August 3 2010 by The Systemic Analyst.

A lot of money is spent on proving the obvious.

The Globe and Mail recently reported on a study that indicates poorer cancer patients in Ontario are more likely to succumb to their affliction. Last time I checked, while visiting a doctor and undergoing tests might be covered by OHIP, the myriad of medications needed to combat the disease are not. This is to say nothing of the pills needed to counteract the long-term effects of treatment required after you have been cured. If you earn enough to get by, you no longer qualify for the benefits that one might who lives on welfare.  Nor do you have the excess resources to dedicate to drugs and other possible treatments that wealthier people enjoy. So, logically, poorer people would suffer financial restrictions limiting their ability to pay for the necessary treatments - in addition to their affliction.

Anyone who required a study to prove this is clearly not logical.

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July 21 2010 by The Systemic Analyst.

Bronwyn Eyre ran a great article, entitled “We’re so deep in debt that we’ll never find our way out“, in the Vancouver Sun yesterday that is definitely worth a perusal. Eyre is right, there is likely no end to the abyss that is the world’s indebtedness.

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July 20 2010 by The Systemic Analyst.

Bank of Canada Governor, Mark Carney, has announced that interest rates will be increased for the second consecutive month. This brings the Bank of Canada’s rate to 0.75 percent. While this isn’t considerable, it is unique. As the Globe and Mail points out, no other G7 country has done so once, never mind twice.

Carney insists that the Canadian economy is like some sort of island in the greater sea of Capitalism, miraculously immune to the market landslides experienced by other so-called developed countries, such as  Ireland or Iceland. This thinking ignores the fact that all modern economies are intrinsically tied through trade et cetera. If the United States sinks, we will go down with it. And, as far as I can tell, some of those larger unhealthy economies have not yet experienced the apparent rebound uniquely enjoyed in Canada. Moreover, what is to say that the economy must rebound? Nothing lasts forever, so why should Capitalism.

We might do better to look at things from a wider perspective instead of focusing on every quarter percent hike. Perhaps one place might be to look at Carney’s track record before putting the fate of a nation in his hands.

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July 12 2010 by The Systemic Analyst.

The OECD has published a report that indicates migration numbers to once richer countries have fallen during the recent economic crisis. If these numbers continue to drop, the West’s status as the place to go for better opportunities will certainly be in question.

As the study also points out, the average age of workers in OECD member countries increased as a result of this dip in immigration. This could have a significant impact on those people living in affected countries, as with fewer immigrants we become ever-more stretched in funding the baby-boomers’ retirement.

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June 21 2010 by The Systemic Analyst.

The boys over at The Fraser Institute are telling citizens of Ontario and British Columbia that we:

“…would do well to ignore the anti-HST rhetoric. The HST is a significantly more efficient sales tax system that will improve the investment climates in both provinces and ultimately benefit Canadians through more opportunities, higher rates of economic growth and increased prosperity.”

At length they expostulated in today’s National Post on the virtues of a Harmonized (oddly spelled the good ol’ American way) Sales Tax and how, theoretically, all the many savings shall be passed on to us lowly shoppers. Reading the wordy argument, I couldn’t help but wonder - if it walks like a tax and quacks like a tax, surely it must be a tax. And perhaps more importantly, when was the last time a tax was a good thing for the denizens of a domain? I, for one, am quite tired of being taxed.

This weariness might also stem from a paid-for advertisement discovered in the Globe and Mail on Saturday that outlined all the services on which I will now pay the equivalent of PST and did not before. To view the Ontario government’s helpful chart, click here.

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June 9 2010 by The Systemic Analyst.

Associated Press, among others, has been reporting on the $2 million fake lake to be built in the Toronto media centre for the G-Summits. It’s part of a “Canadian Corridor”, as the press service called it, otherwise known as “Muskoka Alley”, created to satiate the tastes of the many members of the press who will be left behind in Toronto during the G-8.

Do also take notice that officially both Summits now sport a hyphen, one of the latest changes in nearly a year of organisation, bringing the terms much closer to that other famous abbreviation referring to elusive female anatomy, and no doubt increasing the sex appeal of the melodrama that is becoming this month’s main event. With the inclusion of hyphens and a massive fake Muskoka set, this is turning out to have all the hallmarks of a Hollywood movie - certain to be this summer’s Canadian blockbuster!

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June 8 2010 by The Systemic Analyst.

Mark Carney, the Bank of Canada Governor, is once again reassuring (or misleading, depending on how you look at things) Canadians that their country is economic crisis proof. The CBC reported on Carney’s statements at a Montreal economic forum. Carney apparently told an audience:

“What has been important in the past few months, as sovereign tensions have increased, is to gauge what the actual and potential effects of those difficulties could be in Canada, both on the financial side and on the confidence side….At this stage, the spillovers have been modest. But it depends, in part, on the ability of the central banks and governments to co-operate and act decisively.”

It might take a while for a wave generated on the shore to reach a distant island, but it will eventually arrive. Furthermore, Canada is much less like an island, and far more like a forgotten peninsula out on the peripheries of world affairs, very much connected to everywhere else and in many ways dependent on them for sustenance. We were lucky that the economic crisis that originated in the United States hasn’t impacted us more, and to think that we are isolated from what has now spread to Europe is absolute folly.

Perhaps the source should be considered: Mark Carney, the youngest central bank governor in the G8 nations, built his career at Goldman Sachs - the same financial institution that was so central to the economic crisis in the United States that it continues to be investigated by The Financial Crisis Inquiry Commission. Moreover, Carney was only appointed as Governor in early 2008; I highly doubt that it took just eight months or so to generate that colossal financial disaster, so it’s probable that Carney was privy to, and quite likely employing in his own work there, the same shoddy practices that led to the credit crisis.

Indeed, of Carney’s past “successes” was the Goldman Sachs involvement in the 1998 Russian financial crisis. The firm essentially helped hook the Russian elite on easy (and risky) loans in large volumes.  This house of credit cards was similar in many ways to the sub-prime mortgage pyramid that, when finally collapsed, initially spawned the economic crisis, from which the world is now suffering. And like the financial institution did with clients in this recent crisis, Goldman Sachs bet against the Russian government, so that when it all came crashing down the losses to the firm would be minimal.

The 1998 Russian financial crisis left a new word in the local lexicon; a bastardization of the  word democrat was created by replacing the first part “demo” with “dermo”, meaning “shit”.  Dermokrati became synonymous with a Western capitalist system, brought in by people such as  Mark Carney, that failed the Russian people in the worst way. Let’s just hope that nothing similar happens here in Canada.

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June 7 2010 by The Systemic Analyst.

The Ottawa Citizen reported last Saturday that it was Tax Freedom Day in Ontario. The article offered congratulations, but I’m left wondering if condolences aren’t the better acknowledgment, given that if Ontario tax payers had handed over their hard earned cash in taxes all at once, the tab would have only been completely paid as of June 5. Of course, this is to say nothing of all the other taxes on our heads.

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June 2 2010 by The Systemic Analyst.

The Province of Ontario’s Environmental Commissioner was on CBC Radio Ottawa this morning praising the idea of taxing citizens further. While his intentions are good, to cut down on smog and greenhouse gas emissions, the idea that we should have yet another tax imposed upon us just makes it seem like we are on a paved road to hell. The two new levies in question: tolls on roads to cut down on traffic; and a carbon tax.

Is it really necessary to tax us further as some preventative measure? Apparently, the taxes already levied aren’t keeping us enough inline - and let’s face it, we are taxed heavily.

Large centralised systems, such as government bureaucracies, are extremely inefficient means of organization. While we have derived benefits from the products of large systems, such as safety regulations and massive infrastructure development programs, the public sector has become so big that in its inertia it appears that the system now exists for itself as opposed to acting as a true agent for the people.

Data from Statistics Canada indicates that nearly 23 percent[1] of the entire working population in Canada are employed by the public sector, which includes health care, education, the postal service and municipal, provincial and federal governments and yes, even the Environmental Commissioner. It is unsurprising, as a result, that a Canadian living in Ontario and making $50,000 before taxes, if required to pay all annual taxes up front, would only begin taking an actual income home after 147 days of labour. As per an online Tax Freedom Day calculator offered by the Fraser Institute, an economic focused think tank located in Canada, it would have taken me up to May 28^th of this year to pay my $20,042 tax bill in its entirety: in Newfoundland Tax Freedom Day doesn’t arrive until June 29^th, meaning a person making $50,000 would work 179 days for the government and 186 for oneself.

While many would argue that this is simply the price we pay for solid infrastructure a person such as myself is left wondering if that amount is really commensurate with the benefits personally derived: as I do not have children, any tax money contributed to public education was a loss and furthermore, without dependents there was no tax break in the amount I was required to hand over; not having owned a car for a number of years decreases the impact this household has on physical infrastructure and moreover, as users of public transport living our first year in Ottawa we were held hostage in a strike between unionised drivers and the City for seven weeks during the dark days of winter and now face an increase in fares to compensate for the costs of this protracted and self-interested battle; having been born in Canada, fortunate in being of relatively sound health and earning an above average income, I do not qualify for most social programming and have, to date, never received any state assistance; and, in terms of health care, am free from prescription drugs and have happily avoided most doctors for a couple of years – in fact, the only medical visits I have made in the last year have been one trip to a doctor and otherwise to dentists and optometrists, neither of which are covered through public health benefits. Other than processing my taxes and the myriad of documents associated with maintaining my identity, my impact on the system appears to be quite small – hardly warranting working 147 days a year just to maintain the system.

Granted, we are connected to public utility systems, but we pay additionally for water use and electricity above and beyond taxes. Given the way the pension system works, all funds sequestered from my pay cheque will go to maintaining what remains of a failing system and thinly spread amongst the Baby Boomers rather than being carefully set aside for my distant, and likely elusive, retirement.

In fact, according to the Canadian Consumer Tax Index 2009, published by the Fraser Institute, the average Canadian family in 2008 paid 43.9 percent of the total household income in taxes. The same study notes that this rate is also a 1,783 percent increase in tax rate from 1961. Moreover, while 43.9 percent of a household income is paid to the government in taxes, the average family is spending 35.7 percent on life necessities such as food, clothing and shelter. With just 20.4 percent of household income remaining to cover the host of activities children are in, home repairs, cars and to contribute to savings, no wonder we are all so in debt.

So do we need another tax? Not likely. Perhaps more importantly the question should be can taxpayers actually afford another levy? I would say no. That is, not until all levels of government are cut back significantly. Otherwise it would just seem that the more we pay to support government, the more money government decides to take from us.

[1] Census Canada

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June 1 2010 by The Systemic Analyst.

Everyone is talking about Canada’s economic surge. Well, economic surge vis-a-vis a recession and, in particular, relative to other worse performing economies. Oh, and of course, the Gross Domestic Product grew, but that  measurement included increases of stockpiles or inventory and is not necessarily reflective of actual sales. The whole story of an economic surge seems nothing more than that, fiction.

The about turn most reporters and analysts seem to be making after announcing the good news only appears to confirm the idea that the whole story is bunk.  In one breath they cheer the economic boom. In the next, it’s a weak little plea to the banks to not increase the interest rates just yet - there is no way of knowing how these other poorer economies might taint us still. Well, are we a strong and recovering economy or are we not?

The funny thing is, no one seems to know. The sad thing is, we have allowed our lives to be constructed in such a way that we are dependent on the economy for our existence whereas the economy should only have been a tool to help us share and use resources. And now we sit here fretting and obsessing about how a human creation might react, instead of realising that it is still nothing more than our creation and need not govern our lives so.

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