Wednesday, February 14, 2007

Feds Screw Alberta, Again

Ken Chapman makes the point well in his blog;

Is Harper's ecoTrust Really a Fiscal Imbalance Fund?
Is Harper taking his western base, particularly Alberta and Saskatchewan, for granted, yet again? Premiers Stelmach and Calvert are taking the Harper eco-Trust idea to task. They are calling for the funds to be distributed in a way that responds to solving the emission issues by focusing funds where the GHG problems are, like Alberta and Saskatchewan. Instead, the Harper Cons are proposing a per capita distribution and a pre-emptive promise to Quebec that is tied to elections, in Quebec and federally.Quebec is the place Harper chose to announce a potential (subject to budget approval) funding for reduction of air pollution and GHG emissions.


And the news is not good coming from the silence of Finance Minister Flaherty on the contentious issue of resource revenues.

Mr. Flaherty said the budget will "address the issue of moving from fiscal imbalance in the governments in Canada to fiscal balance." But he's not tipping his hand on whether resource-rich provinces will be expected to share their wealth.He did not indicate how far and how fast the federal government intends to move to help provinces with revenue shortfalls.

So here we have the Party of Alberta in power in Ottawa, screwing Alberta.

Is it because they take their voter base for granted, which is a given in Alberta politics. Or is it something more nefarious.

Like allowing their right wing base to move even further right into the hands of the likes of ex-California Beach Bum and Separatist Ted Morton. Is this a way for Harper to provoke a Firewall around Alberta by showing that the Federalist State can do nothing but placate Quebec.

Because they sure as heck aren't doing anything for Ontario, and they are giving ammunition to newly appointed Alberta CEO Ed Stelmach for his shot-gun blasts at Ottawa.

Or is it simply as Ken asserts that Harper has gotten a taste of power and wants to keep it at any cost, well almost any cost. He will pay Quebec for votes and tax Alberta Saskatchewan and Newfoundland resource revenues for the cost. But to soften the blow he might leave Alberta out of his resource revenue grab, just to further divide and conquer.

It is not the Liberals that are the threat to Alberta's Resources, it is the Harpocrites that will bring in the new NEP. And as usual the right wing pundits in the province, in the media and on the blogs fail to see this obvious fact of realpolitik.

To rule and govern in Canada is to be the PM. The party and the people do not matter.




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Scab Trains Go Off The Tracks


Management can't run CN trains safely during the best of times, why would it be any different as they get scabs to run the trains during the current strike by UTU.

Well in this case the management and scabs managed to have two accidents in one day. That's a record even for CN.


Two CN trains derailed in separate incidents Tuesday in British Columbia and Alberta while being operated by management during a railway strike.

In Prince George, B.C., the wheels on the locomotive came off the rails along tracks between a pulp mill and a refinery, said a CN spokesman.

He also said the role played by replacement workers and managers will be part of the investigation.

union representatives say it shows the dangers of supervisors running trains when they have little experience.

Which reminded me of this song by Joe Hill, changed to reflect the guilty.


The Workers on the CN line to strike sent out a call;
But Casey Jones, the engineer, he wouldn't strike at all;
His boiler it was leaking, and its drivers on the bum,
And his engine and its bearings, they were all out of plumb.

Casey Jones kept his junk pile running;
Casey Jones was working double time;
Casey Jones got a wooden medal,
For being good and faithful on the CN line.
The workers said to Casey: "Won't you help us win this strike?"
But Casey said: "Let me alone, you'd better take a hike."
Then some one put a bunch of railroad ties across the track,
And Casey hit the river bottom with an awful crack.

Casey Jones hit the river bottom;
Casey Jones broke his blessed spine;
Casey Jones was an Angelino,
He took a trip to heaven on the CN line.
When Casey Jones got up to heaven, to the Pearly Gate,

He said: "I'm Casey Jones, the guy that pulled the CN freight."
"You're just the man," said Peter, "our musicians went on strike;
You can get a job a'scabbing any time you like."

Casey Jones got up to heaven;
Casey Jones was doing mighty fine;
Casey Jones went scabbing on the angels,
Just like he did to workers of the S. P. line.
They got together, and they said it wasn't fair,
For Casey Jones to go around a'scabbing everywhere.
The Angels' Union No. 23, they sure were there,
And they promptly fired Casey down the Golden Stairs.

Casey Jones went to Hell a'flying;
"Casey Jones," the Devil said, "Oh fine:
Casey Jones, get busy shovelling sulphur;
That's what you get for scabbing on the CN Line."




See

CN

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A Little Eros For Valentine's Day


Alternet had this article about activism and love for Valentines day;
Why Love Is Our Most Powerful, Lasting Form of Activism

Which is very much what I said here;Socialism Is Love

And it got me thinking about the left wing Freudians like Norman O. Brown. One of the philosophers who was widely read in the Sixties and Seventies but who is forgotten now. Yet Brown only recently passed away, five years ago.

His attack on repression and embrace of Eros against Thantos (death) spoke to the crisis of rigidity, authoritarianism and the war culture in America and around the world in that period. Not unlike the situation of world crisis we find ourselves in now.

Like Marcuse's; Eros and Civilization,
and the various works of Paul Goodman and Eric Fromm, and those of Wilhelm Reich, reading Browns work was a liberatory experience.

For Valentines day I can think of no better suggestion than remember Norman. O. Brown.

Brown like Fromm and the radical theologian Harvey Cox a Dionysian Christian,embraced the idea of death and resurrection as liberation, and that the secret gnosis was to embrace life not death, in that Christos was life against death.

Like
Jane Ellen Harrison who in her work Themis described the revolutionary aspect of Dionysus as being the young god who embraces life even in death, against the sterility and rigidity of the old pantheon of dead stone faced Gods of Greece. By the time of the Bacchanae, the Greek pantheon stood as statues in the edifice of State. Appolianic culture was ridden with wars and patriarchy as it was the creator of high culture and civilization of the Greek State.

This dialectic is also reflected in the later works of Harold Bloom and Camille Paglia.

In his work Loves Body....

Brown here draws much more on ethnography and myth, in addition to psychoanalysis, and he strives for a fusion of the pagan/Dionysian with a radical Christian mysticism. (This latter is noteworthy, because it calls upon potentialities in Christianity that are far different either from the “liberal theology” of Brown’s day or from the heavy fundamentalism that is the main face of Christianity in America today. Brown’s emphasis on the joyousness of the Resurrection, on the “resurrection of the body,” is diametrically opposed to the sadomasochistic body hysteria/disgust of Mel Gibson’s Passion of the Christ). Brown also moves from the formidably learned and argumentative discourse of Life Against Death to a more poetic, more willfully fragmentary style of writing. Love’s Body is short on any concrete discussion of how we might get from here to there, from civilized repression to redemption in the body of Dionysus/Christ, but it’s ferociously visionary in a way that stands as a reproach to more timid social, cultural, and religious theorists.


Norman Brown, Playful Philosopher, 89, Is Dead

October 4, 2002
By DOUGLAS MARTIN


Copyright 2002 The New York Times Company

Norman O. Brown, an erudite and spectacularly playful
philosopher whose attempt to psychoanalyze nothing less
than history itself entranced intellectuals, beguiled New
Age seekers and sold many books, died on Wednesday in Santa
Cruz, Calif. He was 89.

His son Thomas N. Brown said he had Alzheimer's disease and
died at an assisted-living residence.

Dr. Brown was a master of philosophical speculation, mixing
Marx, Freud, Jesus and much else to raise and answer
immense questions. Alan Watts, the popular philosopher,
sang his praises. His works joined David Riesman's ``Lonely
Crowd'' and J.R.R. Tolkien's ``Lord of the Rings'' on the
reading lists of undergraduates aspiring to the
counterculture.

Scruffy pilgrims streamed to commune with him, only to
discover a short-haired man who lived in a split-level
house and avoided drugs. A meticulous student of ancient
Greek who was given to long, meditative walks with his
golden retriever, he was not a little perplexed when
magazine and newspaper articles linked him to the new left,
LSD and the sexual revolution.

``I have absolutely no use for the human-potential
movement,'' he said in an interview with Human Behavior
magazine in 1976.

His books were nonetheless gobbled up by scholars eager to
respond to hip-sounding ideas that combined erudition and a
poetical mysticism.

``Reading Brown was a little like taking drugs, only it was
more likely to lead to tenure,'' the sociologist Alan Wolfe
wrote in The New Republic in 1991.

In his ``Life Against Death: The Psychoanalytical Meaning
of History'' (Wesleyan University Press, 1959), he said
individuals and society were imprisoned by an essentially
Freudian ill: repression. He argued that the only escape
was to face death head-on and affirm life.

Maurice Richardson wrote in The New Statesman: ```Life
Against Death' is a running dive off the Freudian
springboard into history's deep end. It is a fascinating
book, discursive, inconsequent, sometimes preposterous, but
full of interesting ideas, product of a learned man in a
tight place, one of those rare genuine stimulators.''

Dr. Brown's book ``Love's Body'' (Random House, 1966)
discussed the role of erotic love in human history,
describing a struggle between eroticism and civilization.
He voted against civilization, a stance that elicited
praise and criticism.

Among his critics was Brigid Brophy in The New York Times
Book Review, who called Dr. Brown's assertion that
schizophrenics might be saner than those without the
disease ``the most preposterous ever made in serious
print.''

His ``Closing Time'' (Random House, 1973), an interweaving
of quotations from James Joyce's ``Finnegans Wake'' with
excerpts from the works of the 18th-century philosopher
Giambattista Vico, was ``an extraordinary tour de force,''
Library Journal said.

Norman Oliver Brown was born in El Oro, Mexico, on Sept.
25, 1913. His father was an English mining engineer, and he
was mainly reared and educated in England, where his tutor
at Balliol College, at Oxford University, was the eclectic
historian Sir Isaiah Berlin. He earned his doctorate in
classics at the University of Wisconsin.

From 1943 to 1946 he served in the Office of Strategic
Services, the forerunner of the Central Intelligence
Agency. He became a friend of Herbert Marcuse, another
intelligence analyst and later analyst of society, and
those philosophers later engaged in spirited intellectual
debates for many years.

In 1938 he married Elizabeth Potter, who survives him. In
addition to her and his son Thomas, of Santa Cruz, he
leaves another son Stephen, who lives near Armstrong,
British Columbia; his daughters Rebecca Brown of Monte Rio,
Calif., and Susan Brown of Iowa City; and five
grandchildren.

Dr. Brown was a professor at Wesleyan University, the
University of Rochester and the University of California at
Santa Cruz.

He was a Marxist by sensibility and intellectual
inclination in the 1930's, and worked in the leftist
presidential campaign of the Progressive Party's Henry
Wallace in 1948. By the early 1950's, he decided that
politics did not answer the important questions, and became
enamored with Freud. He even learned to interpret his
dreams, which had the unwanted side effect of ruining his
sleep.

Sir Stuart Hampshire, an English philosopher who had known
Dr. Brown since they were students at Oxford, said
yesterday in a telephone interview that Dr. Brown was ``a
victim of theories,'' whether those of Marx or Freud. He
said Dr. Brown's idea that it was possible to abandon
Freudian morality in choosing an unrepressed life was ``not
really his life or anybody's life.''

But Sir Stuart praised many of Dr. Brown's intellectual
insights, mentioning in particular his recognition of
Jonathan Swift's hatred of the physical functions of the
body.

``Nobody had ever said that before,'' he said. ``It was
very, very intelligent.''

Jay Cantor, who teaches a mix of literature, philosophy and
psychoanalysis at Tufts University, said yesterday by phone
that Dr. Brown was brilliant at connecting seemingly
disparate subjects to form new insights. A typical example:
``If Freud is true it is because of connections with the
Gospel, and if the Gospel is true it is because of
connections with Marx, and if Marx is true it is because of
connections with James Joyce.''

Dr. Brown typically used memorized quotations to make the
connections, Dr. Cantor said. He added that Dr. Brown had a
modern poet's sensibility in his writings, allowing ``the
symbolism and the history of the words he used to lead his
thoughts.''

``Everything is only a metaphor,'' Dr. Brown wrote in
``Love's Body,'' ``there is only poetry.''

His favorite poetic sentiment was about how we all die with
unlived lives in our bodies. Dr. Cantor suggested that this
referred to ``the difficulty of breaking the mental chains
we carry within us.''




ZIZEK, NORMAN O. BROWN & THE PSYCHOLOGY OF CULTURE
by Richard Koenigsberg


According to Slavoj Zizek, the fundamental level of ideology is that of an
"(unconscious) fantasy structuring our social reality." Ideology is not a
"dreamlike illusion," rather is a "fantasy- construction which serves as a
support for our 'reality' itself." Matthew Sharpe notes that just as an
individual subject's discursive universe will "only ever be unified through
recourse to a fantasy," so too the public ideological frame wherein
political subjects take their bearings can only function through the vehicle
of what Zizek calls "ideological fantasies."

Norman O. Brown's writings in Life Against Death: The Psychoanalytical
Meaning of History allow us to expand upon Zizek's views. In contemporary
theory, concepts such as culture, ideology, discourse and narrative usually
are taken as "givens." These concepts are used to "explain" the mind, but
are not themselves considered to be subject to explanation. However, one may
pose questions such as: Why do particular discourses become dominant within
a given society? Why do some narratives replicate whereas others do not? How
may we account for the structure and shape of particular ideologies, and the
passion with which they are embraced?

Whereas Lacanian theorists view the mind as a product of the symbolic order,
Norman O. Brown seeks to explain the nature of the symbolic order itself.
Brown states that culture represents a set of "projections of the repressed
unconscious." Symbolic objects in culture, according to Brown, exist to the
extent that they perform psychological functions for the subject. Culture,
Brown declares, exists in order to allow human beings to "project the
infantile complexes into concrete reality, where they can be seen and
mastered."


The Freudian Left

The body was also the nexus of repression for Brown, and his “eschatology of immanence” (to use Susan Sontag’s memorable phrase (262)) foreshadows the postmodernism of many from Dilleuze to Irigaray:

With the whole world still in the bourgeois stage of competitive development and war, the thing to remember about Marx is that he was able to look beyond this world to another possible world, of union, communion, communism…And after Freud, we have to add that there is also a sexual revolution; which is not to be found in the bourgeois cycle of repression and promiscuity, but in the transformation of the human body, and abolition of genital organization. (1968, 246)

Brown is at pains to point out that the most basic of Freud’s speculations demand not only a science of culture, but also a revolution:

In a neurosis, according to Freud, the ego accepts reality and its energy is directed against the id… In a psychosis, the ego is overwhelmed by the id, severs its connection with reality, and proceeds to create for itself a new outer and inner world. The healthy reaction, according to Freud, like a neurosis, does not ignore reality; like a psychosis it creates a new world, but, unlike psychosis, it creates a new world in the real world; that is, it changes reality. (1959, 154)

For Brown, who remains the most Freudian of our triumvirate, sublimation (the result of repression) is essentially desexualization wherein the ego, incapable of accepting its own negation in death, dilutes its life and connects its “higher sublimations” (socially accepted transferences of erosic energy such as work and industry) to lower regions of the body in what Brown terms a “dialectical affirmation-by-negation.” If the simplest example of such sublimation-as-desexualizing is infantile thumb sucking, the “most paradoxical” is anality, and Brown concludes his magnum opus, Life Against Death with a simply astonishing deconstruction of “the excremental vision” in western literature and philosophy. In a discussion ranging form Luther’s eschatology, to Berkeley’s tar-water and Kant’s “categories of repression” we find a conclusion of sorts: “It is by being the negation of excrement that money is excrement; and it is by being the negation of the body (the soul) that the body remains a body-ego” (1959, 161).


Norman O. Brown, 1913-2002

Norman O. Brown was born in New Mexico in 1913 and educated at Balliol College, Oxford, and at the University of Wisconsin. His tutor at Oxford was Isaiah Berlin. A product of the 1930s, Brown was active in left-wing politics - for example, in the 1948 Henry Wallace presidential campaign - and his work belongs within the history of Marxist, as well as psychoanalytic, thought. During World War II, he worked in the Office of Strategic Services, where his supervisor was Carl Schorske and his colleagues included Herbert Marcuse and Franz Neumann. Marcuse urged Brown to read Freud, leading, in 1959, to Brown’s most memorable work, Life Against Death. Brown taught Classics at Wesleyan University and was a member of the History of Consciousness Department at the University of California at Santa Cruz. Although Life Against Death made him an icon of the New Left, he successfully eschewed publicity, insisting to the end on his primary identity as teacher.

There is still no better introduction to Life Against Death than the one that Brown wrote in 1959. The book was inspired, he explained, by a felt ‘need to reappraise the nature and destiny of man’. The ‘deep study of Freud’ was the natural means for this undertaking. His motives, Brown continued, were political in the most profound sense of the term: ‘Inheriting from the Protestant tradition a conscience which insisted that intellectual work should be directed toward the relief of man’s estate, I, like many of my generation, lived through the superannuation of the political categories which informed liberal thought and action in the 1930s.’ ‘Those of us who are temperamentally incapable of embracing the politics of sin, cynicism and despair’, he added, were ‘compelled to re-examine the classic assumptions about the nature of politics and about the political character of human nature.’

How did it come about, at the dawn of the 1960s, that Freud appeared as the successor to a ‘superannuated’, but not yet surpassed, Marxist project? Life Against Death addressed this question. Until the 1960s, as Marx had well understood, the overwhelming fact of human life had been the struggle for material existence. The ‘affluence’, ‘cybernation’, and ‘conquest of space’ that were becoming apparent signalled that this struggle need no longer dominate. As John Maynard Keynes prophesied, even a glimpse at ‘solving the economic problem’ would provoke a society-wide ‘nervous breakdown’ or creative illness in which the ends of society would come in for re-examination. Marxism lacked the means for this re-examination but psychoanalysis did not. However, Freud in the 1950s was understood to be a conservative refuter of liberal and Marxist illusions of progress and not as their successor. As Norman Podhoretz - then a student who, along with Jason Epstein, discovered and promoted the book - noted, Brown disdained the ‘cheap relativism’ of Freud’s early critics such as Karen Horney and Erich Fromm and understood that ‘the only way around a giant like Freud was through him’.

Brown’s reading of Freud in Life Against Death had two main theses. first, Brown offered a riddle: ‘How can there be an animal that represses itself?’ Freud’s texts offered a solution. The determining element in human experience, in Brown’s reading, was the fear of separation, which later takes the form of the fear of death. What we call individuation is a defensive reaction to this primal fear and is ‘based on hostile trends directed against the mother’. Driven by anxiety, the ego is caught up in ‘a causa sui project of self-creation’; it is burdened with an ‘unreal independence’. The sexual history of the ego is the evidence of this unreality. Desexualization (the transformation of object-libido into narcissistic libido) is the primary method by which the ego is built up.

While Brown’s emphasis on the infant’s psychical vulnerability was true to Freud, his one-sided denigration of the ego was not. According to Brown, what psychoanalysis considered the goals of development - ‘personal autonomy, genital sexuality, sublimation’ - were all forms of repression. Above all Brown criticized psychoanalysis for endorsing dualism: the separation of the soul (or psyche) from the body. The true aim of psychoanalysis, he argued, should be to reunite the two. This can be achieved by returning men and women to the ‘polymorphous perversity’ of early infancy, a state that corresponds to transcendence of the self found in art and play and known to the great Christian mystics, such as William Blake and Jakob Boehme. The key was to give up the ego’s strivings for self-preservation; genital organization, Brown wrote, ‘is a formation of the ego not yet strong enough to die’. Brown called repression the ‘universal neurosis of mankind’, a neurosis that every individual suffered.

History, or the collective individual, he continued, went through an analogous process of trauma, repression and the return of the repressed. History, then, had the structure of a neurosis. In particular, Brown saw the birth of capitalism as the nucleus of the neurosis, a critical period, somewhat akin to the stage of the Oedipus complex in the evolution of the individual. Just as, in Freud’s original formulation, the infant moved from anality to genitality, so, Brown believed, in the transition from medieval to modern capitalist society, anality had been repressed, transformed and reborn as property. Capitalism at root, Brown argued, was socially organized anality: beneath the pseudo-individuated genitality of early modern society, its driving force was literally the love of shit. The Protestants, he held, had been the first to notice this. Luther, in particular, regularly called attention to the Satanic character of commerce, by which Brown meant both its daemonic, driven character and its excremental overtones of possession, miserliness and control. The papacy’s ultimate sin, according to Luther, was its accommodation to the world, meaning to commerce or the Devil. Once again, as for the individual, Brown viewed death as the portal to life. Max Weber, he argued, in linking Protestantism to capitalism, emphasized the calling but left out the crucifixion. According to Brown, ‘the Protestant surrenders himself to his calling as Christ surrendered himself to the cross’, meaning that a free, unrepressed merging with this world was the path to resurrection and to the transcendence of the soul/body divide.

Life Against Death will always be associated with Herbert Marcuse’s Eros and Civilization, which appeared four years earlier and which inevitably influenced Brown. Whereas Brown articulated his impossibly utopian vision of an unrepressed humanity in prophetic tones, Marcuse distinguished surplus repression - the repression imposed by alienated labour and class society - from necessary repression, the repression that was inevitably involved in separation from the mother, the struggle with the instincts, and death. Both books reflected the historic possibilities of automation, but Marcuse’s added a note of realism missing in Brown’s. Furthermore, in the ecumenical 1960s, the Christian substructure of Brown’s thought was barely noticed, although it became even more prominent in his 1965 Love’s Body. By contrast Eros and Civilization was unremittingly secular. In one sense, however, Brown’s book advanced beyond Marcuse’s. Whereas Marcuse still suggested that most psychic suffering originated in social demands imposed on the individual from the outside, Brown was closer to Freud in grasping the ‘mind-forg’d manacles’ rooted in the painful facts of dependence and separation.

Although published in the 1950s, Life Against Death found its main audience among the polycentric, globally dispersed, revolution-oriented student and youth groups known collectively as the New Left. Just as such ‘extremist’ sects of the Reformation as the Anabaptists, Diggers and Holy Rollers sought to experience salvation on earth, so the New Left rejected Freud’s insistence that repression was inevitable. In doing so, it served as a kind of shock troop, limning the horizon of a new society. Life Against Death spoke to its key preoccupations: the belief that the socio-political world was intrinsically mad, the rejection of the nuclear family, the desire to transcend distinctions and boundaries, to bring everything and everyone together, the rejection of sublimation and the achievement ethic in favour of authenticity, expressive freedom and play. Like Eros and Civilization it rested its claims on the ego’s original, ‘inseparable connection with the external world’. Giving voice to the communal ethos of the time, it provided an underpinning to the New Left’s critique of instrumental reason, its desire for a new connectedness with nature, and its attempt to liberate sexuality from its genital, heterosexual limits; indeed, to eroticize the entire body and the world.

What, finally, can we say about a work whose tone and vision seem almost infinitely alien to our own ‘post-utopian’ times? Brown’s perception of the liberating potential of the modern economy was not wrong, but it required cultural and political transformations that necessarily occurred only in partial and limited ways. If Brown missed the fact that the fantastic power of the modern economy can be and has been harnessed for life, he illuminated its dark and daemonic underside in ways that we have still not fathomed. It is also worth remembering that the dreams that arise in great periods of social upheaval do not disappear for ever. Rather, they go underground, as the 1960s went underground and were reborn in the women’s movement, in the upheavals of 1989, and in the anti-globalization struggles of today. Memorializing Brown’s death is one way to encourage what he believed in above all: rebirth.

Eli Zaretsky





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Valentines Day Challenge


Valentines Day is the most overt expression of heterosexuality in our culture. The assumption made is that your sweetie is a member of the opposite sex. All of the commercial cultural products are aimed with this assumption in mind.

So as I picked up my obligatory card and gifts for my sweetie, from me and the cats and dogs, hmm, I wondered; what about gay and lesbian couples?

I saw no cards for Mary and Alice or Adam and Steve. No his and his flowers or her and her chocolates. And then I came across this posting at Alternet;

We in the gay and lesbian community understand coming out, but I've found that coming out isn't easy for some heterosexual folks to understand. They still think, but WHY do you NEED to come out?

To answer that, I have a challenge for you: This Valentine's Day, don't indicate to anyone all day what the gender of your sweetie is. Evade. When people ask, "What are you doing this evening?" Say, "I'm having dinner with a someone special," or, "My partner and I are seeing a movie." Some people will assume that the person you reference is of the opposite sex. Some people may think you are in a same-sex relationship. How do you feel about that? How do you think gay and lesbian people feel?




Since I regularly use the term 'my partner' rather than wife, I understand the phenomena. Though in the labour movement and in other progressive circles this term is used more often than the term husband or wife so I am used to it being sexual orientation neutral, and being an acceptable practice.


I used partner long before it was socially acceptable, being an anarchist and coming as it does from the anarchist tradition of Free Love referring to ones lover as companiero, companion,comrade, or close friend, showing that we are partners not property of each other.

Mollie Steimer and Senya Fleshine
Anarchist activists who were in their 80’s at the time of these interviews (both are now deceased). Steimer, defendant in the celebrated “Abrams Case” (one of the most important civil liberties cases in US legal history, it was the first important prosecution under the 1918 Espionage Act. The Supreme Court upheld the convictions of Steimer and her comrades, Jacob Abrams, Samuel Lipman, Hyman Lachovsky, and Jacob Schwartz, for giving out leaflets protesting American intervention in Soviet Russia.). She was deported from the United States to the Soviet Union in 1921.

There, she met Senya Fleshine, then secretary to Emma Goldman (also an immigrant to the United States, he had not been deported to the Soviet Union, but had hurried back when the revolution broke out. He participated in the historic attack on the Winter Palace, and was acquainted with the Ukrainian anarchist general, Makhno.) . Steimer and Fleschine became “companieros”, and lived together for the next 60 years, although several times separated by war, revolution, and imprisonment. In 1923, they were both deported from the Soviet Union for their anarchist activities and protests against authoritarian rule. They lived in various places in Europe (mostly in Paris), until Nazism forced them to flee to Mexico in 1940, and where they stayed until the ends of their lives. Senya became a nationally-known photographer, assisted in his photographic studio by Mollie, under the name of “Semo” (orSenya-Mollie).


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Income Trust Fraud

Dianne Urquhart speaking before the Commons Finance Committee investigating Income Trusts on Tuesday, January 30, 2007,in answer to a question from NDP member Judy Wasylycia-Leis said that indeed according to both Canadian Securities law as well as American securities law that there may have been unethical sales of Income Trusts to seniors based on false promises and could be investigated by the RCMP as fraud.

Judy Wasylycia-Leis was making the point that even with the change in taxation status the Trusts themselves operate in a fashion that current accounting practices would be considered illegal. A point neither the Liberals or Conservatives have bothered to deal with.

I support the income trust tax plan, with no increase in grandfathering beyond four years. I strongly urge that the income trust tax plan be enhanced by the addition of prescribed conditions to the Income Tax Act to stop income trusts from reporting deceptive, non-gap financial measures. Cash distribution must be defined as income distribution and return of capital distributions. The cash yield calculation should be restricted unless there is an equally prominent income yield calculation.

The federal government should not be giving tax incentives for an investment targeted to seniors where the product is an unsuitable investment based on the investment objective of secure retirement income and preservation of retirement capital. The high-risk design of income trusts and their deficient investor protection legal framework makes them unsuitable for seniors.

Making matters worse, the tax incentive is promoting the purchase of an investment where there is considerable malfeasance in the financial reporting and marketing material, which I'll speak about in a moment.

I have found that two out of three business income trusts pay distributions well in excess of their incomes. The average amount that the cash distributions are above income is 60%. The sources of the extra money are borrowed money, reserves from prior financing, and not retaining cash to replace plant, machinery, equipment, and software. This financial engineering, without proper transparency, is causing the return of capital to be capitalized as income. This is causing excessive pricing in the market.

In my research “Heads I Win, Tails You Lose”, I found that the business income trust market was trading at a premium of 55% relative to the TSX/S&P60, which comprises sixty of Canada's largest public corporations and a few income trusts. I also compared it to a sample of Canada's non-cyclical public corporations, which comprise the banks, the telcos, the utilities, and the power companies. On that basis, Canadian business income trusts were trading at a 55% premium. Even when I looked at the cashflow from operations, I found that income trusts were trading at a 40% premium. I believe the tax advantages in income trusts contributed 16% of the 55% premiums.

I conclude that the income trust tax plan with a four-year grandfathering period has a 10% negative impact on prices. My calculations differ from the calculations Mr. McKay asked about earlier with respect to what the investment losses have been since October 31 and the announcement of the plan. Business income trusts and energy income trusts, based on a roll-up of each of the individual trusts, are down 13%—up to about two to three days ago—for a loss of $23 billion.

On the basis of my detailed analysis of the tax advantages and the elimination of the premium associated with the tax advantages, it's my opinion that the income tax loss associated with the decision to introduce the income tax plan is $17 billion. This damage is a necessary consequence of a government closing a tax loophole that is not achieving benefits for the economy and is promoting the purchase of an investment by seniors for which this investment is unsuitable.

For a properly diversified portfolio with less than 20% invested in income trusts, the new tax damage is 2%. This is clearly capable of being absorbed by Canadians who invested in this security. Those who have higher losses than this have seen them occur as a result of improper diversification, or perhaps they have suffered the losses as a result of the malfeasance with respect to the improper marketing of income trusts to seniors.

I want to note that on May 3, 2006, the Canadian Accounting Standards Board said that the failure to distinguish clearly between returns on capital and returns of capital is inaccurate and potentially misleading, particularly when terms such as “yield” are used to describe the amount distributed.



Ms. Judy Wasylycia-Leis:
Thank you, Mr. Chairperson.

I just wanted to say that I didn't hear Dianne Urquhart condoning Enron. What I heard Dianne Urquhart saying was that we need to be vigilant at all times, and whenever there is the possibility of unethical practice or even criminal undertakings, we should be ready to crack down on it.

I want to ask Dianne, since I'm just getting up to date on this Prudential Securities issue, are you saying that what is common practice in Canada would be considered criminal in the more tightly regulated U.S. environment?

Mrs. Dianne Urquhart:
I would say that the RCMP and provincial and municipal police forces have the tools within section 380 of the Criminal Code today to call the deceptive cash yields...as has been said by the chairman of the Canadian Accounting Standards Board and by Paul Hayward, OSC senior legal counsel, who said in a tax journal in 2002 that an investigation could be conducted and fraud could be found. I'm not making that allegation specifically, but the wording concerns the Canadian Accounting Standards Board and Paul Hayward, OSC senior legal counsel. The actual criminal charges in the United States suggest that the misconduct of the limited partnerships of the eighties and early nineties was similar to that which has occurred in the Canadian income trust market, and it could be considered criminal in Canada upon investigation.

Ms. Judy Wasylycia-Leis:
Thank you.

I have one more question for Dianne Urquhart and then one for Mr. Teasdale.

Dianne, as you and others know, I have publicly stated that I support measures to shut down income trusts used as a way to avoid paying taxes, and I accept the statistics we've now had from a number of jurisdictions and a number of years, which are consistent with what you and others are saying.

My question to you, Dianne, is given the fact that the ways and means motion is likely to go through, based on the previous vote in Parliament.... And I've been working on this issue you've raised about the undervaluing—or overvaluing, sorry.

Ms. Judy Wasylycia-Leis:
No, it's clearly overvaluing.

It's a serious issue to change the Income Tax Act to deal with this. Is it still worth my while to do this, given the fact that, hopefully, we'll see over the grandparenting period the end of income trusts? Is it still important for consumers that we do it?

Mrs. Dianne Urquhart:
Yes, there is still $200 billion of current income trusts in the market, and 288 of the trusts are, I believe, in non-bifurcated markets--full transparency. I don't want those who know that their income trusts are overvalued having the opportunity to sell them to unsophisticated players. I believe we should have immediate requirements; the sooner we can get this into the Income Tax Act the better. The sooner we get transparency on the return on capital and the distributions, then we can have a market that's honest and not one in which sophisticated players dump trusts onto those who do believe the return on capital is there for their household expenses. It's just not there, because there is a limit on access to the amount of cash that's on the balance sheets and on the financial markets paying it.

A further hit on income trusts came when Seniors, those folks whom everyone in the income trust business says they speak for, spoke for themselves.

''The federal government should not be giving tax incentives for seniors to purchase an investment that is risky and does not have a proper investor protection regime in place,'' the National Pensioners and Senior Citizens Federations said in its brief to the committee. President Art Field noted that even before Flaherty announced the tax on trusts, the federation had passed a motion expressing concern seniors were being urged to invest money in what it called ''unsuitable'' and ''questionable'' income trust investments.


The Liberals who continued to opportunistically defend Income Trusts, as does Ralph Klein speaking of strange bedfellows, stated they of course would NOT have taxed Income Trusts...now they should have made that an election promise.


McCallum, meanwhile, defended the former Liberal government, noting it had moved to level the playing field between trusts and corporations, but by reducing the tax on corporate dividends rather than putting a tax on trusts. ''It's difficult to say what else we would have done had we stayed in government,'' McCallum added.

Well now we know what they would have, should have, could have done.

They issued their press release on the last day of the hearings, yesterday after Judy had issued her own private members bill, a bill that got NO attention from the MSM.

Despite the fact that neither the government nor the Liberals have addressed the real problem with Income Trusts that they are a Ponzi Scheme. An attempt to separate seniors from their pensions, since pensions are a vast untapped source of capital.

That is the elephant in the room,that the NDP has addressed in their private members bill.

“This NDP bill will bypass government inaction,” says Wasylycia-Leis.“We have a Finance Minister who claims he wants better securities regulation but continues to ignore this urgent problem. Meanwhile, our self-regulating investment system acknowledges there is a serious problem but has failed to produce an enforceable solution, and the industry continues to sell its products to unsophisticated investors using fuzzy numbers. This is unacceptable.”
See

Income Trusts

Pensions

Ponzi




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