‘The trouble with the populist narrative’

By Aaron Wherry - Wednesday, November 9, 2011 at 1:28 PM - 0 Comments

Bob Rae appeals to economics.

A premium is a tax, and payroll taxes discourage hiring. Make no mistake, payments to people who have no work is essential, and a hallmark of a decent society and an effective automatic stabilizer for the economy. But how we pay for them should be the subject of a serious debate. The Liberal Party is calling today for a freeze on employment insurance premiums, and a review of the tax into the future. The payroll tax increases planned by the Conservatives will put a new tax burden of 1.2 billion on businesses and workers just as the economy is slowing down. It is a very bad idea, and the Conservatives should change course.

We need to go further and address the income tax code itself. Like their other favourite statute, the Criminal Code, the Conservatives cannot resist tinkering with endless boutique tax credits and changes that respond to the flavour of the month politics that is now the hallmark of the political right. These credits are rarely refundable, which means that those who really need help don’t get it. Out of the roughly 25 million tax filers in Canada, eight million do not have enough income to pay taxes. Those are the people who need these tax credits the most and they are the ones who don’t even get to apply.

France and Germany explore “two speed” eurozone

By macleans.ca - Wednesday, November 9, 2011 at 1:27 PM - 0 Comments

Some German and French officials are toying with the idea of a “two speed” eurozone where a core group of countries would pursue closely integrated tax and fiscal policies, Reuters reports. It would be a radical overhaul of the European Union, and a development that remains purely theoretical for now. Such a move would likely meet the opposition of many EU countries, whose backing is necessary for any amendments to the bloc’s treaties. Nonetheless, it is significant that the two EU heavyweights are willing to even entertain the idea.

Reuters

Rough economy hits Ottawa

By macleans.ca - Wednesday, November 9, 2011 at 1:10 PM - 0 Comments

Faced with unending turmoil in Europe and a sluggish U.S. economy, Ottawa is starting to plan for a possible double-dip in Canada, two reports from the Globe and Mail suggest. On Tuesday, the Finance Department hinted at the fact that declining revenues for the federal government and most provinces could affect increases in federal health-care transfers after 2013-14, when the current accord expires. In another sign of the times, the Department of Industry said on Tuesday it is planning to rely on U.S. auto industry experts to evaluate how a double-dip recession would affect auto assembly plants in Canada, a move, writes the Globe, that could “pave the way for more government assistance.”

The Globe and Mail

The Globe and Mail

The Oprah effect and why not all scientific evidence is valuable

By Julia Belluz - Wednesday, November 9, 2011 at 1:09 PM - 0 Comments

One of the inspirations behind Science-ish was the seemingly endless barrage of complaints by friends in medicine regarding the “Oprah effect” on their offices and hospital wards: patients making important decisions about a lifestyle choice or treatment option based on something they had seen on Queen of daytime talk.

Now, the Oprah Winfrey Show is off the air, but the after-effects of her work on childhood vaccination and menopause will surely haunt doctors’ visits for years to come. Of course, other media—before and after Oprah—have a powerful sway over patient decisions. Every day, newspapers dole out advice on how much alcohol and coffee to consume, how best to manage your diabetes, and the benefits of probiotics. New media play a big role in purveying health knowledge, too. In research into YouTube as a source of information on immunization, the investigators found that about half of the videos posted had anti-immunization messages, and the negative videos were more highly rated and viewed more often than those backed by science. Continue…

Italy’s borrowing costs enter danger zone

By macleans.ca - Wednesday, November 9, 2011 at 12:45 PM - 0 Comments

The yield on Italy’s bonds crossed the red line of seven per cent on Monday, as the planned resignation of Prime Minister Silvio Berlusconi failed to reassure jittery investors. Analysts told Reuters Italy is now in a situation similar to the one that forced Greece, Ireland and Portugal to seek bailouts. The markets had long been pushing for the reform-shy leader to leave the helm of Italian politics, but optimism about his planned departure quickly turned to panic among fears that Berlusconi’s resignation won’t end paralysis and uncertainty in the country.

Reuters

For aging men, loneliness can be deadly

By Julia Mckinnell - Wednesday, November 9, 2011 at 11:40 AM - 0 Comments

Getty Images; Photo Illustration by Taylor Shute

Men grow lonelier and sadder as they age, whereas women’s self-satisfaction accelerates, writes psychotherapist Thomas Joiner in a new advice book to help men fight loneliness, a condition that creeps up over time, “a lot like hair loss.” In Lonely at the Top: The High Cost of Men’s Success, Joiner tells the story of his own father, a successful businessman and family man, who committed suicide at age 56. “My dad had close friendships in early childhood but they faded or failed for whatever reason. I have godparents; they were close friends of my dad’s and I can still recall the excitement he showed when our families socialized. Tellingly, he lost touch with them. And the problem is not precisely that he lost them, the precise problem is that he did not replenish them—and I believe it killed him, or more accurately led him to kill himself. His autopsy report should read: male, age 56, cause of suicide: friendlessness.”

The condition of loneliness isn’t just psychologically detrimental; its health effects can be as fatal as cancer and obesity, reports Joiner, suggesting it’s associated with “less restorative sleep” and “decreased functioning of the immune system.” In a study of middle-aged men in Sweden, “having a close attachment to just one person, like a spouse, did not confer much protection against heart attack and death due to heart disease. But having multiple friendships did.”

Joiner theorizes that men sustain fewer friendships than women in part because they are more narcissistic and self-centred. “Men seem to be under the impression that friendships will always be provided for them, just as they were in grade school.”

Continue…

Knocking people off their feet

By Chris Sorensen - Wednesday, November 9, 2011 at 11:30 AM - 0 Comments

Sunjoo Advani

Visitors to the basement of the Toronto Rehabilitation Institute’s new 13-floor building on “Hospital Row” could be forgiven for thinking they had unwittingly stumbled upon a super-villain’s subterranean lair. Several floors below the ground, technicians monitor computer consoles perched above a deep chamber that houses three giant fibreglass pods—each with an interior about the size of a spare bedroom. A claw-like system dangles from the ceiling, waiting to hoist one of the pods off the ground and carry it along a track into a neighbouring chamber, where it is placed atop a set of giant hydraulic legs bolted to the cement floor.

There are, however, no plans to take over the world with this high-tech equipment, part of the institute’s new Challenging Environment Assessment Lab, or CEAL, a computer-controlled motion simulator system similar to those used to train pilots and astronauts. Except these simulators, part of a $36-million initiative to make Toronto Rehab a leader in geriatric and neurological rehabilitation research, will be used to replicate more mundane environments like icy sidewalks and household staircases—both of which are responsible for a staggering number of injuries among elderly and disabled Canadians every year. “We take on the big problems,” says Geoff Fernie, the vice-president of research at Toronto Rehab, as he levels his gaze over the glasses perched on the end of his nose. “Stairs kill and maim three times as many people as car accidents.”

In Canada, one out of three people over the age of 65 has a slip or a fall every year, and they are responsible for nearly 20 per cent of injury-related deaths and two-thirds of all hospitalizations among the same age group, according to the Public Health Agency of Canada. And falls break more than just brittle bones. They also shatter confidence and can often mark the beginning of a rapid decline in health and quality of life among the elderly, a growing national health issue for an aging Canadian population.

Continue…

Learning to the sound of rap

By Angelina Chapin - Wednesday, November 9, 2011 at 11:10 AM - 0 Comments

Photograph by Mark Peterson/Redux

It’s a Sunday night in Manhattan, and the only place in the world where 40 white people have their fists in the air chanting “I’m a African.” Their ringleader is performer Baba Brinkman: a tall, gangly man who is explaining to his audience in the off-Broadway theatre how the theory of evolution is captured in the lyrics of New York City-based hip-hop duo Dead Prez.

Brinkman’s riff on their song, which argues that until 60,000 years ago Homo sapiens all lived in Africa, is a part of his rap guide to evolution—the second in a series of educational rap guides he’s produced. The songs unpack such Darwinian principles as natural and sexual selection using the analogy of the rap industry: just as certain organisms are selected to survive in nature based on favourable qualities, certain rappers are selected by their audience to succeed based on talent.

In January, this caught the attention of Anat Lechner, a professor of management at New York University’s Stern School of Business. “He’s a walking example of innovation, differentiation, value-adding and the bizarre,” says Lechner. “These are exactly the things we teach business students to do.” This year, she commissioned Vancouver-raised Brinkman to make the rap guide to business, which turned out to be a collection of six songs. (“Classical economists have been hittin’ the bong / Cognitive biases are mad strong,” he raps on a track called Walk Like an Amoeba.) He performed a selection for Stern’s incoming class in August, and Lechner will use the album to illustrate principles such as risk-taking in her courses.

Continue…

Hollywood banishes celluloid

By Jaime Weinman - Wednesday, November 9, 2011 at 11:10 AM - 0 Comments

Getty Images; Photo illustration by Sarah Mackinnon

At the Tate Modern gallery in London last month, artist Tacita Dean unveiled her exhibit “FILM,” an expression of fear for the future of motion picture film. “It breaks my heart to think that we’re going to lose this beautiful medium,” Dean told the Evening Standard. Not long after that, Creative COW magazine reported that several major motion picture companies, including the venerable Panavision, will stop creating new film cameras and concentrate on digital video cameras instead. It looks like all of film, not just Dean’s, may be a museum piece. “The end of film distribution is on the horizon,” says Patrick Corcoran, director of media and research at the National Association of Theatre Owners in the U.S.

It’s not that demand has completely disappeared. “Filmmakers are very much accustomed to working with film,” says Corcoran. “There are some who are going to be slow to give that up.” Wally Pfister, the cinematographer of The Dark Knight, told American Cinematographer that film can be exposed in a wide variety of ways, which gives him “infinite creative flexibility in creating images.” Steven Poster, president of the International Cinematographers Guild, has embraced digital, but says film “does have a look that’s kind of unique.” Film fans love its inherent grainy quality, and Dean’s exhibit also celebrates film processes like hand-tinting, which can’t be done with computers.

But even if some directors still want to use film, it may become harder to find anyone willing to make or process it. Film has been battered by the popularity of digital 3-D, which has no film equivalent. TV studios have mostly abandoned film for new pilots over the last two years, in part for labour reasons: Poster says “they were fighting with the Screen Actors Guild,” and digital video allows them to deal with a different union. As more producers find reasons to give up film, the cost of making and delivering film prints will go up; by 2013, Corcoran estimates, the studios are likely to conclude that “it no longer makes economic sense to ship film.”

Continue…

The PTC Racket

By Jaime Weinman - Wednesday, November 9, 2011 at 11:04 AM - 0 Comments

Last night’s Glee was one of the more enjoyable ones, although as Todd notes, the Blaine who appeared in this episode is basically a different character from the one who was originally introduced. His early appearances implied that he was supposed to be the worldly-wise one, but for the purposes of this episode he needed to be unworldly, so that’s what he became. Ryan Murphy’s shows almost employ cartoon logic in their approach to characterization, which is that a character is defined by a few basic traits or relationships, and everything else is negotiable from episode to episode. This is how Tweety Bird can be an innocent in one cartoon and a sadist in the next one. (More recently, I recall Larry David addressing complaints that Kramer is courageous and strong in one episode, and a coward in another episode – he argued that that kind of consistency isn’t important.) Some shows have rules that govern every aspect of the characters’ behaviour, and others have only the barest of rules; the only thing that defines some of the people on Glee is who they’re romantically involved with. In an odd way, it works, because the Ryan Murphy universe is a cartoony universe where character motivation and personality are very flexible.

The episode, the most tasteful and reserved losing-their-virginity episode in some time, got a lot of publicity build-up because the Parents’ Television Council complained about the content. I sometimes wonder if this group has any actual power, of if it just seems that way because they’re the source of virtually all the reports about this kind of complaint. The PTC is extremely aggressive about getting itself into the news, but more importantly, they’re there in a way that most pressure groups are not. There is pressure, there are complaints and boycotts and people changing the channel, but a lot of it isn’t organized in a very public way: if people have political or social complaints about a show, it’s likely to occur in venues that we don’t necessarily follow. The PTC’s gimmick is turning this kind of complaint into press releases; they are the one-stop shopping location for socially conservative views of television, and so they are always going to be quoted when a quote is needed about moral turpitude in television.

In this sense, the PTC is very much like William Donohue. People have complained that Donohue is often quoted to represent the views of conservative Catholics, when his organization doesn’t speak for many Catholics. (This is all unlike the old Legion of Decency, which really was powerful – movie studios were actually listening to them and pleading with them not to condemn their movies. Focus on the Family is an organization that wields some actual power, and the old Moral Majority did too, but the evidence that anyone is listening to the PTC is sketchy at best. Maybe the FCC, but a lot of the complaints they get from the PTC are sort of frivolous complaints that never result in fines.) There’s really no telling who these organizations speak for, but they’re there, and they’re available for quotes. In effect, the PTC and Donohue are used as proxies for views that are assumed to be common, but can’t be traced to anyone in particular.

The problem with this is that there’s a danger of assuming that the PTC really speaks for Heartland values, when we really don’t know what the Heartland thinks. Well, sometimes we do, usually when people vote with their money – like it or not, it was clear that the Dixie Chicks had alienated a chunk of the country music audience when they criticized President Bush. And we know that there is a market for movies with certain types of conservative or religious messages. But with TV, where most people don’t pay directly for the shows they watch, there’s often no telling what people want or like, so we wind up extrapolating; the thing is, though, we don’t know. We don’t know what type of content offends people and what doesn’t. Maybe the networks, with their more sophisticated data, knows what offends people. But the network executives probably know more about this sort of thing than the PTC does. What a PTC press release is, in effect, is a sort of fantasy version of regular-folk values; they’re sort of writing fanfic about the average Heartland viewer, but they simply don’t give us any insight into what that viewer really thinks.

The cheese theft epidemic

By Emma Teitel - Wednesday, November 9, 2011 at 11:00 AM - 0 Comments

Chris Ratcliffe/Getty Images

Forget candy bars and bubble gum: according to the U.K.’s Centre for Retail Research, over three per cent of our planet’s cheese is stolen every year—making it the “most stolen food item in the world.” Apparently, says Joshua Bamfield, director of the centre, “a lot of the theft is for resale and a lot of this cheese will be resold into other markets or to restaurants.” And he has a point. Yahoo! News reports that two Michigan men were recently caught stealing over $1,000 worth of provolone, and a group of ambitious shoplifters in Oregon attempted to roll three large wheels of cheese worth approximately $600 out of a supermarket. It’s hard to believe their motives were fondue related.

At home, Express Fine Foods in Toronto’s Greek village has resorted to keeping its cheese in the centre of the store under bright lights and a video camera, all to dissuade the too-familiar cheese thief. One staffer says cheese theft has become “a huge problem,” with patrons stealing the store’s cheese and “taking it to the bar for when they have a beer” (how he came to that conclusion remains a mystery). Other foods commonly targeted include fresh meat, baby formula, chocolate and seafood.

REVIEW: Mafia Inc.: The Long, Bloody Reign of Canada’s Sicilian Clan

By Martin Patriquin - Wednesday, November 9, 2011 at 11:00 AM - 0 Comments

As with its actors and professional football players, Canada’s Mafia families were long considered to be little more than farm teams for their many big brothers to the south. Montreal journalists André Cédilot and André Noël turn this notion on its ear to show that, perversely, this country’s organized crime underworld is arguably deeper, darker and more violent than the goings-on in New York’s five boroughs or elsewhere.

Cédilot and Noël, veteran crime reporters for La Presse, spin an exhaustive and compelling read. Much like the mob itself, Mafia Inc.’s narrative tendrils are long and widespread, and converge on an imposing subject: Montreal’s Rizzuto clan. Hailing from Sicily, Nick Rizzuto arrived in Montreal and in short order usurped the Cotroni clan to become patriarch of the country’s most important crime family. His son Vito, who helped cement the deal with bullets pumped into the bodies of rivals, eventually took over.

For whatever reason—luck of the devil, the RCMP’s zealous ineptitude, or what Cédilot and Noël call “Canadian judicial authorities’ incomprehensible indolence” toward the mob—Vito stayed out of jail, and his decades-long reign expanded the family’s influence to New York, Italy and beyond. The book is larded with keen details. For example: who knew that the Lebanese civil war was the reason why Montreal organized crime moved from hashish to cocaine, or that leaders of Quebec’s biker gangs had a childlike adoration of Montreal’s Mafia types?

The genius of Mafia Inc. is its all-important connections between organized crime, legitimate business and government. The chapter on the alleged cozy relationship between former Liberal minister Alfonso Gagliano and the Rizzuto clan (Gagliano denies any Mafia ties) is alone worth the price of admission. And the authors show how the Rizzutos, like any big and violent Mafia clan worth its salt, were crippled much as they started: with hubris and a hail of bullets.

A cooler Croc?

By Michelle Magnan - Wednesday, November 9, 2011 at 11:00 AM - 0 Comments

Photography by Jenna Marie Wakani

Damian Van Zyll De Jong grew up on Vancouver’s west side devoted to two things: skateboarding and snowboarding. Maybe three. Van Zyll De Jong always loved shoes, but he was bored with the selection. On the way home from a snowboarding trip, he told his friends he thought he could design something better. He wanted his kicks to be funky, functional and, most of all, unique. So in 2009 the Vancouverite founded Native Shoes. “I twisted everything I grew up loving into my own little rendition,” he says, “and I just put it out there.” The brand’s nine styles, including his takes on Chuck Taylors and boat shoes, are injection-moulded and made with EVA, an ultralight material that’s odour-resistant, animal-free and washable. Some of them have holes, leading to an obvious comparison with Crocs. “They’re two very different brands but we use the same material, so it’s easy to be pigeonholed in that group,” he says. “It reminds me of the Mac and PC ads.”

Native is the cooler Mac kid, of course. South Park creator Trey Parker, American singer Travie McCoy and TMZ reporter Harvey Levin are fans. Paparazzi have photographed the kids’ line on the offspring of Halle Berry, Barack Obama and the Jolie-Pitts. Canadian rocker Bif Naked has a Native habit that started when Caroline Boquist, co-owner of Walrus boutique in Vancouver—a woman who “knows everything and is the epitome of cool”—gave her the sell job: “Local. Hot. Like Crocs but better.” Continue…

REVIEW: The scrapbook of Frankie Pratt

By Sarah Weinman - Wednesday, November 9, 2011 at 11:00 AM - 0 Comments

Pratt’s life should be familiar to readers weaned on novels by F. Scott Fitzgerald and Ernest Hemingway depicting the vivaciousness and vacuousness of the Jazz Age. She’s a small-town girl from Cornish, N.H., with lightning-fast fingers, bent on a career as a writer, as long as she can get through college at Vassar, living as a working girl in New York City, and adventures in Paris without ending up in too much trouble. Inevitably, Frankie finds some, thanks to a love affair that moves from inappropriately chaste, to adulterous, to simply doomed, with pauses for lighter-hearted romantic hijinks on both sides of the Atlantic before she finds the real thing where and when she least expects it.

Preston, who previously demonstrated her expertise with this time period in her 2006 novel Gatsby’s Girl, takes this straightforward narrative and weaves it through the motif of a scrapbook (the conceit is that it’s a high school graduation present from Frankie’s mother). In doing so she adds colour, vibrancy, and an idiosyncratic flavour to Frankie’s growth from girlhood innocence to complicated womanhood. Postcards from the 1920s, which Preston herself has collected for years, populate Frankie’s scrapbook and story, illustrating key events (being dropped by her college best friend and roommate, learning a secret about one of her New York beaus, hearing her doomed lover declare his love while her stomach rebels against an Orange Crush drink) with wry panache.

The Scrapbook of Frankie Pratt is a delight to read, the juxtaposition of period advertisements, report cards, and other memorabilia demonstrating the highs and lows of the 1920s. For Frankie, opportunity seems limitless, but it’s also inhibited by social mores, class boundaries, and the rules of romance. Nonetheless, far from being restricted, she soars, and it’s a pleasure to succumb to this confection and enjoy Preston’s literary collage.

Crusade?

By Aaron Wherry - Wednesday, November 9, 2011 at 10:30 AM - 0 Comments

Julian Fantino reassures Texas that the Harper government is committed to the F-35 program.

“We will purchase the F-35,” Fantino asserted. “We’re on record. We’re part of the crusade. We’re not backing down.”

Even setting aside the word‘s fraught history, “crusade” seems an odd term to apply here.

Foie gras: Duck, duck, and finally some goose

By Jacob Richler - Wednesday, November 9, 2011 at 10:30 AM - 0 Comments

Photo by Colin O’Connor

There is a small community of Canadian gourmands who worry that duck foie gras is simply not rich enough, and that something better exists elsewhere that is unavailable here. We have no support group but each other. And this close-knit relationship explains why rumours spread so quickly this spring that a Quebec distributor was importing fresh whole lobes of foie gras from Hungary—not small ones, sourced from elegant, svelte little ducks, but the Brobdingnagian stuff, plucked from fat, lumbering geese.

Finally, one happy afternoon a few weeks ago, a cab rolled up to my front door with nothing in the passenger seat but a plump, yellow, one-kilogram goose liver, sporting a label from an importer in Laval, Que., called Cunico (about $55 a pound, if your butcher can get it for you). The foie gras was a gift from my friend Arpi Magyar, a wonderful and passionate chef who, in 2003, after 20 years in charge of some of the better restaurant kitchens in Toronto, turned his hand to catering and opened Couture Cuisine.

Magyar grew up in Hungary, which is the second-largest producer of foie gras in Europe after France, and its largest exporter (primarily to insatiable France). And unlike France, where most foie gras comes from moulard ducks, Hungarian foie gras is almost always sourced from geese.

Continue…

An arts agenda

By Aaron Wherry - Wednesday, November 9, 2011 at 9:30 AM - 0 Comments

Paul Dewar outlines his arts policy commitments.

1. Income tax averaging to mitigate the fluctuations in income for artists and cultural workers
2. Extending federal income support such as EI and CPP to self-employed, freelance, and part-time workers
3. Removing federal income tax on the first $15,000 of income earned from copyright and residual payments by professional artists

Dewar also reaffirmed New Democrats’ long-standing commitment to provide sustained and increased funding to the Canada Council, CBC, Radio-Canada, and the Canadian Media Fund, as well as creating a new international arts touring fund to replace Trade Routes and PromArt which were cancelled by the Harper government.

‘Focus on what unites us’

By Aaron Wherry - Wednesday, November 9, 2011 at 8:30 AM - 0 Comments

Nathan Cullen continues to pitch his proposal for joint nominations.

Some worry about the implications of my proposal. The root of many of these fears is a belief that my party can win on its own. I understand that sentiment. Indeed, I agree with it: We can out-organize another party in a joint nomination—resembling a U.S. primary—and go on from there to beat a sitting Conservative. Others say it’s not realistic, that parties would need common platforms to make it happen; or that vested interests wound not allow it.

In response, I ask them whether the differences among progressive Canadians are really so great that we can’t find ways to co-operate before the next election? They can’t be that large. If other candidates can imagine and plan to co-operate after an election, surely we can democratically co-operate before one, too.

A question of honour

By Michael Friscolanti - Tuesday, November 8, 2011 at 10:01 PM - 0 Comments

Michael Friscolanti is covering the honour killing trial for Maclean’s, filing regular reports from the Kingston, Ont. courtroom to Macleans.ca and weekly dispatches for the magazine. The reports will continue for the duration of the trial, which is expected to run into December.

Accused “honour killer” Mohammad Shafia returned to court this morning, nearly a week after being rushed from his prison cell to a hospital room with an undisclosed ailment. Dressed in a checkered sport coat and silver ankle chains, the 58-year-old was escorted to his reserved seat inside a bulletproof prisoner’s box. Within minutes, he was weeping. Continue…

Please hold

By Aaron Wherry - Tuesday, November 8, 2011 at 6:28 PM - 0 Comments

The Canadian Press notes that the Conservative promise of income splitting for two-parent families will be delayed another year by the government’s retreat from April’s pledge of a balanced budget in 2014-2015.

Other campaign promises that will be similarly delayed: doubling the children’s fitness tax credit, establishing the adult fitness tax credit and doubling the tax free savings account limit.

Why so shy, Jim?

By Aaron Wherry - Tuesday, November 8, 2011 at 4:27 PM - 0 Comments

The New Democrats and Liberals are unhappy with Jim Flaherty’s decision to deliver the economic update far away from the House of Commons.

NDP House Leader Joe Comartin argued the Conservative tactic “demeans the role of Parliament and parliamentarians.” He said it follows the government’s strategy of disrespecting democracy by bringing in time allocation and closure to shut down routine debate on legislation … “I think it obviously gives the government an advantage of being able to put out whatever their messaging is, even if there are some negative parts, without having to be concerned about an immediate response in the House from the opposition parties.”

Carney’s new gig: Congratulations or condolences?

By Erica Alini - Tuesday, November 8, 2011 at 4:27 PM - 0 Comments

Mark Carney’s appointment last Friday as chairman of the Financial Stability Board, the world’s top banking watchdog, is a central banker’s dream. Plus, he’ll have an old school friend from his Oxford days serving as second-in-command. Great gig, right? Well…

About the FSB: The Financial Stability Board is the updated version of the Basel, Switzerland-based Financial Stability Forum, which was created in 1999 by the G7 to improve information-sharing among finance ministers and central bankers in the aftermath of the Asian financial crisis. The FSB itself came to life ten years later, after the global financial crisis, when its membership was extended to all G20 members. It now includes representatives from more than 20 countries, a number of prominent international bodies, including the European Commission, and the world’s most important institutions in charge of setting international standards for the global financial market.

In part, the FSB helps design new regulations for banks and other financial institutions that aim to avoid another 2008-style meltdown. In part, as Carney put it in a CBC interview, the institution’s job will be that of “policeman” in charge of ensuring that countries follow the rules.

The nasty fine print: The FSB’s chairmanship is surely enormously prestigious, and it will serve Carney well as a megaphone. Still, if the institution is supposed to be the top cop of global finance, it’s like Dirty Harry armed with a billy stick. The tough guy attitude is there, but not the firepower.

For now, in fact, the most the FSB can do to punish a country that does not follow the new rules is resort to the so-called naming and shaming. It doesn’t help that, in order to assess compliance with international standards, the institution relies on peer reviews approved by consensus. In practice, it means any member country under review can simply veto criticism, according to Eric Helleiner, chair in international political economy at the Centre for International Governance Innovation and a professor in the department of political science at the University of Waterloo.

Another problem, says Helleiner, is that the FSB wants to uphold rules for everybody–but not everyone gets a say about those rules. Whereas the World Bank, the International Monetary Fund and the World Trade Organization have near universal membership, the FSB brings together just 24 countries.

The bright side: Things are looking up. So far, the FSB has been carrying on with only 20 employees, all borrowed from other organizations. At the latest meeting in Cannes, though, leaders of the G20 group of world economies promised to award it legal standing, meaning that the institution will finally get a budget of its own, and the power to hire permanent staff (and perhaps cough up a paycheque for the chairman, too).

And the FSB isn’t quite as powerless as it seems. When it comes to financial markets, explains Helleiner, the name and shame tactic tends to work better than in most other contexts. It’s not just as if Amnesty International wrote up some damning human rights report hoping to foist moral pressure on the dictators of the world (which sometimes works anyways). It’s more like Standard and Poor’s downgrading the creditworthiness of a country–the markets take notice.

Resolutely flexible

By Aaron Wherry - Tuesday, November 8, 2011 at 3:50 PM - 0 Comments

The prepared text of the Finance Minister’s remarks is here.

Countries, just like individuals, do not stumble into prosperity. They set out a plan and stick to it, so that they are fully capable of seizing opportunity when misfortune hits, instead of merely being overwhelmed by it. 

That’s not to say, of course, that our Government believes an inflexible approach for every conceivable scenario is anything to admire.

For those of you scoring at home, six references are made to flexibility against ten references to stability.

The full economic update is available here. More from the Globe and Canadian Press.

‘Increasing the adjustment for risk’

By Aaron Wherry - Tuesday, November 8, 2011 at 3:13 PM - 0 Comments

In March, the Harper government announced that it would return the federal books to balance in the 2015-2016 fiscal year. Seventeen days later, the Conservatives changed their minds and promised instead to return to balance in 2014-2015. Seven months to the day after that, the Harper government has decided it can’t fulfill April’s promise and is going back to March’s projection (at the earliest).

Depending on how you count these things, this is either the third or fifth return-to-balance projection the government has offered in the last three years (first 2013-2014, then 2014-2015, then 2015-2016, then back to 2014-2015 and now back to 2015-2016).

Including Mr. Harper’s vow in 2008 that a government led by him would “never” go into deficit, this is the second time in three years that the Conservatives have made a balanced-budget promise during an election campaign only to abandon it after being reelected.