Archive for February, 2010

Krugman on Canada

13 Feb 10: Nobel Prize winner and New York Times columnist/blogger Paul Krugman calls Canada’s banks “Good and Boring” (h/t to PM):

Over the past decade the United States and Canada faced the same global environment. Both were confronted with the same flood of cheap goods and cheap money from Asia. Economists in both countries cheerfully declared that the era of severe recessions was over.

But when things fell apart, the consequences were very different here and there. In the United States, mortgage defaults soared, some major financial institutions collapsed, and others survived only thanks to huge government bailouts. In Canada, none of that happened. What did the Canadians do differently?

It wasn’t interest rate policy. Many commentators have blamed the Federal Reserve for the financial crisis, claiming that the Fed created a disastrous bubble by keeping interest rates too low for too long. But Canadian interest rates have tracked U.S. rates quite closely, so it seems that low rates aren’t enough by themselves to produce a financial crisis. …

Canada’s experience does seem to support the views of people like Elizabeth Warren, the head of the Congressional panel overseeing the bank bailout, who place much of the blame for the crisis on failure to protect consumers from deceptive lending. Canada has an independent Financial Consumer Agency, and it has sharply restricted subprime-type lending.

Above all, Canada’s experience seems to support those who say that the way to keep banking safe is to keep it boring — that is, to limit the extent to which banks can take on risk.

One thing I would add to Krugman’s analysis is that in Canada there is no income-tax deduction for home-loan interest payments, which means that home-buyers here aren’t encouraged by the government to buy homes they might not otherwise be able to afford. It also means that there is less real estate speculation. Yet: the percentage of Canadians who own their homes is basically identical to the percentage of Americans who do. And we have avoided the kind of housing bubble that wiped out so many Americans.

Canada also has the lowest debt-to-GDP radio of any of the G8 countries (under 20%). During Chretien’s reign, virtually every year the government ran a surplus to pay down the debt. We are thus not owned by China.

Niman

12 Feb 10: Thinking of Mike Niman’s post, let’s not pretend we are dead.

Niman

11 Feb 10: Mike Niman is one of my favourite authors, indeed, one of my favourite people. We met one another more than thirty years ago, as students at SUNY/Buffalo. We became friendly journalistic adversaries, with Mike founding an alternative newspaper (wittily called “The Other One”) to counter the influence of the mainstream student newspaper I wrote for and helped edit. Our careers have had roughly parallel trajectories, as both of us made a name for ourselves publishing work on new Utopian movements in the United States (Mike studied the “People of the Rainbow,” and I delved into the “New Age”); now we both teach communications at a university.

Mike has long been an astute radical leftist-socialist when it comes to politics and policy. When he visited me last year in Vancouver, I felt I learned more about the world in the single afternoon we spent walking around the city than I did in the preceding month, not that I always agreed with him. Mike’s got a merry personality to go with the a very pessimistic outlook. As you can see from the following passage from his “Valentine’s Day Message,” Mike’s prose is filled not with anger — how he accomplishes this, I have no idea — but with lucidity:

Humanity is tied together with the common belief that the world is in trouble—politically, economically, and environmentally. Our problems, however, are bound together with a common thread. Whether we’re talking about resource depletion, as in running out of oil, fish, forests, arable land, and rare earth minerals, or whether we’re talking about the overproduction of wastes, as in carbon, chemical waste, nuclear waste, landfill wastes, or ocean trash vortexes, we’re talking about one issue—overpopulation. There are too many of us consuming too much stuff and turning it into too much garbage.

If the earth is alive, than we’re the pathogens that arrived relatively recently, spread exponentially, and are wreaking biological havoc. We’ve bred beyond the carrying capacity of the planet—beyond a climax population. For its part, the earth is running a fever, just like we do when we get sick. We’re seeing this in climate change, with the world turning both wetter and more arid, with wild weather making it colder and hotter. The earth is slapping us where we eat and sleep, making it more difficult for us to live and multiply—like a fever combatting a virus.

More people also means more political pressures as more of us fight over fewer resources. In American cities, yuppies are using financial weaponry to fight working families in an ongoing war over limited urban real estate. The result is gentrification-driven housing bubbles for the wealthy, or formerly wealthy, and homelessness and mortgage-induced poverty for the poorest among us. Too many rats fighting for too few nests.

Around the world we’re starting to see resource wars—nations organizing militarily to combat each other over energy and fresh water. Is the Israeli-Palestinian conflict really a war over two bands of bearded zealots arguing over how to worship the same god, or is it more about two civil organizations fighting for control of the same aquifer upon which both states depend for their daily survival? (It’s under the West Bank.) Expect intrastate water wars as well, as burgeoning desert cities in the US move to pump the Great Lakes into ecological oblivion in coming decades.

And expect wars and massive social disruptions as environmental refugees fleeing population-linked environmental devastations compete for scarcer resources and land. Think ocean level rises depopulating 13 of the 15 largest cities in the world—places such as Miami, Mumbai, Tokyo, New York, Shanghai, London, and Manila. Then think about cities depopulated due to fresh water depletion, such as Miami (again), Mexico City, Las Vegas, Delhi, Sao Paulo, and Los Angeles.

Now think about the burgeoning market for pollution credits, as wealthy nations, like urban yuppies who displace the poor, try to buy their way out of a crisis—in this case trading money for the right to pollute, buying conceptual pollution rights from those too poor to pollute, in a neoliberal dance of eco-insanity.

Mayhew on Jazz

10 Feb 10: My good friend and prolific, brilliant author Jonathan Mayhew has started a new blog, devoted to jazz, to complement his blog ¡Bemsha SWING! From a recent post:

When swing style pop vocals like those of Tony Bennett became eclipsed by rock music in the mid 1960s, it freed Bennett up to be a jazzier singer. The same happened with Rosemarie Clooney–a pop star in the 1950s but a jazz artist later in life. Interestingly, rock musicians popular in the 1970s like Linda Rondstat and Rod Stewart, Joni Mitchell, also turned to the great songs of the great American songbooks much later in their careers–with varying results, some good, some bad.

Nat Cole began as a jazz pianist. When he began singing that talent eclipsed his piano playing and he became an international pop star. His brother, Freddie Cole, has had an interesting career as a jazz singer, using a Nat King Cole-like voice but a more jazzy, less pop feel. Even Armstrong did pop vocals in his later career that have little to do (seemingly) with his jazz roots: “It’s a Wonderful World” and “Hello Dolly.”

Vocal music, then, has always been close to the commercial side of jazz, often to the point of not being jazz anymore. To what point the dichotomy between jazz singing and popular music is valid, I don’t know. Is Sinatra singing jazz with Count Basie and pop with Nelson Riddle? For me, Sinatra is a jazz artist. He even tried to hire Billy Strayhorn away from Duke at one point…

Downtown Eastside

6 Feb 10: With the Olympics in Vancouver, we’re going to see a whole lot more stories and slideshows like this one, in the New York Times, about the Downtown Eastside, alas. Visit Aha Media, run by the wonderful April Smith and her colleagues, to find stories and videos documenting that neighborhood’s many “positives.” [Stay up to date on Downtown Eastside news here. – 7 Feb 10]