Harper and Flaherty's Conversion

Ottawa faces up to reality of deficits Here is the real reason that Harper and Flaherty had their economic conversion on the road to Damascus.

Budget officer questions projected federal surplus

OTTAWA - Canada's parliamentary budget officer is publicly questioning the projected budget surpluses of the Conservative government's recent economic statement and is asking for evidence to back up the predictions.
Kevin Page asked Finance Deputy Minister Rob Wright to turn over details on the projected spending reductions in departments and asset sales that the government has said will generate $10 billion in savings over five years. These are seen as key to the maintenance of a federal surplus.
Page's letter, sent on Dec. 3, has now been posted on the budget office's website. It asks for a reply this week.
He also asked for economic data and assumptions used for the 2008 budget and recent economic statement. Finance refused to give the data for the 2008 budget even though the numbers are routinely turned over to Bay Street forecasters. The assumptions, key to estimating the impact of economic volatility, used to be published by previous governments.
In his economic statement, Finance Minister Jim Flaherty projected a budget surplus of $100 million for 2009-10 based on the sale of about $2 billion in assets that he didn't identify.
Page tabled his office's assessment of Flaherty's economic statement last week, but the report got lost in the storm of the political crisis sparked by the Liberal-NDP coalition's attempt to topple the Prime Minister Stephen Harper's Conservative minority.

But as usual they will use a red herring to distract us from their complete failure to address this crisis earlier. Just as they used the opposition coalition as a red herring to seize power in Ottawa.

Canada's banks are being set up.
Prime Minister Stephen Harper has misplayed the financial crisis from the start. The lack of political leadership in this country is staggering. Now Mr. Harper – who dictates lines to his Finance Minister – has finally woken up to the fact 2009 will be one grim year for the domestic economy. '10 doesn't look too hot either. Someone will wear responsibility for a deep recession. The Conservatives are skating hard as they prepare to pin this one on the banks. The politicians will claim the banks hoarded capital, and refused to lend, and that sent consumers and corporations over the cliff. It's nasty, it's cynical, it's destructive and it doesn't happen to be true. But that's clearly going to be Mr. Harper's line.

And despite Flaherty threatening the banks, the Harpocrites have not addressed the increased service charges on credit cards the banks have made, the fact that interest on credit cards is as high as it was during the recession in the eighties, and that banks still charge usury rates on ATM fees.

Feeling the crunch
Rising card transaction fees may mean higher prices, retailers say

Restaurant industry supports cap on credit and debit card fees

RCC applauds Alberta Premier's call to Harper for limits on credit and debit fees

Suddenly the issue raised by the NDP is no longer pie in the sky. However unlike Stelmach, the NDP called for the elimination of ATM fees, not just a cap. And we need to see a reduction in usury interest on credit cards. Banks loaning millions to capitalist enterprizes will have less effect than reducing /eliminating service charges, reducing credit card interest and eliminating ATM fees.

New Brunswick Senator Pierrette Ringuette is calling for a federal probe and stronger regulations on fees charged by credit card companies .Canadians hold 64.1 million credit cards, and 80 per cent of them are issued by the two main players in the industry, Visa and MasterCard. Consumers already pay an average of over 24 per cent interest.Visa and MasterCard have about 80 per cent of the national credit card market. Credit card companies are, therefore, extremely wealthy and powerful. Is this a 'collusion' situation because of this 'quasi monopoly' situation?" Ringuette also raised the concern felt by business and retail lobby groups that rates for debit card transactions could increase. There has been concern that the Interac Association, the non-profit group which administers debit and direct payment, could change to a "for-profit" organization. If this happens, the retail council is concerned that the private corporation could be purchased by the credit card companies and therefore create an even greater monopoly over plastic in Canada.

The Canadian Imperial Bank of Commerce said it would tighten credit card lending through 2009, as it announced its fourth-quarter profit fell by 50 per cent from the same quarter in 2007 — mainly because of higher credit card delinquencies. Some banks have also raised credit card interest rates by five percentage points for customers who are late with their payments. Art Thornton, a bankruptcy trustee in Ottawa, says the changes will mean more business for him."It's going to increase the interest rates noticeably to people who can ill-afford to pay, and it's going to render them — in many cases — insolvent."

And this NOT the issue that Flaherty or Mark Carney are addressing when they challenge the banks to free up credit after bailing them out and reducing the Bank of Canada rate.

Hyer Questions Gov't on Credit Card Processing Fees
Friday, 28 November 2008
Ottawa, ON -- Thunder Bay Superior North MP Bruce Hyer was up in Question Period on Thursday. Hyer was questioning the government over the cost of credit card processing fees.Here is the transcript of the exchange in the House of Commons:

Mr. Bruce Hyer (Thunder Bay—Superior North, NDP): Mr. Speaker, small businesses create a huge percentage of all the job growth in Canada. We should be helping them, not hurting them.The Canadian Federation of Independent Business is demanding that this government act before the big banks' next big cash grab. Our small businesses are facing a 10,000% increase in their Visa and MasterCard merchant fees. Is this fair?Does the government believe that it is not its problem, or that it can just not do anything about it? Which is it?

Hon. Diane Ablonczy (Minister of State (Small Business and Tourism), CPC): Mr. Speaker, the member raises an issue of real importance to small business. As he knows, the Canadian Federation of Independent Business has been speaking with the players about this issue. The fact of the matter is that the banks in this country are competitive. They are free to put forward products to all of the customers they have, including small business.The Minister of Finance has written to the banks about this issue asking them to deal with it. We are awaiting their responses momentarily, and we believe we can work on it together.

Bank of Montreal Profit Rises on Consumer Banking

Canadian consumer-banking profit rose 20 percent to C$344 million from a year earlier as personal loans rose 21 percent and it added more mortgages. Commercial loans and credit-card revenue also rose from a year earlier.

Royal Bank of Canada reports fourth quarter and 2008 results

Canadian Banking net income was $2,662 million, up 5% or $117 million from last year, reflecting solid volume growth across all businesses and effective cost management, partially offset by margin compression and increased provisions for credit losses. Net income was up 13% over last year, excluding the impacts of a $326 million ($269 million after-tax) gain related to the Visa Inc. restructuring and a $121 million ($79 million after-tax) credit card customer loyalty reward program liability charge recorded in the fourth quarter of 2007.

Scotiabank Reports Fourth Quarter and Full Year Results

Canadian Banking's average assets grew by $21 billion or 14%, primarily in mortgages. There was also strong growth in personal revolving credit and other personal loans, as well as in business lending to both commercial and small business customers. Card revenues were a record $397 million in 2008, an increase of 8% from last year. International card revenues increased 11% due to strong growth in Peru, the Caribbean and Mexico. Canadian revenues were up 6% year over year, due mainly to higher transaction volumes. Credit fees of $579 million were $49 million or 9% higher than last year. There were higher acceptance fees in Canada, from both corporate and commercial customers.

It's time to 'shift to thrift'

A recovery in consumer spending will have to wait until Canadians pay down the excess credit card and mortgage debt accumulated in the past decade. Total personal debt nearly doubled between 2002 and the first half of 2008, when it stood at $1.2-trillion. The ratio of debt to disposable income rose from 98 per cent to 130 per cent over that period, while interest payments as a share of available income were virtually unchanged.
Canadians were besieged with advertising messages that promoted borrowing over those years. With credit so cheap and housing prices surging ahead, households took on a lot of risk. Now debt burdens look much too high.
We can take some comfort from the fact that the loans outstanding here are nowhere near as risky as mortgages in the United States. According to the Canadian Housing Observer, Canada has “a negligible subprime mortgage sector; [and] it is characterized by prudent underwriting.” And in Canada, mortgage insurance to protect the lender is mandatory for high-ratio loans.
But there is no insurance to protect the borrower when housing values decline or when someone in the family loses their job. If you ask people living in homeless shelters what sent them on a downward spiral, the common theme is a combination of losing their job, being unable to work because of injury or illness, and then losing their home.
This is a terrible price to pay for doing what was advertised as the smart thing to do.

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Criminal Capitalists:Madoff and Zell

Once again as financial markets collapse they reveal the truth that all capitalism is basically a ponzi scheme.

THE MADOFF AFFAIR: $50-BILLION PONZI SCHEME ALLEGED
Madoff put under house arrest as celebrities, charities, banks disclose exposure

It befits the close of one of the most bizarre years in international finance to look at the collapse of one of its most extraordinary villains, Bernard Madoff, a former chairman of the Nasdaq sharemarket and a Wall Street titan.The crisis in the world financial system has its roots in excessive greed, stupidity, poor regulation and disappearing capital, and the story of Madoff's downfall and a $US50 billion sting bears many of the same hallmarks.

When Enron and World Com collapsed it was revealed that they were in cahoots with their accounting firms, who not only checked their books, but helped them cook those books in order to avoid taxes and to make it appear they were more profitable than they really were. And at the same time the SEC was not doing its job in fact as this recent scandal reveals they acted not as regulators but enablers of Mr. Madoffs criminal scheme.

SEC investigators discovered Madoff violations in 2006: WSJ

We should be surprised by this I think not, after all capitalism began as a joint effort between merchant bankers, pirates and private mercenaries. Why should it be any different four hundred years later.

Bernard Madoff 's $50 billion Ponzi scheme was so breathtaking that investors have been left speechless. But the alleged crook -- universally described as "charming" -- would not have succeeded were it not for the unbelievable gullibility of supposedly sophisticated investors.Madoff knew that just because people were rich it did not not make them smart -- that was the source of his success. All you have to do is talk about an investment philosophy that is vague but sounds really authoritative. Give people nonsensical statements that they glance at quickly. Make sure that the statements indicate steady returns of 10% to 13% a year. Many CFOs, CIOs and portfolio managers were amazed that Madoff produced such steady returns for so long. They were mathematically impossible. Barron's raised questions in 2001 about whether Madoff was "front-running" trades, an allegation he denied. Still, Madoff's rich buddies stood by his side.Maddoff somehow managed to convince a slew of banks and hedge funds, billionaires such as Mets owner Fred Wilpon, Yeshiva University along with charities associated with Steven Spielberg and Nobel Laureate Elie Wiesel that the laws of investing do not apply to them. The odds of anyone getting double-digit returns year after year are laughably small. They, of course, understood that, but figured why fix something that ain't broke. By turning a blind eye to fiscal reality, these victims showed almost as much greed as Madoff.


Madoffs clients are a who's who of the very financial institutions that lined up at the trough to be bailed out, and who claimed if they failed capitalism would collapse. In fact the whole collapse of America's financial market reveals that it was all a ponzi scheme.


After all, Madoff’s scheme -- at least in spirit, if not in its nefarious intent -- wasn’t much different than the business models at some of the nation’s largest failed financial institutions.
Back in May, four months before it collapsed, American International Group Inc. increased its dividend at the same time it unveiled plans to raise $12.5 billion in capital. Later, when its cash ran out, AIG got a government bailout, the size of which has expanded to about $150 billion.
Whether you call that a Ponzi scheme or something less sinister, AIG was paying old investors with money raised from new investors. The same could be said of many banks that blew through billions of dollars in freshly raised capital the past couple of years, continuing to pay large dividends even as their balance sheets quietly imploded. So why have other Ponzi-esque operators emerged scot-free (so far) with taxpayer bailouts, while Madoff gets pinched?

And one of these financial institutions caught up in the Madoff affair is UBS the Swiss banking company recently indited for using its banks in Canada to hide U.S. billionares fortunes offshore in its banks acounts top avoid taxes, which is itself illegal, but just another case of business as usual until we are caught.

Howewver while Mr. Madoff's actions have been declared illegal, another capitalist billionaire Sam Zell is able to do the same thing legally!!! And there really is no difference between them.

Sam Zell, Tribune's billionaire CEO, but rather the thousands of Tribune employees whose stock ownership plan was jerry-rigged to fund the company's buyout last year. Mr. Zell was the architect of the deal, but put up only around $300-million of his own money as a kind of option to later buy financial control of the company for as little as $500-million more. Under the mind-boggling structure Mr. Zell and his advisers came up with, the Tribune ESOP owns 100 per cent of the shares. What happens to them? The Chicago Tribune said it most starkly, quoting an employee conference call with Mr. Zell: “The ESOP, which Mr. Zell said a year ago offered employee “owners” the chance to share richly in Tribune Co.'s eventual success, could be wiped out, leaving thousands of Tribune Co. employees with no company retirement plan besides what they elect to save in a 401(k).”

Tribune’s Chapter 11 filing likely means a court delay for six current and ex-L.A. Times employees who are trying to oust billionaire owner Sam Zell from the board of directors. But in the meantime, they can point to Zell’s bankruptcy-protection filing as Exhibit A in the court of public opinion. “The sort of critique we made in the lawsuit has been borne out,” says plaintiff Henry Weinstein, the Times’ former legal affairs writer and now a professor at UCI’s new law school. In addition to the Times, Tribune’s assets include KTLA-TV, the Chicago Tribune and the Chicago Cubs. In late 2007 Zell took the company private by putting up $315 million and borrowing $8 billion. The class-action suit, filed in September, accused Zell of orchestrating a scam and burying the company in debt. Zell called the suit “a distraction that’s unnecessary.” Says Weinstein: “We are certainly going to try to be heard in the bankruptcy court. There are all sorts of employee interests” ...

The following is an official statement from Teamsters General President James P. Hoffa.
"When billionaire Sam Zell took Tribune private in an overleveraged, doomed deal that swiftly brought down the 161-year-old media giant, the risks involved were placed squarely on the shoulders of Tribune workers. Now, as Tribune's creditors head to bankruptcy court for payback, these workers should go directly to the front of the line.
By transferring 100 percent ownership of the company and some $13 billion of debt to an S-Corp Employee Stock Ownership Plan (ESOP) in the buyout, Zell insulated himself from tax responsibilities and mortgaged the future retirement savings of Tribune employees. Despite owning 100 percent of the company, employees were given no voice in the governance of the company or in the plan itself. They've had no say in the terms of their own debt obligations or decisions related to how best to service that debt.
Tribune contributions to employee retirement savings for employee-owners changed from a defined benefit plan to a defined contribution plan structured as the ESOP. Employees participating in the ESOP can't diversify their holdings until they reach age 55.
The first of the company's contributions to the ESOP was expected to happen in the first quarter, but now -- with the Tribune mired in Chapter 11 bankruptcy -- it's unclear whether that will happen or whether those shares will have any value.
Not everyone lost on the deal. Tribune executives made millions, including CEO Dennis FitzSimons, who engineered the deal with Zell and raked in $17.7 million in severance and other payments and cashed in his stock for $23.8 million. Shareholders traded in stock rated deep into junk territory for cash representing a 21 percent premium over the stock price just before the transaction. The banks that lent Tribune the money shared some $47 million in fees.
Citigroup and Merrill Lynch who advised Tribune on the deal received $35.8 million and $37 million respectively. And billionaire Zell, who put up only $315 million in the deal, is expected to stand ahead of employees in the creditors' line at bankruptcy court.

Unfortunately Mr. Zell will not be sharing a cell with Mr.Madoff nor with another Chicago paper baron; Lord Black. Though he should.

SEE:
Super Bubble Burst
Hedge Funds, Junk Bonds, Ponzi Schemes




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Bank Rip Off

Gosh folks are surprised that Canada's Big Six banks are greedy and won't pass on the interest cut to you and me.

Bank slashes key rate to 1958 level
Six Canadian Banks Fail to Match Central Bank Cut (Update6)
Big banks keep slice of deep rate cut
Big 6 lag behind central bank's lead
Bah humbug to banks’ greedy actions on rates

Why I am shocked, shocked I say, shocked that the media and pundits expected these greedy bastards to act like good corporate citizens. After all the last time Carney cut the interest rates, only a month ago, they didn't pass them on. And despite Flaherty and Harper bailing them out to the tune of $75 billion, the banks increased interest rates and service charges on credit cards and have refused to loan money to credit agencies like GMAC and Ford Credit. When you give these guys money with no strings attached they use it to increase their profit and to pay off their bad debts and criminal activities.Of course Mark Carney knows this he used to work for Goldman Sachs. Flaherty knows it too. When the bank and commerce committee met to review credit card and bank card user fees and interest rates they got the cone of silence from the bankers.Truly this is a case of throwing good money after bad.
And while they will claim they are looking after the interests of their shareholders remeber who that is , why you and me of course with our mutual funds, our CPP and other public pension funds who are institutional investors in the banks. In fact we own them.
Time to socialize the banks along with the auto industry under workers control, the only solution to this crisis of capitalism is socialization of capital.


SEE:
Back To The Fifties
UBScandal
Pension Rip Off
Credit Card Rip Off
Canada's Billion Dollar Rip Off
Bank Union
Service Charges


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Alberta Loses Billions

Poor fiscal management is the heritage of the Tired Old Tories....as in Heritage Trust Fund lossing billions in investment interest and the Alberta Treasury Branches (the Socred Bank)losing billions in the toxic paper loans. Anywhere else heads would roll. Howerver in the province of the one party state those in charge just keep on keeping on, including rewarding themselves for bad management decisions.

And the Alberta Treasury Branch brass - who showered themselves with hefty bonuses last year - are getting their ducks for an "additional provision" to cover the toxic asset-backed commercial paper they lost Albertans' money on.

ATB Financial has made an additional $55.5-million provision for potential losses on its holdings of asset-backed commercial paper, bringing its total provisions for possible ABCP losses to $308.6 million.ATB's net income for the quarter ended Sept. 30 fell to $5.7 million, the financial services company said Friday in its latest quarterly report. That's down from $8.5 million in the year earlier period when ATB took a $77.6-million provision for potential losses for its holdings of asset-backed commercial paper. ATB's $1.14-billion principal investment in ABCP will be converted to longer-term notes that reach maturity in six to nine years. ATB will revalue the restructured ABCP investment upon closing. "Times are getting tougher, even in resilient economies such as Alberta's, and interest rate conditions and uncertainty in the marketplace continue to impact our business. But our continued growth and positive results mean Albertans can be confident in ATB," said Dave Mowat, ATB's President and CEO.

Knowing full well that Alberta taxpayers will bail you out.

SEE:

Recession Hits Alberta

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Back To The Fifties

Deflation in Canada in the late 1950's led the Bank of Canada to create the floating Dollar. Now it's sinking.

Biggest inflation rate fall since 1959 raises deflation concerns
Economists fear deflation because consumers and businesses are more likely to delay purchases hoping that prices will fall further, slowing economic activity and business investments.
But more importantly, CIBC World Markets economist Avery Shenfeld said deflation often appears as the final nail in the coffin of a dying economy.
"Typically the only way you get deflation is if you've had a massive recession that has high unemployment rates and a lot of economic slack, so the conditions in which you get deflation are certainly not welcome," he explained.
One factor that may offset the potential for deflation is a recent drop in the value of the Canadian dollar. After starting the year near to parity with its American counterpart, the loonie, as the Canadian currency is popularly known, fell below 80 United States cents this week.

SEE:

Here Come the Seventies

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Here Come the Seventies

The U.S. cannot cut its interest rates much more or it will end up at zero.

US interest rate falls to 1 per cent

Which means that the U.S. is no longer facing infaltion but the very real recessionary spiral of deflation. The very thing that created the crisis of the Seventies.

Deflation now tops policy-makers' hit list
Globe and Mail, Canada - These are some of the disquieting signs that the once-distant spectre of deflation is looming larger on the horizon, now that economies around the world .
..Deflation: A Primer New York Times
Deflation is the new bogey word as crunch sends prices tumbling Times Online
Deflation worries send Dow below 8000 Washington Times

When your house is burning, there is no sense fretting over painting the fence. With the U.S. economy mired in what will likely be a recession of historic proportions—and an outright depression in some industries—it would be foolish to get too worked up over future inflation concerns. Oracle-of-the-moment Nouriel Roubini, in his Forbes.com column, forecast the following for next year:
“The advanced economies will face stag-deflation (stagnation/recession and deflation) rather than stagflation, as the slack in goods, labor and commodity markets will lead advanced economies’ inflation rates to become below 1% by 2009.”

Remember those wheelbarrows of cash Germans had to use to buy things after WWI watch for Americans to roll out the barrow.

Deflation is considered a problem in a modern economy because of the potential of a deflationary spiral and its association with the Great Depression, although not all episodes of deflation correspond to periods of poor economic growth historically.

And true to form the Austrians celebrate deflation as one of the great things about the Great Depression.

Now we get to the crux of the matter: the Great Depression. The assumption is that falling prices somehow caused the economy to crumble. In fact, it was the after-effects of the boom combined with massive government intervention that caused the depression. The only silver lining in the entire period of the 1930s was precisely the falling prices that made the dollar count for more. Falling prices (a falling cost of living) are what Murray Rothbard has described as the "great advantage" of recessions. If you can imagine the Great Depression without falling prices, you have conjured up an image that is far worse than the reality.
As Rothbard has said, "rather than a problem to be dreaded and combatted, falling prices through increased production is a wonderful long-run tendency of untrammelled capitalism. The trend of the Industrial Revolution in the West was falling prices, which spread an increased standard of living to every person; falling costs, which maintained general profitability of business; and stable monetary wage rates—which reflected steadily increasing real wages in terms of purchasing power. This is a process to be hailed and welcomed rather than to be stamped out."

Now with deflation rising on the horizon as Bush bails out the financial market this prediction from the CATO Institute holds a warning for the future.

The Bush Legacy: Deflation or Inflation?
by Steve H. Hanke
Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore and a Senior Fellow at the Cato Institute.
Added to cato.org on September 24, 2008

Economists of the Austrian school of economics term this type of debt deflation a "secondary deflation". If the forces of a secondary deflation are strong enough, a central bank's liquidity injections are rendered ineffective by what amounts to private sector sterilization. When people expect prices to fall, their demand for cash increases and soaks up central bank liquidity injections. This phenomenon characterized Japan's economy during most of the 1990s.
But what if the Federal reserve--fearing a secondary deflation, as they feared (incorrectly) a mild deflation in late 2002--pushed the Fed funds rate lower (now it's 2%) and turned on the inflation switch by monetizing more debt? Given the growing mountain of government debt, there is virtually an unlimited potential. It's a scenario worth thinking about.

And that future is here and now.

This week's cover story in The Economist makes it more or less official. Deflation, not inflation, is now the greatest concern for the world economy. Over the past year, producer prices have fallen throughout the advanced world; consumer prices have been falling for the last 6 months in France and Germany; in Japan wages have actually fallen 4 percent over the past year. Until the recent crisis prices were falling in Brazil; they continue to fall in China and Hong Kong; they will probably soon be falling in a number of other developing countries.
So far, none of these price declines looks anything like the massive deflation that accompanied the Great Depression. But the appearance of deflation as a widespread problem is disturbing, not only because of its immediate economic implications, but because until recently most economists - myself included - regarded sustained deflation as a fundamentally implausible prospect, something that should not be a concern.

The point is that deflation should - or so we thought - be easy to prevent: just print more money. And printing money is normally a pleasant experience for governments. In fact, the idea that governments have a hard time keeping their hands off the printing press has long been a staple of political economy; dozens of theoretical papers have argued that the temptation to engage in excessive money creation causes an inherent inflationary bias in fiat-money economies. It is largely to combat that presumed bias that most of the world has accepted the notion that monetary policy should be conducted by an independent central bank, insulated from political influence - and has written into the charters of those central banks that they should seek price stability as their main, often only, goal.

And since we are being nostalgic here is the theme song to the CTV series Here Comes the Seventies....



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Stiglitz On Market Fundamentalism

The market crisis exposes the failure of the neo-con agenda of deregulation, self regulation, privatization and contracting out. The real solution to this crisis as Stiglitz pointed out in 2006 is the socializtion of capital.

Joseph Stiglitz was awarded the Nobel Prize for Economics in 2001.

Gardels: What, then, is the ultimate impact of the Wall Street meltdown of market-driven globalization?

Stiglitz: The globalization agenda has been closely linked with the market fundamentalists -- the ideology of free markets and financial liberalization. In this crisis, we see the most market-oriented institutions in the most market-oriented economy failing and running to the government for help. Everyone in the world will say now that this is the end of market fundamentalism.
In this sense, the fall of Wall Street is for market fundamentalism what the fall of the Berlin Wall was for communism -- it tells the world that this way of economic organization turns out not to be sustainable. In the end, everyone says, that model doesn't work. This moment is a marker that the claims of financial market liberalization were bogus.

Financial markets are supposed to be a means to an end -- a more prosperous and stable economy as a result of good allocation of resources and better management of risk. But instead, financial markets didn't manage risk, they created it. They didn't enable America's families to manage the risk of volatile interest rates, and now millions are losing their homes. Furthermore, they misallocated hundreds of billions of dollar.
We will never achieve perfect stability of our financial markets, or of our economy. Markets are not self-correcting.

Gardels: What set of policies in the advanced countries can make globalization work?

Stiglitz: The prescription for making globalization work is what is generally called “the Scandinavian model.” That means high levels of investment in education, research and technology plus a strong safety net. That of course also entails, as in the Scandinavian countries, a highly progressive income tax.
Far from making these countries less competitive, it has made them more so. Though it may seem a contradiction to conservative ideologues who think cutting taxes is the answer to everything, the fact is that people are more willing to take entrepreneurial risks if they can count on a safety net and if they have the training to be innovative.
In Sweden, the social democrats who fashioned this policy have just been turned out of office. But we should not read that as a some kind of rupture in the social consensus. The new, more conservative government will only be about fine-tuning the model.

SEE:
Blue Throne Speech
Auto Solution
Not So Good News
Huh?
Super Bubble Burst
October Surprise Was The Market Crash
No Austrians In Foxholes
CRASH

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Blue Throne Speech

Why am I not surprised?

Throne speech warns of deficit, offers economic plan

No specifics in Tory economic plan

Because the neo-con agenda was about the failure of Keynesianism, except now all the capitalists and their political puppets are Keynesians when the market crashes. And when they applied their neo-con agenda it was during a temporary debt and deficit crisis of their own creation and it exasperated that into a full blown Reagan Recession. A little historical fact they fail to mention.

Canadian Prime Minister Stephen Harper moved closer to an about-face on economic policy today, outlining plans to stimulate growth that may run up a budget deficit after vowing to preserve surpluses.
A month after his Conservative Party government strengthened its hand in Parliament while falling short of a majority, Harper outlined his legislative agenda in a so-called Speech from the Throne, the ceremonial opening of a session. He pledged ``support'' for the country's car makers and plans to expedite infrastructure spending.
``In a historic downturn, it would be misguided to commit to a balanced budget in the short term at any cost,'' according to the text of the speech, which by tradition was read by Governor General Michaelle Jean in the country's Parliament, while Harper and other lawmakers listened. ``Ongoing'' deficits, though, would be ``unacceptable,'' Harper said.
Harper, who pledged ahead of his Oct. 14 re-election to maintain a balanced budget, told reporters last week his government may need to provide more stimulus to the world's eighth-largest economy to boost demand amid a global recession.


SEE:
Pinocchio Conservatives
Deja Vu
Business Unionism Offers No Solution To Capitalist Crisis

tags
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Turn About

"It is not a secret that in a real way this problem began in the United States
with completely inadequate regulation of the financial sector," Harper said in
Winnipeg. "Unregulated financial markets do not work. Canada has
known that for a long time. We all knew that from events of many decades
ago."

My, my now our neo-con, republican lite, libertarian free marketeer PM is proclaiming praise for state regulation. Like I said before when capitalism crashes there are no Austrians in fox holes. And as our PM has admited come a capitalist melt down there are no neo-cons in foxholes either.



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asset-backed commercial paper ,, goldhomes, mortgages, housing, bubble, US, economy, oil prices, sub-prime mortgage, Wall Street, crash, recession,Bernanke, Inflation, Staglation, Stock-Market, US, Federal-Reserve-Chairman, Oil, gold, commoditiesSmoot-Hawley, protectionism, tariffs, Herbert Hoover, U.S., U.S. economy, Canada, Great Depression, John McCain, market crash, free trade, Republicans, recession, Canada, Flaherty, tax cuts, corporate tax cuts, politics, Conservativestaxes, tax-credit, budget, economy, government, Conservatives, Flaherty, Harper, Salaries, Canada, wages, Economy,

UBScandal

As capitalism melts down the rich always find a way to hide their taxable income. In the best of times and the worst of times. If they don't get the tax cuts they demand c'est lavie. They can always hide their money in Swiss bank accounts courtesy of the Gnomes of Zurich.In this case courtesy UBS. As we found with Enron, capitalism breaks down because those who play in the market know that rules are made to be broken and so they break them.


UBS executive indicted in US

UBS executive charged with aiding tax evasion

The Swiss Banker and 'Toxic Waste'

Gee could that have anything to do with this;

Top Executives at UBS Will Not Get Bonuses

Or maybe its actually because of this;

UBS warns earnings will be squeezed for rest of year

After being Europe's first major credit crunch victim, writing down $37.0 billion in the first two quarters of the year, there has been a shift in focus in the concerns that investors have about UBS. Its balance sheet is looking decidedly less frightening, now that it has shifted $60.0 billion of illiquid mortgage-backed securities into a vehicle created by the Swiss national bank, while it managed a profit in the third quarter.

And before we get all warm and fuzzy about those poor bankers UBS will still pay em heaping amounts of gold, just not all at once....

UBS said its new compensation model would be "focused on the long-term" and "closely aligned with the value creation of the firm." Executive board members whose bonuses had depended on annual performance alone will now be paid according to the new system that tracks their performance and the bank's share price over a three-year period. The two variable parts of their compensation--in cash and equity--will both be performance linked and the chairman of the bank will no longer get so-called "variable compensation."

And like that other Republican Investment Banker; Dan Quayle, who works for Cerebeus, lookee here UBS has one in their pocket too.

Phil Gramm: A Deregulator Unswayed
RGE Monitor, NY - , he left Capitol Hill in 2002 to work as an investment banker and lobbyist for UBS, a Swiss bank that has been hard hit by the market downturn,

You remember Phil he advised the McCain campaign until last summer when he called Americans concerned about the meltdown appearing on the horizon a bunch of 'Whiners'.

In an interview with the Washington Times,

Phil Gramm, a former Texas senator who is now vice chairman of UBS, the giant Swiss bank, said he expects Mr. McCain to inherit a sluggish economy if he wins the presidency, weighed down above all by the conviction of many Americans that economic conditions are the worst in two or three decades and that America is in decline.
"You've heard of mental depression; this is a mental recession," he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. "We may have a recession; we haven't had one yet."

"We have sort of become a nation of whiners," he said. "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said. "

Now he says the push to deregulate the market had nothing to do with the current meltdown.

<'>The retired Texas senator claims that deregulation “played virtually no role” in the current economic turmoil engulfing the globe, nor the housing collapse or the credit crisis. The exempting of any regulation of derivatives, including state insurance supervision, reserve requirements or clearing information was not significant to the crisis. The nonfeasance of the Fed in supervising all of the non-bank lenders that lay at the heart of the housing boom and bust was not the cause either (it was “Predatory Borrowing”). And the payola scandals at the ratings agencies — Moodies, S&P, and Fitch — that slapped triple AAA ratings on paper that turned out to be junk would not have been prevented via better oversight.
Gramm said placing any blame on deregulation was simply “an emerging myth.”

The whole UBS scandal comes home to Canada where we specialize in White Collar Crime....Corporate Captialist criminals get away with murder in Canada. We have no single national regulator liie the SEC, and clearly our bank laws are not enforced effectively, if UBS can set up a secret offshore account for wealthy Americans called the 'Canada Desk' because the deals were done on Canadian soil.

Top Firm Accused Of Having Illegal 'Secret' Desk


This scandale has caused the Montreal Gazzette to pick up on the popular slogan of the Communist Party of Canada Marxist Lenninist in its latest editorial; Make The Rich Pay.

Government has obligation to make the rich pay, too
Raoul Weil, a senior executive of the Swiss bank UBS, has been indicted by the U.S. Department of Justice on charges of helping his U.S. clients hide some $20 billion in assets from the taxman. Americans will be glad to see their government pursue this sort of case aggressively.
In Canada, however ....
The Globe and Mail reported last week that Weil was also in charge of a secretive team of senior bankers whose job was to help Canadians hide as much as $5.6 billion from the Canada Revenue Agency, this country's tax collector.
So what has that agency, and the rest of the Canadian government, been doing about these allegations, the outlines of which have long been known? Nobody knows. Maybe nothing. And that's not nearly good enough.
Nothing is more corrosive to the sense of fairness and transparency that society needs to function well than the idea that there are two standards - one for the wealthy and one for everyone else


And in light of this scandal this failure to collect what is due the people of Canada or to prosecute UBS for breaking our banking laws, what does the Government and Revenue Canada do? Wait for it....

Ottawa targets online merchants who pay no taxes

Canada Revenue Agency to focus on so-called 'power sellers' on eBay

Pound foolish, pennyt wise.



SEE:

Crime Pays If You Are Rich

Whining and Dining with the Irvings

Hedge Funds, Junk Bonds, Ponzi Schemes

Criminal Capitalism Business As Usual

Tax Cuts For All

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