Geordie's blog

Nouriel Roubini, one of the world's most well-known economists, discusses his take on the current market climate in the Wall Street Journal.

Money quote:

"Karl Marx said it right, at some point capitalism can destroy itself because you cannot keep shifting income from labour to capital without not having an excess capacity and lack of aggregate demand and that's what's happening. We thought that markets work; they're not working...it's a self destructive process."

Today the IMF and Europe agreed to a €130 billion bailout package to Greece.

Greece has been under intense pressure recently. The economic crisis plunged Greece, like many other nations, into tough economic times.

As Greece has maintained consistently high levels of debt over many years, the downturns in their shipping and tourism economies have meant that they have required more and more debt in order to keep paying their bills.

However there has been a catch.

American debt-rating agencies (companies which essentially set out how much it will cost to take out a loan) recently said Greece might not pay back its debts.

Greek Prime-Minster George Papandreou has even stated that Greece is being 'attacked' on purpose.

Speaking in the Guardian he said, "This is an attack on the eurozone by certain other interests, political or financial, and often countries are being used as the weak link, if you like, of the eurozone. We are being targeted, particularly with an ulterior motive or agenda, and of course there is speculation in the world markets."

So few people are lending Greece money. This has made it impossible for Greece to get the loans it needs to keep running the country and pay back the loans it has already taken out.

And the 'shock' of the Greece financial situation is being used to destroy Greece's welfare state in what is being reported as "the most drastic overhaul of a European economy ever attempted."

Haroon Siddiqui, one of, if not 'the' best, columnists in the Main Stream Media has an article today looking at politicians who muckrake and target immigrants in order to help with their unpopularity in the polls.

Siddiqui, writing in the Toronto Star, is always very eloquent in his analysis', which using clear cut arguments to back up his opinions on the Rights and Democracy fiasco, Israeli Apartheid Week and International Trade.

In a broad swipe at several politicians and parties he accuses individuals of very low blows:

Sarkozy's standing in the polls is low, as is that of Quebec Premier Jean Charest, Harper, Ignatieff and Dosanjh. They want to climb back up on the backs of vulnerable women or by being dangerously intolerant of multiculturalism, which is the law of the land in Canada.

The Ontario government recently approved a motion that the term "Israeli Apartheid" should not be used.

The motion passed with unanimous support from the Ontario Tory's, Liberals and NDP.

Speaking to the Toronto Sun Conservative MPP Peter Shurman stated that "I want to be clear about what it is I’m trying to do. I want the name changed. It’s that simple. It’s just wrong."

And why is it wrong for Shurman? What stunning and well thought out rational did Shurman use to back up his condemnation of the words "Israeli Apartheid"?

Does he dispute that there are similarities between the Bantustan system in South Africa and the territory allotments to Palestinians? Did he challenge the claim that there are two different laws that exist in Israel, one for Israelis and another for Palestinians? Why did he and the entire Legislature choose to target the the term "Israeli Apartheid"?

“My problem is the name,” he said. “Israeli Apartheid Week is not dialogue, it’s a monologue. The name is hateful, it is odious and that’s not how things should be in my Ontario. It’s a term that frankly I’m sick of hearing. Get rid of this word apartheid.”

Two things.

One, Shurman never said that the term was not accurate in describing the system. Which makes sense given many South Africans and Israelis themselves use this terms to describe the treatment of Palestinians.

Two, replace the word "Israeli" with "South African" in Shurman's quote and it makes about as much sense as it would have in the 1980's.

As reported in the BBC:

Latin American and Caribbean nations have agreed to set up a new regional body without the US and Canada. The new bloc would be an alternative to the Organisation of American States (OAS), the main forum for regional affairs in the past 50 years.

The new bloc is called Community of Latin American and Caribbean States. It joins a number of new regional bodies in Latin America which have recently been developed including the Bolivarian Alliance for the Peoples of Our America (ALBA), Petrocaribe S.A., and the Union of South American Nations, all of which have been promoting regional integration. A regional currency similar to the EURO, called the SUCRE is also being planned.

For the second time, a judged has concluded that Toronto Police have engaged in racial profiling and lying to Ontario Superior Court when dealing with Irshad Ahmed.

According to the Toronto Star and National Post, Superior Court Justice Frances Kiteley found police had lied in their explanation of why they pulled Mr. Ahmed over exactly one year ago to this day. The judge concluded in her decision, "I am compelled to draw the inference that Mr. Ahmed was investigated and arbitrarily detained because of his race."

Last year in a separate case, Superior Court Justice William Bassel found that officers lied and racially profiled Ahmed last year when used excessive force Tasering him.

An internal Report from the Canadian Border Services Agency, warned that arming border guards at a controversial border crossing could result in violence.

According to a story in the Toronto Star, the crossing on Akwesasne Mohawk land at the Ontario-Quebec-New York border was to be staffed by armed guards in May 2009.

Six months before, the report claimed that doing so could lead to violence and "further damage the border agency's relationship with local Akwesasne Mohawks".

The day before guards were to get guns, 400 Mohawks had camped near the border crossing. According to the guards, threats of violence were issued causing the guards to abandon their posts.

Mohawks make up 70% of the cross border traffic at the crossing and demonstrated against the arming of the guards stating that it was a threat to their sovereignty and that they would evict the federal government if the guards were armed.

Speaking in the Cornwall Standard-Freeholder Akwesasne Mohawk Grand Chief Tim Thompson said MP Stockwell Day, Public Safety Minister at the time, refused to meet with the Mohawk Council of Akwesasne over the issue.

A proposal by UK Prime Minister Gordon Brown for a global tax on financial transactions to fund bank bailouts has been rejected by Canadian Finance Minister Jim Flaherty, according to the CBC.

"That’s not something that we would want to do. We’re not in the business of raising taxes," said Flaherty.

A a global tax on financial transactions (also known as a Tobin Tax) was first proposed by economist James Tobin as a means of regulating out-of-control speculation in financial markets.

Brown's proposal was also rejected by the US.

A trailer for Oliver Stone's new movie, South of the Border.

Our friends at Rabble bring us news that the latest NDP convention in Halifax this August will be a pretty white affair.

As can be gleamed from the convention speakers: "7 out of 7 featured speakers at the convention are white; 6 of them are men. 9 out of 9 headshots are of white people. For that matter 18 out of the 18 people pictured on this page are white. Seriously?"

While appealing to people of colour has rarely been at the top of the NDP agenda it's pretty amazing to see them totally absent from a major NDP convention. Especially considering organizers were able to squeak in an NHL defenceman and his Carbon Neutral Challenge.

Photos by James Clark, Megan Hope and Enid Godtree.

1. Thousands of Tamils converge on Toronto's Gardiner Expressway on May 10th for almost 4 hours shutting down a key artery in the City's road network. The protest was part of a series of actions in Toronto contesting the war in Sri Lanka and the Canadian governments actions or lack thereof.

2. People get a unique view of a section of the City normally over-run with cars going 80 kph. Tamils had previously shut down major sections of the City including a 4 day protest on University Ave.

3. One of many Tamil Tiger flags at the event. Tiger supporters were prevalent amongst the protesters, many of whom were calling for a separate Tamil state in addition to an immediate ceasefire.

4. Police tactics at the event were relatively non-confrontational. Protesters were allowed to come and go from the ramp and bring in supplies (coffee,food, blankets). Protesters who biked to the event to join the demonstration created the rare sight of bikes locked up to the guard rails on the Expressway.

5. One of many vigils. Protesters were totally peaceful.

6. Toronto Police, OPP and RCMP were called into the protest. Police discussing tactics with other units.

7. Riot Police form at one end of the protest.

8. A small group of police begin beating protesters before other police order them to stop. 4 are arrested.

9. Tamils agree to end the demonstration peacefully and march to Queen's Park (the Ontario legislature)...but not everyone gets away unscathed.

10 days later, the Sri Lankan government declares a conventional victory over the Tamils. The leader of the Tamil Tigers is declared killed.

Fours days before receiving a second bailout to the tune of $30 Billion, AIG issued a confidential internal memo regarding what could happen if the insurance company failed.

Doomsday scenarios included:

• The potential for cascading failure of US insurance companies
• The potential that US companies in foreign companies could be permanently lost to nationalization
• A run on the US dollar
• Destroy US retirement savings
• General economic meltdown similar to that of Lehman Brothers

Happy reading!

The meltdown of the economy is becoming so common and widespread it has been hard to keep track of everything that is going on. Briefly:

• In Canada, media empires including
  CTV, Torstar, Quebecor and Canwest continue to flounder along with a whole host of other media outlets across the continent.
• At the same time, Canadian pension funds, most of the big banks, Nortel, Walmart Canada, GM and a number of agricultural and mining industries are being hit with massive losses.

South of the border, thing are looking a little rough for the folks in the halls of power.

• Barack Obama is strutting out the biggest budget in US history which looks to (supposedly) raise taxes on the upper classes, cut Medicare to give more people health care and rip into Pentagon spending, military contractors and agri-business. The US economy meanwhile contracted 6.2% in the last 3 months of 2008.
• The "Sage of Omaha", Warren Buffet is sage-no-more having admitted to $11.5 billion in losses.

Photos by Gwalgen Geordie Dent and Sharmeen Khan

1. The backdrop to the Cuban anniversary celebration in Havana.

2-4. The 50th anniversary celebration. Reported in The Miami Herald the next day: "No big celebrations in Havana Cuba on the 50th anniversary of the Revolution."

5. Cuban cars. The economy has picked up with more petrol, automobiles and consumer goods.

6. A "Cuban 5" sympathy banner in Havana.

7. Quotes by Fidel on a wall in Santiago de Cuba

8. Cuban oil fields. Cuba recently found major deposits of tar-sands-like oil off the coast.

9. Pastors for Peace Caravan

10-11. 50th anniversary billboards in Santiago de Cuba near the Moncada: a major revolutionary-historical monument. Cuba has little to no commercial advertising.

12. The square in Santiago de Cuba where the revolution was officially launched 50 years ago. Raul Castro spoke here 2 days later for the anniversary.

Was reading the less-than-stellar analysis of Globe Opinion writer Jeffrey Simpson the other day when I noticed this little gem:

France and Canada are on the same wavelength on issue after issue, including Afghanistan and trade (Canada and the European Union are entering serious talks about a free-trade agreement). They both opposed the invasion of Iraq.

Canada and EU free trade deal? I read a lot of news so I was wondering why I hadn't seen more of this before.

A quick google search found a couple of news pieces here, here and here about the issue, but this could potentially be major.

I'm no fan of free trade and think NAFTA should be abolished, but do believe in the benefits of fair trade as long as never-ending growth isn't part of the deal.

Canada's trade has been almost entirely dependent on the US since colonization. Would a free trade agreement with the EU mean less dependence? Would Canadian standards plummet on certain issues? What would the impacts on social justice, the tar sands, mining and other issues be?

Ontario NDP leader Howard Hampton spoke against the back to work legislation of CUPE 3903 (York TA's and Graduate Faculty) being debated in the Legislature on Monday January 26th, 2009:

"In the last week, the university insisted on a vote on their offer. The workers voted; they voted democratically. They said, "No, this offer is not good. We turn it down." The workers prepared a counter-offer. Do you know what the university said? "We're not going to look at it. We're not going to bargain. We're not even prepared to discuss it." Does that sound like a university that wants to get the students back in the classroom? Does that sound like deadlock? No, what it sounds like is a university that is saying, "We're not going to bargain."

Let me give you another example. We left here before Christmas. There was about a three-week break in the university schedule over Christmas before they'd return to class-the last exams; ample opportunity to bargain. Was York University willing to bargain during those three weeks over the so-called winter break? Lots of opportunity: three clear weeks. Was the university willing to bargain? No.

They tell us, and the McGuinty Liberals tell us, that it is absolutely essential to get these students back to the classroom today. They had three weeks, the end of December, the beginning of January, where they could have, should have been bargaining and they wouldn't do it. And where were the McGuinty Liberals? Were the McGuinty Liberals calling up the York University administration, saying, "You'd better get to the table, and you'd better work within Ontario's labour relations system and try to find a collective agreement"? No. The McGuinty Liberals weren't doing anything either.

Chomsky has a series of insightful (if not painfully dry) speech segments on the Israeli invasion of Gaza posted onZmag.

True to form, a written summary of them reveals a couple gems:

Obama provided the usual reasons for ignoring the elected government led by Hamas. "To be a genuine party to peace," Obama declared, "the quartet [US, EU, Russia, UN] has made it clear that Hamas must meet clear conditions: recognize Israel's right to exist; renounce violence; and abide by past agreements."

Unmentioned, also as usual, is the inconvenient fact that the US and Israel firmly reject all three conditions.

In international isolation, they bar a two-state settlement including a Palestinian state; they of course do not renounce violence; and they reject the quartet's central proposal, the "road map." Israel formally accepted it, but with 14 reservations that effectively eliminate its contents (tacitly backed by the US).

As previously reported, both the New York Times and CanWest Global have been facing steep economic challenges recently.

The Times has been thrown a lifeline by Carlos Slim Helu, the Mexican Communications Billionaire who's loaning them $250 million to help them cope with the $l.1 billion in debts they already have.

Things however, seem to have gotten a whole lot worse for CanWest. David Beers, editor-in-chief at the Tyee, managed to get an internal memo from CanWest about 'cost containment'.

It's seems everything is being cut at the chain including:

A freeze on all hiring,
A freeze on salaries,
A freeze on meals, catering and entertainment expenses,
Ceasing engagements with external consultants,
A freeze on conference/seminar attendance,
Equipment expense and capital purchase delays,
Limiting the use of mobile devices by 20-25%,
Reducing energy usage.

According to the Tyee, both Canada Post and Telus have been censoring Youtube.

The story claims that video's by angry union members have been at the centre of attempts by both censor the free video uploader.

Telus 'cleansed' 23 video's in 2007, while Canada Post took a strong exception to CEO Moya Greene being portrayed as The Greench Who Stole Xmas" in late 2008.

Guess she never saw this video.

What's surprising is that these massive employers seem to be using a well-known loophole to remove the material:

"The case highlights a common occurrence under U.S. law, which allows copyright owners to file complaints with web hosts such as YouTube if they believe that the site is hosting infringing content. Under the law, the web host avoids liability if it immediately removes the content. No court or independent third party reviews the infringement claim since nothing more than a complaint that meets certain criteria is needed."

Also reported here in the Guardian on November 5th:

A four-month ceasefire between Israel and Palestinian militants in Gaza was in jeopardy today after Israeli troops killed six Hamas gunmen in a raid into the territory.

Hamas responded by firing a wave of rockets into southern Israel, although no one was injured. The violence represented the most serious break in a ceasefire agreed in mid-June, yet both sides suggested they wanted to return to atmosphere of calm.

It seems the New York Times could no longer be in circulation as soon as May. According to The Atlantic:

Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400 million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the company’s debt was recently reduced to junk status), the paper’s future doesn’t look good.

Things are not much better for Canwest, which Jen & Fitz report has a:

High debt load of $3.6 billion, falling ad revenues for Canadian newspapers and broadcasters, and precipitously falling value of Australian TV stations it might try to sell to raise cash.

Could be ripe timing for some other kind of alternative media giant to emerge...

A sit-in at York University began Monday where CUPE 3903, the York University union local representing teaching assistants, contract faculty and graduate students has been on strike for 5 weeks.

With the union making a variety of strong demands and the University refusing to bargain further the strike has dragged on for 5 weeks and tensions have grown.

For-profit media has largely written anti-union pieces unilaterally in favour of the University. Many editors in the corporate sphere have suggested the government enact back to work legislation of a questionably legal nature.

In the meantime, 80 students in support of striking workers are occupying the University Presidents Office demanding to question the University President. Classes for the rest of 2008 are scheduled to be canceled today.

"Starving the Beast" is an economic-political strategy to use budget deficits via tax cuts to force future reductions in the size of the (beast) government.

Tom Flanagan is a Professor of Political Science at the University of Calgary. He's a member of the Calgary school, the Fraser Institute and is a former chief of staff to Steven Harper.

With Harper, Flanagan drafted the infamous "Firewall" letter to Alberta in 2001 urging Alberta to control Federal Health Care and opt out of the RCMP and the Canada Pension Plan. He is a close confidant of Harper and has been referred to by Western Standard founder Ezra Levant as "the master strategist, the godfather – even of Harper."

Flanagan recently had this to say on Harper's economic strategy in the near future:

"I'm hopeful there will be some ideologically-driven, neo-conservative cuts to government," political scientist Tom Flanagan, a former chief of staff to Harper, said in an interview.

Such cuts, he added, would be consistent with Harper's long-term goal of reducing the size and scope of government.

"I think that's always been sort of the long-term plan, the way that Stephen was going about it of first depriving the government of surpluses through cutting taxes . . . You get rid of the surpluses and then it makes it easier to make some expenditure reductions."

For those, not up to speed in politico-speak, a "message box" is a carefully crafted set of talking points which political parties and others use to get a specific message out in the media.

While the Canadian press found out in March "that the Conservatives Party was scripting call-in responses for supporters to read out on the air," the Globe and Mail has learned through a leaked e-mail that Conservatives are doing it again.

The Rwandan New Times has an interesting article on how global economic problems are affecting African industry.

The continent’s tourism sector, remittances from abroad and Aid flows will dramatically fall as a result of the global crisis.

“African governments will have to reduce their expenditure because they are not going to get as much aid. Governments should prepare themselves by concentrating on domestic growth to sustain the economies because ultimately even the export market will be affected and there will be reduced sales,” said Betty Maina, Executive Director of the Kenya Association of Manufacturers.

This years Prix Pictet has been won by Montreal born Benoit Aquin.

Aquin won the Prix Pictet with a series of photographs in Northern China focusing on environmental disaster called The Chinese Dust Bowl.

It seems the usual process of urbanization is going in reverse in BC.

Over 25,000 people have left Vancouver between 2001 and 2006. The areas outside of BC's major metropolitan area have all seen a gain in population.

BC is currently in the midst of a huge election extravaganza. After the Federal Election this month, BC has faced two important provincial by-elections and will soon see municipal elections in Vancouver. A provincial election is set for next year.

Whew!

In the mean time, housing has been creeping in as an important issue.

The NDP made it a major part of their platform in the provincial by-elections calling it a "huge issue" for voters. Mayoral candidates are facing off against condos to address the lack of rental housing. Special groups are pushing for better tenants rights, similar to those in Ontario.

At the same time, the death of a homeless man who was one week away from assisted housing and homeless tent cities have drawn more attention to homelessness in Vancouver.

Iceland is nearing economic collapse as its second largest bank has been nationalized by the government.

The most free-market of the Nordic countries, it seems as if Iceland has been too heavily involved in the credit markets for the last 15 years. The Guardian reports:

Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out.

In a telling turn of events, Iceland has had to get a loan from cash-rich Russia to help stave off collapse. The Prime Minister of Iceland has reportedly stated,

"We have been calling for aid from neighboring countries and have been turned down. In times of crisis, one has to look for new friends."

Nouriel Roubini, one of the economists who successfully predicted the subprime crisis years ago, has been allowing full access for the time being to his blog: RGE Monitor.

Roubini, once considered a perma-bear (a perpetual pessamist about the economy) has recently looked at banking crises historically to find the best way to prevent a total economic meltdown.

Surprise, surprise, he found that the US $700 billion plan may not be the best way to go. Instead, he suggests that the way Scandinavian countries (Norway, Sweden, Finland) dealt with previous crises, may be the better method.

To understand how this works on a more understandable level, Planet Money, a spin-off of the award winning radio show This American Life has been putting out some great radio about the credit crisis and solutions.