Come & get it

Monday’s dose of Chrystianomics will be put to a confidence vote, her boss now says. Thanks for the deputy prime minister, Jag, the government will not fall. The spending will continue. And your children’s children will look at their marginal tax rates and wonder what the hell their ancestors were thinking.

More news: bank profits are back. And the economy roared ahead 40% in Q3 after being crushed 38% in Q2. The big question is what the second wave will do to Q4. And it won’t be pretty. But meanwhile Mr. Market doesn’t care. He’s hopped up on vax, so the Dow topped the 30,000 mark on Tuesday and investors just enjoyed the best November since ever.

Yup. What a mixed-up world. Stephen Harper suffered the wrath of media hell with a deficit of $56 billion during the credit crisis. When Trudeau’s red ink hit $381 billion this week, there was barely a ripple. Around the globe governments have now thrown $19 trillion at Covid. In Canada this has meant a giant spike in the household savings rate, since gobs of people have more money than they did pre-virus. It’s why Justin would actually love to lose that vote, triggering an election.

What do most little beavs care about?

Themselves, naturally. And the gifts keep coming.

Like the $400 everybody got Monday for staying home. Chrystia announced the CRA would be introducing a simplified claim to allow WFH warriors to write off up to four hundred bucks worth of staples, paper, thumb drives and wires. This will be a straight deduction from taxable income and – guess what? – nobody needs receipts. Or even a T2200 form from your employer stating that you can claim work-related costs. Nope. It’s just a freebie. Four hundred clams.

And for the homeless urban moisters comes the enhanced First Time Home Buyer Incentive. Remember that? It’s the shared-mortgage scheme whereby the government will chip in 5% or 10% of the financing, cost-free, for up to 25 years. Now the pot’s been sweetened so buyers in Van, the GTA or Victoria can buy digs worth up to $722,000, employing government money – a huge jump from the previous limit of $505,000.

Won’t this just add to absurd 1.7% five-year mortgage rates in goosing house prices beyond the means of average people? You bet. But this is Covid Canada, 2020. Everybody gets a pony. If excessive stimulus, emergency rates and historic deficits completely screw things up, just relax. ‘We’ve got your back,’ the leader said. What could possibly go wrong?

Well, the big news here on this pathetic blog is the winner of the Deficit Challenge. We asked you for an estimate of how pooched the Chrystia mini-budget would leave us, and more than 300 of you responded with wild, unsubstantiated and possibly inebriated responses. The number announced Monday was $381.6 billion. The closest guesser came in at… $381.6 billion.

That winner posted here as ‘TANSTAAFL’, whatever that means, and has earned a guest post on a topic of his choosing plus the chance to moderate comments for a day. After being notified of this massive and systemically-significant prize, this was the response from a person we now know is called John.

I initially assumed this was some sort of sad fishing attempt as I did not think my message had even posted. I had to go back and literally check the mind boggling numbers.

This is your blog sir, while I will embarrass myself if you are serious about the offer, I have no interest in moderating the comment section.  I can afford the therapist but I don’t think I can carry the cost of the single malt required to wade through that particular ocean.

Given that I am not a financial advisor, realtor, economist, or politician I will have to think about what I have to offer.  I considered turning the blog over to my friend, a micro-biologist working on COVID-19, but he likes gold too much and would likely look at the comment section and loose his last shred of hope for humanity.

If you are serious, I have no problem if you wish to edit or offer an interspersed commentary.  I do not view this as a transgression against my freedom of speech on your blog.  As a warning, my post would likely hold up politicians and experts while ending with a recommendation to get vaccinated to save the economy.

Who is John? What does he do and where’s he live? How’d he possibly know – to the fraction of a billion – what our flashy new finance minister was going to do? And why would somebody who’s intelligent, articulate and prescient visit such a trashy site?

Stay tuned. You’ll soon have the chance to punish him badly.

Here we go

Three months and two weeks ago the finance minister resigned.

“Since I expect that we will have a long and challenging recovery, I think it’s important that the prime minister has by his side a finance minister who has that longer term vision,” Bill Morneau said, politely. “That’s what led me to conclude during this time period that it’s appropriate for me to step down.”

It was a shock. In the midst of scandal. And it occurred after Morneau had a blow-out with Justin Trudeau. One man wanted prudence. The other, glory.

As we know, both were tainted by the WE debacle, now blurred by the ongoing Covid crisis and its  troublesome second wave. Trudeau allowed his family members (including his mom) to become paid shills for a dodgy charity with a penchant for buying commercial real estate in the name of its founders. Morneau carelessly accepted gifts and travel. It was an embarrassment he won’t live down.

But that’s wallpaper. The real story here is the course of the nation which today again lurches left. Morneau in July was devastated to announce Canada would have the worst deficit on record, $342 billion, as a result of T2’s virus spending and the CERB tsunami. He then argued for restraint, telling the prime minister of the need for a long-term strategy to restore fiscal health. Trudeau rebuffed him. This crisis, he argued, was an opportunity to remake society, expand the role of government, promoting social and climate justice. The spending would continue.

Bill quit. Chrystia Freeland was instantly thrust into his chair.

So let’s consider this a moment.

Bill Morneau is Old Money. If you’ve ever spent much time around OM people you know they live by a code. No wonder. The system’s been good to these folks. Capitalism works. Things are as they are for a reason. Change should be incremental. Reputation matters.

Before losing his mind and running for Parliament, Morneau headed a billion-dollar executive benefits company and earned over a million annually. He lives on a two-acre estate in the middle of Toronto and married one of the wealthiest women in Canada. Nancy McCain is an heir to the food empire of the same name. Her brother is chairman of McCain Foods. Her cousin runs Maple Leaf Foods. Her sister lives in a little castle across the street. There are two family yachts, large enough to cruise to the Galapagos, normally anchored off the family’s summer compound in New Brunswick or its holdings in Florida. There is also a chateau in Provence, in the south of France

In short, there’s nothing to prove. Being in public office is not about personal gain, advancement or brand-building. It’s service. It finished badly. But it also ended on principle.

Chrystia ain’t OM.

Both parents were lawyers with her mother running as a federal NDP candidate in native Alberta. Her BA is in Russian lit and history. Her MA is in Slavonic studies. She worked as a journalist stringer in Ukraine, and afterwards in London and Moscow. Then to the Globe and Mail and Reuters. Her major publication was a book called “Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else”, a 2013 bestseller. Then she ran for Parliament. She’s married to Graham Bowley, a former NY Times reporter. Three kids. Normal house.

An accomplished, ambitious woman. Now the second most powerful person in Ottawa. In interviews over the past few days she’s indicated a willingness to ‘spend whatever it takes’ for the Trudeau agenda of worker support and economic rebuilding to occur.

Privilege, business success, family, wealth and marriage made Bill Morneau. Justin Trudeau made Chrystia Freeland. She may well be more in sync with a nation where Millennials outnumber Boomers and social justice/climate issues trump balanced budgets. He may be the dinosaur, the last hulking carcass of fiscal restraint standing at the vault door.

   But we are now the spendiest country in the industrialized world. In a single year our deficit, as a share of the economy, has grown by a factor of 18. “No major economy,” says Scotiabank, “will show a bigger fiscal swing in 2020, according to estimates from the International Monetary Fund.”

And it’s only started, apparently.

$     $     $

Well, here it is. The shiny new (so far) Chrystia deficit number: $381.6 billion (by March). And this does not include another $100 billion in stimulus spending coming after the second wave…

Now, let’s see who in the steerage section came closest with their estimate, and will be our Guest Blogger! May God help the winner.