Maple MAGA is Going to be Going Through Some Stuff

Maple MAGA is already melting down. Through the defection of 5 opposition MPs to the Liberals, in the last few months, they are within one seat of gaining majority government status. There are three by-elections tomorrow and the Liberals are expected to gain at least two of the three with a reasonable probability that they will sweep them. That would give the Liberals a three seat majority. As well, it has been reported that other Conservative caucus members could move to the Liberal caucus in the coming weeks, giving the Liberals a more comfortable majority.

If this comes to pass we can probably expect Maple MAGA to react poorly.

By-elections being what they are no Liberal should take them for granted. In the past by-elections did not mean anything. They were just elections to fill vacant seats in between general elections and did not have any real impact on the political situation and they could not be taken as a harbinger of future elections, although commentators, both professional and amateur, often tied themselves into knots to prove otherwise.

This time it will be different. The results will lead to a majority government or force the Liberals to continue to work as a minority government. That will change the dynamic of them, from voter turnout usually being very low and many turning out to cast a protest vote, to voters actually voting to have a real impact on the federal political scene. 

However, assuming the Liberals win at least two of them, what is going to happen to Pierre Poilievre.

There are reports he may resign but I would bet money that he will not. If the Conservatives want to be rid of him they are going to have to push him out. He will not go voluntarily. 

I have stated the reason in this space before. If the next election is held in 2029, which would be the most probable outcome of the Liberals gaining majority government status, the leader of the CPC at that time will have a very good chance of becoming PM. There is no way that the Liberals will be able to fly as high as they are currently for the next three years. They will come back down to earth. Combine that with the fact 2029 will see the Liberals governing for 14 years, the chances of the Liberals winning the election in 2029 is probably less than 50/50.

Pierre Poilievre has to know this so unless he is forced out he will stick around. Ironically, if the Liberals gain enough seats for a majority the pressure will be reduced on Mr. Poilievre, even if more of his caucus leaves. The political dynamics of a majority government are much different from the dynamics of a minority government. He would have the luxury of just waiting out the Liberal surge and then attempt to take advantage of any downturn they experience. Without the prospect of a snap election he would have the luxury of time.

All of that will not reduce the extreme angst of Maple MAGA however so expect them to really lose their shit in the coming weeks if the by-elections results from tomorrow night play out as expected.

More Ridiculous Polls

I usually ignore the media polls. They are usually not worth my time. However, if you visit any kind of social media they are hard to miss. Someone is usually posting them so they are hard to miss.

About 18 months ago the media polls were indicating that the Conservatives were leading by 20 points, on average, with the seat models indicating that they would win up to 220+ seats. At the time I expressed the opinion that they were ridiculous for a whole host of reasons and that when an election looked imminent they would equalize. That's exactly what happened.

Now we are seeing the same trend, only favouring the Liberals this time. It is all BS. Yes, I would agree that Mark Carney is liked and respected by Canadians. Even my conservative relatives, who never had anything good to say about Justin Trudeau, like him. Yes I would agree that is rubbing off on the Liberal Party but not to the extent the media polls are indicating.

I will use the same arguments for that opinion. If they were true election speculation would be rampant. It would be the top domestic issue that the media would discuss. It would take second place to the ongoing war in Iran but even that is going to leave the front pages soon, if nothing really mind blowing does not happen in the next few days.

As well, I would remind you that the companies that publish these polls do not make money on them. They are marketing tools so they do not need to be super accurate in between elections because their estimates are not tested against actual election results. 

Judging by how the political parties are acting I would say that the Liberals are in a good position politically. However, I would argue that position is not nearly as good as the media polls are indicating.

As well, I would also like to point out that the "Conservative collapse" a year ago became part of the story of that election, which is also something I stated would happen.

The Liberals are in the same position. If they actually call an election you will see the leads in the media polls evaporate almost immediately, guaranteed. We saw that in the 2021 election. The Liberals opened up a10 point lead in the media polls, they foolishly called an election, and that lead evaporated literally the day after the writ was dropped. The Liberals still won but not the majority government the polls were saying they would sale to just 37 days before election day. That collapse would be the story of the campaign and media would never stop talking about.

So the Liberals should just ignore the noise and govern and hope that the media polls are right enough to win all of the by-elections on April 13.

What the End of the War In Iran Could Look Like

The two sides in the war in the middle east have provided their opening positions for the eventual negotiations for the end of the war.

The Americans have indicated that they will only accept an unconditional surrender.

The Iranians have provided a list of conditions for them to stop shooting. They are:

1. To hand over PM Netanyahu to the International Criminal Court
2. Israel to withdraw its forces to the October 7 borders
3. The Cancellation of President Trump's plans to turn Gaza into a tourist attraction
4. Lift all sanctions on Iran and unfreeze funds
5. Recognize Iran's nuclear rights
6. US and Israeli military is to leave Lebanon, Syria and Yemen
7. The US is to remove all of its military presence from the Arab soil
8. A public apology by Donald Trump to Mr. Khanenei
9. Compensation for every sanction ever imposed on Iran.

This would be very similar to an unconditional surrender by the US and Israel.

Neither side is going to accept the conditions demanded by their enemy so how can this lead to the secession of hsotilities?

As I stated at the beginning neither of these positions are meant to be accepted. They are the opening positions for negotiations. As with all high stakes negotiations the two sides always start out with the most unreasonable demands possible.

So just speculating what could an eventual deal look like.

For the US/Israel it would be:

• The promise by Iran to never close the Straits of Hormuz again.
• Iran would submit to very stringent nuclear inspections to be certain that they are unable to build nuclear weapons.
• I big reduction in their ballistic missile manufacturing. They can keep what they have currently but they cannot build new ones, unless the destroy an equal number of old ones.
• The same provision for drones.
• The recognition of the State of Israel, including statements that it has the right to exist
• A corollary to that is the ending of military aid to the various anti-Israel militias around the Middle East.

For the Iranians it would be:

• Iran is allowed to pursue the peaceful use of nuclear power, with provisions to ensure they keep that promise,
• Sanctions against Iran would be gradually lifted until they were gone.
• The removal of all US bases that currently surround Iran. Essentially the US presence in the Gulf and wider Middle East would at least be reduced if not completely removed.
• Israel would not be allowed to redevelop its anti-missile defences, except for those designed to intercept the short range rockets favoured by the anti-Israel militias.
• Israel would guarantee the security of Iran, and automatic sanctions would be placed on them by the international community if they violate that guarantee

All of this would include provisions to make certain that the two sides are keeping their sides of the bargain, overseen either by the UN or third parties mutually agreed upon by the two sides. The compliance provisions would be quite robust and open to all parties. As well, although the three main combatants in the conflict will do most of the negotiating other countries will be involved, including China and the European Union.

You will note that nothing about the plight of the Palestinians is mentioned above. They will be part of the negotiations but Iran will drop them pretty quick, provided they can get something they really want in return. The same is true about the personal stuff around PM Netanyahu and President Trump. Those are merely bargaining chips to be discarded as negotiations proceed.

Eventually they may move towards talking about confidence building measures but that is a ways off if it happens at all.

In the end Iran is going to want guarantees that it will not be attacked again and it wants the ability to hit back, hard, if Israel or the US decide to attack again.

Israel and the US want to prevent Iran from becoming a nuclear power and prevent it from holding the international economy hostage again. 

Of course, like all peace agreements, the worth of this one would be the willingness of the two sides to adhere to it. 

That is a big problem but what nobody is talking about very much yet is the fact that this war is going to change the face of the Middle East. The old power dynamic that has been in existence for 60 or so years will be gone once the shooting stops. The Gulf States will never trust the US again. Iran will receive overt assistance from China to rebuild and I would bet money that they will allow the Chinese to build military bases in Iran. Global public opinion towards Israel will harden, including in the US, and their days of being able to do as they please to their neighbours will come to an end. 

All of the above is speculation but I believe it is a plausible outcome once both sides decide to stop the shooting.

Members of Parliament Crossing The Floor

The Carney Liberals picked up a fourth Member of Parliament from the Opposition parties, this time the NDP member from Nunavut. That brings the Liberals to 170 seats which means the Liberals only need to win two out of the three by-elections on April 13 to become a majority government, assuming no more floor crossings in either direction before that. Since two of those by-elections are taking place in Liberal strongholds the chances are pretty good for the Liberals, although not guaranteed. They are by-elections after all, which can sometimes surprise us.

Of course, this has created a great deal of angst and anger from the parties who lost Members, with them even stating that if the Liberals gain a majority as a result of floor crossings it is somehow illegitimate. They are wrong of course, Members switching sides predates Confederation so there is nothing inherently wrong with that. However, it is true that this is the first time in modern history that floor crossings could result in a minority government becoming a majority government and I have to admit that it does not completely meet the smell test. That does not mean I believe we should overturn almost 300 years of Parliamentary convention but I can understand why the Opposition parties might be much more aggrieved by the situation than for floor crossings that do not really have any impact on Party standings in the House.

As well, it does not look like any of the Members who switched parties are receiving anything in return. None appear to be destined for Cabinet and considering the success rate of floor crossers in subsequent elections is very low it can probably be concluded that their motivations were not completely self-serving.

As well, we need to look at the parties that have lost Members.

The Conservatives have become a caricature. Really, they are not a serious party anymore. Pierre Poilievre decisively won his leadership review but this has not positively impacted the CPC. As well, he went full Maple MAGA leading up to the review, which I thought was just because he needed to secure them to secure the leadership, but he has not pivoted to a message that would appeal to a broader audience. In fact, he has doubled down on the MAGA rhetoric. As well, it has been widely reported that his leadership style does not allow for much freedom for his caucus. That approach is a good one if you are seen as a winner. Stephen Harper did that when he was PM but no one in the CPC caucus cared because they were the governing party. When you are not the governing party such a tight leash on your members can alienate them, which can result in the floor crossings we have seen in recent months. In short, Pierre Poilievre should do some self-reflection but it appears he is not doing so. That could mean that more CPC MPs may decide life would be better on the Liberal benches.

The NDP is a mess. It is going through an existential crisis and it is rather irrelevant in Parliament. Encouragingly, the front runner for the leadership of the party looks like he will create an actual identity for the party. Whether Canadians will get on board with that identity remains to be seen but at least they will have one, which was something that was missing from the party since before 2015.

The NDP member who crossed the floor is from the North, which has somewhat different politics. Northerners are less partisan, tending to elect Members they believe can deliver the goods for the north. The MP from Nunavut probably concluded that she could do that much better from the government benches instead of staying with a party that does not have official party status in the House of Commons.

So if the Liberals actually do achieve a majority government by the end of next month that is going to give all of the Opposition parties time to get their shit together while virtually guaranteeing the slow erosion of the Liberals' popularity. There is no way the Liberals can fly as high as they are currently flying for the next three years. They are going to come back down to earth. If this Parliament makes it to 2029 that election is going to be very interesting and I would bet that it could be a change election. So there might be a silver lining to these floor crossings for the Opposition parties. We will see.

Impact of War on Iran to the United States

In the short term I believe this will make President Trump a lame duck long before the mid-term elections. The reason is the unpopularity of the war and the economic fallout from it are going to make the Democrats a virtual lock to take back both houses of the the US Congress. That will probably cause the Republicans to finally attempt to rein him in to try to staunch the bleeding. It probably will not happen soon but I suspect we will see it happen after most of the primaries are complete. It will be after that time when incumbent Republican politicians will no longer be in danger of being replaced for the November election and when they will need to do something to increase their chances during that election. 

As well, the US can pretty much kiss all of the alliances in the Middle East goodbye, except for Israel. The Gulf States will probably not cut ties completely, because they do not currently have viable alternatives, but I would bet a sizable chunk of money that they will begin to look to China to assist them. Their alliance with the US was to serve as a deterrent to Iran from doing exactly what it has been doing for the last nine days but that deterrent only works if the US does not attack Iran first. China will have no problem in turning the Persian Gulf into a Chinese lake and I suspect, after the war ends, the people of the United States would say "Let them have it."

In the longer term the US will be weakened by the war diplomatically. However, that has been happening for quite some time and it predates the election of Donald Trump in 2016. His election then and again in 2024 has accelerated that trend but we need to be careful not to overstate it. As well, there could be a case made that this war could hasten the time when the US Dollar ceases to be the reserve currency but if so that is a long time away and many things could happen before then so we can safely dismiss such arguments for now. It is not going to happen before the end of the decade and speculating on what will happen on a longer timeline is like trying to figure out what the weather is going to be like a year from now. 

The two main rivals to the US are Russia and China. 

One thing that everybody has to remember about Russia is it is a country with an economy the size of Italy's and it is shrinking. The once great Russian (Soviet) armed forces, which everybody thought would be able to roll through Western Europe with ease back in the 80s, has made absolutely no progress in four years of war with Ukraine. Indeed, there is some evidence that they have suffered some very substantial setbacks on the battlefield in recent weeks and many credible analysts have indicated that they have blown through all of their reserves of tanks and armoured vehicles. As well, the same analysts are indicating that they have lost around 1 million men during that four years and are suffering a recruiting crisis. In other words, they have pretty much "bled themselves white" since the war started. This all bodes ill for Vladimir Putin's ambitions for the rest of Europe. If they have a hard time against Ukraine, they will have an even harder time against NATO. Yes, they are in a bit of disarray because of Donald Trump but that really is not relevant. The Russians are going to take years, if not a decade or so, to rebuild their strength enough for any more adventures in Europe, those same Europeans are taking steps to rearm and will reach their targets before the end of the decade and Donald Trump will be gone, replaced by a President that will probably try to rebuild the alliances and trust that Donald Trump as squandered in the last few months. (And Putin will probably be gone and Russia may do what it has done for centuries, replace a leader who turned away from the West with one who turns toward it.)

Considering this, if the Russians did not have nuclear weapons, their threat to Western Europe would not be taken as seriously as it is currently. But they will be of no help because if they try to "nuke" any part of Western Europe they will have to deal with a potential nuclear retaliation from the US, Britain and France.

Some are saying the the war has weakened the US enough to allow China to take Taiwan. (I even heard one fool say they could take Japan *headshake*). The problem with that is even after this war the US will have the most powerful military in the world. That is not going to change anytime soon. Any attack on Taiwan will be different from what we are seeing in the Middle East. The Taiwan Strait is not wide but it is wide enough that any invasion force would be at the end of a very tenuous supply line, which could easily be cut for a time by the Taiwanese themselves and permanently cut with the assistance of the US. They still have 11 carrier groups that would pay merry hell with the amphibious ships that China would have to use to invade Taiwan. If they successfully cut that supply line then the invasion of Taiwan fails and the Chinese know it. That fact has not been changed by the events of the last 10 days.

Economically China's progression towards replacing the US as the largest economy has slowed to a crawl. It could speed up again, particularly if they gain more influence in the Middle East, but we probably will not see that happen for the foreseeable future and there are just too many variables at play to conclude it will happen at this point. I personally believe it will but that is just my gut talking. I have no solid evidence to back it up and at any rate I also do not believe it will happen soon. 

So the US is going to come out of this war more diminished than it already was when it started the war. We are going to see some shifting of influence and alliances away from the US in the Middle East but they will not come out so diminished that either Russia or China will be in a position to take real advantage of that. The great power struggle that we have been seeing for the last few years will continue without any resolution, one way or another, for the foreseeable future.

They Really Are That Stupid

I have been trying to wrap my head around the events in the Persian Gulf for a week. Really, no one has seen this kind of thing before. Benjamin Netanyahu has been trying to convince successive American presidents to attack Iran for decades but none of them have been stupid enough to do so. They realized that attacking and militarily defeating a country the size of Western Europe, with a population of around 90 million people is a virtually impossible task. Then Mr. Netanyahu met Donald Trump and all of that changed. Some are asserting that the Israeli PM has some Epstein dirt on Donald Trump but I do not believe that. I think Donald Trump is just that stupid. In all likelihood PM Netanyahu appealed to Donald Trump's narcissisms and the rest is history.

The other piece of stupidity is the Israeli PM's belief that they could have ended this war in a few hours by taking out the Iranian Supreme Leader. That man was 86 years old. The plan to succeed him was well established. I stated in a post in June, during the first attack on Iran by Israel, that Israel just seems to underestimate Iran, its leadership, its will to fight and its people. At this point it is almost looking pathological.

So how does this end? Damned if I know.

Here are a few things we do know:

• The US and the Israelis have a limited number of interceptor missiles. They are already showing signs that they are running low.
• The US and Israel have a massive number of offensive ordinance but even that is finite and not quickly replaced. The consensus I see from some of the experts is they have between two to six weeks of ammunition left
• It is unknown the exact number of missiles and drones the Iranians have, which should have stopped any notion of attacking them from the beginning. Like last June this war is going to come down to who runs our of ammo first. The people who planned this war should have taking that into account.
• The Strait of Hormuz is closed and the international insurance industry will make certain it stays that way until the war ends and there are assurances that ships will once again be able to go through it without being threatened with being attacked.
• Energy prices are increasing and that will be the X-factor going forward. 
• Iran is taking a beating but so are the US bases in the Gulf and Israel. 

The American and Israeli current strategy (Their strategy seems to change on a daily basis) seems to be to level Iranian cities as quickly as they can. The Iranians seem to have the same approach but they have decided that this is going to be a marathon instead of a sprint so they are moving slower. Some have argued that this is a sign of them running out of ammunition, and that could be true but it is just as possible that this is all part of the plan. After all, if your strategy was to use ballistic missiles and drones against your enemies, and those enemies have a supply of anti-missile missiles, then you would work to deplete that supply before launching the real weight of your attack. That is what I would do and I am just some guy tapping away on a keyboard in Canada. I am certain if I could figure this out someone who makes a living developing military strategy could also figure it out.

Long-term what will happen? That depends on how this all ends but here are some possibilities.

If the Iranians do not suffer a strategic defeat, and it is possible they will suffer such a defeat, then they will survive and develop nuclear weapons before the end of the decade. They do not need many. Their principle enemy is Israel, which could be destroyed as a functioning state by three to five 100 kt warheads. So Iran would only need 50, assuming as hit rate of 10%, to destroy Israel. They will probably announce they have them by 2030 and the power dynamic in the Middle East will change forever.

Israel is not going to come out of this war in a good place. Just the shear amount of destruction to its cities and military, political and social infrastructure will require huge amounts of money and resources to repair. Before this war many Americans were coming to realize the oversized influence Israel has on its politics, and not liking it, and that is probably only going to become worse. That could preclude them from providing all of the aid Israel will need to rebuild as quickly as they would need to. As well, there is a chance that Israel will actually suffer a strategic loss in this war, probably equal to the chance of Iran suffering such a loss, in which case Israel could go through an existential crisis.

As for the US, that is more complicated and deserves its own post, which I will publish in the coming days.

Different Approaches to Canada/US Relations, Part 2

Pierre Poilievre gave a major foreign policy speech last week and it demonstrates perfectly the two approaches that I described in my previous post. 

Quickly, the two approaches are: Work with the Americans but push to maintain our sovereignty and distinctiveness or take a more "subordinate" approach to the US, generally following their lead with less concern about sovereignty and distinctiveness. For decades the Canadian approach to US relations has been a mix of these two approaches with the Liberals tending to favour the first approach and the Conservatives tending to favour the second.

Mr. Poilievre's speech was very critical of Donald Trumps words and actions towards Canada and it had several themes and ideas that were similar if not identical to those expressed by the PM at Davos. However, where the PM stressed the need for Canada and other middle powers to work together to navigate the post-American world Mr. Poilievre maintained that Canada should work harder to strengthen ties with the US. A perfect contrast.

I stated in my previous post that the PM gave a rather extreme speech in Davos. He said a great deal out loud that many foreign policy experts and professionals have been saying behind closed doors for decades. That is, and I am paraphrasing, the international system is an anarchic system where whether the rules apply to a certain country is a function of its relative power in the world and that Canada and other middle powers need to begin make decisions with that in mind instead of hoping what rules that do exist will protect them from those bigger powers.

Pierre Poilievre seems to disagree with that assertion, or if he does agree his solution is not to work with other middle powers but to tuck Canada even further under the US's protective wing. As I stated in my previous post, considering the current US policies and goals of the administration and the fact that Donald Trump disappearing from the scene would probably not see changes in all of those policies and goals would mean that any government looking to improve relations with the US would also have to go to extremes to do so. What that looks like is anybody's guess, which is one reason why Mr. Poilievre did not go into details.

Mr. Trump wants to make Canada a part of the US or at least a vassal state, taking orders from Washington. His history has proven that he does not compromise so it would be an all or nothing proposition for him. The Trump administration is using several economic tools in his attempt to make that happen and it is still a question of how much would a Conservative government go to appease the President.

Personally, I really do not want to find out.

Different Approaches to US/Canada Relations

I, like many, watched Mark Carney's speech in Davos. I am not going to address the specifics of his speech but I am going to attempt to put it into a broader context.

Many believe that it was just a rebuke of Donald Trump, which it certainly was, but it was much more than that. It was a very articulate and rather extreme expression of one of the two approaches that have dominated Canada's relations with the United States for decades.

The first approach is the one PM Carney expressed rather forcefully. That is, the United States is our neighbour and our friend but they are so large there is an ever present threat that they will swallow Canada just by its very existence. Therefore, there needs to be a constant effort to push back on that to maintain our sovereignty and our distinctiveness.

The second approach is to be somewhat more subordinate to the United States. They are the dominant country on the planet, financially, militarily and culturally, so trying to fight that is futile and besides making us more like them can only be beneficial to Canada and its people.

Of course, that is a simplification of the complex interplay between the two approaches. No government has ever chosen to follow one approach over the other but all governments have chosen to give one more weight in their dealings with the US.

The Liberals tend to choose the first approach. Think of PM Pierre Trudeau and his much more conciliatory approach to relations with the Soviet Union and Communist China of the 1970s and 80s. Think of Jean Chretien telling George W. Bush that Canada would not participate in the second invasion of Iraq in 2003. 

The Conservatives tend to favour the second approach. Think of the Diefenbaker government giving into pressure from the Kennedy Administration to scrap the Avro Arrow and buy the Bomarc Missiles, missiles that were obsolete before we bought them. Think of the Canada/US Free Trade Agreement or think of the trial balloons, from both Brian Mulroney and Stephen Harper, of adopting a common currency with the US. Only to see both never to mention that idea again when those balloons were shot down by Canadians with extreme prejudice.

Again, that is not to say they exclusively follow these approaches. The Chretien government negotiated the NAFTA and sent troops to Afghanistan after 9/11. The Mulroney government took the lead in negotiating the treaty that banned CFCs and they took the lead in the efforts to bring down Apartheid in South Africa, breaking with the Reagan Administration in both cases.

So Mark Carney's speech was just another example of the first approach and it was consistent with the Liberal's preferred approach to Canada/US relations. What was remarkable about it was how extreme of an example it was of that approach. As someone who has followed Canadian foreign policy for over four decades I was shocked by that speech, not because what he said was wrong but because I never believed a Canadian PM would articulate such a position in public.

Then again, Donald Trump, and his actions towards Canada, has created the conditions where the Canadian government would have to go to extremes to defend our sovereignty. The corollary to that is if we were being governed by the Conservatives they would probably have to go to extremes in their preferred approach.

That prospect scares the hell out of me as I have always preferred the first approach. This is not a partisan dig at the Conservatives by the way. I have always appreciated that governments of every stripe have balanced the two approaches in such a way that we have had decades of peace and prosperity with our southern neighbours. I have often disagreed with specific policies and decisions but overall I have been satisfied with how governments have handled the Canada/US relations.

Unfortunately, Donald Trump has eliminated the balanced approach as an option. He demands complete subordination from Canada, either as the 51st or a vassal state so we are left with having to choose a single approach. Therefore we either have to push back on that hard, as PM Carney is doing, or we have to give in to his demands. I am glad that PM Carney has chosen the approach he has chosen.

Well the Canadian Auto Industry Is Not Up to the Task

In a previous post I asked if the Canadian business class was up to the task of taking advantage of all of the new opportunities being presented by Mark Carney's efforts to expand and diversify markets for Canadian goods and services. I expressed doubt they would be and it would appear I am correct with regard to the Canadian auto industry.

My reasoning is they are beginning to make noise about having the government eliminate or at least delay the requirement to eliminate the sales of gas powered cars by 2035. That requirement has been in the books for over a decade and the Trudeau government gave the industry a couple of decades to meet it.

Those calls have become a little more louder with the Americans eliminating a large number of green house gas emissions requirements in the US, including measures that impact the US auto industry.

The reasoning I have heard is that with the US eliminating the requirement Canada no longer needs them and that pretty much sums up my distain for the Canadian business class.

As usual, they are falling on the old habit of depending on the US market for their business even though the actions of the Trump Administration is disintegrating the North American auto industry. They just cannot help themselves. The evidence is mounting, almost daily, that the US market is no longer a reliable one and will become increasingly unreliable as time goes on. As well, even if Donald Trump were to drop dead today it would not change much because his ideas about tariffs have been embraced by MAGA and will not go away quietly even after he is gone.

Therefore, if the Canadian auto industry wants to continue to be a viable industry they are going to have to expand their access to markets in Europe and Asia. The problem is those countries are toughening environmental requirements, not loosening them. So if the Canadian auto industry fails to meet those requirements they will not be able to sell their cars in those markets. They will be frozen out on environmental grounds. To be clear these will not be tariffs they will be bans on Canadian made automobiles on environmental grounds, i.e. no sales at all.

So the Canadian auto sector should be looking to accelerate their efforts to replace the sale of gas powered cars, not asking the government to loosen requirements. 

It is almost a state of nature that governments trail behind private businesses. There are many examples of that. However, we are seeing an exception. The Canadian government has embarked on a quest to completely change who Canadians can sell their goods and services to and our industry appears to be oblivious to this, falling back onto old but increasingly nonviable habits. 

It is both sad and infuriating.

Polls and Election Speculation

Liberals are celebrating great polling recently and some are speculating that we will be having a spring election.

Some will remember that when the CPC were 20 points up on the Liberals that I expressed profound doubt in the veracity of the polls because there was no election speculation to go along with the lead. After all, when a minority government, with less seats than the current minority government, goes 18 months without an election despite being down by that much then the polls were obviously untrue. It's true that Pierre Poilievre has no political acumen but even he would have finally figured out how to take advantage of great polling, given the amount of time he had to do so, if the polls were right. They were not and the fact the polling gap was closing before the election of Donald Trump, the resignation of PM Trudeau and the election of Mark Carney as Liberal leader pretty much proves that.

Which brings us to the great polling the Liberals are enjoying. The interesting thing is they are being accompanied by the media speculating about the Carney Liberals calling a snap election to take advantage of them. Does this mean we can assume the polls are correct this time? 

No.

Polls in between election campaigns are hopelessly unreliable. Hell they are only slightly more reliable during election campaigns but that is only because the polling companies use their polls as marketing tools so they have to be as close to the final election results as possible to maximize their effectiveness. So no campaign means the polls are garbage that can be safely ignored.

So why is the media speculating about an early election? 

First, because it sells. The media care about nothing more than clicks. It has been like that for quite some time. It is also why news media outlets are always skating near the edge of doom. No one wants to actually pay for that shit and they are increasingly acting on that lack of desire.

Second, the main stream media gave up actually informing consumers of their products on substantive issues a long time ago. And I mean before the internet became all pervasive. So if the media has to choose between election speculation and actually providing us real information about government programs and policies they will take speculation 100% of the time.

Third, the media does not have the best interests of the Liberal Party of Canada in mind. It has been like that since Jean Chretien was PM. They have been actively working to undermine the party since then and the election speculation is all about that. Right now Canadians are concerned about the orange blob who occupies the White House. They are also impressed with how Mark Carney is handling that situation. That is leading to his personal polling numbers being quite impressive and they are the only ones I actually believe, although they are probably overblown. The reason is I actually have conservative members of my family indicating they like him and what he is doing. These are the same relatives who never said a good thing about the Liberals for decades.

So something needs to be done to try to bring those numbers down. Telling Canadians that Mark Carney is planning on calling a snap election is one way to do that. No one wants an election and if the Liberals were to actually call one they would see their polling advantage evaporate very quickly. So a way to take advantage of that is to say the Liberals are planning to call a snap election, although not in so many words, which is why it is all speculation right now.

So my advice to you is to ignore it. It is all noise.

Is Canada's Business Class Up To The Task?

I have written in this space before that Canada is a first rate country with a fourth rate business class. Their way of making money is to establish branch plants for the big US multinationals and to pull stuff from the ground to sell as raw material. They rarely process that raw material into a value added product, being content to sell the raw material to another establishment, usually in the US, and buy back the finished product at a markup.

The actions of the US administration and the actions of the Carney government are putting big monkey wrenches into that approach to making money. The US is no longer reliable and even if Donald Trump were to drop dead tomorrow, it will not be reliable ever again. At the same time, Mark Carney is traveling around the world making trade and investment deals with anybody who is interested and judging by the number of deals he has announced it would appear that many are interested in what Canada has to offer.

So now our business class is going to have to step up. The government is creating the conditions for them to make money a different way than in the past. They just need to have the business acumen and courage to take advantage of them.

I am not holding my breath that they will. The old approach is too ingrained in our business class for them to change. However, they could surprise me.

We will have to wait and see.

The F-35 or the Gripen?

Personally I would prefer Canada buy the Super Hornet but that is not an option.

In all of the arguments around which aircraft to buy the key issue is always, "which aircraft has the greater capabilities?" Proponents of the F-35 indicate that it is the more capable aircraft of the two and they are correct.

Unfortunately, that is the wrong question. The question is which aircraft can best meet all of the operational needs the Canadian Air Force? 

The F-35 cannot meet all of the requirements. This particular airframe was developed for a specific mission, namely the deep penetration of hostile airspace, to take out high value targets, and return alive. For this it is very well suited but for other tasks not so much. Which is the reason that most users of the F-35 have other 4th generation fighter and strike aircraft to back them up. Hell, even the US has not even suggested retiring any of the F-Teens aircraft and the cost of the F-35 is not the only reason why.

So can the Gripen meet the requirement? Not completely. It is a capable aircraft but it is still lacking, although if Canada is only going to buy one type the Gripen comes closest to being able to meet all of the operational needs of the Air Force.

Then you have to look at the politics. The simple fact is the US is no longer a reliable ally so buying aircraft from them is a huge risk, particularly when said aircraft requires the frequency and intensity of maintenance the F-35 requires. It is true that part of the deal to purchase the F-35 is the maintenance of them and that the supply chains for the manufacture and maintenance of them include Canadian companies. However, watching the current administration trample all over agreements when it suits them does anybody really believe the maintenance deals and supply chains are safe? If they are not then the Canadian Air Force would be left with a large number of useless pieces of junk very quickly.

On the other hand the Swedes have made all sorts of promises regarding the manufacturing of the Gripen here in Canada. It all sounds great but one of the reasons why they have made these promises is because they want to build the Gripens for the Ukraine war away from the combatants. The problem is, if the deal goes through, the first Gripens would not roll of the assembly line until the late 2020s, maybe early 2030s. By then the war in Ukraine will probably be concluded one way or another and that could change plans really quick.

So what is the answer? As I stated above most F-35 users have other aircraft to complement them and that is the approach the Canadian Air Force should take. We have already agreed to buy 16 F-35s from the US and that agreement should be honoured. However, Canada should not agree to buy any more, instead filling out the balance of their requirement with the Gripen. 

This approach would best meet all of the operational requirements of the Air Force while mitigating the risks associated with buying both airframes. It would provide the Canadian Air Force with its own deep penetration capability, which is very important in the changing geopolitical landscape, while better meeting all of the other requirements as well.

Some would argue that maintaining two aircraft would lead to logistical issues but I am old enough to remember when the CAF had the Voodoo, Starfighter and CF-5 and they had no problems with logistics. They can do it again and with the big influx of money going to the CAF maintaining two logistical chains would be a good way to spend that money.

I do not know how this will all finally shake out but I am hoping that someone in authority will start thinking outside of the self-imposed box they seem to have put themselves in and consider the idea of buying both types.

A short note on why I prefer the Super Hornet. We already use an earlier version of the Hornet so the transition would go alot smoother. As well, I remember when Canada purchased the Hornets. It was a competition between the F-16 and the F-18 in the early 80's. Canada eventually settled on the F-18 and one of the reasons was it has two engines. When we have to send a couple of fighters up to the Arctic to play with some Russian Bears they have to cross some of the most forbidding terrain in the world. If an aircraft loses its engine there you not only lose the aircraft but the pilot also has a very low chance of survival even if they successfully and safely eject from the plane. Having two engines mitigates that risk. If one fails the other will allow you to limp home. Of course, the instances of engine failures in modern aircraft is very low so it is not a huge issue but it is not negligible and it would only take the loss of one Gripen or F-35 to engine failure to create all sorts of questions of why we did not buy aircraft with two engines.

Will Pierre Poilievre Quit?

No, he will have to be pushed out, in January, by gaining less than 50% of the vote at the Conservative Party leadership review. If he wins more than 50% he will claim victory and hang on.

In all of the talk about the troubles in the CPC one thing is missing. The Liberals only had a 50/50 chance of winning the last election going into it. If it were not for the actions and words of the current US president, before and during the election campaign, the Liberals could very well have lost.

They did not and Mark Carney is enjoying a rather extended honeymoon, although the Liberal Party is not. That honeymoon will end. It is as inevitable as the sun setting tonight and when it does the Liberals will likely lose any subsequent election to the CPC. You see, the Liberals have been governing on borrowed time for a couple of years and historical voting patterns will make their loss virtually inevitable next time.

Pierre Poilievre knows this. I have questioned his political acumen and instincts in the past but even he has to see that the leader of the CPC will likely be PM after the next election. So if he is that leader he will be that PM. So he is going to hang on as hard as he can, despite the short term negative impacts that will have on the CPC. As an aside, others in the CPC, who have Prime Ministerial ambitions should know the same thing which is why I am surprised that campaigns to oust him have not been more prevalent.

Of course, his hanging on could shake loose more CPC MPs who decide to cross to the Liberals, giving them a majority government. While this would hurt Mr. Poilievre in the short term it would actually allow for more time for the positive aura around PM Carney to become tarnished. Or to put it another way, if we have an election within the next 12 to 18 months the Liberals still have a 50/50 chance of winning it. If the election takes place 4 years from now they have virtually no chance. So the short-term pain would actually be to his advantage in the long run.

I am not saying that Mr. Poilievre is play 4D chess and letting all of this happen as part of some master plan. He just wants to hang on because he likes the perks and he believes, rightly, that if he does he has a very good chance of becoming PM someday. 

There is the wildcard of CPC members not deserting to the Liberals but quitting the caucus and attempting to form a conservative alternative to the CPC. Perhaps an attempt to resurrect a progressive conservative party within Canada. I do not believe this is likely to happen or whether they would be successful if they attempted it but it cannot be discounted and if they do succeed then the next election could be very interesting.

So if he receives even a small majority of the vote in January he will claim victory and stay on as leader of the CPC. He will then try to rehabilitate his image. Incidentally, assuming he is able to do so or he just decides to wait until PM Carney's popularity starts to slide it will take time so I would not expect the CPC to bring down the government anytime soon. He will find a way to allow this government to continue until he believes he can win.

The Federal and Alberta Governments Make a Deal

Or more accurately the two governments have settled on a framework that could potentially lead to a new pipeline being built to the BC coast.

When I first read about it I asked the question: WTF is Mark Carney doing? 

Then I read the agreement, or Memorandum of Understanding (MOU) and I have concluded that no pipeline will ever be built. The reason for that conclusion is the MOU specifically states that the funding for such a pipeline has to come from the private sector and that those very same companies will have to come to an agreement with all of the potentially impacted indigenous peoples to build it.

At this time I can confidently state that this is not going to happen. The biggest reason is there is no business case for a new pipeline. There has not been one for over a decade, whether you are talking about one to the Pacific, Churchill or points east. Most oil and gas industry analysts, who do not work for the industry, are indicating that oil and gas demand, and therefore prices, will permanently decrease by the end of this decade. So considering it will take at least that long to have a pipeline approved, even with the new approval process in the Build Canada Act, and built, that the pipeline will never show a profit. No profit, no business case, no pipeline.

The MOU also holds out the possibility of revoking the tanker ban, although the language around the conditions to do so is quite convoluted, but again private interests will make that meaningless. The waters that the tankers would have to go through to pick up the oil are very treacherous and no insurance company would insure a tanker going through them. Without insurance the tanker company would be on the hook for the entirety of the liability for any accident and they will not accept that risk.

So in the end the MOU is virtually meaningless.

Of course, there has been alot of talk about how the MOU has put the ball into Danielle Smith's court, taking away a bone of contention that she could use to fire up her base and hang on to power. I am not going to repeat all of that here, although I will disagree on two points.

The first point is the peace between Ottawa and Alberta will be short lived. The next battle will be Alberta demanding that Ottawa put up a substantial amount of money to build the pipeline. Danielle Smith promised her voters a pipeline, the private sector is not going to step up to build it, which will leave governments to foot the bill. Alberta does not have the financial wherewithal to do it alone so they will eventually get around to demanding Ottawa to kick in, which means most of the cost. 

The second point is this MOU will not help the Liberals in any way with Alberta voters during an election. During the next election the Liberals will most likely lose seats in Alberta instead of gain any. That was true before the MOU was signed and it is still true.

So in the end it is status quo. There will be relative peace between the two governments for a short period but the Alberta government will go back to blaming Ottawa for all of the ills in the province because that is what provincial governments do when they shit the bed. No pipeline will be built, without governments paying for it. The Liberals will lose seats in the next federal election. 

Who Cares?

With that question PM Carney voiced the frustration that most Canadians are feeling with regard to Donald Trump and his administration. 

Then he followed it up by stating that it was a poor choice of words.

I do wonder if it was as much an off-the-cuff question or whether the whole thing was calculated. 

That sentiment would resonate with most Canadians. The Conservatives, ever predictable, decided to try to make political hay from it and then he walked it back making them look kind of silly and reminding Canadians that when it comes to Donald Trump there is some doubt the CPC can be trusted to fight for Canadian interests.

Or the put it another way the Conservatives failed to read the room yet again. That should come as no surprise. After all there was a poll that came out a few weeks ago that indicated that a large majority of Canadians are very unhappy about what Donald Trump is doing. It indicated that over 80% of non-Conservatives were unhappy but only around 50% of Conservative were unhappy. That is, around 50% of Conservatives are quite happy with what Donald Trump is doing. The Conservatives appealing to their base at the cost of appealing to the broader electorate has become the MO in the last few years. Maybe they believe it will eventually win them an election, and they could be right, but I do know that appealing to a broader audience would almost guarantee them a victory. However, as a Liberal supporter I hope they keep doing what they are doing. It decreases their chances of winning.

The old "elbows up" never meant that the government would fight the Trump administration on everything. It was always going to be about picking their spots. The PM did just that in South Africa this week.

Nicely done. 

Surprising No One Budget 2025 Was Passed

Why does the political class actually believe Canadians really care about the minutiae of what happens in Parliament?

I am one of those who follows politics pretty closely. So here is a brief summary of how the budget was passed:

The Liberals did not give a damn whether it passed or not. They were the only party that was poised to benefit from an election and they also knew that two of their opponents wanted desperately to avoid one.

The Bloc did not want an election either but they were not as desperate so they decided to vote against, knowing it would not come back to bite them on the ass.

Elizabeth May managed to win vague assurances from the PM, providing her with the political cover to vote for the budget.

The Conservatives and the NDP desperately wanted to avoid an election but they did not want to be seen supporting the budget either. So they took the half-assed approach of making certain that not enough of their members voted to ensure their votes did not exceed that of the Liberals and Greens. Hell, the Conservatives literally had two of their senior members hide behind curtains in the House so that they could quickly move into their seats to vote once the outcome was known.

All of this is very interesting and both amateur and professional political commentators have been in a tizzy since it happened.

Monday night, after the vote, I went to my non-political wife to tell her the results. She had seen in the news the week before that there was a confidence vote that could trigger another election. She asked me if we were going to have an election and I said no.

So, when I went to tell her I began giving her the above summary. She stopped me very early and asked "Is there going to be an election?" 

I said "No."

"Good"

"Don't you want to hear the details?"

"No."

And we have not spoken about it since.

For years my wife has reminded me that most Canadians do not care about politics to the point where some do not ever bother to vote. And those that do care tend to have already chosen a side and nothing that happens will probably change that.

So the Conservatives and the NDP twisting themselves into knots Monday night was all for naught. It was a complete waste of time.

The 2025 Canadian Federal Budget

Having read the budget I can say that it did not surprise me. It does not contain any of the poison pills that the opposition was talking about a couple of weeks ago and it is not the progressive budget it would have been if PMJT was still the head of the Canadian government. I stated in this space a few months ago that PMMC would have fit in quite well in the Progressive Conservative cabinet of Joe Clark and this budget proves it. Make no mistake that this is a progressive conservative budget.

As with all progressive conservatives, and all conservatives for that matter, they talk a good game with regard to reducing deficits but when push comes to shove they fail as much as non-conservative governments. This budget did not buck that trend. The actual number given for the deficit this year is an eye catcher but as some have noted if you account for inflation it is no bigger than the average deficit from the last 50 years. At any rate, the usual deficit hawks are loudly condemning the Federal deficit, from a Liberal government, but as usual they are dead silent about the deficits, and some rather egregious mishandling of taxpayers money, from Conservative provincial governments. I am certain that must be a coincidence.

What makes the current deficit a progressive conservative one instead of a conservative one is it is being created by investing in stuff Canada needs. They are borrowing money for big projects and the military instead of just borrowing money to transfer it to the wealthy in the form of tax breaks, which is what the last federal Conservative government did several times in their nine years in power. A progressive budget would have borrowed money to give to ordinary Canadians, who we are told are going through an "affordability crisis".

The amount of money involved is quite impressive and it cannot have anything but a positive impact on overall economic activity. That is not to say that its impact will always be positive but overall it probably will.

My biggest beef with the budget is its measures to shrink the public service. It does not make sense to plan to invest billions but also get rid of the people who will be required to make certain the money is being spent as intended. After all, when this kind of money is being talked about it is inevitable that some will wind up where is should not be. You need people to keep that to a minimum but that is harder to do if you are giving the people charged with doing that pink slips.

As well, these periodic reductions in the size of the public service have always been shell games. Certainly they reduce the size of the public service, for about a month, maybe six. Then the government departments go back to hiring more staff because they realize that they need them. Oftentimes the staff they hire back are those that left during the workforce reduction. When you add that most staff reductions take place as a result of people taking incentive packages to volunteer to leave what really happens is the government gives many employees months long paid vacations.

Really these workforce reductions are just a publicity stunt and it is disappointing that the current government is doing this. I would have thought that a former Bank Governor would be able to figure this out and approach workforce reduction if a different and sustainable way.

I cannot speak about the budget without talking about how it has discombobulated the Conservative Party. It is probably not the reason for their current troubles but it seems to have been a catalyst for the unrest in the party that was inevitable after their election loss in April and Pierre Poilievre' s refusal to step down as leader of the CPC. These things do not go way quickly so it will be interesting to see how this all finally shakes out.

For a first budget I cannot say I am surprised by it. It is certainly ambitious and if they achieve even half of what it sets out to do then it could very well be the transformative budget the Liberals are selling it as. However, there is alot of time and politics to go before we will begin to see this transformation so I would not get too excited about it yet.

I would be very surprised if this budget caused the government to fall and trigger an election. If I am the opposition parties I do not want to piss off the electorate by triggering an early election and fight said election against this budget. Stranger thing have happened so we will have to wait and see but I believe you do not need to worry about campaigning in the snow.

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.