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	<title>hughmcguire.net &#187; politics</title>
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	<link>http://hughmcguire.net</link>
	<description>at the intersection of technology, philosophy, and politics (and some other things).</description>
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		<title>MPs: Please Get Back to Work</title>
		<link>http://hughmcguire.net/2010/01/05/mps-please-get-back-to-work/</link>
		<comments>http://hughmcguire.net/2010/01/05/mps-please-get-back-to-work/#comments</comments>
		<pubDate>Tue, 05 Jan 2010 16:54:25 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[politics]]></category>

		<guid isPermaLink="false">http://hughmcguire.net/2010/01/05/mps-please-get-back-to-work/</guid>
		<description><![CDATA[I haven&#8217;t been writing much bloggy stuff lately, certainly not political rants. And true enough I don&#8217;t know much about the history/implications of suspending parliament by prorogue (can anyone point to a good recent source that explains Harper&#8217;s action in a historical context? Is it usual? Unusual? &#8211; I&#8217;d never heard the word before last [...]]]></description>
			<content:encoded><![CDATA[<p>I haven&#8217;t been writing much bloggy stuff lately, certainly not political rants. And true enough I don&#8217;t know much about the history/implications of suspending parliament by prorogue (can anyone point to a good recent source that explains Harper&#8217;s action in a historical context? Is it usual? Unusual? &#8211; I&#8217;d never heard the word before last year, and now he&#8217;s done it twice).</p>
<p>On principle, I don&#8217;t like it. MPs are elected and are supposed to represent us in parliament. Which they cannot do when parliament is suspended early. Because of the <em>Olympics</em>? Come on. The Olympics? You have to be kidding.</p>
<p>Anyway, why not put voice to your annoyance at a democratic government that wants to govern outside of democracy? Some ways to do it:</p>
<p>1. Join the <a href="http://www.facebook.com/group.php?gid=260348091419">Canadians Against Proroguing Parliament Facebook Group</a>.</p>
<p>2. Email Harper &#38; tell him you don&#8217;t like it: pm@pm.gc.ca &#8230; you could say:</p>
<blockquote><p>Dear Mr. Harper,</p>
<p>Canada is supposed to be a democracy. For democracy to function, our elected officials are supposed to represent us in Parliament, which they cannot do because of yet another prorogued session. Please reconsider, and get our MPs back to work.
</p></blockquote>
<p>3. Email your MP (mine is Tom Mulcair: Mulcair.T@parl.gc.ca) and tell them you don&#8217;t like it: </p>
<blockquote><p>Dear Mr. Mulcair:</p>
<p>I am writing to you register my strong disapproval at the government&#8217;s decision to prorogue parliament. Please do everything in your power to help MPs get back to work soon.
</p></blockquote>
<p>4. email the  Governor General: info@gg.ca</p>
<blockquote><p>Dear Ms. Jean:</p>
<p>I am writing to you register my strong disapproval at the government&#8217;s decision to prorogue parliament, again; and your agreement with the decision. Our parliament is supposed to represent the people of Canada, which it can&#8217;t do while suspended.
</p></blockquote>
<p><STRONG>RESPONSES:</STRONG><br />
Response from Mulcair&#8217;s office:</p>
<blockquote><p>Dear Mr. McGuire,</p>
<p>On behalf of Thomas Mulcair, Member of Parliament for Outremont, I acknowledge receipt of your e-mail.</p>
<p>Thank you for sharing your thoughts on the shutting down of Parliament by Mr. Harper. We share your outrage.</p>
<p>Stephen Harper is locking out Members of Parliament, preventing them from doing the very important work they were elected to do.</p>
<p>By pulling the plug on Parliament, Stephen Harper killed 36 government legislations which were making progress, including bills dealing with important issues such as consumer protection, white collar crimes or digital policy. It is our view that this is a further attempt by the Harper Government to avoid being held accountable for torture issues in Afghanistan.</p>
<p>The NDP Caucus had a retreat planned the week before the scheduled return of Parliament. The meeting will go ahead as planned,<br />
and NDP MPs will attend and discuss the strategy for the next few months. </p>
<p>Sincerely,</p>
<p>Mathilde Rogue<br />
Adjointe parlementaire<br />
Parliamentary assistant<br />
___________________________________________________________     </p>
<p>Thomas Mulcair, d&#233;put&#233;/MP Outremont<br />
T&#233;l. : 514 736-2727<br />
mulcat@parl.gc.ca</p></blockquote>
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		<title>Canadian Health Care</title>
		<link>http://hughmcguire.net/2009/09/20/canadian-health-care/</link>
		<comments>http://hughmcguire.net/2009/09/20/canadian-health-care/#comments</comments>
		<pubDate>Sun, 20 Sep 2009 18:39:27 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[politics]]></category>

		<guid isPermaLink="false">http://hughmcguire.net/2009/09/20/canadian-health-care/</guid>
		<description><![CDATA[I have not been paying much attention to the US health care debates, but I gather those opposed to Obama&#8217;s health plan have been portraying Canada as some kind of healthcare disaster. &#8220;We don&#8217;t want to be like Canada,&#8221; they say, &#8220;where the government has ruined healthcare.&#8221; 
My wife Christine is an emergency doctor, so [...]]]></description>
			<content:encoded><![CDATA[<p>I have not been paying much attention to the US health care debates, but I gather those opposed to Obama&#8217;s health plan have been portraying Canada as some kind of healthcare disaster. &#8220;We don&#8217;t want to be like Canada,&#8221; they say, &#8220;where the government has ruined healthcare.&#8221; </p>
<p>My wife Christine is an emergency doctor, so I know a bit about the problems in Quebec, which is probably as &#8220;bad&#8221; as anywhere in Canada. </p>
<p>The concise description of Canada&#8217;s health system is the following: critical health issues are dealt with quickly, and well. Less critical health issues mean longer wait times. And generally health outcomes in Canada are equivalent to outcomes in other industrial countries, and often better than those in the US. </p>
<p>Plus, we have universal coverage: for most healthcare, you don&#8217;t pay a cent, except through taxes (which turns out to be a much cheaper way to do it than thru insurance).</p>
<p>There is an excellent article in Bloomberg, <a href="http://www.bloomberg.com/apps/news?pid=20601109&amp;sid=a_zs1Y1FspIM">Canadian Health Care Even with Queues, Beats US</a> looking at the studies done in the past five years, including a recent one done by the OECD:</p>
<blockquote><p>Opponents of overhauling U.S. health care argue that Canada shows what happens when government gets involved in medicine, saying the country is plagued by inferior treatment, rationing and months-long queues.</p>
<p>The allegations are wrong by almost every measure, according to research by the O and other independent studies published during the past five years. While delays do occur for non-emergency procedures, data indicate that Canada&#8217;s system of universal health coverage provides care as good as in the U.S., at a cost 47 percent less for each person.</p>
<p>&#8220;There is an image of Canadians flooding across the border to get care,&#8221; said Donald Berwick, a Harvard University health- policy specialist and pediatrician who heads the Boston-based nonprofit Institute for Healthcare Improvement. &#8220;That&#8217;s just not the case. The public in Canada is far more satisfied with the system than they are in the U.S. and health care is at least as good, with much more contained costs.&#8221; [<a href="http://www.bloomberg.com/apps/news?pid=20601109&amp;sid=a_zs1Y1FspIM">more...</a>]</p></blockquote>
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		<title>Copyright Consultations &#8211; Hurry!</title>
		<link>http://hughmcguire.net/2009/09/09/copyright-consultations-hurry/</link>
		<comments>http://hughmcguire.net/2009/09/09/copyright-consultations-hurry/#comments</comments>
		<pubDate>Wed, 09 Sep 2009 12:41:07 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[copyright/left]]></category>
		<category><![CDATA[politics]]></category>

		<guid isPermaLink="false">http://hughmcguire.net/2009/09/09/copyright-consultations-hurry/</guid>
		<description><![CDATA[There are five days left in the federal government&#8217;s copyright consultations. Go make your voices heard!
http://copyright.econsultation.ca/
For more info, see Michael Geist&#8217;s info page: Speak Out on Copyright.
]]></description>
			<content:encoded><![CDATA[<p>There are five days left in the federal government&#8217;s <a href="http://copyright.econsultation.ca/">copyright consultations</a>. Go make your voices heard!</p>
<p><a href="http://copyright.econsultation.ca/">http://copyright.econsultation.ca/</a></p>
<p>For more info, see Michael Geist&#8217;s info page: <a href="http://www.speakoutoncopyright.ca/">Speak Out on Copyright</a>.</p>
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		<title>Canadian Copyright Consultations</title>
		<link>http://hughmcguire.net/2009/07/22/canadian-copyright-consultations/</link>
		<comments>http://hughmcguire.net/2009/07/22/canadian-copyright-consultations/#comments</comments>
		<pubDate>Wed, 22 Jul 2009 11:47:36 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[copyright/left]]></category>
		<category><![CDATA[politics]]></category>

		<guid isPermaLink="false">http://hughmcguire.net/2009/07/22/canadian-copyright-consultations/</guid>
		<description><![CDATA[The Government of Canada is holding copyright consultations, which you can answer by sending an email to the this address [info AT copyrightconsultation DOT gc DOT ca] which answers the following questions:
1. How do Canada&#8217;s copyright laws affect you? How should existing laws be modernized?
2. Based on Canadian values and interests, how should copyright changes [...]]]></description>
			<content:encoded><![CDATA[<p>The Government of Canada is holding <a href="http://copyright.econsultation.ca/topics-sujets/show-montrer/18">copyright consultations</a>, which you can answer by sending an email to the this address [info AT copyrightconsultation DOT gc DOT ca] which answers the following questions:</p>
<blockquote><p>1. How do Canada&#8217;s copyright laws affect you? How should existing laws be modernized?<br />
2. Based on Canadian values and interests, how should copyright changes be made in order to withstand the test of time<br />
3. What sorts of copyright changes do you believe would best foster innovation and creativity in Canada?<br />
4. What sorts of copyright changes do you believe would best foster competition and investment in Canada?<br />
5. What kinds of changes would best position Canada as a leader in the global, digital economy?</p></blockquote>
<p>Visit <a href="http://copyright.econsultation.ca/topics-sujets/show-montrer/18">here for more info &#38; to submit</a> your responses. </p>
<p><a href="http://www.michaelgeist.ca/content/view/4176/125/">Michael Geist has posted</a> his short answer.</p>
<blockquote><p>My short answer would begin by noting that the five questions can really be grouped into three key issues:</p>
<p>Why does copyright matter to you?<br />
How can the government ensure that copyright reforms remain relevant in the long term?<br />
What specific reforms should the government prioritize (having regard for creativity, innovation, competition, and the digital economy)? [<a href="http://www.michaelgeist.ca/content/view/4176/125/">more...</a>]</p></blockquote>
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		<title>Beers for Canada: Visiblegovernment.ca Fundraiser</title>
		<link>http://hughmcguire.net/2009/07/01/beers-for-canada-visiblegovernmentca-fundraiser/</link>
		<comments>http://hughmcguire.net/2009/07/01/beers-for-canada-visiblegovernmentca-fundraiser/#comments</comments>
		<pubDate>Wed, 01 Jul 2009 13:13:57 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[data]]></category>
		<category><![CDATA[friendsprojects]]></category>
		<category><![CDATA[openmovement]]></category>
		<category><![CDATA[politics]]></category>

		<guid isPermaLink="false">http://hughmcguire.net/2009/07/01/beers-for-canada-visiblegovernmentca-fundraiser/</guid>
		<description><![CDATA[For the price of a beer (or a pitcher, or a round), you can support VisibleGovernment.ca &#8230; the non-profit that promotes online tools for government transparency, openness and accessibility around government and civic data (yay!).
They&#8217;ve got a little fundraiser going, in celebration of Canada Day: Beers for Canada &#8230;
How we&#8217;ll spend your money
We work on [...]]]></description>
			<content:encoded><![CDATA[<p><img src="http://img.skitch.com/20090701-ahwper8ksk9wkqrur4b6a2hat.jpg" alt="beers for canada" class="alignright"><a href="http://beersforcanada.com/">For the price of a beer</a> (or a pitcher, or a round), you can support <a href="http://visiblegovernment.ca">VisibleGovernment.ca</a> &#8230; the non-profit that promotes online tools for government transparency, openness and accessibility around government and civic data (yay!).</p>
<p>They&#8217;ve got a little fundraiser going, in celebration of Canada Day: <a href="http://beersforcanada.com/">Beers for Canada</a> &#8230;</p>
<blockquote><p><strong>How we&#8217;ll spend your money</strong></p></blockquote>
<blockquote><p>We work on several aspects of transparency:</p></blockquote>
<blockquote><p>Creating new tools: We work with developers and designers to build websites that encourage citizens and governments to communicate openly.<br />
Encouraging government openness: We show elected officials the benefits of open, two-way discourse, highlighting places where information is lacking and celebrating the efforts of those who want to be more transparent.<br />
Public awareness: We emphasize the civic importance of transparency and open government.<br />
Working with other organizations: We share and collaborate with organizations like the <a href="'http://sunlightfoundation.com'">Sunlight Foundation</a>,  <a href="'http://mysociety.org'">MySociety</a> and <a href="'http://changecamp.ca'">Changecamp</a>.</p></blockquote>
<blockquote><p>We&#8217;re also organizing <strong>Code For Canada</strong>, an application design competition that awards prizes to people who build web, facebook, and iPhone apps that provide visualization, analysis, and access to federal government data sets.</p></blockquote>
<p>So, <a href="http://beersforcanada.com/">go support a worthy cause</a>.</p>
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		<title>Those Darned Kids</title>
		<link>http://hughmcguire.net/2009/06/10/those-darned-kids/</link>
		<comments>http://hughmcguire.net/2009/06/10/those-darned-kids/#comments</comments>
		<pubDate>Wed, 10 Jun 2009 12:28:45 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[philosophy]]></category>
		<category><![CDATA[politics]]></category>
		<category><![CDATA[privacy]]></category>
		<category><![CDATA[technology]]></category>

		<guid isPermaLink="false">http://hughmcguire.net/2009/06/10/those-darned-kids/</guid>
		<description><![CDATA[Kids boycott classroom with CCTV cameras. People call them brats. Kids respond with an op-ed that every adult should read.
Many users suggested that cameras were a good idea because they could be used to keep an eye on bullying and student behaviour, we were accused of been &#8220;narcissistic megalomaniacs&#8221; angry at &#8220;being nabbed for our [...]]]></description>
			<content:encoded><![CDATA[<p>Kids boycott classroom with CCTV cameras. People call them brats. Kids respond with<a href="http://www.guardian.co.uk/commentisfree/libertycentral/2009/jun/03/cctv-classroom"> an op-ed </a>that every adult should read.</p>
<blockquote><p>Many users suggested that cameras were a good idea because they could be used to keep an eye on bullying and student behaviour, we were accused of been &#8220;narcissistic megalomaniacs&#8221; angry at &#8220;being nabbed for our churlish troublemaking&#8221;. This stereotypical and frankly ignorant view ignores the fact that Davenant Foundation School produces some of the best exam results in Essex. Violent behaviour among pupils is simply not an issue, making the justification for putting cameras in our classrooms more surprising&#8230; </p>
<p>Eroding standards in schools and deteriorating discipline are down to a broken society and the failure of the education system. The truth is that we are whatever the generation before us has created. If you criticise us, we are your failures; and if you applaud us we are your successes, and we reflect the imperfections of society and of human life.  [<a href="http://www.guardian.co.uk/commentisfree/libertycentral/2009/jun/03/cctv-classroom">more...</a>]</p></blockquote>
<p>[via <a href="http://www.boingboing.net/2009/06/09/students-who-went-on.html">boing</a>]</p>
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		<title>The Tourist Dynamic</title>
		<link>http://hughmcguire.net/2009/05/20/the-tourist-dynamic/</link>
		<comments>http://hughmcguire.net/2009/05/20/the-tourist-dynamic/#comments</comments>
		<pubDate>Wed, 20 May 2009 15:29:32 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[personal]]></category>
		<category><![CDATA[philosophy]]></category>
		<category><![CDATA[politics]]></category>

		<guid isPermaLink="false">http://hughmcguire.net/2009/05/20/the-tourist-dynamic/</guid>
		<description><![CDATA[My pal Chris wrote a moving post about an experience he had growing up in South Africa, a white boy who went with his church to talk about Jesus in the &#8220;coloured&#8221; townships.
Which made me think about traveling and the relationship we rich, &#8220;white,&#8221;[*] educated people have with the rest of the world. I commented [...]]]></description>
			<content:encoded><![CDATA[<p>My pal Chris <a href="http://www.lookagain.me.uk/2009/05/03/strange-meeting/">wrote a moving post</a> about an experience he had growing up in South Africa, a white boy who went with his church to talk about Jesus in the &#8220;coloured&#8221; townships.</p>
<p>Which made me think about traveling and the relationship we rich, &#8220;white,&#8221;<a href="#note">[*]</a> educated people have with the rest of the world. I commented on Chris&#8217; blog, but here&#8217;s what I wrote:</p>
<p>I was in Cuba some years ago on holiday and I recall reading before I went about how Cuba had been &#8220;spoiled&#8221; by tourism, and how you couldn&#8217;t have a genuine interaction with people any more because they see Westerners only for their wallets now. It&#8217;s true, as far as it goes &#8211; those Cubans did see me as a wallet.</p>
<p>But these days (even then), that kind of talk makes me angry, because built into it is this assumption that we <em>deserve</a></em>a certain kind of treatment, as if the world is a kind of park, where we can go visit various places to get wonderful experiences: Bhutan for the mountains and the sage monks &#38; yak-milk tea; Philippines for the sunrise while visiting tropical islands in a skiff guided by a wiseacre biologist; Hong Kong where we can do commerce with the shouting market people, who get such a kick out of Gweilos straying beyond Kowloon. Drinking beer late at night in the veld listening to stories of African leopards. Cuba for sexy music and smiling, dancing people.</p>
<p>I&#8217;ve experienced all these things and loved them, they are experiences I cherish. But I have done these things, am able to do these things because I am wealthy and white, and the world, truly is my oyster. I remember being in university, thinking: I will travel the world, I will undertake adventures, I will see distant land and do great things. And for a few years I did. I loved it; it was dashing and daring and exotic and all the things it&#8217;s supposed to be. And granted to me with ease, and no sacrifice, because of who and what I am.</p>
<p>I hated that trip to Cuba, not because Cubans see me for a wallet &#8212; which actually is &#8220;annoying&#8221; &#8212; but rather because of what I, as tourist, saw Cuba as: a place filled with people who should like me for who I am, give me the benefit of the doubt, people who should see beyond my colour and my new running shoes and instead have a conversation with me about what life is really like for them, because, well, I&#8217;d be happy to do the same for them if they came to Canada. That is, I saw Cuba as: entertainment. I&#8217;d paid for it, and didn&#8217;t get what I wanted.</p>
<p>And it pissed me off, not that Cuba didn&#8217;t deliver; but rather that I had put myself in that position, of &#8220;he who has paid to be entertained.&#8221; I don&#8217;t mean that on a surface sense, but at a deeper level. Tourism puts us in such an odd dynamic with people: you are there to get something out of an &#8220;experience&#8221; &#8230; joy, wisdom, commune with nature, commune with another culture, history, something&#8230;And the exchange? What do we give up? Our time and our money. Only one of which is worth anything to anyone.</p>
<p>I have this odd feeling that tourism and it&#8217;s thinly veiled cousin, &#8220;international development,&#8221; are about as colonial as a military invasion: the real beneficiaries are the tourists, the NGO&#8217;s and their rich, adventuresome consultants; just as the beneficiaries of military invasions are rarely those under whose name invasions happen, these days at least.</p>
<p>I say all this because I am conflicted by Chris&#8217; story of the townships &#8230; I have been treated well by people all over the world, treaded poorly by others; i&#8217;ve been robbed and cheated, threatened and bored to death. All of it great, and I wouldn&#8217;t trade it. Saying I&#8217;ve had yak&#8217;s milk in Bhutan gives me great pleasure (I was there to &#8220;help&#8221; the Bhutanese, naturally).</p>
<p>But it&#8217;s curious when our own innocence or blindness is caught out &#8212; as I guess the young Chris Hughes&#8217; was &#8212; by something so moving, which is the twin realization that:<br />
a) we do not belong somewhere<br />
and yet:<br />
b) we are welcomed nonetheless.</p>
<p>I think that might be just the thing that irks me about our modern white fascination with &#8220;doing&#8221; Asia, or &#8220;doing Columbia,&#8221; &#8230; this assumption that we do belong there. It&#8217;s our world afterall.</p>
<p>So I find Chris&#8217; story very moving because, I interpret it something as a recognition that he did not belong where he was &#8230; and yet&#8230;.and yet&#8230;there was kindness, despite his naivete, despite where he came from, despite the preposterousness of the situation, and not because of it.</p>
<p><a name="note">*</a> Re: &#8220;white&#8221; I use this term broadly, and really it&#8217;s the wrong term. It&#8217;s not &#8220;white&#8221;, so much as &#8220;affluent middle-class, educated westerner&#8230;&#8221; I&#8217;m using it as a cultural marker, not a racial one; though the two are not totally unrelated.</p>
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		<title>One Wonders How This All Ends&#8230;</title>
		<link>http://hughmcguire.net/2009/03/26/one-wonders-how-this-all-ends/</link>
		<comments>http://hughmcguire.net/2009/03/26/one-wonders-how-this-all-ends/#comments</comments>
		<pubDate>Thu, 26 Mar 2009 22:07:33 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[economics]]></category>
		<category><![CDATA[politics]]></category>

		<guid isPermaLink="false">http://hughmcguire.net/2009/03/26/one-wonders-how-this-all-ends/</guid>
		<description><![CDATA[&#8220;The Big Takeover:  The global economic crisis isn&#8217;t about money &#8211; it&#8217;s about power. How Wall Street insiders are using the bailout to stage a revolution,&#8221; by Matt Taibbi, in Rolling Stone:
In essence, Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company, one whose balance sheet includes the world&#8217;s [...]]]></description>
			<content:encoded><![CDATA[<p>&#8220;The Big Takeover:  The global economic crisis isn&#8217;t about money &#8211; it&#8217;s about power. How Wall Street insiders are using the bailout to stage a revolution,&#8221; <a href="http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print">by Matt Taibbi, in Rolling Stone</a>:</p>
<blockquote><p>In essence, Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company, one whose balance sheet includes the world&#8217;s most appallingly large and risky hedge fund, a controlling stake in a dying insurance giant, huge investments in a group of teetering megabanks, and shares here and there in various auto-finance companies, student loans, and other failing businesses. Like AIG, this new federal holding company is a firm that has no mechanism for auditing itself and is run by leaders who have very little grasp of the daily operations of its disparate subsidiary operations.</p>
<p>In other words, it&#8217;s AIG&#8217;s rip-roaringly shitty business model writ almost inconceivably massive &#8212; to echo Geithner, a huge, complex global company attached to a very complicated investment bank/hedge fund that&#8217;s been allowed to build up without adult supervision. How much of what kinds of crap is actually on our balance sheet, and what did we pay for it? When exactly will the rent come due, when will the money run out? Does anyone know what the hell is going on? And on the linear spectrum of capitalism to socialism, where exactly are we now? Is there a dictionary word that even describes what we are now? It would be funny, if it weren&#8217;t such a nightmare. [<a href="http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print">more...</a>]</p></blockquote>
<p>And:<br />
&#8220;No Return to Normal:  Why the economic crisis, and its solution, are bigger than you think,&#8221; by <a href="http://www.washingtonmonthly.com/features/2009/0903.galbraith.html">James K. Galbraith in Washington Monthly.</a></p>
<blockquote><p>The oddest thing about the Geithner program is its failure to act as though the financial crisis is a true crisis&#8212;an integrated, long-term economic threat&#8212;rather than merely a couple of related but temporary problems, one in banking and the other in jobs. In banking, the dominant metaphor is of plumbing: there is a blockage to be cleared. Take a plunger to the toxic assets, it is said, and credit conditions will return to normal. This, then, will make the recession essentially normal, validating the stimulus package. Solve these two problems, and the crisis will end. That&#8217;s the thinking.</p>
<p>But the plumbing metaphor is misleading. Credit is not a flow. It is not something that can be forced downstream by clearing a pipe. Credit is a contract. It requires a borrower as well as a lender, a customer as well as a bank. And the borrower must meet two conditions. One is creditworthiness, meaning a secure income and, usually, a house with equity in it. Asset prices therefore matter. With a chronic oversupply of houses, prices fall, collateral disappears, and even if borrowers are willing they can&#8217;t qualify for loans. The other requirement is a willingness to borrow, motivated by what Keynes called the &#8220;animal spirits&#8221; of entrepreneurial enthusiasm. In a slump, such optimism is scarce. Even if people have collateral, they want the security of cash. And it is precisely because they want cash that they will not deplete their reserves by plunking down a payment on a new car.</p>
<p>The credit flow metaphor implies that people came flocking to the new-car showrooms last November and were turned away because there were no loans to be had. This is not true&#8212;what happened was that people stopped coming in. And they stopped coming in because, suddenly, they felt poor.</p>
<p>Strapped and afraid, people want to be in cash. This is what economists call the liquidity trap. And it gets worse: in these conditions, the normal estimates for multipliers&#8212;the bang for the buck&#8212;may be too high. Government spending on goods and services always increases total spending directly; a dollar of public spending is a dollar of GDP. But if the workers simply save their extra income, or use it to pay debt, that&#8217;s the end of the line: there is no further effect. For tax cuts (especially for the middle class and up), the new funds are mostly saved or used to pay down debt. Debt reduction may help lay a foundation for better times later on, but it doesn&#8217;t help now. With smaller multipliers, the public spending package would need to be even larger, in order to fill in all the holes in total demand. Thus financial crisis makes the real crisis worse, and the failure of the bank plan practically assures that the stimulus also will be too small. [<a href="http://www.washingtonmonthly.com/features/2009/0903.galbraith.html">more...</a>]</p></blockquote>
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		<title>Common Sense and Boring Canadian Banks</title>
		<link>http://hughmcguire.net/2009/02/13/common-sense-and-boring-canadian-banks/</link>
		<comments>http://hughmcguire.net/2009/02/13/common-sense-and-boring-canadian-banks/#comments</comments>
		<pubDate>Fri, 13 Feb 2009 18:08:36 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[economics]]></category>
		<category><![CDATA[politics]]></category>

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		<description><![CDATA[As a start-up, I&#8217;ve complained about how conservative the Canadian business culture is, especially banking and finance.   But boring has it&#8217;s benefits, when things get shaky. From Newsweek:
In 2008, the World Economic Forum ranked Canada&#8217;s banking system the healthiest in the world. America&#8217;s ranked 40th, Britain&#8217;s 44th.
Canada has done more than survive this [...]]]></description>
			<content:encoded><![CDATA[<p>As a start-up, I&#8217;ve complained about how conservative the Canadian business culture is, especially banking and finance.   But boring has it&#8217;s benefits, when things get shaky. From <a href="http://www.newsweek.com/id/183670">Newsweek</a>:</p>
<blockquote><p>In 2008, the World Economic Forum ranked Canada&#8217;s banking system the healthiest in the world. America&#8217;s ranked 40th, Britain&#8217;s 44th.</p>
<p>Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn&#8217;t grown in size; the others have all shrunk.</p>
<p>So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1&#8212;compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada&#8217;s more risk-averse business culture, but it is also a product of old-fashioned rules on banking. [<a href="http://www.newsweek.com/id/183670">more...</a>]</p></blockquote>
<p>Given that we lost 129,000 jobs in January alone, I don&#8217;t think it&#8217;s fair to say our economy is thriving. But certainly our banking sector appears to be in decent shape.</p>
<p>Speaking of which: 60:1 leverage in European banks? God help us.</p>
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		<title>Credit Default Swaps</title>
		<link>http://hughmcguire.net/2009/01/25/credit-default-swaps/</link>
		<comments>http://hughmcguire.net/2009/01/25/credit-default-swaps/#comments</comments>
		<pubDate>Sun, 25 Jan 2009 12:56:56 +0000</pubDate>
		<dc:creator>Hugh</dc:creator>
				<category><![CDATA[economics]]></category>
		<category><![CDATA[politics]]></category>

		<guid isPermaLink="false">http://hughmcguire.net/2009/01/25/credit-default-swaps/</guid>
		<description><![CDATA[When I worked at Prebon in 2000 (on financial/insurance products that would financing greenhouse gas reductions while hedging against the risk of greenhouse gas legislation), I remember trying to figure out the credit default swap market. At the time, it was a relatively new product, and it was where Prebon &#8211; a broker, not a [...]]]></description>
			<content:encoded><![CDATA[<p>When I worked at <a href="http://www.tullettprebon.com/">Prebon</a> in 2000 (on financial/insurance products that would financing greenhouse gas reductions while hedging against the risk of greenhouse gas legislation), I remember trying to figure out the credit default swap market. At the time, it was a relatively new product, and it was where Prebon &#8211; a broker, not a trader &#8211; was making a killing. Generally in the financial business, new products are where all the profits are. Once your clients and competitors figure out what they&#8217;re buying, transparency comes into the market, efficiency, and prices/margins drop. But in the early days of a financial product, the margins are huge &#8211; because if you are offering something people want, and no one else is offering it, and no one else understands it, you can strip out enormous profits.</p>
<p>Anway, at the time the CDS market was pretty new and pretty hot. A credit default swap, nominally, is an insurance policy against the issuer of a financial product (say, a bond) defaulting. What it became was something else altogether, a massive commodity trading scheme where the underlying commodity (the CDS) had come completely uncoupled from the underlying assets. By the time things started collapsing last year, the CDS market was $30 trillion dollars. It&#8217;s a massive liability that no one&#8217;s really owned up to yet. NYTimes has a good article explaining things and asking when the next shoe will drop:</p>
<blockquote><p>Any honest assessment must include the role that credit-default swaps have played in this mess: it&#8217;s the elephant in the room, the $30 trillion market that people do not want to talk about.</p>
<p>Credit-default swaps are insurancelike contracts that Wall Street created in the early 1990s. They allow bondholders to protect themselves against losses if a company or a debt issuer defaults&#8230;.</p>
<p>Sellers of C.D.S.&#8217;s spent years raking in premiums while underestimating or simply ignoring the possibility of rising defaults. Regulators let the market grow unchecked.</p>
<p>In the end, far too much of this insurance was written at way too cheap a cost. Now, with Wall Street and the economy in tatters, the fear that already-hobbled financial companies may have to pay off huge amounts on C.D.S. arrangements hangs like a cloud over the markets.</p>
<p>C.D.S.&#8217;s have already figured prominently in taxpayer bailouts. The $150 billion rescue of the American International Group, for example, came about because of swaps the insurer had written on mortgage securities. And the $100 billion taxpayer backstop handed to Bank of America on Jan. 16 had a good bit to do with soured credit-default swaps that the bank inherited when it acquired Merrill Lynch. [<a href="http://www.nytimes.com/2009/01/25/business/25gret.html?ref=business">more...</a>]</p></blockquote>
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