the Iranians are going to come out on top strategically. How the Israelis did not figure this out before they started the war is astounding.