Wednesday, July 22, 2015

Who is going to win the October 19 election?

This post is inspired by a conversation I had with a colleague who also happens to be a Liberal supporter.  We had a good noon hour conversation.

The short answer to the question is ask me the same question on October 20.

However, the key question between now and then is whether the desire for a change of government will hit "critical mass".

If no, then the Conservatives will probably win the election, possibly winning a majority mandate considering the apparent split in the anti-Conservative vote.

If yes, then the Conservatives lose, by how much being the only mystery.

However, that then begs the question of which party Canadians will choose to replace the Conservatives.

Will Canadians stick to their 150 year old habit of alternating between a Conservative Party and a Liberal Party?  Or will they take the historic step of electing an NDP federal government for the first time?

We will know for certain on October 20 but my sense is the "throw-the-bums-out" sentiment is not as strong as it needs to be, at the present time, for me to be convinced that the Conservatives will lose the election.  That could change during the campaign but as of now they have a reasonable shot at winning a fourth election.

If they do not then I would say the Liberals would be their replacement.  The NDP certainly are having a good couple of months but I have serious doubts that those who are telling pollsters that they support the NDP are saying so with the degree of conviction necessary to essentially change a 150 year old political dynamic.  Further, I am not sensing a real enthusiasm with the idea of an NDP government.  In fact, from the people I speak to, and this is by no means scientific, there seems to be some trepidation at the prospect of an federal NDP government.  

Considering that, I find it doubtful that if Canadians want a change in government that they will opt for such a radical change.

But like I said at the beginning we will know for certain on October 20.

Wednesday, July 01, 2015


A Greek debt default and its exit from the Eurozone is probably inevitable now.  Indeed it was probably inevitable when the economic crisis first hit.

When it happens there will be alot of blame being thrown around by the various parties but really the lion's share can be place squarely on the EU, the IMF and Greece's creditors. They are the ones with the greatest room to maneuver in this crisis but due to their stubbornness they are refusing to use it.

By no means is Greece innocent in all of this.  They spent beyond their means expecting the EU to bail them out when the proverbial other shoe dropped but on the other hand Greece's creditors kept lending them money because they expected the same thing.  

The current crisis could have been avoided if the EU and the IMF would have taken a different approach to Greece's debt situation than their default position of demanding austerity before providing for bail-outs.  In order for Greece to get out from under its debts it needs to positive economic growth.  Austerity creates the exact opposite.  In fact since the crisis first materialized the Greek economy contracted 25%.

So the Greeks run into debt trouble.  They seek help and their helpers demand they take steps which reduces economic activity within Greece, which, of course, prevents the Greeks from being able to meet their new debt obligations, which leads to more demands for austerity from the EU and the IMF, which reduced economic activity some more and so on in a nice little vicious circle.

It is an untenable situation and something drastic will have to change in order to break the circle.

There are probably two choices, neither one of which is a good one.

The first choice is the EU and the IMF forgive some of Greece's debt and reschedule the rest of it, without imposing any more tough austerity measures on Greece, in order to allow that country to begin realizing positive economic growth again and give it the ability to repay its debts without having to take out new loans to pay off old loans.  This choice will not fly of course.  Internal EU politics will prevent that since other EU countries besides Greece have spent beyond their means and have been suffering the same austerity being imposed on them in order to receive EU bailouts.  If Greece gets a different deal they will demand the same and that will not just do for the movers and shakers in the EU.

So that leaves us with a Greek default and exit from the Eurozone.  Certainly it would have an economic impact in the broader EU but that would pale in comparison to what would happen in Greece itself.  The Greeks would suffer that is for certain and the EU and IMF would point to that suffering to keep the other countries going through EU/IMF imposed austerity in line.  

However, the Greeks are already suffering and this choice would eventually allow them to get off the treadmill they currently find themselves on.  

The current situation has pretty much run its course.  Neither side wants to continue down the current path.  Their reasons for not wanting to are markedly different but the final conclusion is identical. Since the chances of the EU and the IMF relenting on their austerity demands are nil it will be up to the Greeks to bite the bullet and do what is necessary to break the current vicious circle they find themselves in.