Big Bucks At Big Banks

Whew, that's a relief. The figures are in and Canada's big banks are making big bucks again. The Royal Bank saw its profits surge a whopping 24 percent to $1.6 billion. The saw its profits go up by almost 7 percent. National Bank also had a profit boost of 6 percent. TD-Canada Trust had a whopping 48 percent profit explosion compared to its previous quarter.
I'm sure everyone feels warm and fuzzy that the banks - the ones who caused the present crisis by creating dubious and opaque "derivatives", "asset-backed debt obligations", sub-prime mortgages, "credit default swaps" et al - will feel warm and fuzzy that they are the first to recover from the crisis that's wiping out jobs, and personal disposable incomes.

It does show, however, that when the government puts its mind to it, in this case by buying up $125 billion worth of bank held mortgages to inject liquidity into the system, it actually has an impact on that sector. It does raise questions, the first being why are we rewarding the sector responsible for the crisis? But more importantly, why is the government pumping money into a sector that will not directly stimulate job creation or retooling the economy?

The banks sat on the newfound liquidity and only now are increasing loan activity, but had the government invested that money directly in infrastructure it would have created, perhaps, 1,375,000 jobs, since it's reckoned that every $1 billion invested in infrastructure creates about 11,000 jobs. Instead, we're getting a commitment to $12 billion over two years - if municipalities, many of which are totally strapped - meet any federal investment. In other words of total money invested in the economy, if we include the entire $30 billion "stimulus package" from the January budget, 19% went to what I will call direct investment (infrastructure, tax breaks to individuals, housing, etc), the remaining 81% went to the banks. This doesn't include the $10.5 billion bailout to GM and Chrysler, which will go towards paying off old debts, rather than new production capacity. I will only note that Time Magazine listed it as one of the "worst business deals of 2008":

"The Canadian rescue package works out to more than $340,420 for every employee at Chrysler Canada, which has 9,400 hourly and salaried workers on payroll. That's 15% more than the $295,000 per employee that Washington is shelling out to save about 40,000 Chrysler jobs in the U.S. "This money will never be paid back to the Canadian government," says Toronto auto analyst Dennis DesRosiers, with DesRosiers Automotive Consultants. 'The deal has been spun in a positive way, but if taxpayers understood what's really going on, they would revolt.'"

But back to banks and the rest of us. The money that has gone to restore the banks' profitability comes from government coffers. Those coffers are filled via tax revenue. The government receives 46.6% of its revenue from personal income tax, while only 16.8% comes from corporate income tax. Another 12.3% comes from GST (which business don't pay) and 6.8% comes from EI premiums.

In other words the government gets 66% of its revenues straight out of our pockets. Yet the money it has shelled out has been directed by priority in almost exactly the opposite proportions. The Tory government "recession strategy" has been nothing more than another transfer from our pocketbook to the pocketbooks of corporations and the wealthy.

Afghanistan: Tories Score Own Goal

You’d think that the knuckle-draggers and mouth-breathers who presently run the Government of Canada would be able to run the war in Afghanistan. After all, war is what these jokers are all about and Afghanistan is the “good war” in the War on Terror.
Well, it warms the cockles of the heart to see that, in fact, sometimes even a PR budget bigger than the budget for reconstruction isn’t enough to cover up corruption and brutality.
Let’s start with the good news – good news for the Tories, that is. Former Liberal Foreign Minister, John Manley, did the Tories a good service when he released his government commissioned report on Afghanistan. No surprise, he basically rubber-stamped the mission in Afghanistan and called for Canadian troops to stay after the 2009 mission deadline, if NATO ponies up another 1,000 troops.
The Harper Tories, with the support of the media and the pliant and confused Liberals – including NDP turncoat and present Foreign Affairs Critic Bob Rae – pumped the report as a lifesaver for the increasingly unpopular mission. Of course, the only real “critical” suggestion in the report, besides the NATO troop boost call, is that the Tories need better propaganda to sell the war.
The good news for the Tories ends exactly there.
But a funny thing happened on the way to the printers for the intellectually light-weight report – that couldn’t manage a single footnote to back-up its claims. It seems that big chunks of the report were written prior to the panel having been struck by Mr. Manley.
Canadian blogger, The Scott Ross, compared the report to an article written by Manley last October in a Magazine called Policy Options. What did he find whole chunks were identical.
A related article in Maclean’s Magazine added the point that the only thing Manley seemed to have changed was to downplay the corruption of the Karzai governent in Kabul.
So far the media’s given Manley a pretty easy ride on this obvious plagiarism – and therefore big waste of Canadian taxpayers’ cash. But already other aspects of the war were coming unraveled before the Tories could even pop the champagne corks on their coup of getting a highly placed Liberal to back them.
The big one is, of course, the ongoing farrago known as the “detainees scandal”. Doug over at The Proles has good coverage of the history of this whole mess.
Basically the scandal can be summed up as a series of revelations that our “democratic” partners in Afghanistan systematically torture their prisoners and the Canadian government has systematically tried to cover it up.
It’s remarkable how many times the Harper Tories have been caught lying and stuffing documents down their pants. What’s more remarkable is that the media still takes anything they say seriously.
In any case, on January 22 the whole issue exploded again when a spokesperson for the Prime Minister claimed that the military hadn’t informed the government that they had stopped transferring detainees to Afghan authorities.
The head of Canadian forces, General Rick Hillier, sitting on a beach in the Dominican, shit his pants and called up the Prime Minister to give him a piece of his mind. The Prime Minister’s office had to retract the claim the next day. Oops.
And it got still worse.
A few days later it was revealed that the Tories and the military were covering up allegations of involvement by the governor of Kandahar, Asadullah Khalid, in torture. Now, just to make this clear, the allegations aren’t just that he endorses or permits torture, it’s that he himself engages in it. He’s a hands-on kind of guy, apparently, and keeps a personal prison in his compound.
Now, of course, he denies it along with the report by Canadian diplomats that the Tories and the military have worked hard to suppress. Trouble is, it was after a meeting between Khalid and Tory Defence Minister Peter MacKay that the decision was taken to stop detainee transfers.
Of course, the Tories are doing what they always to and are deflecting and denying. MacKay now says that since the detainee who made the specific allegations wasn’t a Canadian transferred detainee, it’s not our issue. Besides, Khalid is an appointed governor, we have no right to investigate him.
Interesting logic. Suppose we were to say that about the Taliban – they were a sovereign government, their treatment of prisoners and everyone else was an internal matter and we had no jurisdiction there. Of course, we invaded Afghanistan and put in place a regime that we approved of, with personnel we approved of, to achieve policy goals we approved of. So, Khalid, as an appointee of our man in Kabul, is also our man. If he’s torturing people, then that is an expression of our policy and we are responsible.
But, what’s more, what are we doing participating in a civil war to back appointed governors, corrupt officials, and torturers? What are we doing there if the regime we’ve put in place is identical to the one we overthrew in every way, except that it supports our policy? But then, the question contains the answer, doesn’t it?

Spinning Tories

I don’t remember who said that there are three kinds of lies - “lies, damn lies and statistics” – but surely we’d have to include opinion polls as a fourth kind of lie. For instance on the cover of today’s Globe & Mail newspaper is a half-page article on the "Stephen Harper paradox"; ie. how the Tories are doing great at solidifying support and winning us to their agenda but Harper can't quite win our hearts and minds. I will only point out here that the Tories now stand at 33% in the polls. However, in May, 2006 the National Post was creaming its jeans that the Tories - then at 43% - had enough support for a majority. Great job indeed.
With every day bringing more bad news from Afghanistan and the hardening of opinions in opposition to Canada’s involvement over there, it seems funny that the Globe & Mail – which made a special effort to lick Tory butt in the last federal election – decided that now is the moment to tout the "growing support" for the Conservatives. Funny as in suspicious.
So, I went and had a look at the poll on the Strategic Counsel website.
First of all the questions they ask are pretty vague in relation to the Conservatives. For instance “I disagree with the Harper government’s approach to Afghanistan” – 44% agree with the statement, 47% disagree. Well, Harper has been sending out mixed signals recently in relation to Afghanistan. He’s now saying that the troops will come home at the end of their mission in 2009 if there isn’t support. So, people go, ‘ok, he’s listening to the opposition and he’ll bring the troops home.’ And, of course the response from most of the opposition, NDP aside, is to say “oh yeah, well, you better bring the troops home in 2009.” Not exactly hard-hitting critique.
The same basic thing applies to the question on climate change: “The Harper government has shown that it is serious about starting to deal with global warming” – 48% agree and 46% disagree. Well, Harper has worked hard – and done a pretty good job with the help of a compliant media and pathetic parliamentary opposition – to deflect and diffuse their way out of the early controversy over their opposition to any notion of stopping climate change (remember when Harper claimed that Kyoto was a socialist plot? Ah, those were the good old days...)
However, what is more interesting than the confusion that these numbers indicate both because of the questions and the spin of the Harper Tories is how steady is the opposition to the main political thrust of the Tories – and this stuff is revealed deeper in the survey, after the meaningless nonsense about “Stephen Harper is somebody I like – agree or disagree”. Here people were asked whether their opinion would improve or worsen if the Tories did a series of things. The numbers were as follows:
Get us out of a combat role in Afghanistan immediately – 63% (vs 28%)
Standing up to George Bush – 77% (vs 13%)
Meeting Canada’s Kyoto targets to reduce global warming: a WHOPPING 83% vs 13% are down with the socialist plot. Even in Western Canada, that supposed bastion of oil burning conservatism the numbers were 78% vs 13%. So much for that myth.
Putting significantly more money in public transit – 78% vs 8%.
The list goes on. And it’s not all unproblematically left-wing – a larger minority would have their opinion of the Tories improve if they lowered corporate taxes than not (47% vs 39%). And, as usual, the fear of crime drives 81% to want to see the Tories get tough.
Overall, however, the results show clearly that the Tories are WAY to the right of the general population, even in Alberta. In fact, looking at a mid-July survey by the Strategic Counsel Tory support has fallen the most in two regions: Quebec and the West. In the West they have slumped from 49% in 2006 to 40% today – and remember, that’s in the middle of a massive oil boom in Alberta.
If you can’t hold your support in a boom, well, it doesn’t bode well.