Politics and Economics

“plus ça change, plus c’est la même chose”

220px-Alphonse_Karrplus ça change, plus c’est la même chose“, Jean-Baptiste Alphonse Karr (24 November 1808 – 29 September 1890) was a French critic, journalist, and novelist. His epigrams are frequently quoted, and the title line is one of his best. Another was on the proposal to abolish capital punishment, “je veux bien que messieurs les assassins commencent”  “let the gentlemen who do the murders take the first step”, or “I wish the assassins to go first”, a view which I share.

Any time the system rewards bad behaviour the society always and everywhere get more bad behaviour. The never was a time in history when treating bad folks well caused them to rehabilitate themselves.

So, as anyone who is even slightly awake can attest to, the river of change is never ending, and yet we always seems to repeat the mistakes of the past.  I often think of time and change as the wind that blows away the chaff of our lives leaving only the important kernels of value behind.

Of course, to benefit from those kernels one has to actually pick them up and digest them and their wisdom and change one’s behaviour if one wants to “improve” one’s life.  Unfortunately, many seem to trundle along like so many cattle, chewing their cultural cud and treading the grains underfoot, the proverbial pearls before swine.

Still working away on my year-end. Have mostly fixed all the disasters resulting from the chaotic family disaster of May and June 2014 and will be wrapping things up shortly.  Had a nice long conversation with a friend, who also happens to be my accountant. I’ve known him for almost 20 years now. He informs me that there are major changes in our tax structures pending over the next two years. Seems that our tax rate here is set to increase from 14% to around 32% over the next two years. Hmmmm. Not great looking down the road.

NDP imagesNo surprise at that development since the cattle (OOOps, voters, my bad) here elected a mob of rabid socialists/communists known popularly in the resistance as Rachel and her Merry Band, robbing from the “rich” and giving a little to the poor along the way for good photo ops. Of course, most of their loot always goes to their Organized Labor voting base with little left over for the genuine poor and seniors and all those “useless” folks for whom we will soon be buying a new fleet of Mercy Vans to help recycle the used parts. What’s that you say??? “MOOOOOO’ve on”!  Right!  Whole lot of thinkin’ goin’ on there.

Combine a local tax rate of 32% with an exchange rate of 1.32 against the US dollar where a lot of our vendors are based, and the possibility of interest rate hikes following the next Federal election  to fix the exchange rate plunge, which would almost  certainly trigger a hike in the inflation rate (maybe double digits like we saw in the 80’s)  and the rosy complexion of the face of Canada starts to look decidedly Liberal, Leprous and Loser!

Rickards400Our jurisdiction is steadily moving from  the most business friendly Province in the Dominion to the most hostile and restrictive, and the so-called “Alberta Advantage” has been pissed away in an orgy of “TAX THE RICH”. And of course the “RICH” who usually have significantly more brains and a better understanding of how the world works, have already left or are in the process of leaving and the brunt of this will fall on the small business owners who have enough brains to see and understand what is going on (legal now in Canada) but not quite as much money as the “Rich” to take flight until the storm blows over.

Canada is not immune to “hitting the wall.” It doesn’t happen just to Third World countries. Some examples of OECD countries that experienced foreign exchange crises related to large government and current account deficits are Italy (1974), the United Kingdom (1976), Denmark (1980), Italy (1981), Ireland (1981), Belgium (1982), New Zealand (1984), Australia (1985), Sweden (1992) and Italy (1992). The typical response was a serious devaluation of the country’s currency, rising interest rates (double digit), fiscal austerity (major cutbacks in all government programs), and sharply rising unemployment in all sectors except those employed by governments at all levels.

Italy’s experience (1992) and New Zealand’s crisis (1984) and its aftermath may provide some insight into what Canada could expect if the Liberals or NDP take power in the upcoming Federal election and as they have promised, reverse the steady Conservative trend towards budget surpluses and reducing debt. Not only are Liberals and NDP unwilling to take the necessary actions to reduce the debt burden and spending but have promised in writing and in the media to dramatically increase spending. Don’t take my word for it, just take a look at all the information online and short order you will have “the facts M’am, just the facts”.  Of course they might go against what you get from your cool aide in which case just … “whatever …”.

The New Zealand crisis in 1984 provides an interesting example of what happens when a country “hits the wall” and its government has the political will to take longer-term corrective action. For a short time investors refused to buy New Zealand government bonds. The New Zealand dollar was devalued and a strict fiscal austerity program was introduced. The government removed subsidies from all sectors and virtually abolished quantitative import controls. State business enterprises were “corporatised” and, in many cases, sold off. Monopoly rights were removed from all government departments and internal product markets were significantly deregulated. Over a number of years, the New Zealand tax system was overhauled.

Canada dodged the bullet in the 80’s  by actually cutting back enough on spending and raising interest rates such that we wiggled through. Of course the Liberals giggled all the way to the bank because they also encouraged high inflation, and indexed everything except tax brackets. It was a massive “stealth” tax hike which moved even the poorest Canadians much higher in the tax brackets and no one in authority has ever acknowledged the scam.

So, is it time to start restructuring to adjust to the coming evils, or is it time to start looking abroad?  Many factors to consider in such a search.  Economic Performance, Social Networks, Cultural Factors, Crime, Housing, Business Climate, Natural Climate, Rule of Law, Education, and so on. My personal bias’s are towards English Speaking nominally Christian cultures and countries in the British tradition, that is tracing their roots to the British Empire and it’s traditions.

First thoughts are balanced between adjusting the business model and staying put OR cashing in all the chips and emigrating to somewhere like Australia or new Zealand, or wherever. I am cognizant that the grass is always greener and every culture and economy has it’s own set of problems. I think both the Australian and New Zealand economy is in about the same crappy shape as Canada’s, and I have seen a good part of the crappier social side of Canada in the Justice Dept, the Education system and the Healthcare arena, and I believe that Progressive Bureaucracies are a Global plague. So one needs to be very careful before jumping lest one wind up in the fire yelling W.T.F!!!! For example, just take a short read at Forbes about New Zealand.

Anyway, as the Socialists and the Progressive takers take more and more of the maker’s resources the maker’s will make less and less and eventually move on. The problem is “WHERE in the World …?” Meanwhile, batten down the hatches and prepare for a storm. Of course we can always hope that John Cleese got it right and no-one will get hurt

Cheers

Joe

cdn-ddh-heavy-weather-87471.jpgOh well, been there, done that, how bad can it get?

 

Standard

One thought on ““plus ça change, plus c’est la même chose”

  1. Pingback: WHOOHOO!!! | Not My First Rodeo

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s