The Foreign Interference in Canadian Politics Inquiry

I read that the inquiry is hearing witnesses. I am not paying much attention to this inquiry. I will wait for the final report. However, I will say that if that final report does not include any attempts to follow the money then the whole thing is a colossal waste of time.

I am not going to attempt to guess the final outcome except for two points.

The first is no federal political party is going to come out of this smelling like a rose. There are many foreign actors that do not like democracy and they want to discredit it. They really do not have any allegiance to any Canadian political party. They choose targets of opportunity regardless of partisan considerations. If the inquiry discovers those situations all of the political parties at the federal level will have red faces. There are other foreign actors that have a preferred Canadian political party and it will be interesting to see if the inquiry identifies them and who they are supporting.

The second is the reaction to the final report will be along partisan lines. That is, each political party will grab hold of the parts of the report that hurts their opponents and benefits them. As well, we can expect our largely Conservative media to play up any foreign interference that either benefited or was perceived to benefit the Liberals while they play down or ignore interference that benefited the Conservatives. 

In the end we will have to see what is in the report and then it will be up to us voters to decide what we consider to be legitimate political actions by foreign actors and what we consider to be illegitimate foreign interference in our political system, institutions and processes. 

Him, Her, They, Them

I was born a male. That is, I have certain genitalia typical of the male of the human species and I am unable to bear children.

I am also a man. Is there a difference?

Yes. With rare exceptions there are only two biological sexes for our species and every other mammalian species. That fact cannot be disputed. However, your biological sex at birth is not the only determinant of ones sex or gender. Psychology plays a much bigger role.

I am not a man because I have certain sex organs. I am a man because I think like a man, I feel like a man and for lack of a better phrase I identify as a man. Sexism, feminism and all sorts of other "isms" only exist because we have a brain that allows us to have values and beliefs about ourselves and our world. I believe I am a man but, here is the kicker, I do not know why I believe that. I do not know the reason that when I was young I believed I was a boy and when I became old enough I started to believe I was a man. It just happened. Maybe it was genetic. Maybe it was the environment I grew up in. I cannot be certain.  

So if the biggest part of being a man or a woman is in our heads why are people surprised that some might not be able to reconcile how they feel about themselves with their biological sex? There are over 7 billion of us on this planet so it stands to reason that some of us would not be wired like everybody else.

Looking back at my childhood I can recall some kids that did not fit the mold of being typical boys and girls, as dictated by the norms of society. Could they have been having difficulty with their gender identities? We know back then that talking about that kind of thing was a one way ticket to trouble. We know that gays and lesbians did what they had to do to avoid being persecuted so I would not be surprised that those who were atypical genders would have to do the same thing, or more likely, they had no way to really process their feelings in a useful way so they just suffered and did their best to cope.

Alot of time has passed and now people can be more honest with themselves and they have the freedom to explore themselves with less fear of persecution. That is probably why it seems that this phenomenon seems to have come upon us suddenly. We know that homosexuality was much more prevalent than outward appearances made it appear so it would make sense that the same can be true of atypical genders.

The biggest fear that homosexuals created amongst us straight folks was that being around them could cause their homosexuality to rub off on us, or worse yet our children. I feel that same fear is being felt about people with atypical genders. To which I say, stop worrying. It does not rub off. If their existence is causing you to doubt your own gender it is not because them it is because of your own psychology and it has been proven again and again that no amount of persecution of someone will allow you to reconcile the conflict you may be experiencing.

Book Review: $uperHubs: How the Financial Elite & Their Networks Rule Our World

This is a book by Sandra Navidi.

One of the enduring conspiracy theories of both the Left and the Right is the idea that a small cabal of the super rich are actually working behind the scenes to "run" the world for their own benefit. The implication of this is this cabal collectively plans the activities they need to do in order to meet their objective. Such figures as George Soros are key players and they use such organizations as the World Economic Forum (the WEF) to accomplish their goals.

I have never bought into this. The financial system is just too complex and there are just too many players, with competing interests, in the system to make planned collective action feasible. However, there is no denying that the financial industry, and many of its key players, do seem to have an inordinate amount of power and influence in the world.

Ms. Navidi does a good job of explaining why. She explains that the financial system is not a collection of institutions but a collection of human beings, who run these institutions, who create, develop and grow vast networks of contacts, associates, colleagues and friends. In other words, it is though relentlessly networking that these individuals derive their power. Individuals in the financial industry work very hard to expand their networks and the power that they give them. For the most part the network influences those in it but some of the most successful networkers become superhubs and they gain the ability to move some of the the network in the direction they want it to go. There are many superhubs and the author introduces many of them to us in the book. She also identifies the WEF and its annual meeting in Davos Switzerland as a supercharged networking opportunity, which is why it is such a popular event for CEOs, politicians and academics.

The networks go beyond the financial system. They spread into the political theatre as well and the author provided several examples of the revolving door between the financial industry and politics. The one that sticks out is the story of Robert Rubin. He is considered a financial genius who started out as a bright light in the financial industry. His success there lead to him  being a key financial advisor to Bill Clinton, and the architect of the dismantling of the Glass-Steagall Act. Repealing the act removed the line between commercial and investment banks which was a great contributor to the financial crisis of 2008. He had left government long before the financial crisis hit but he was brought back by President Obama as an advisor on how to resolve that crisis. Yep, one of the (inadvertent) architects to the 2008 crisis was tapped to help resolve it.

On a superficial level this would seem to validate the cabal conspiracy theory but the author clearly demonstrates how this would be impossible. First of all, the sheer complexity of the global financial system makes this impossible. No one person, or group of people, no matter how connected they are, knows all of the ins and outs of the financial system, which would be a basic requirement to actually controlling it. Secondly, the author points out that the most powerful people in the financial industry are pretty much identical to each other. They all went to the same two or three universities, they are mostly middle-aged white men, most of them speak English, most of them are American and most of them rose up the industry ladder the same way. In short, they are familiar with each other and it is human nature to trust and to want to be around people just like yourself. We generally abhor differences. All that being said the author points out that despite this many of the major players in the financial industry can have different interests at any given point in time, which precludes widespread and ongoing collusion. The author identifies and details several examples of this.

Although it was not the intent of the book the author effectively debunks the conspiracy theory, although she still paints a grim picture of a homogenous group of men, who are completely clueless of what their decisions are doing to the broader economy and to society. She mentions that such a situation is probably not sustainable but she also mentions that the nature of networks is they are self correcting.

The biggest issue with the book is the author is an financial industry insider, although not a major player. Her livelihood depends on not offending people in the industry so she does not go very far in criticizing what she is writing about. Indeed, much of the book is her dropping names and telling personal anecdotes about them. The anecdotes are effective in demonstrating the points she is trying to make but she never really takes the gloves off in her criticisms. The closest she comes is the chapter on the almost total lack of female representation at the highest levels of the financial industry.

In the last chapter Ms.Navidi does argue that the dependence of the financial industry on the few superhubs introduces a great deal of fragility into the global financial system. As well, the increasing financial inequality in the world is leading to undesirable outcomes that could lead to greater unrest and increase the danger of another financial crisis that we may not be able to get out from under this time. Note that this book predates the election of Donald Trump and it was published just after the Brexit vote so she could not take those events into account in her analysis.

She acknowledges that the current situation is untenable in the long-term and that something has to change. Unfortunately, she places too much faith in the idea from network theory that networks are self-correcting so it will all work out in the end, probably creating some hardship along the way but nothing fatal to the system. My problem with that argument is the network is made up of people who are getting very rich as a result of the current system and they will resist any kind of correction. As with the rest of her argument Ms. Navidi stops short of suggesting the only real solution to the problem, namely outside intervention. There are too many vested interests for the financial system to correct itself. Therefore the impetus for change will have to come from outside of the system. Ideally, it would be well considered and incremental change proposed and adopted by governments but the change could also come from an explosion of anger and resentment from ordinary people and history has demonstrated that the outcomes from such events are always unpredictable.

Superhubs is a fascinating look into the world of high finance. We get to meet some of the key players in the industry, how they rose to become key players and how they maintain their positions of power. We get a glimpse of how the financial industry operates. It is obvious that the author has some misgivings about the system but she never goes very far in her criticisms of it. Her conclusion that things have to change is spot on but she never really looks past the self-correcting nature of networks to see how that change might come about. Who knows, maybe the movers and shakers in the financial industry will see the need for change and move it that way on their own. However, I would bet a great deal that such an outcome will not happen. Any change is going to come from outside, the only question being whether it will be controlled and incremental or a sudden change brought on by a crisis. 

Anti-scab Legislation

The Federal government introduced "anti-scab" legislation in Parliament last week. The legislation would make it illegal for federally regulated businesses to hire replacement workers in case of strike action by their regular workers.

I have noted in this space before that one of the reasons why workers have not benefited from the steady rise in productivity over the last 30+ years is the erosion of workers rights and the steady drop in union membership. The simple fact is businesses will not raise the wages of their workers unless forced to by minimum wage laws and collective bargaining creating upward pressure on wages in the labour market.

So it is heartening to see the federal government introduce legislation that will tip the balance a little bit back towards workers during collective bargaining. Of course, it does not go far enough. What really needs to be done is laws need to be passed that will make it easier for workers to organize. However, the level of government with that responsibility is the Provincial level and most of them are Conservative governments.

Indeed, the backlash against the legislation by conservative commentators and the business community has been predictable. It is also overblown. Even with this legislation businesses will still have the most power and the greater advantage during labour disputes. This just reduces that by a small amount. Of course, that will not prevent them from claiming all sorts of negative outcomes if the legislation is passed. They are completely unwilling to give up even a small part of their power and advantage.

The fact that workers have not seen any benefit from the increase in productivity was never sustainable and negative outcomes for the economy and businesses were inevitable. They seemed sustainable in the last decade or so because credit was practically free. Who needed wage increases when you could get money from the bank at negative real interest rates? That situation was always going to be reversed it was just a matter of when. The economic impact of the COVID pandemic just caused that reversal to be much more sudden and steep than if it would have followed a more typical business trend.  

With credit no longer being free the house of cards that was built on it is crashing down. The first victims of that destruction are the young people, which is not new as young workers are always the first victims of economic shocks. However, if you are a more mature worker you will not be spared the impacts. Higher interest rates will have an impact on you in due time. The banks will eventually reduce interest rates again. They have no choice because the economy is no longer structured to absorb high interest rates for long anymore. However, the days of negative real interest rates are probably behind us. So, if we want our purchasing power to keep up with inflation we are going to have to see our wages go up.

That is only going to happen if the balance of power between business and their workers becomes more even. The "anti-scab" law is a step in the right direction but more needs to be done.

Now the Polls are Just Becoming Ridiculous

Glancing through my political sights today I noticed a screen shot of a seat projection that had the Conservatives above 200 seats and the Liberals under 70.

After I stopped laughing I could not help but think that the pollsters and the pundits that report on these ridiculous polls are setting up some really big expectations for the CPC.

In the last few change elections, both Federally and here in Ontario, the party that won the election and replaced the sitting government started out trailing the incumbent or were tied with them. They did not have commanding leads going into an election campaign, they built one as the campaign unfolded.

With the Conservatives currently polling in the low 40 there is only one way the Conservative estimates can go. 

Down.

When it will happen remains to be seen and if my suspicions about polling companies are correct they will not go down any time soon. However, when the writ is dropped, and the polling companies will have to compare their estimates with actual election results, things could get rather sticky for them and the Conservatives.

If, as I suspect, the polls are not currently reflecting the true picture of the political situation in this country then the pollsters will have to begin showing that before an election if they want to be considered credible after that election. If their estimates are way off on election day they will never be trusted again and they know it. Plus, they will threaten their paying business of doing surveys since survey companies use political polling as marketing tools.

The implications for the Conservatives is their polling estimates will go down while the Liberals will go up and then the story will be the Liberals have the momentum, which could be a death blow to the Conservatives' election chances, particularly if it happens close to or during an election campaign.

There has been a full court press by the Canadian media to have Justin Trudeau resign as PM, although none of them have engaged in election speculation, despite massive polling leads for the Conservatives. That should be a clue by the way. I suspect the pollsters are on board with assisting the media in their efforts since they have no worries about their estimates being tested by an actual election. 

I also believe that the very sophisticated data management teams of the political parties have data indicating the true political situation in the country, which is why Justin Trudeau has not shown any indication of leaving and his caucus is solidly behind him. It also explains, that except for a few drive by suggestions by the Conservatives to the NDP, no pressure has been placed on the NDP and the Bloc to join the Conservatives in forcing an election. 

Mr. Trudeau probably has data telling him he can outwait the polling companies. Mr. Poilievre probably has data indicating that an election would not be the slam dunk the public pollsters are saying it would be. Either way both seem to be content to let things go on as they have been going on for the foreseeable future.

In an effort to push PM Trudeau out of his job our media could be overplaying its hand and in the end they could make things very difficult for Pierre Poilievre as we get closer to an election.

Book Review: The Expendables: How the Middle Class got Screwed by Globalization

I just finished reading this book by Jeff Rubin. I found it a bit of a slog because in several places he got basic facts wrong. For example, he states that those migrants who crossed at Roxhan Road in Quebec and then asked for asylum entered the country illegally. That is simply false. The vast majority of those who crossed were in the US legally but doubts about a change in their status during the Trump presidency convinced them to move north. They came to a designated border crossing, crossed the border, presented themselves to Canada Customs officials and then asked for asylum. None of that is illegal either domestically or internationally

It is hard to take a book seriously if it cannot get simple facts like that correct.

However, the central argument of the book is valid. The era of globalization, with its love affair with free trade agreements has certainly kicked the stuffing out of the middle class in the West. This book looks at the situation the United States, Canada and the European Union but its primary focus is the US experience. The author goes into great detail just how much of a negative impact that globalization has had on the middle class. There is no denying that central argument.

The problem lies in his proposed solution which is to introduce more protectionism into the international trading system. Anybody who has read this blog before knows that I am no fan of free trade agreements. They have never lived up to their promises. However, the historian in me also knows that when countries or trading blocks establish high trade barriers they protect their domestic industries but at the price of making their economies more brittle and less able to handle economic shocks. This was true almost a century ago and it is doubly true in the integrated world economy we have now. When I say integrated I mean the fact that everything is now done by computers. When you can transfer ridiculous amounts of money with just a few key strokes and you no longer have to worry about transferring the currency or precious metal to cover that transfer the level of economic integration is way too high to create economic islands.

That does not stop Mr. Rubin from trying to argue just that. He does so by arguing that President Trump's tariffs on China, the EU, Canada and Mexico brought back jobs to the US. There is some truth to that but the jobs brought back are a mere fraction of the ones lost. As well, when those jobs returned they usually did not return to the old locations, they returned to US states that have "Right-to-work" laws on the books so most of those returning jobs are not as high paying as the ones that left.

Mr. Rubin touches on one of the big problems caused by globlalization. Namely, the level of unionization in the West falling off a cliff in the last 50 years. That is exactly right. That situation created the condition where workers could not stop business from siphoning off the financial benefits of increased productivity over the last five decades from workers to themselves and their stockholders. However, Mr. Rubin fails to make that connection.

The promise of free traders has always been that there would be more winners than losers and programs to assist the losers would be created to make certain they were not left behind. That promise was broken from the start but that hardly matters because it was the wrong promise. Most of the jobs that have been lost in the West as a result of globalization have been manufacturing jobs. What has been left behind are mostly service jobs. They are the jobs that were supposed to replace the manufacturing jobs but they did so at much lower wages and benefits. So the promise should have been that Western governments would make it easier for service workers to organize to allow those jobs to really compensate for the lost manufacturing jobs. The level of unionization does not need to be high. As Mr. Rubin points out at the height of unionization in the US less than one-third of jobs were unionized but that was enough to create upward pressure on wages economy wide. If we reach those same levels we would probably see a similar result.

The simple fact is Westerners cannot compete on wages for the manufacturing jobs that have been offshored and while higher tariffs might change that it will not do so to the extent of bringing all of those jobs back and certainly not at the wages and benefits that workers in those industries used to enjoy. The solution lies in making the jobs that replaced those manufacturing jobs better paying and with more benefits. The true failure of globalization and free trade proponents was not doing that. Until they and Western governments are willing to facilitate that process the outlook of the ever shrinking middle class in the West will grow increasingly bleak.

That is the connection Mr. Rubin failed to make which is unfortunate because otherwise he made a good case for what is ailing the middle class and the fact that something needs to be done about it.

Crazy Like Foxes

In my previous two posts I asserted that the only way Israel realizes real security is by making an equitable peace with its neighbours and that not doing so and continuing with the never ending cycles of intense violence, followed by relative calms, is insanity.

That assertion assumes that the Israelis want to make peace and achieve that security and that all Palestinians want peace with Israel.

It might seem crazy to believe otherwise but history has proven that there are hawks on both sides of the Israeli/Palestinian divide that do not want peace. These hawks believe that there is a military solution to the situation and if given enough time and resources they can achieve it.

It just so happens that Israel is being lead by one of those hawks and the Palestinians in Gaza are being lead by their Palestinian counterpart.

Mr. Netanyahu firmly believes in the military solution and Hamas has as a central tenet of its ideology the destruction of the State of Israel. Both are out to lunch of course. If Israel really could resolve their conflict with the Palestinians by brute military force they would have done so by now, and I will have unicorns fly out of my butt before Hamas destroys Israel.

However, one thing that this situation does for both is provide them with domestic political cover.

Mr. Netanyahu was having some really serious political trouble before last weekend. He was facing indictments and protests over the changes to Israeli institutions that would make it easier for him to undermine Israeli democracy. His counterpart in the Gaza Strip has the problem of not being able to deliver the most basic services to Palestinians in Gaza. In most other jurisdictions that would be a recipe for political defeat.

Then the weekend happened and all of this went away. Hamas will remind Gazans that Israeli actions are to blame for the hardships in Gaza and Mr. Netanyahu will be able to drape himself in the flag and claim that to oppose him would be disloyal to Israel. The fact he will use his sudden popularity to advance his authoritarian agenda, which will also allow him to quash the indictments against him should surprise no one.

In fact, this is not new. Both Hamas and Mr. Netanyahu have benefited greatly from the conflict between Israel and the Palestinians of Gaza for two decades. They have been playing off each other the whole time and both have realized tremendous domestic political benefits. In other words the relationship between Mr. Netanyahu and the leaders of Hamas has been a symbiotic one. That is not to say that they are having secret Zoom meetings to plan this relationship. It just means that both know their roles in this kabuki play and they are quite happy to play them

Which is why, despite all of the grand claims by the Israelis about destroying Hamas, nothing will really be changed by the latest round of violence. Many people are going to die over the next few weeks but in the end there will be no fundamental change to the underlying relationship between the Israeli government and the leadership of Hamas.

The Insanity is not Confined to the Middle East

Today I read that none other than our own PM Trudeau forcefully asserted that Hamas is a terrorist organization and not freedom fighters.

So what is the difference between a terrorist group and freedom fighters? Simple, you agree with the cause of freedom fighters and you disagree with the cause of terrorists. In general, both tend to use terrorism to achieve their political ends so really the only difference is whether you agree with the political ends of a given group.

After all, terrorism is just a political tool, used by a weaker force against a stronger force, in order to effect political change in the terrorists' favour. They use it because to attempt to actually go against the stronger force in a straight up military battle is to invite annihilation. As well, they lack the traditional, peaceful levers of power that can be used to effect political change.

I have heard some argue that terrorism does not work and in many cases they are correct. However the Taliban, the IRA, the Haganah, the Irgun Zvai Leumi and the Stern Gang would take issue with such a sweeping generalization. The first two most would be familiar with. Both the Taliban and the IRA successfully used terror tactics to force a political change. It took time but they achieved their political objectives. They are not the only examples, they are just a couple most would be familiar with.

The other three might not be familiar to everybody. They were three organizations that fought for an independent Jewish state in British Palestine from the 1930s to the departure of the British from Palestine shortly after the Second World War. During that period the three groups carried typical terrorist tactics of bombings, assassinations and sabotage, killing more than 1000 military personnel and civilians between 1945 and 1947 alone. Their tactics worked and the British left Palestine in 1947 and the State of Israel was born.

For Israelis the members of these groups are considered to be freedom fighters. The British government of the day had a different view and the descendants of the people they killed and injured might also have a different point of view.

All of this is to say that things are not nearly as cut and dried as our PM stated today.

I stated in my previous post that Israel will not achieve true security until it makes an equitable peace with its neighbours, including the Palestinians. To make that happen the international community needs to put political pressure on the Israeli government to make the effort for peace. They also need to put the same pressure on the Palestinians to put their own house in order and to choose a credible negotiation team that can speak for all Palestinians in peace negotiations. All involved, Israeli, Palestinian and other interested governments must have the intestinal fortitude to ignore provocations by the hard-liners on both sides that would do every thing in their power to scupper any peace efforts. Both need to negotiate in good faith and create a process that will survive the inevitable bumps in the road. All need to be patient.

Israel will have to make more concessions than the Palestinians because they hold virtually all of the cards. There is not much the Palestinians can really concede that would result in an equitable peace. And an inequitable peace is not sufficient. History is full of examples of how inequitable peace only pushes war down the road and the resulting war is often much worse than the war that was ended by that peace.

Of course, none of that is going to happen for a whole host of reasons. Everybody is doing the same thing they have been doing for decades and expecting different results. The result is going to be the continued tragedy of the Israeli-Palestinian conflict.