So the company that had applied to start another massive open pit mine to extract tar sands in Alberta has decided to withdraw that application just days before a cabinet decision about it was to be made.
It should come as no surprise considering their application contained the assumption that the oil prices would average $95 dollars per barrel for the 40 year life of the mine.
While I believe the current low oil prices will rebound within the next decade they will probably not reach that level for that amount of time.
In other words, the economic and business case for the mine did not exist. It would not have been economically viable for most of its run. It probably would have lost money to the company for most of that time, requiring massive government subsidies to keep it going.
It is interesting that for most of the life of the exploitation of the Tar Sands I have read that the price of oil has only been at a level for make their exploitation profitable for about a decade in total. All other times they have only been able to break even or operate at a loss. Yet, Tar Sands exploitation still hums along nicely. One big reason could be the companies exploiting the Tar Sands are receiving huge government subsidies so that they can stay profitable.
Their argument is probably the same every time. If you do not give us the subsidies we will have to shut down our operations putting thousands of Canadians out of work. No government would want to be in power when that happens to they cough up.
The dynamic might have changed with the most recent federal election. Albertans turned their backs on the Liberals in a big way. They took away all incentive for the Federal government to provide further subsidies to the Tar Sands. They will maintain the current ones but one of the probable planning assumptions for the Teck Mine was they would receive subsidies and once they began it would be nearly impossible for any future government to take them away.
So with no government backstop to compensate for their wildly inaccurate assumption about oil prices the whole operation became completely non-viable from a business and economic point of view.
Many Albertans will blame the Federal Government in general and the Liberals in particular for this but that is nothing new.
Monday, February 24, 2020
Mr. Trump and Evangelicals
Many progressive commentators in the US and other parts of the world are expressing bafflement that evangelicals support Mr. Trump so much considering his history of lying, possible adultery, consorting with ladies of loose morals, etc..
They question how can these people support such a person and still call themselves good Christians.
They miss the point. Evangelicals are obsessed with making abortion illegal in the US. For the life of me I cannot understand the obsession but it is there. Mr. Trump is using his powers to advance that cause, including appointing two Supreme Court justices who are specifically against abortion. For them he is doing God's work and so they will support him.
That is all anybody needs to understand with regard to Mr. Trump and evangelicals.
They question how can these people support such a person and still call themselves good Christians.
They miss the point. Evangelicals are obsessed with making abortion illegal in the US. For the life of me I cannot understand the obsession but it is there. Mr. Trump is using his powers to advance that cause, including appointing two Supreme Court justices who are specifically against abortion. For them he is doing God's work and so they will support him.
That is all anybody needs to understand with regard to Mr. Trump and evangelicals.
Saturday, February 22, 2020
Book Review - Winners Take All, The Elite Charade of Changing the World
I recently completed reading the book. It was written by Anand Giridharadas.
The essential argument of his book is that the elites in the United States have completely abandoned any support for government action to address the many problems and issues of the modern world to instead support "market solutions" to those problems.
The author indicates that many of the entrepreneurs, venture capitalists and other members of the business elite in the United States realize that there are serious problems in the country and in other parts of the world. That includes massive inequality of incomes and wealth distribution. The author points out that in the last 30 years productivity in the US has more than doubled but instead of ordinary people enjoying the benefits of that, which all Economics texts books say should be the outcome of that situation, only a very small elite have actually benefited from it. Ordinary people were left behind. The author also points out that many of that very same elite sees the problems and the negative impacts of them (Donald Trump and Brexit to name two) but they are unwilling to do what really needs to be done to address them, which is to strengthen and reinvigorate the role of government in society and the economy.
Instead these elites are resorting to market solutions to fix the problems. The author uses the phrase "doing good by doing well" which just means that these entrepreneurs and market types are trying to find ways to fix problems while making money doing it. The author then spends a significant amount of the book describing some of these "fixes". There were quite a few but the one that stood out for me was the lady who developed a telephone app to help people with low incomes to better manage their money. For an annual fee of about US$200 the app would provide advice to the user on how to spend and save money each month to meet all of their financial obligations. The tone deafness of this solution and the person who developed and marketed it is beyond astounding. Instead of trying to find a way to help people increase their income this person developed a way for people stretch what they earn a little farther.
There is also a rather in depth discussion of those who really "did well" and are now "giving back" through philanthropy. The author specifically mentions Michael Bloomberg and Bill Gates, among others, in this discussion. Men who made billions and who are giving alot of it away to worthy causes.
The author acknowledges the contributions of these philanthropists but he also points out that the problems that they are throwing money at are problems they contributed to creating in the first place. As well, the author points out that these very same people are against any of the traditional solutions to the problems that now beset US society, namely, higher taxes for the wealthy, government redistribution and strengthening labour organizations. This would very much explain why Bill Gates recently mused about supporting Donald Trump if the likes of Elizabeth Warren or some one like her wins the Democratic Presidential nomination. It also explains why Michael Bloomberg entered the race and why, mark my words, he will run as an independent if he does not win the nomination. He will run against Donald Trump but he will also siphon off enough votes from the Democratic nominee to hand Donald Trump four more years and Mr. Bloomberg will be fine with that.
It should come as no surprise that Mr. Giridharadas is very critical of the market solutions proposed to resolve the many deep problems now faced by the US. He is very much in support of the more "radical" approaches proposed by the Elizabeth Warrens and the Bernie Sanders of the world. He believes that if their solutions do not come to pass revolution will probably be the result.
I happen to agree with him about the solution to the problems. It should be noted that when the West was enjoying its best economic years, during the first 30 years after the Second World War, profound inequality existed. The rich managed to maintain their wealth and became even wealthier. However, ordinary people also become wealthier at the same time. Not on the same scale as the "postwar elites" but at such a rate as to create a virtuous circle that allowed the Western World to become the leader of the planet and to dictate the politics and the economics of the world for almost 60 years.
Going back to that model would probably have the same outcome. As well, the current elites should be supportive of such an approach because the current situation is unsustainable in the medium to long-term. There will come a time when the pressures building in the world, climate change and automation being the big two, will reach a breaking point and there is no telling what will happen then. Revolution? Who knows, but it is a possibility and with the current civilization being a global civilization such a revolution will probably be global in scope as well. In the past if a revolution happened in one country the elites could move themselves and their wealth to another stable country. That may not be an option during the next big revolution. There may be no place for the elites to hide from the rage of ordinary people. Considering history has shown the revolutions can cost elites everything, including their heads, it would be a good idea for the current elites to try to prevent one from happening. Of course, that would take forethought and humility, which elites are incapable of having. The greatest quality of any elites, and the current ones are no different, is the inability to see what impact their actions are having on the broader society in which they live and the hubris to believe that even if things do go sideways they will be able to avoid any negative consequences.
The author ends the book by noting that there is some hope. He points out that there are some very influential people who are seeing the problems and who are more supportive of increasing government involvement in resolving them. They still seem to be voices in the wilderness but they also seem to be persistent in pushing their arguments. Perhaps their voices will be heard enough to bring about the changes that are needed to address the current and future challenges faced by Western society.
I highly recommend the book although I will warn you that if you believe the current profound inequality is a big problem some of the arguments of some of the people who the author interviews will probably raise your blood pressure just a little bit.
The essential argument of his book is that the elites in the United States have completely abandoned any support for government action to address the many problems and issues of the modern world to instead support "market solutions" to those problems.
The author indicates that many of the entrepreneurs, venture capitalists and other members of the business elite in the United States realize that there are serious problems in the country and in other parts of the world. That includes massive inequality of incomes and wealth distribution. The author points out that in the last 30 years productivity in the US has more than doubled but instead of ordinary people enjoying the benefits of that, which all Economics texts books say should be the outcome of that situation, only a very small elite have actually benefited from it. Ordinary people were left behind. The author also points out that many of that very same elite sees the problems and the negative impacts of them (Donald Trump and Brexit to name two) but they are unwilling to do what really needs to be done to address them, which is to strengthen and reinvigorate the role of government in society and the economy.
Instead these elites are resorting to market solutions to fix the problems. The author uses the phrase "doing good by doing well" which just means that these entrepreneurs and market types are trying to find ways to fix problems while making money doing it. The author then spends a significant amount of the book describing some of these "fixes". There were quite a few but the one that stood out for me was the lady who developed a telephone app to help people with low incomes to better manage their money. For an annual fee of about US$200 the app would provide advice to the user on how to spend and save money each month to meet all of their financial obligations. The tone deafness of this solution and the person who developed and marketed it is beyond astounding. Instead of trying to find a way to help people increase their income this person developed a way for people stretch what they earn a little farther.
There is also a rather in depth discussion of those who really "did well" and are now "giving back" through philanthropy. The author specifically mentions Michael Bloomberg and Bill Gates, among others, in this discussion. Men who made billions and who are giving alot of it away to worthy causes.
The author acknowledges the contributions of these philanthropists but he also points out that the problems that they are throwing money at are problems they contributed to creating in the first place. As well, the author points out that these very same people are against any of the traditional solutions to the problems that now beset US society, namely, higher taxes for the wealthy, government redistribution and strengthening labour organizations. This would very much explain why Bill Gates recently mused about supporting Donald Trump if the likes of Elizabeth Warren or some one like her wins the Democratic Presidential nomination. It also explains why Michael Bloomberg entered the race and why, mark my words, he will run as an independent if he does not win the nomination. He will run against Donald Trump but he will also siphon off enough votes from the Democratic nominee to hand Donald Trump four more years and Mr. Bloomberg will be fine with that.
It should come as no surprise that Mr. Giridharadas is very critical of the market solutions proposed to resolve the many deep problems now faced by the US. He is very much in support of the more "radical" approaches proposed by the Elizabeth Warrens and the Bernie Sanders of the world. He believes that if their solutions do not come to pass revolution will probably be the result.
I happen to agree with him about the solution to the problems. It should be noted that when the West was enjoying its best economic years, during the first 30 years after the Second World War, profound inequality existed. The rich managed to maintain their wealth and became even wealthier. However, ordinary people also become wealthier at the same time. Not on the same scale as the "postwar elites" but at such a rate as to create a virtuous circle that allowed the Western World to become the leader of the planet and to dictate the politics and the economics of the world for almost 60 years.
Going back to that model would probably have the same outcome. As well, the current elites should be supportive of such an approach because the current situation is unsustainable in the medium to long-term. There will come a time when the pressures building in the world, climate change and automation being the big two, will reach a breaking point and there is no telling what will happen then. Revolution? Who knows, but it is a possibility and with the current civilization being a global civilization such a revolution will probably be global in scope as well. In the past if a revolution happened in one country the elites could move themselves and their wealth to another stable country. That may not be an option during the next big revolution. There may be no place for the elites to hide from the rage of ordinary people. Considering history has shown the revolutions can cost elites everything, including their heads, it would be a good idea for the current elites to try to prevent one from happening. Of course, that would take forethought and humility, which elites are incapable of having. The greatest quality of any elites, and the current ones are no different, is the inability to see what impact their actions are having on the broader society in which they live and the hubris to believe that even if things do go sideways they will be able to avoid any negative consequences.
The author ends the book by noting that there is some hope. He points out that there are some very influential people who are seeing the problems and who are more supportive of increasing government involvement in resolving them. They still seem to be voices in the wilderness but they also seem to be persistent in pushing their arguments. Perhaps their voices will be heard enough to bring about the changes that are needed to address the current and future challenges faced by Western society.
I highly recommend the book although I will warn you that if you believe the current profound inequality is a big problem some of the arguments of some of the people who the author interviews will probably raise your blood pressure just a little bit.
Party Discipline in the United States
I followed the impeachment process of Mr. Trump to a certain extent but not very closely because I knew the outcome was a foregone conclusion.
Anybody paying attention would have realized that the Democratic lead House of Representatives would bring down articles of impeachment only to have them die in the Republican lead Senate. That is exactly what happened. Sure there were some twists and turns in the process but it was always heading to this conclusion.
What I did find most interesting about the whole process was the end where Mitt Romney faced a major backlash for voting to convict. His vote meant nothing. It did not impact the final outcome one iota so the backlash against him is both interesting although not surprising.
I think we can now conclude that party discipline has arrived on the US government scene. In such political systems as the one in my home country of Canada party discipline is an integral part of how the system works. The system would probably break down if it did not exist because every time a sitting government loses a vote on raising or spending money it is a confidence motion. That means if the government loses that vote they lose the confidence of the House and an election is triggered. That would mean elections would take place much more often and government paralysis. However, party discipline prevents that. It is a given that Members of Parliament, of the governing party, will vote with the government on confidence motions even if they may have reservations about them.
Contrast that to the American system which, for most of its existence, Members of the House and Senators voted any way they pleased without worrying about party discipline and they knew they could do so without any real consequences. Indeed, many laws and policies, both good and bad, have been enacted in the US because of "defections".
That appears not to be the case any more. Senator Romney cast a vote against his party, a vote that had no impact on the final outcome and many are calling for his ouster from the Republican Party.
This could just be a function of the current buffoon in the White House and the Senate Republican leadership or it could be the beginning of a permanent change in how politics is done in the US. We do not know yet it will take more time to see. However, if this is the beginning of largely ironclad party discipline in the US I am not certain it is a positive development. I do not believe party discipline is conducive to the smooth operation of the US system. I do not think it is built for it.
We will have to wait and see.
Anybody paying attention would have realized that the Democratic lead House of Representatives would bring down articles of impeachment only to have them die in the Republican lead Senate. That is exactly what happened. Sure there were some twists and turns in the process but it was always heading to this conclusion.
What I did find most interesting about the whole process was the end where Mitt Romney faced a major backlash for voting to convict. His vote meant nothing. It did not impact the final outcome one iota so the backlash against him is both interesting although not surprising.
I think we can now conclude that party discipline has arrived on the US government scene. In such political systems as the one in my home country of Canada party discipline is an integral part of how the system works. The system would probably break down if it did not exist because every time a sitting government loses a vote on raising or spending money it is a confidence motion. That means if the government loses that vote they lose the confidence of the House and an election is triggered. That would mean elections would take place much more often and government paralysis. However, party discipline prevents that. It is a given that Members of Parliament, of the governing party, will vote with the government on confidence motions even if they may have reservations about them.
Contrast that to the American system which, for most of its existence, Members of the House and Senators voted any way they pleased without worrying about party discipline and they knew they could do so without any real consequences. Indeed, many laws and policies, both good and bad, have been enacted in the US because of "defections".
That appears not to be the case any more. Senator Romney cast a vote against his party, a vote that had no impact on the final outcome and many are calling for his ouster from the Republican Party.
This could just be a function of the current buffoon in the White House and the Senate Republican leadership or it could be the beginning of a permanent change in how politics is done in the US. We do not know yet it will take more time to see. However, if this is the beginning of largely ironclad party discipline in the US I am not certain it is a positive development. I do not believe party discipline is conducive to the smooth operation of the US system. I do not think it is built for it.
We will have to wait and see.
The Railway Blockades in Canada
Currently there are some protests against the Trans Mountain Pipeline in Canada taking the shape of rail blockades around the country.
In the grand scheme of things their impact on the larger Canadian economy or society are negligible. Certainly some are suffering as a result but if these protests were actually causing real damage then the Canadian economy has much bigger problems than just these blockades.
With that in mind it is no wonder that the government has not moved to bring them down with more force than they have so far. They are content to negotiate with the protesters to bring about a peaceful resolution to the situation. Note I am not going to call it a crisis because it is not a crisis. It might be a profound inconvenience for some but that is all.
Of course, many in the media and the Conservative Party are calling it a crisis and demanding decisive action to bring it to an end, namely ending it by force. It is amazing what you can demand when you do not have to worry about the consequences of your actions or your demands. Any fallout from such actions would fall squarely on the government and those who demanded said actions would completely deny they made such demands when it did. It is just further proof to me that the Conservative Party is morally and ethically bankrupt and it is further justification for me to never again pay for news in this country. If the media is going to fail in its duty to democracy I should not have to pay for the product they are peddling.
As well, if these protesters blocking the rail lines were white people demanding such things as the end of the legality of abortions and same sex marriage or the elimination of gun control laws both the Conservative Party and the media would be calling them Canadian patriots and screaming at the government NOT TO USE FORCE in any form. I would like to say the hypocrisy is mind-blowing but that would imply the Conservatives and their cheerleaders have scruples, which they do not. We are just seeing more of the same.
As for the protesters themselves I find them not much better. Make no mistake I am very conflicted about the Trans Mountain Pipeline. However, the process for approval has been followed, the protesters had their day (or days) in court and they lost. It really bugs me when people or organizations insist on governments following due process and the rule of law but then when those same people or organizations come out on the losing end of that process they do not accept it and resort to illegal means to attempt to bring about the outcome they were looking for. I find them not much better than the Conservatives or the media.
Imagine the outcry (a very justifiable outcry) if the government were to revert to extra-judicial measures to subvert or ignore a court ruling.
Enough is enough. To the media and Conservatives, shut up. You are not helping matters. To the protesters, you lost. Get over it.
In the grand scheme of things their impact on the larger Canadian economy or society are negligible. Certainly some are suffering as a result but if these protests were actually causing real damage then the Canadian economy has much bigger problems than just these blockades.
With that in mind it is no wonder that the government has not moved to bring them down with more force than they have so far. They are content to negotiate with the protesters to bring about a peaceful resolution to the situation. Note I am not going to call it a crisis because it is not a crisis. It might be a profound inconvenience for some but that is all.
Of course, many in the media and the Conservative Party are calling it a crisis and demanding decisive action to bring it to an end, namely ending it by force. It is amazing what you can demand when you do not have to worry about the consequences of your actions or your demands. Any fallout from such actions would fall squarely on the government and those who demanded said actions would completely deny they made such demands when it did. It is just further proof to me that the Conservative Party is morally and ethically bankrupt and it is further justification for me to never again pay for news in this country. If the media is going to fail in its duty to democracy I should not have to pay for the product they are peddling.
As well, if these protesters blocking the rail lines were white people demanding such things as the end of the legality of abortions and same sex marriage or the elimination of gun control laws both the Conservative Party and the media would be calling them Canadian patriots and screaming at the government NOT TO USE FORCE in any form. I would like to say the hypocrisy is mind-blowing but that would imply the Conservatives and their cheerleaders have scruples, which they do not. We are just seeing more of the same.
As for the protesters themselves I find them not much better. Make no mistake I am very conflicted about the Trans Mountain Pipeline. However, the process for approval has been followed, the protesters had their day (or days) in court and they lost. It really bugs me when people or organizations insist on governments following due process and the rule of law but then when those same people or organizations come out on the losing end of that process they do not accept it and resort to illegal means to attempt to bring about the outcome they were looking for. I find them not much better than the Conservatives or the media.
Imagine the outcry (a very justifiable outcry) if the government were to revert to extra-judicial measures to subvert or ignore a court ruling.
Enough is enough. To the media and Conservatives, shut up. You are not helping matters. To the protesters, you lost. Get over it.
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