Is Canada Too-Big-To-Fail?

In last Saturday's Toronto Star, Irvin Studin wrote an editorial entitled "Canada is too big to fail" where he promptly asserts that,

If Quebec goes, who in the rest of today’s Canada will agree to be governed from Ottawa? Will Victoria agree? Will St. John’s? And, to be sure, will Calgary? Instead, a succession of unilateral declarations of independence is far more likely, with a hodge-podge of new political-constitutional unions and partnerships issuing from what will be a highly destabilizing, chaotic and protracted period of bartering by weak political units, shifting constituencies and even outside powers in order to arrive at a new “post-Canadian” legitimacy across our gigantic land mass.

Needless to say, Irvin regards smaller, decentralized states as inferior to the large centralized bureaucracies we're used to today. Obviously, he's never read Orwell. In addition, he jumps to the conclusion that if Quebec goes, the whole country will fall apart. Nevertheless, let's accept this fact. Let's reason from the premise that when Quebec goes, so does Canada.

What would a "post-Canadian" world look like?

The Road Back From Disaster is Paved with Good Intentions

The Sun Media franchise has been unfairly criticized as an extension of the Harper regime, much in the same way as Fox News parrots the GOP line. I say unfairly because while Sun certainly is right-winged, I don't consider them as partisan as Fox News. However, this article by Warren Kinsella has cast doubts on my ratiocination. He's written an article entitled "Grtis' road back from decade of disaster" where he highlights three proposals the Liberals should adopt if they ever want to win an election again. I did this two months ago, highlighting central banking, inefficient bureaucracies and war as the three main topics that would resonate with Canadians in the post-American world. Kinsella is a little more two-dimensional than that, citing three proposals that reaffirm the Left's belief that the Sun Media conglomerate is purposely trying to rid the world of left-wing statism.

Restoring Capitalism to the Capitalists

Also available at mises.ca

Last week Mark Carney gave a speech to the Canadian Auto Workers union; the Bank of Canada has posted Carney's speech on their website. There's a line that I'd like to address:

We must address, once and for all, the unfairness of a system that privatises gains and socialises losses. By restoring capitalism to the capitalists, discipline in the system will increase and, with time, systemic risks will be reduced.

Instead of bailouts, Mark Carney suggests "bail-ins." All I hear is more of the same. If Mark Carney is serious about restoring capitalism to the capitalists, then he needs to announce his resignation and advise Finance Minister Jim Flaherty to dissolve the Bank of Canada.

"Dead Money" & The Circular-Flow Fallacy

Also available at mises.ca

"This is dead money," said Mark Carney during a press conference after his speech last Wednesday to the Canadian Auto Workers union. He was referring to the $600 billion in unused cash being held by non-financial Canadian companies. Since the financial crisis of '08, Canadian corporations have increased their cash reserves as a hedge against the uncertain global economy. "The level of caution could be viewed as excessive," he continued, "if companies can't figure out what to do with it, then they should give it to shareholders and they'll figure it out."

Unfortunately entrepreneurs are accustomed to obeying the whims of bureaucrats, but it's quite extraordinary for a bureaucrat to be seen as the expert and for the entrepreneurs to be viewed as anything but. Clearly, Mark Carney knows what's best for corporate Canada. After all, he spent his fair share of time in the corporate sector working at Goldman Sachs. But of course, his views on "dead money" are dead wrong.

Private Property in the Arctic

Also available at mises.ca

As Prime Minister Harper wraps up his week-long tour of the Arctic territories, the emphasis has been on balancing economic development with environmental sustainability. While those on the Left criticize the Conservative's environmental record, the establishment media seem more concerned with an "ATV-debate" than reporting any actual news. But what are the facts of the trip? While most Prime Ministers never venture too far North, Harper has made it an annual trip. In fact, a large aspect of the governing Conservatives have been their emphasis on reclaiming the once neglected Arctic. Obviously the commodities boom has sparked this interest, once again making the word "Yukon" synonymous with gold mining. Not surprisingly, the recent Conservative budget changed the rules for assessing natural resources projects. “Northern development must mean northern prosperity,’ Harper said during a speech in the Yukon, “We need thorough, balanced science-based assessments conducted on a timely basis according to the principle of one project, one review,” which is doublespeak for: we need to increase the size of the federal government in the Arctic economy.

Northerners, according to Harper, are posed to benefit from resource extraction and economic development. Meanwhile, in an effort appease the more environmentally-conscious, the new Naats'ihch'oh National Park will protect just under 5,000 square kilometres of land from development. "One of our objectives is to make sure we protect our environment and also allow for economic opportunity here," Harper told the press.

Although it all sounds rosy and favourable, a reminder that the federal government is a monopoly of violence with the power to tax should set off some alarm bells. The federal government should have little to no role to play in the Arctic and instead allow the region to develop according to the individual sovereignty inherit in a free market of private property ownership.

Simply, the Arctic should be privatized.

Jack Layton's Legacy - From A Libertarian Perspective

One year ago today Jack Layton died. Loved by his supporters, his legacy has taken on an eerie cult of personality. However, the aim of this post isn't to deride or ridicule those that idolize him, but instead present a libertarian perspective on the man and his life.

Although I hate to pigeonhole my politics, for all intents and purposes I am a libertarian. I believe in a society based on voluntary association. Therefore, I view the state (an institution of monopoly force with powers of ultimate decision-making and forced payment) as immoral and corrupt.

It is through this lens that I hope to show why Jack Layton, a good man with good intentions, is not someone to admire or emulate. Why his philosophy is flawed and how his vision for Canada can be achieved through libertarian means.

Silence! Mark Carney Speaks and Inflation is Low

Also available at mises.ca

Last Friday Statistics Canada reported that the Consumer Price Index had declined despite modest gains in consumer prices. Combined with other data, mainstream economists and financial journalists have interpreted this to mean that inflation is low. Bank of Canada Governor Mark Carney himself has called inflation low and admits that the "strong" Canadian loonie is to blame for the country's manufacturing woes.

There are many problems with this analysis due to a mix-up of definitions. Inflation, as defined by the establishment, is the Canadian Consumer Price Index. CPI Inflation is an increase of prices based on an index of goods and services. This collection of goods rests on the whims of central bankers. A built-in bias is inevitable.

If inflation is defined by its traditional meaning, an increase in the money supply, then inflation in 2011 (according to StatsCan M3 data) was a 7.5% increase from 2010. And from 2009 to 2010 inflation increased 5.1%, and from 2008 to 2009 inflation increased 3.3%, and from 2007 to 2008 inflation increased 11.9%.

Redefining a word for political ends is obviously Orwellian. Hopefully when Mark Carney speaks to auto workers tomorrow, he'll have an opportunity to answer some tough questions.

Quebec Should Separate

Quebec is in the grips of a provincial election scheduled for September 4th. According to the latest polls, the separatist Parti Québécois (PQ) are leading with Pauline Marois at the helm. Marois advocates "sovereigntist governance" and the PQ platform states that a referendum might be held. Bernard Drainville, a prominent PQ member, recently explained the separatist strategy: "I don’t see how we can lose. If Quebec wins, it becomes stronger. If Quebec is rebuffed, the demonstration is made that there is a limit to our ability to progress in this country."

So there you have it. Either they win, and the federal government bends over backwards to appease the separatists or they lose and.... well the federal government continues to bend over backwards to appease the "distinct culture" of the Québécois.

I agree with Jane Jacobs. Quebec should separate. If the PQ win and hold a referendum where the "oui" vote captures the majority, then I can see the future of Quebec heading in two directions.

Wheat Entrepreneurs vs. Weed Entrepreneurs

REGINA — Two Prince Albert residents have been charged with drug offences after police raided a home in the city... Police said the search turned up 732 grams of marijuana, a digital scale, packaging materials and $1,395 cash.

"These people were not criminals, they were our fellow citizens, citizens who protested injustice," Harper said, "Never, never, never again will western farmers - and only western farmers - growing their own weed on their own land be told how they can and can't market their products"

169 Independents

The 42nd Canadian federal election is tentatively scheduled for October 19, 2015. As a fan of Hoppe, I'm well-aware of how absurd democracy is. However, this being Canada, many people are still unaware of this fact. Therefore to help combat the Party Dictatorships that are destroying society, I'm proposing a website called: 169 Independents

169 Independents will be a forum for Canadians to discuss national issues but more importantly connect with others in their respective ridings. The goal is to get 169 independents elected to the House of Commons to counteract the Party Dictatorships. The result will either be 169 independents that form government based on an agreed upon agenda or allow a minority Party to form government, but have their power checked by the 169 independents that are representing their ridings. Obviously, 169 will be the new majority number, but anything below that is still welcomed and anything above it will be considered a vast success.

Pointless? Let me know in the comments section.

Why the Liberal Party is Probably Doomed

Several weeks ago I sent an e-mail to a prominent Liberal Party member describing why I believe the Liberals have failed so badly and what a "liberal" actually is and what the policies of a "liberal" party should be.

Surprisingly, I actually received a response sympathetic to my cynicism. So I sent this e-mail in response to the response. I received this response yesterday in my inbox. Clearly, the Liberal I was e-mailing is not a liberal in the classical sense. It's a little disappointing since he/she seemed to be the most levelheaded and open to new ideas. Perhaps there is still time to change his/her mind. Regardless, I'm reluctantly reminded of Rothbard's quote about the state being a gang of criminals writ large when I read this [emphasis mine]:

Hi Caleb,

What a great description of your travels and what you saw and heard.

I will take a minute to say that I am actually a big fan of Mark Carney's, and I think he's doing an excellent job as Governor of the Bank. And I will take one exception to your comment about going into debt to get us out of debt. I agree, but going into debt is sometimes necessary -- and indeed helpful -- just as taking a mortgage or a business loan is needed to expand and grow. Provided it's manageable (which is pretty key), it's a good thing.  But I also have a hard time with a government that doesn't understand that you can't keep increasing your debt -- you must look for surpluses in good times with which to pay it down.

Slightly different than what you were saying, but thought I'd clarify my views.

Stay in touch.

All best,

X.

Being a "big fan" of Mark Carney and believing that he is doing "an excellent job" only highlights how little this person understands. As harsh as that may sound (especially given the politeness of this individual) the reality is that central banks are detrimental to prosperity. By lowering interest rates past their market level and keeping them there, Mark Carney has created a credit boom that is unsustainable.

For more information I suggest, in no particular order:

10 Reasons Why Austrian Economics Is Better Than Mainstream Economics

Austrians vs. Keynesians, Forecast Comparison

Business Cycle Primer

Austrian Business Cycle Theory: A Brief Explanation

Economic Depressions: Their Cause and Cure

My Speech Delivered at the New York Federal Reserve Bank

"Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem

Fix Agriculture, Fix Everything

After World War 2 the Government of Canada decided to double its subsidies to Western farmers. A subsidized commodity has a tendency to be overproduced; a subsidized industry causes all kinds of havoc. Between 1951 and 1967 the total number of Canadian farms declined while those remaining expanded. Labour-intensive work was replaced by mechanized farm units as the gap between "commercial" and "family" farms increased their degrees of separation.

By the close of the 20th century Canadian agriculture would be a victim of crony capitalism. With global corporate trade agreements, central bank fiat and public-private partnerships with governments - to call it economic fascism is to put it lightly.

Yet a growing force in consumer sovereignty is the appeal for organic, sometimes locally-grown food. Farmers markets are more popular than ever, with many individuals even growing a small portion of their own food supply. If government food policy is going to resemble consumer wishes, a host of reforms will need to take place.

The Hitchhiker's Guide to the Liberal Party

This is a real email. It is the response to an email I received from a Liberal Party member and possible leadership contender. I've withheld the name for practical reasons.

Hello,

Thank you for personally responding to my email. Sorry about my delayed response, I actually got your e-mail the day I left for my vacation. I've spent the last 14 days travelling around the country. It was my first time seeing the Prairies and the Rockies and all I can say is: wow - we live on a vast, beautiful planet. Since I hitchhiked for most of my trip, I met a lot of interesting Canadians with a variety of opinions.