Wednesday, November 06, 2024

I Guess My Question Was Answered

Last July I asked the question  "Is the US Ready to Elect a Woman of Colour as President?

The answer to my question seems to be an emphatic "NO".

I have been saying since July that the election was going to come down to turnout. As well, I also asserted that the choice of VP Harris as the Democratic flag bearing had the potential to demotivate Democratic voters, who do not like Donald Trump but also do not like the idea of a woman of colour as President, from voting.

It would appear that just such a situation came to pass last night. Looking at the overall number of votes from last night, Donald Trump received around the same number of votes as he did in 2020, so the MAGA cult showed up. However, Kamala Harris only received around 70,000,000 votes which is around 12,000,000 less that Joe Biden did in 2020 and 10,000,000 votes less than Hillary Clinton did in 2016. Democrats stayed home, Republicans did not, hence last night's results.

In the postmortems of last night the idea that VP Harris' skin colour and gender was a big contributing factor cannot be ignored. While it was not the only reason why Democrats decided not to vote it is certainly an important reason why.

It is unfortunate because VP Harris would have probably made a good president and if I were allowed to vote in American elections I would have certainly voted for her. However, racism and sexism have deep, long lasting roots in the United States, that cut across partisan lines, and the US was just not ready for what Kamala Harris represented.

Monday, November 04, 2024

Is Inflation Dropping Almost 1% in Two Months Good News?

One thing we need to remember is that while the CPI is a measure of the change of prices over time it is also an indicator of aggregate demand and having the CPI fall by close to a whole percentage point in two months should give us pause.

It is just one indicator so you have to look at others to see if the CPI is showing a potential problem but unfortunately they are inconclusive, which is not bad news but it is not good news either.

We will have to wait and see if that big drop is a portent of some nasty economic clouds gathering on the horizon or if it is just the echo of the massive disruption that the pandemic caused and continues to cause.

You all may recall that when we were all sent home in March of 2020 and told to stay home inflation tanked. It dropped so far that for the months of April and May we were actually in deflation territory, with the topline yearly inflation number dropping into the negative and month-over-month dropping significantly into the negative for those two months. Then the impacts of the CERB and other government supports hit and inflation flattened out to around 0 to 0.5 percent. 

In other words, aggregate demand tanked. Everybody stopped buying except for the bare essential. However, the desire to spend money did not abate, we all just had to wait, causing a huge increase in pent up demand. Then in 2021, when the worst of the pandemic was over and vaccination rates were high enough we all decided to begin spending again with a vengeance. From haircuts to houses we went on a spending spree but before manufacturers could ratchet up production again and the supply chains that had been broken by the pandemic could be reestablished. Naturally, inflation spiked, everywhere, and then the war in Ukraine just made it worse.

That spending spree could not be sustained. It was already falling off before the high inflation and the higher interest rates that came with it cause an even bigger reduction in demand.

So again, demand fell, although not to the levels of the pandemic. That is what we are seeing with the steady decline in inflation in this country over the last year. Like many things in economics the precipitous decline in the last couple of months could just be an indication of an overcorrection, something that happens often in economics. Then again, it could be a harbinger of something bigger and nastier.

We will have to wait for the inflation data for the next few months to determine which one is true. If it is a harbinger then inflation will probably go down again and we should begin to worry. If it is just an overcorrection we should see inflation increase again, probably into the 2 to 2.5% range in the coming months and stabilize there.

Saturday, November 02, 2024

Are Republicans Giving Democratic Voters a Reason to Vote

According to the polls the presidential election in the US is close. That is nothing new. It was close in 2020 and it was close in 2016. However, this closeness just seemed to happen in the last six weeks and it happened because Republican leaning pollsters flooded the political scene with polls saying the race is tight. Hell, I believe Donald Trump even stated that his campaign paid for pollsters to do just that.

My question is why? This election is going to come down to turnout. As I have stated before in this space there are more voters who dislike Donald Trump than like him so if they come out to vote he loses. So, it would be in his best interest to attempt to convince them to stay home. However, a race that looks close could do exactly the opposite. 

One of the reasons why Donald Trump won in 2016 was because everybody and their brother was stating that Hillary Clinton would win. I believe that convinced many Bernie Boys to stay home. They really did not like her as a candidate and that combined with the notion that their votes were not needed was all the motivation they needed to sit out the 2016 election. The result is history.

Then after four years of President Trump everybody that wanted him gone came out in droves. The result was an increase in votes for the Democratic candidate of around 6 million in 2020, while the number of votes for Donald Trump stayed at 2016 levels and he was history.

So, if Donald Trump and the Republicans want a result more closely resembling the 2016 election they should be encouraging the notion that Kamala Harris has a much better chance of winning than Donald Trump. That might convince those who do not like him but are also not that comfortable with a woman of colour being President to stay home. A close race may convince them to do otherwise.

If there is some grand strategy for the Republicans to push the narrative that the race is tight I cannot see it. Maybe the Republicans are worried about turning out their vote so showing a tight race would also convince them to show up too. Or maybe Donald Trump does not want to be seen as losing the election going into election day because of his fragile ego. Or maybe it is a whole other reason that I cannot see. Whatever the reason, I cannot believe encouraging potential voters of your opponent to vote is a sound strategy when their are more of them than your own voters. But what do I know?

Wednesday, October 30, 2024

Immigration Levels Returning to the Mean

Recently the Federal government announced that they were reducing immigration levels. Upon further examination the reduction is essentially to the historical mean.

Nothing really out of the ordinary right?

Not according to our media. Of course, they indicated that this is a reversal or a pivot away from recklessly high immigration levels and the result of political pressure on the Liberals and a change in attitudes of Canadians towards immigration. 

What a load of crap.

Immigration levels in this country are not pulled from the ass of any government. They are arrived at after extensive consultations by the government with the provinces, the business community, demographers and other stakeholders. They are designed to allow Canada's population growth to be sufficient to allow younger Canadians to replace retiring Canadians in the job market. This is because the Canadian fertility rate is way below replacement level so if we did not bring in immigrants our population and the pool of people looking for work would decrease, leading to all sorts of negative economic outcomes for the country, including lower profits and falling stock markets.

As well, remember that immigrants are not refugees or asylum seekers. Canadian immigration official look for people with specific skills from those seeking to enter Canada. If they want to come to Canada they have to prove they are able to work here and get a job very soon after they arrive.

The reason why there was a spike in immigration levels in the last three years is all because of the pandemic. After the worst of the pandemic was over everything spiked; aggregate demand, prices, wages and other economic indicators. What also spiked was the demand for labour. Many of you with decent memories probably remember all of the stories about a labour shortage immediately after the worst of the pandemic was over. The government responded by increasing immigration levels.

Well, although COVID is still stalking the land, the pandemic is over and everything is returning to what it was pre-COVID. We are seeing it with inflation and we are now seeing it with unemployment. The labour shortage of three years ago has abated so immigration levels do not need to be so high. Thus, we see their return to the historical mean.

By the way, these immigration levels are very similar to the ones the Harper government had during its tenure and that is why, if you are hoping another Conservative government will further reduce immigrations levels, you are in for a big disappointment. Simply put, big business will not let them.

The government continues to do what it is supposed to; govern. And governing means looking at the current situation and adjusting policies to address any issues. That's the job and this government is just getting on with doing it.

Wednesday, October 23, 2024

Provincial Elections

In the past week there have been two provincial general elections and the results of both surprised virtually everyone. That is strange because we have a whole industry, the polling industry, that is supposed to provide us with an idea of what is happening leading up to an election. In both cases they were way off. Kind of makes you wonder about the federal polling we have been seeing. Are their estimates accurate? Probably not.

Many are trying to read the entrails of both elections to guess how a federal general election might turn out. I would caution people from reading too much into the results for the federal level. This country is famous for voters voting one way federally only to have the same voters vote the exact opposite provincially. 

All that being said there are some encouraging signs. Blaine Higgs won a minority government six years ago and during that time he seemed like a moderate conservative. Then he won a majority government, governed from the far-right, and was crushed in the next election. A government only lasting 6 years in this country is a rarity. 

The results in BC is the biggest surprise. The incumbent NDP government had been in power for about a decade. Like all governments, they had a lifespan and like all governments they were running on borrowed time after eight years. Considering these facts the BC conservative party should have swept to power. Instead, as of writing this blog entry, they are tied. Either one could come out on top but regardless of which one does they will not have a strong majority either way.

Overall, the results of these elections shows us just what Canadians feel about the far right. The far-right Premier of New Brunswick lost big, including his seat. The BC conservatives, lead by an extreme right politician could not score a decisive victory over a 10 year incumbent government. That should give more than one conservative politician in this country pause, considering they have been drifting further and further right for about two decades.

While I will reiterate my caution about reading too much into these elections' impact at the federal level the one is BC is interesting. Like the federal level, a progressive government, long in the tooth, was up against a conservative opposition. That conservative opposition ran on far right policies (and continuously and blatantly lied) and they could not "bring it home". Kind of makes you wonder if something similar will happen when the writ is finally dropped at the federal level considering the parallels between the BC election and the probable federal election will be stark.

I am not certain how the next federal election will turn out but these two provincial elections seem to indicate that governing and campaigning from the far right has limited appeal to a significant number of voters, making being elected that much more difficult. (Except in Alberta where voters there seem to have this perverse belief that they have to punish themselves.)

Thursday, August 22, 2024

Another Trudeau Scandal

Many in the media are all aflutter because Justin Trudeau has stopped announcing his itinerary and has resorted to just showing up at places. These media folks claim that Justin Trudeau is lying about his whereabouts and hiding from Canadians.

That's it. That's the final straw. The only solution is for Mr. Trudeau to resign.

Of course none of these media types points out that Mr. Trudeau is the first politician to announce his whereabouts at all and that includes all of the past PMs and current politicians such as Mr. Poilievre. Mr. Trudeau made the conscious decision to buck past practice but now that he has decided to stop doing that it is a "scandal".

As well, none of these media types mention that the political environment today is much more toxic that it was in 2015. Hell it is more toxic that it was in 2021 when there were people throwing rocks at the PM during the election of that year. Although, many in the media have argued that "rocks" is a misrepresentation of the objects that were thrown. They were actually "pebble". Schmucks.

It is a fact that a few years ago some guy rammed the gates of Rideau Hall, probably to do harm to the PM, but he was stopped by security. The media at that time played down that aspect of the event instead focusing on that fact the guy was a "happy sausage maker". Really, this guy just drove from Manitoba to Ottawa, with a pickup truck full of firearms and rammed the gates of the Official Residence of the Governor General and the Prime Minister because he wanted a fulsome discussion on the finer points of the government's environmental policies with the PM.

It is also a fact that this summer two men were charged with threatening the PM. 

Finally, Mr. Bexte ambushed the PM on a beach while he was on vacation with his kids. Bexte is an idiot and a poseur but he is harmless. He would not have the guts to actually try to harm the PM but there are others out there who would. Incidentally, Mr. Bexte must have been disappointed. He always has people there to record his stupidity and in this case he was probably hoping that they would get a juicy recording of the PM's security detail wrestling him to the ground. That did not happen and then the PM schooled him when Mr. Bexte asked his questions. 

With all of this it is no wonder Mr. Trudeau stopped announcing his itinerary in advance. His security detail probably recommended it. Indeed, I would bet that they recommended it awhile ago and he finally decided to take that advice. Good on him and I hope he continues to do so. It is bad security practice to tell those that might want to do you harm where you are going to be in advance.

Another aspect of this "scandal" is the PM has been showing up at places where there are large crowds to "give the impression that he is more popular than he really is." While it is true he is showing up at these events it is also true that no other Federal leader is doing the same thing. Both Mr. Poilievre and Mr. Singh could do the same thing. The question is why are they not doing so. Mr. Poilievre in particular is supposed to be running away from the PM in the polls. You would think he would take every opportunity to show that popularity by spontaneously intermingling with ordinary Canadians. Imagine the fawning by our media if there were pictures similar to the ones that came out last week of the PM at the opening of the CNE and other events. That is not happening and I would love to hear someone ask the reason for that.

Friday, August 16, 2024

The Ukrainians Open Up a Second Front

It has been expected for weeks that the Ukrainians would launch a summer offensive but it was also expected that they would launch it at the static front in Eastern Ukraine. Instead they attached North into Russia itself.

A couple of things.

First, the fact the Ukrainians could launch the offensive and encounter little to no resistance is a testament to Russian hubris. They firmly believed that the Ukrainians would never have the temerity to actually launch ground operations into Russia itself so they never actually defended against such a possibility. Make no mistake, if they had the Ukrainian incursion into the Kursk Region would have been nothing more than a raid in force, ending almost as soon as it began.

This could change the strategic situation on the ground somewhat. With this incursion the Russians are going to have to spread their troops a little thinner to prevent a repeat of it after the Ukrainians finally withdraw. Up until now the Russians could concentrate their forces in the Donbass region, effectively outnumbering the Ukrainians at the point of attack. Now they are going to have to put more troops on the other borders with Ukraine. Where are those troops going to come from? They will either come from Eastern Ukraine for from Russia itself. In the first instance that will lead to the weakening of the Russian lines in the East and in the second instance it will lead to less reinforcements being available to replace the losses they have been experiencing in the the war of attrition taking place in the east. Either way, things just got harder for Russian commanders.

The question that this incursion does not answer is whether the Ukrainians, with their superior equipment, training and morale, can outlast the Russians, with their greater number of soldiers and their total lack of concern about casualties. That has been the question of this war since it began.