Monday, August 03, 2015

Forum poll: Harper in free fall and Mulcair headed for strong minority government

Forum tale of the seats
Tom Mulcair is headed towards becoming prime minister of a government with a hefty chunk of seats in Parliament, just shy of a majority, according to the latest Forum poll:

A Forum Research poll conducted a few hours after Stephen Harper officially called the 2015 federal election on Sunday shows that 39 per cent of Canadian voters would vote NDP if the election were held today. According to the poll, released Monday, the Harper Conservatives, who tied the New Democrats on the even of the call, tumbled to 28 per cent. The Liberals came in third at 25 per cent.

“If these results are projected up to a 338 seat house, the NDP would capture 160 seats, 10 short of a majority, while the Conservatives would take 118. The Liberals would settle for 58 seats, the Greens for their leader’s seat and the Bloc for one seat,” Forum Research stated on its website.

The collapse of the Harper Conservative vote, according to this poll, is a key ingredient in the explosive mix that is now Canadian politics, triggered by Stephen Harper’s insensitive calling of a very costly early election campaign. The cynicism that is the basic core of Harper’s politics was revealed by this last fling of the dice by a desperate, out-of-touch, and flailing politician.

Talk about last hurrahs, Harper’s roll of the dice tops the charts.

His tone-deaf response seems to have finally tilted the scales, and coalesced Canadians’ feelings about a man who really does not respect the concept of fair play or political conventions.

It’s as if Canadians have decided to move from having a majority government run by a single man, to a minority government, subject to the checks and balances of having to obtain votes from MPs of other parties.
Canadians react to Harper's waste of $125 million of their money

Sunday, August 02, 2015

How Trudeau can remove the debate veto imposed by Harper and Mulcair

Possible debaters
So Mulcair has decided he will only debate if the prime minister is debating? And Harper has decided not to debate in a forum that would attract the widest public viewership.

This leaves the Liberals twisting in the wind.

Or does it?

One of the secrets of martial arts is to use the momentum of your opponent against him. You go with his movement, but change it to your advantage.

Justin Trudeau can do this and stop this Harper-Mulcair spoiled-child bickering with a proposal to the CBC consortium that would allow their debate to take place, and would attract a large viewership.

The proposal is simple.

Trudeau agrees to the CBC consortium holding a debate on these conditions:

1.      At least the leaders of two of the political parties with one or more MPs must agree to attend. This means if Elizabeth May and Justin Trudeau agree to debate, but Mulcair and Harper do not, the debate(s) will be held.
2.     The debate must be organized by the CBC consortium, and include the principles set out below.
3.     The debate must include a townhouse style of venue.
4.     Canadian voters are invited to attend the debate by applying for a ticket. Tickets will be selected by random drawings, with backups in case of no-shows.
5.     Half of the questions must come from votes attending the debates.
6.     The host will be selected by the CBC consortium.
7.     A panel of 3 will also be selected by the CBC consortium, and this panel will be entitled to ask questions as well.
8.     Preferably, the debates should be held in several places in Canada.
9.     The leaders who are attending must be given adequate time to answer questions fully.
10.  Questions must be divided equally between three topics: foreign policy; domestic policy; and other. The other category includes anything the questioner wants to ask.

How about it, Justin? Why not give the people a chance to participate actively in the debates? There is enough time in the 70 plus days left for the CBC consortium to organize a few debates along these lines.

Globe & Mail: 95% Chance Harper Government will be replaced in election

The mighty Globe & Mail has spoken, on this, the first day of our election campaign. The writ has been dropped, and the G&M has carried the golden election forecast down from the mountain top, and is displaying it for all to see.

As of today, this is the entrails of the portent-indicating G&M chicken:

Methinks there is one of the 6 projections that we can all take to the bank: the 95% chance that the LPC and NDP will together gain a majority of seats in the new Parliament.

As for the 79% chance the Tories will have a minority government because they will gain the most seats, the jury is still out, in my view.

And the Bloc will do better in Quebec than most non-Quebec commentators expect. It has a new lease of life, and will draw back into its fold many more NDP supporters there than either the G&M or the NDP think will happen.  Fortress Quebec is no longer a sure thing for Mulcair’s party.

But the interesting event will be this: How long will it take for the Harper minority government (if he gets one) to lose power?

If the Liberal MPs and NDP MPs all vote against the Harper minority government in the Throne Speech confidence vote, then the Governor General will call upon the leader of the party with the next highest number of seats (Mulcair, according to the mighty G&M, which is never wrong, eh?) to try to gain the confidence of the House by gaining a simple majority of MPs to vote for his government.

If – it would insane for Trudeau and Liberal MPs not to do so – Mulcair does gain the confidence of the House, he will then attempt to run a minority government, seeking cooperation on all confidence (money bills) votes from either the Tories (fat chance of this happening – see Ibbitson’s article on Harper’s DNA-response to those he believes have slighted him) or the Liberals.

He should get that confidence, provided he does not do something really silly in his budgets, or couples something silly (like the repeal of the Clarity Act) with his omnibus budget measures. So he could stay in power for 18 months to 24 months on this basis.

And if Mulcair tabled a bill to start public discussions of electoral reform, with a referendum allowing Canadians to choose between two substitute methods of electing MPs (other than a continuance of the first past the post system), he would definitely get the support of the Liberals for this vote (which, because it is not a money bill, would not be a confidence vote unless Mulcair makes it one).  That would mean the next election would not be on the first past the post system.

And that would mean that our democracy has come of age, with every vote being counted, and every vote counting.  And I will blade a bottle of champagne on a sandy beach to celebrate that! Date, time and place to be announced when the bill is signed by the Governor General.

Saturday, August 01, 2015

Election: EKOS poll - Seniors will return Harper to power as Prime Minister

A key statistic is not who favours what party before election day, but how many voters actually cast a vote on that day.  Seniors vote. Younger voters don’t vote in the same proportions.

The latest EKOS poll explains why Stephen Harper will be Prime Minister on September 20, 2015, leading a minority government:

Neither the Liberal Party nor the NDP has managed to make big enough inroads into the senior vote in order to knock Harper’s Conservatives out of power.

This means the key to who will actually govern Canada will be settled in the months after the election, as Harper tries to stay in power with the support of either the NDP or the Liberals. He probably will need just over a dozen MP votes in the confidence votes to survive as a minority government.  The longer he can survive, the more likely it will be that the Governor General will agree to a request from Harper as PM to dissolve parliament again, and plunge us into another election.

If he can survive for roughly six months (say until the end of March 2016), the GG most likely will accede to a dissolution request and we will be off to the races again.

What does that mean for the governance of the country?

Firstly, Harper would try to delay the convening of the new parliament as long as possible, so as to gain time and run the 6-month clock out as much as possible.

Secondly, he will be constructing his first budget with the view to enticing either the NDP or the LPC to support the money vote in the confidence motion following the Throne Speech.

This means he will pull out all the stops to inject as many goodies attractive to Mulcair and/or Trudeau as possible.

We can expect him framing the Throne Speech as one that has as its primary purpose the holding of a referendum in the country on the abolition of the Senate, with goodies for individual provinces designed to encourage them to vote Yes to its abolition. This plum will be dangled before Mulcair, who might well find it irresistible.

However, Harper will not really care whether the required number of provinces sign on to abolition, nor whether the required number of voters agree in the referendum he will legislate. His objective will be to run the clock out, getting to the 6 month mark (April 1, 2016), and then proroguing parliament and asking the GG to allow him to go to the country again.

Because this plum of Senate abolition will be well-night irresistible to Mulcair, but perhaps not enough to make Mulcair prop up Harper’s minority government, we can expect Harper to dangle further plums before Mulcair.

These will be aimed at one or two of Mulcair’s main economic planks in his election campaign, plus – and this could be the key plum – some kind of deal with the province of Quebec that will be supported by 70% of voters in that province.

This dramatic shift to asymmetric federalism will be aimed at making Mulcair an offer he cannot refuse: if he does not keep Harper in power to implement the changes, he will be punished in the April 2016 election by the voters in Quebec who form the foundation of NDP strength there.

Mulcair will know that if he pulls the plug on Harper, it is unlikely that he will be able to take over as PM of a minority government and give Quebec the same rich deal that Harper might be offering. Why not? Because Harper would withhold his support (read Ibbitson about Harper’s behavior if he feels he is crossed by anyone), and Trudeau has locked himself into a position where he will not support such a deal for Quebec, whether proposed by Mulcair or by Harper.

So we could then face another election in April 2016, with Harper dealing from a position of strength; the Liberals pushed to the side if the ballot box question of that election is asymmetric federalism for Quebec; and Mulcair having to face a hornet’s nest of fury from his base in Quebec, and from voters in the rest of the country who want Harper out of power in October this year.

Thursday, July 30, 2015

Harper’s Just Not Ready attack boomerangs!

Seems the Trudeau attack ad works with Conservatives but is making NDP supporters think about voting for Trudeau’s Liberals:

A Conservative Party attack ad targeting Liberal leader Justin Trudeau for being “just not ready” to lead the country is actually working to convince Canadians to vote for him, a Forum Research poll has discovered.

The survey found that 32 per cent of Canadians who had seen the ad were now more likely to vote Liberal in the upcoming federal election. The ad is having an adverse effect on NDP supporters as 21 per cent said viewing it made them more likely to support Trudeau.

A majority of NDP supporters polled — 57 per cent — also disagree with the ad’s tagline “Justin Trudeau: He’s just not ready.”

Talk about unintended consequences!

Let’s hope the Tories keep that ad running right up until the election!

Friday, July 24, 2015

Donald Trump will become President in 2016

Trump's Powerful Slogan
Chances are very high right now that in early November 2016 we will find that Donald Trump will be the next president of the USA, after narrowly beating Hilary Clinton in the election.

And the symbol of his meteoric rise to the most powerful elected position in the world will be his newly-minted, hot off the assembly line, baseball cap.

That cap, and the slogan on it, are extraordinarily powerful statements of just what Trump is hoping will be the ballot box question in 2016: The perceived loss of American power by so many Americans.

Trump’s slogan hearkens back to the man Republicans still view with awe: another Washington outsider, with simplistic views that matched his core beliefs, Ronald Reagan:
“Make America Great Again” is also Trump’s campaign slogan, which Trump has trademarked. It also has close similarities to President Ronald Reagan’s campaign slogan “Let’s Make America Great Again!”

Trump wore his baseball cap on his visit to the border with Mexico. While trying to mend fences with Hispanic voters whom he might have offended with his brash statements the day he announced his run for Republican nomination, Trump also took the chance to speak about his plan to build a long, long fence (or wall) along the border, so as to solve the problem of illegal migrants.

His cap proved so popular that he is now selling it:
On Friday morning, a Trump campaign aide confirmed to Business Insider that the hats are on sale at Trump Tower in Manhattan and are "coming soon to" The aide said all of the campaign merchandise was "made in the USA."

Business Insider visited Trump Tower where the woman at the store in the lobby said the hats arrived on Friday morning. They are available in three colors: red, blue, and the white model Trump wore on his border trip. The hats cost $20.

And, true to Trump’s marketing skills, the cap comes in a fancy package.

Trump is now the man to beat on the Republican side. With some 16 wannabees vying for the nomination, Trump has come from nowhere to take the lead in recent polls, beating the 3 really viable candidates (Bush, Walker, Rubio).  

What is his attraction? His willingness to state boldly what he believes:

He Speaks His Mind For a blanket statement, look no further. Politicians excel at one truly despicable thing; lying and misleading with a big dirty, endearing smile on their faces. They don’t just excel at it, they do it for a living. Trump is not only not a lawyer, he’s also not a politician. He’s gotten to where he is by speaking his mind, which is frank and honest and would be a breath of fresh air when in charge…. In this race, you will see many mouthpieces and purveyors of empty words; people who are more talk than action, and a few leaders, who will act, innovate and solve problems. Make no mistake, Trump is a leader.

We are already hearing voters talk about their admiration for a candidate who ‘speaks his mind’, or ‘tells it like it is’.

So why is Hilary Clinton vulnerable to defeat by Trump?

Both candidates have low favourables to unfavourables ratings in polls. Lots of people don’t like either of them. But American presidential elections are won in a handful of purple states, and by small margins of a few percentage points in the popular vote.

And it is here that Clinton is vulnerable. Trump appeals to working class white voters, who believe they have been stiffed by the elites (as they have been). And the Democratic Party is not their choice for righting these wrongs, as this poll result shows:

The comment on that poll goes on to say:
It’s now widely predicted that the 2016 election will be fought heavily around the idea that the economy works far better for the wealthy than it does for working and middle class Americans, who are being left behind by stagnating wages, stalled economic opportunity, and a recovery that’s disproportionately rewarding top earners.
One subplot of that storyline centers on a corollary question. Can Democrats perform better among non-college whites in 2016 than they did in 2012, by fielding a candidate (say, Hillary Clinton) who enjoys a greater cultural affinity with those voters than Barack Obama did, and by speaking directly to their sense that the economy has been rigged for many years against them?
The new Washington Post/ABC News poll starkly illustrates the challenge Democrats face in this regard. It turns out that an overwhelming majority of non-college whites believes the U.S. economic system is stacked in favor of the rich — but far more of those voters also think Republicans, not Democrats, have better ideas to address that problem.
And independents are almost exactly split between the two parties on this question.
Trump’s campaign slogan Make America Great Again speaks to these very concerns. And he has solutions to the loss of well-paying jobs: make them come back from China, which he as president will make happen.

Unlike his wishy-washy beltline Republican opponents.

And unlike Clinton.

Right now, I see the presidency as Trump’s to lose.

Wednesday, July 15, 2015

A Modest Proposal for Reducing Greek Debt

No 'classic' debt forgiveness for the lady
The fault line between German insistence on Greece obeying the rules, which means if you borrow money you pay it all back, and the inability of Greece to pay back all its loans, as outlined by the leaked IMF report, continues.

The Greek parliament reluctantly blessed the deal forced upon the country by the EU and the Troika and now the work starts to flesh it out.

Of paramount interest to Chancellor Merkel is the need to impress on all EU members that they have to stand on their feet if they borrow money, and cannot see the EU as a partnership, with joint assets and income. This means any reduction of Greek debt must be structured to preserve these rules.

The Greek government and the IMF know that there is no hope in hell that Greece can repay all the mountain of debt it raised, using conventional debt repayments.

How to square the circle?


If the Greeks are  wise, they would be hiring the best brains on Wall Street to fashion wrinkles on debt repayment structures that the Germans can agree to (no classic haircuts, please!) and that preserve cashflow for the Greek nation. 

You can skin such cats in many ways.

Many are huddled in rooms across Europe thinking of ways to do this. What follows is my modest proposal for one way to take a significant amount of the Greek sovereign debt off the table, while meeting the interests of Germany that debt must be repaid, with no “classic” haircuts.


My modest proposal follows.

One structure the Greek government should look at is a simple one that takes some of the cash lent to them and invests it in zero-coupon bonds issued by the German government and pledged by the Greek government to the holders of a portion of its current sovereign debt as security.

The key is that those lenders then agree not to look to Greece for repayment of that secured debt but only to the security of the zero coupon bond issued by the strongest credit in the EU, the German government. This converts existing recourse loans of Greece into non-recourse loans and takes the principal amount off the back of the Greeks.
Into the breach a brave man leaped ...

A zero coupon bond is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic interest payments. When the bond reaches maturity, its investor receives its face value.

This means the Germans and French and other Eurozone lenders to Greece get a German debt instrument, held in trust according to the laws of (you name it, any tax haven place in the EU except Greece, to keep the Germans comfortable), to secure the extended repayment schedule of the Greek debt.

I would suggest the bullet repayment of the Greek debt that is part of this solution be extended to 50 years, not just 30.

The zero coupon would work because the new (ECB? IMF? other?) loans that are made and are invested in the zero bond security, would bear a nominal and minimal interest rate - say 0.1% (one tenth of one percent).

However, the interest rate on the zero coupon bond issued by Germany would be more like 3% for such a long term bond.

How does it work? The Greek government invests $20 billion in a zero coupon bond issued to it by the German government; the bond is repayable in one lump sum in 50 years time and has a yield to maturity of 3%. In year 50 the sum of $100 billion is paid by Germany to the trustee, who turns around and pays it to the holders of $100 billion of current Greek debt in full and final repayment of that debt.

The $100 billion of current debt that is now converted from debt owed by Greece into debt solely secured by the zero coupon bond pleged to these lenders; it is no longer Greek debt and so reduces the total Greek debt immediately by the $100 billion; nor does this non recourse debt earn earn interest (as the IMF is recommending in its new report).

So $20 billion now wipes out $100 billion of current Greek debt.

But where does Greece get that $20 billion to invest in the German zero bond?

I suggest they look at two sources: a new loan for half that amount, from the ECM (low, low interest and repaid as a bullet in 30 to 50 years) and using half of the asset privatization amount of Euro 50 billion the EU tabled this week.


I also expect Greece to get long term bullet repayment terms (up to and perhaps over the 30 years the IMF report mentions) for a big chunk of the total sovereign debt. I also expect interest rates to be slim to zero on the outstanding amounts. The Germans will, I think, go for this because it allows the fiction of non-haircut to remain on the table. And that is true, if you don't present value the long term repayments!


But it would not surprise me if the Germans demanded accelerated repayments (clawbacks) at earlier dates of the postponed repayments of principal if the Greek economy rebounds for some agreed number of years and Greek government coffers are filled with cash that can be used for this.

This the Greek government can agree to if it negotiates the trigger for earlier clawbacks as having a growth test: if growth of the Greek GDP equals the median or average GDP growth of the Eurozone nations, over say a 10 year period, then agreed earlier repayments of such debt (clawbacks) can snap into place, provided they are not so high that Greece cannot sustain the expansion of its economy.

Best of luck to the birthplace of our Western democracy!

IMF rides to Greece defence with shocking dose of reality

Legarde leads the cavalry to the rescue
Despite attempts by the top EU states to suppress its latest report, the IMF, led by managing director Christine Lagarde, has spoken truth to the powerful with a dramatic report that clearly indicates three things.

First, Greece cannot repay the crushing national debt it now has. This means the supranational lenders will have to take a huge haircut within a short time, by forgiving a large part of that debt.

Second, if a haircut is not on, as Chancellor Merkel has said (no haircut in the classic sense, were her words last week), then all the Greek debt needs to be extended for at least 30 years, and interest rates need to be lowered.

Third, the games played by the EU leaders and the strangling of the Greek banks by the grudging extension of credit but no increase in credit from the European Central Bank, have added substantial burdens to Greece. Greece is unlikely to be able to find private sector lenders, and might well need annual transfers of funds from the other Eurozone states to have a fighting chance to prime its economy and fight its way out of the austerity it now faces.

The main battleground of the past three weeks has been the fierce determination by the Greek government to force the Troika and the German chancellor to confront the need to address the huge debt load by removing repayments for decades, one way or the other, and to inject new funds into Greece to kickstart its economy.

Monday, July 13, 2015

Success - Greece to stay in the Eurozone and the EU

Hands are being wrung; Chancellor Merkel is being cast as a vicious, heartless, and vengeful person; some speak of the French president being brushed aside; and Greeks are dismayed.

During a tense, drama-filled weekend, a deal was hammered out and presented to the debtor nation, which now has to pass legislation this week in order to earn the bailout:

The demands, quickly leaked, piled up: a complete overhaul of Greece's tax and pension system, the ceding of $70 billion of Greek assets to eurozone authorities for privatization, and an agreement to allow Greece to become a ward in all but name of the International Monetary Fund and the European Central Bank.

And all of this to be passed by the Greek parliament by Wednesday, according to Finland's finance minister.

The Greek prime minister, Alexis Tsipras, was given this to-do list in a meeting with Merkel, Hollande and European President Donald Tusk. One European official described the encounter as "extensive mental waterboarding."

If the Greek parliamentarians have any sense at all, they will pass the legislation and start the onerous work of dragging a chaotic, fraudulent economic system into the modern world.

Friday, July 10, 2015

The Harper Game Plan: Taming the dragon

A must-read article by Bruce Livesey in the  National Observer should send chills down the spines of the 60% of Canadians who do not want Stephen Harper to win another election in October.

Here is a snippet about the Kenny outreach to conservative minorities:

Another effective strategy was championed by Jason Kenney, who would later be Harper’s immigration minister (and current defence minister) – tapping into the rich pool of voters among new immigrants. These voters had traditionally voted Liberal, but Kenney saw that many of them were social conservatives and felt the Tories had ignored them for too long.

“They stole that constituency [from the Liberals],” says Kinsella. Indeed, between 2007 and 2013, financial contributions from the Canadian Chinese community to the Tories almost doubled.

And the origin of the slice and dice campaigning strategy (my underlining):

But who were those key swing voters? One person who had a notion was Patrick Muttart, who became one of Harper’s top political advisers after 2004. Muttart had risen through the ranks of the PC and Reform parties before becoming a public relations manager of a hotel chain and working for Jaime Watt, a former Mike Harris political adviser in Toronto.

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