Categories
politics social commentary

Homelessness As A Product Of Prosperity

An Update:
I originally created this post back in June 2019 but for some reason it ended up in the drafts instead of being published. Since then my speaking out on this issue has resulted in so much aggravation on social media from those who disagree with that I’ve had to tender my resignation from broadcasting / streaming city council. Before it goes too far and people go after my partners business or engage in criminal mischief like they have with the Mayor of our town. (those links may stop working later in 2020 once the hosting runs out on my gftv.ca site and if I decide not to carry on with it)


I’ve been reading this HuffPost article Why America Can’t Solve Homelessness. Hobbes has brought some ideas to my awareness. One of them is the topic of the post.

As the economy has come out of the Great Recession, America’s unhoused population has exploded almost exclusively in its richest and fastest-growing cities. Between 2012 and 2018, the number of people living on the streets declinedby 11 percent nationwide — and surged by 26 percent in Seattle, 47 percent in New York City and 75 percent in Los Angeles. Even smaller cities, like Reno and Boise, have seen spikes in homelessness perfectly coincide with booming tech sectors and falling unemployment.  
In other words, homelessness is no longer a symbol of decline. It is a product of prosperity. And unlike Eric, the vast majority of people being pushed out onto the streets by America’s growing urban economies do not need dedicated social workers or intensive medication regimes. They simply need higher incomes and lower housing costs.

from the HuffPost article Why America Can’t Solve Homelessness

In my 13 years of covering local politics I’ve seen various topics become the major fire under council’s butts. Heavy handed dealing with volunteer organisations. The Deer Problem. Is Garbage Collection really a function of the City? The Universal Residential Water Meters. The Homeless.

Even though our town was hit by the worst flood in its history last year (2018) it’s really that last one, The Homeless, that is the major problem council is taking heat over at this time. This problem was inherited from the previous council in that it was already a hot topic before last fall’s election. And had been the major issue bugging the town and council in these first two years of its 4 year term.

The previous council’s way of dealing with the problem posed by the persistent homeless camps along the river and rising friction between the more scary homeless and the public was to evict the main support they had, soup kitchen / thrift store and bad weather shelter, from the city owned property they occupied. And then tear the building down leaving the non-profit society to fend for itself and find a new location. Simple solution to a complex problem. Except it didn’t solve anything – we still have the homeless. The druggies. The petty thievery.

And rising affluence isn’t just transforming the economic factors that cause homelessness. It is also changing the politics of the cities tasked with solving it. Across the country, as formerly poor neighborhoods have gentrified, politicians are facing increasingly strident calls to criminalize panhandling and bulldoze tent encampments. While city residents consistently tell pollsters that they support homeless services in principle, specific proposals to build shelters or expand services face vociferous local opposition.

Gee – let’s see: I was just reading about a nearby town, Penticton, bringing in stricter bylaws about hanging about and in the article they referred to a recent panhandling bylaw, Bulldozing tent encampments – we just take them down but bulldoze the soup kitchen and shelter. We have the last bit too – more on that coming up,

In our Canadian government system there are governmental entities called Crown Corporations. They are funded by taxpayers. They have mandates. Unlike other parts of the government, such as departments of the various government ministries, a Crown Corp. enjoys certain exemptions. They are on a mandated mission for the Crown and under our parliamentary system the Crown is the head of government. (we have a Queen even though she’s in another country on the other side of the ocean). So they can, and do, behave in a ‘my boss beats your boss’ way when it comes to other members of government.

In my province, British Columbia, there is a crown corporation called BC Housing. It’s mandate is housing for the people of BC. Shelters. Low-income housing. Supportive housing. Transition Houses. People who need it but cannot afford it.

Last year BC Housing responded to the needs of Grand Forks with two housing projects.

One was to provide a little over 50 low income housing spaces. A whole chunk of our town has been told that their properties are going to be bought out. And the land go back to being flood plane. A certain number of the people who lost almost everything last year are low or fixed income. The cost of buying a new house are beyond many. Two years ago they had a house. This year they’re living in trailers or rentals (if they can find them) or doshing down on a friend’s couch or squatting in a house that will eventually go away. The city would like to retain as many taxpayers and spenders as possible. But housing was a problem before and rentals very very scarce. They are there but all full up.

The other BC Housing project is Supportive Housing for the Homeless.

Both projects have gotten a lot of push back though the supportive housing has created the biggest waves. If you read the HuffPost article at the top you’ll remember that this push-back happens everywhere.

People have been offended by the way BC Housing went about the whole process. They employed a numbered company and used an out of town real estate agent to represent the buyer. So the seller had no knowledge of who they were selling to.

BC Housing says that this is because if they were open about their plans inevitably the prices for the properties they desire would get jacked up. That sounds like a valid reason. But I think there’s more to it than that . . . I think that they’d rather side step the onerous and interminable process of public consultation and angry recriminations that would ensue.

Some on City Council felt offended that BC Housing did not consult them. The public feels like they should have had a say as well.

Let’s see how that would go: BC Housing says they want to put in a Supportive Housing project that would house 40 homeless people. Almost immediately the rumours and predictions and scary scenarios would pervade social media. People would start to hammer local politicians with questions about the project. Where will it be? – not in our backyard. Who would be there? – druggies and criminals. Who would pay for all this? – and why all this money for losers? Won’t they bring in druggies from other towns if they can’t fill the beds with the ones from here?

As more and more people’s fears are stoked the more pressure city council will get. I’ve seen the way people treat council and it’s not pretty. They do not understand how it works. Or what council has power over and what it has no power over. If a government is doing something people don’t like then the closest government gets the treatment.

Unlike Provincial or Federal politicians city councillors live in the communities they govern. People can stop them on the street, in the checkout line or anywhere and start questioning. Or complaining. Or threatening – meaning no more votes for you. And most local politicians stand alone without the backup of a political party.

So local politicians are much more amenable to public opinion and petitions and town hall gripe sessions. Savvy civil servants know this. So if you were in the position of BC Housing with a mandate to get x number of housing projects / units done in a given time period then why would you engage with the local political process knowing it will likely bog down and get ugly?

I hear many of the arguments against it. One type in particular I find curious. It goes something like “we’re such a soft touch that they hear about it an come here. Other towns send their problem people here to our town.”

No matter how many times people who are in a position to know the real facts explain the fallacies in those statements the message does not get through. When they say most of the homeless are people who grew up here, that it’s a small cohort that are the real problem . . . either they are not believed or it doesn’t stick.

I’ve heard the local RCMP detachment head say twice that most of the homeless we have are from here and yet people keep ignoring that. Even politicians. When the Mayor mentioned that the bulk of those served by the soup kitchen were poor and elderly and not the thieving-drug-monkeys (not his term but one locals have coined) the gallery loudly scoffed. As if he was joking or telling a lie. When the BC Housing director for a big chunk of the interior of the province told the public that she hears the same fearful mistaken impressions in almost every city she serves it was clear that half the crowd did not believe her.

It’s a relatively easy thing to check on. And if you just watch the national news you’ll see homelessness is a serious problem very many places. But people insist on holding onto the mistaken idea that somehow we’re extra specially bad.

It is true that the homeless have become more of a visible problem in the past while.

I often encounter the idea that the druggies are leaving used needles in public spaces such as playgrounds and parks. Where the unwary can get jabbed.

Perversely many of the same people who pass that horror story on will also express shock and revulsion that the city has put sharps disposal containers in places downtown. It’s a waste of taxpayers’ money they say. It will somehow make the problem worse , , , maybe emboldening the needle users.

When I point out that there were sharps disposal containers posted in public spaces back in 2004 before this latest crush of homeless I get blank stares. Or “See!” as if it backs up their argument somehow.

Every needle places in a disposal container is one that isn’t laying in wait in the grass. (had to point that out to our previous Mayor) But logic doesn’t appear to apply.

This has been a long winded preamble to the topic of the post. Thanks for bearing with me so far. I’m getting to it.

I’ve been turning that idea over in my head. It’s caused me to reflect on some of the things I’ve seen in my life and heard about in history.

The first big Stock Market Crash of 1929 was caused by smart money speculators pumping the values of stocks up because they could. Because so many naive members of the public were putting their money into stocks. And then the smart money was dumping those stocks when they could reap the best profit. Doing this in such a way that the knock-on effect caused a run on the banks which couldn’t withstand that. Artificially valued stocks devalued over a few hours and millions lost everything.

Back in 2008 we had another event instigated by the financial services segment of the economy. Huge collections of crap mortgages were incorrectly valued as good mortgages and used as financial underpinnings for businesses and fortunes. When those mortgages began to fail, as was inevitable given the greedy way the whole thing was done, many people lost billions of dollars.

We’re now learning about how the pharmaceutical industry has been ruining the lives of millions with opiods because it’s profitable to do so. From the makers to the national distributors to the politicians it’s clear that laws will be broken if it means profits will be made. And if people are getting addicted and lives are being ruined in the process they are just roadkill on the path to more profits. CBS 60 minutes lays out how conniving by big pharma enabled a drug like Oxy to be relabelled into a category that helped to create the opiod crisis the USA is in now. You might not be able to view the video but the text is pretty explanatory.

Not long ago I watched a Fifth Estate piece, Kickbacks Caught On Camera, about how most pharmaceutical reps and pharmacies in the largest province in the country regularly break a law that says kickbacks are illegal. That drives the price of medicine up.

Recently I watched a 60 minutes piece on a price fixing scheme where the biggest Generic Drug makers conspired to drive the prices of some medicines up by hundreds of percent. The term I remember from that is that these companies had become “Too Big To Care” about the ultimate user.

I hear about how the USA doesn’t like that China has played a game where companies doing business there were obligated to share their expertise and tech with their Chinese counterparts. The companies complained to US embassy and government officials but didn’t want them to push the topic too much because they didn’t want to be shut out. This kind of technology theft by coercion is one of the problems the USA has with China. It could have been head off decades ago by forcing China to play fair but that wouldn’t work for Big Business so it was left alone.

Time and time again we learn about how Big Business is caught screwing the system. Engaging in criminal behaviour, damaging behaviour, hurtful behaviour – all in the name of profit.

Add to that the growing gap between the rich and the rest of us. The downward pressure on the middle class.

Real Estate prices are rising fast. Vancouver BC has become one of the most expensive cities to live in in the whole world. Families with both parents employed find it hard for afford property. Some families are living with other families as room mates just so they can have a house.

Vancouver and Toronto have been drivers of house pricing in Canada over the past few decades. Price rises in these cities eventually are followed by rises in smaller markets.

But now we learn that a significant driver of pricing in Vancouver has been money laundering. Not just in the real estate market but also in government regulated casinos. Apparently for a number of years people could show up with bags of cash – literal bags of cash – and the casino would take it in and later on pay money back. Clean money. And when regulatory agents reported and warned about this nothing happened. Action was stifled at a high, political, level. Because someone was making a profit somewhere.

So those who are really rich, and some who work for them, manipulate the system in ways that enrich them but impoverish everyone else. It’s a game that only the wealthy can play without suffering.

I can see how people have a problem with Capitalism. While it might rightfully be the Capitalists that are the problem the system is the way they want it to be. Because they can afford to make it that way.

So how do you fix that?

Well for homelessness you might look to Finland.

Categories
politics social commentary

Trump’s plans for housing

Trying to understand Trump can be confusing at best.

He says on the one hand he’s there to help those left behind by the mess the ‘elites’ have made. On the other hand he’s filthy rich and most things his administration does make things easier for the rich and harder for the working schlump.

This last week I read two stories about Trump’s administration related to having a home or not.

First let’s look at the buying a house part: (https://beta.washingtonpost.com/business/2019/09/10/trumps-housing-finance-plan-will-make-mortgages-more-expensive-especially-black-borrowers-say-housing-groups/ )

Fannie Mae and Freddie Mac are the entities that purchase mortgage loans and package them into securities they guarantee. Fannie is the Federal National Mortgage Association and Freddie is the Federal Home Loan Mortgage Corporation.

They are government sponsored enterprises created near the end of the Great Depression of the 1930s to “the organization’s explicit purpose was to provide local banks with federal money to finance home loans in an attempt to raise levels of home ownership and the availability of affordable housing … expand the secondary mortgage market by securitizing mortgage loans in the form of mortgage-backed securities, allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on locally based savings and loan associations (or ‘thrifts’).”

Essentially to help create and maintain a housing marketplace where citizens can afford to buy homes and home can afford to be built.

Trump’s administration has this plan to overhaul the country’s housing finance system. Part of it is to end government control of Fannie Mae and Freddie Mac.

Fair Housing and Lending groups say this will make mortgages more expensive for minority borrowers and aspiring homeowners in the South Midwest and Rural communities.

Why would they say that? Because it would change the direction from citizen centered to profit oriented “The plan is a potential windfall for hedge funds that have invested heavily in the companies’ stocks.”

Those that know say this will make it harder for those at the bottom and edges of the economy to become home owners.

With the way the economy is going it is becoming harder and more expensive to hold onto that home once you’ve got it.

Property values are climbing and with them taxes. The single biggest portion of household debt is rent or mortgage. And it gets bigger each year. Faster than pay cheques increase for sure.

And the employment market is changing as well. More of the old dependable well paying jobs are being replaced with lower paying and gig style employment with less benefits.

So at a time when people are faced with more costly living they are also put into a less beneficial working environment. Which means even more people are close to that ‘one missed pay cheque and you lose your home’ situation. Or one unexpected large bill. Or one accident.

Did you know that in many places by missing just one bill payment on any bill your bank will jack your credit card interest rate up to %29? So that tight home finances plan your family had gets even tighter. And slipping through the crack gets even easier.

That’s how people get squeezed out of the system and become homeless. And once they are homeless it’s a very hard slog to get out of it.

These days many jobs do direct payment for payroll. But that requires you to have a bank account and if you’re homeless with no fixed address good luck getting one of those. Potential employers want people who can and will show up for the job consistently on-time. Homeless people aren’t seen as fitting into that category of hires. Writing resumes, having clean clothes, having a phone to call back on – these things are essential to finding a job and not easy to have if you’re homeless.

Homelessness has a stigma attached to it.

Many people who are not homeless don’t understand and are scared of the them. They are seen as lazy, drug using, petty criminals who litter the streets and parks with their little tarp shanties and discarded needles and bottles. While that may not describe the majority of the homeless it’s the perception the rest of society apparently has.

The homeless situation in quite a few US cities has become very bad. Los Angeles has 60,000 homeless living within it. Nearly all cities in California have serious, crisis level, homeless problems.

Trump’s administration has a plan for them too . . . (https://beta.washingtonpost.com/business/2019/09/10/trump-pushing-major-crackdown-homeless-camps-california-with-aides-discussing-moving-residents-government-backed-facilities/ )

The title says it all: Trump pushing for major crackdown on homeless camps in California, with aides discussing moving residents to government-backed facilities

  • What government backed facilities are they talking about? Where?
  • Who will run these facilities? Government or Private?
    IF it’s private businesses – how much funding will they get?
    How much profit taking will they do?
  • How did the last government mandated housing for undesirables work out? The places they send illegal immigrants to.

And if it’s a crackdown and the homeless don’t want to leave sunny California for some other place what happens then? Will they be rounded up by force like ICE raids do for illegal immigrants?
When they resist will they be charged with a crime and sent to Administrative Detention camps?

As many point out the actions of this administration have tended to cut supports for the homeless and make affording a home more difficult. This all exacerbates an already bad situation.

But maybe it all works out for the best in Trump’s mind.

  • The homeless will never stay at a Trump branded facility.
  • His big money friends will make even more profit from all of this.
  • Doing something to get the homeless out of people’s sight and mind will likely play well with his supporters after Fox News has massaged the story.
  • And he gets to beat up Democrat city’s administrations and politicians while doing it.
Categories
politics

The other shoe drops on Cuba

In a previous post I worried about the ramifications of a shift backwards in US policy towards Cuba and how it could affect Canadian businesses.

Essentially the unwinding of Obama era shifts meant than Canadian (and other nations’) businesses could be sued if they did any business with any Cuban entity associated with the Cuban military. And that covers more business than you’d think – most of the hotels for instance. An additional complication is a Canadian law, Foreign Extraterritorial Measures (United States) Order, which ” bars Canadian companies from complying with any U.S. law that seeks to limit their business dealings with Cuba.” And the Canadian business person could face prison time.

In 1996 the Helms–Burton Act was passed. Title III allowed Americans to sue companies from other countries that operate out of properties and facilities that the Castro government seized (nationalized) after the revolution. This was originally intended to target European companies but every president since has chosen not to enforce Title III so as to keep trade between the US and others unencumbered and unaffected by the legal morass that would happen if the law were enforced.

Well the current president has decided it is time to take that step . . . and as unpredictable as he may be the reactions to this are predictable. Canada and others are pushing back.

But how effective that might be is another matter – lawsuits in US courts against non-US entities are possible. Let’s say a Cuban exile family sues a Canadian company doing business, and making a profit, with an arm of the Cuban military that operates an economic entity that was nationalized by Castro. Canada will take any judgement US courts levy out of the assets of US interests in Canada . . . but if the entity bringing suit (a family) has no assets in Canada then what else can Canada do? As I point out in my previous post how bad it could get would be whatever US courts decide to do. Impound expensive airliners until a payment is made? Seize property and other assets for forfeiture sale? Could happen if things get moving along this direction.

So where does that leave the ‘best friends’ relationship Canada and the USA have enjoyed?

Categories
politics social commentary

Working with victims of disaster

Nearly 4 months ago we were hit by a devastating flood – the worst in our history. It’s left large areas of our city unoccupied and in question of restoration.

During this I heard the experiences of those affected, saw the way things worked or didn’t.

Suggestions to those who have to work with the victims of disaster:

  1. Put yourselves in the places of those you are helping. If you can’t envision what that is like go to where their losses happened, usually their houses or businesses, and spend some time with them there. If you think you know everything there is to know and haven’t visited their disaster then go visit because unless you’ve done this before you’re fooling yourself.
  2. Do Not Assume you have thought of everything they are facing – details you missed could be devastating to them.
  3. If you’re processing applications and see a pattern that leads to failure of applications then when you are working with someone who fits that pattern address the issue that might result in failure first so you don’t push them to put in a lot of difficult, unnecessary, and possibly expensive, data gathering for nothing. They won’t hate you as much.
  4. Don’t hide the truth from them because you think it will be hard to take now. Think about how hard it will be to take down the road when they’ve committed to a fruitless course and / or spent all their available resources on a dead end.
  5. Don’t give them vague guesstimates that you think might be wrong but don’t want to say I don’t know. It’s better if they get as much data as possible early so they can make informed plans for their future.

These few points are some of the things I’ve learned by watching how the disaster of our historic flood has unfolded. The reasoning behind my suggestion I expand on below.

1 – a few weeks after the flood the extra police were sent home. The EOC (Emergency Operations Centre) still had a security firm patrolling the Ruckle area but a week later the contract was cancelled. Why? The EOC thought that by now people were back in their homes so it wasn’t needed. But no one was back in their homes. No one from the EOC had come to the area to see first hand that simple fact. So theft and looting happened.

2 – After the flood waters receded people were in their houses and ripping out all the water and sewage damaged items, appliances, furniture, wall-board and flooring. When this was taken to the dump these people were faced with huge tip fees even though everyone knew that these would all end up being paid by some level of government. For a few weeks it was business as usual at the dump. Busy though.

3 – many businesses have been turned down by their Insurance because they did not have flood insurance. And then turned down by the DFA because they did not have flood insurance.  I just heard of a small owner / proprietor who this happened to but they didn’t learn about it until after they’d paid their business accountant hundreds of dollars to assemble the financials going back 5 years for the application. The person dealing with it could have saved them time and money by asking them that simple question up front. But they didn’t. And now that business owner is poorer and even more dejected.

4 – the people in Ruckle are facing a possible buy-out. So their houses can be flattened and the land rezoned as non-residential. But the advice they are getting is to keep working on their places, keep spending their money on fixing them up because winter is coming.
What if these people would rather use the time and money they have to try and do the best for their family and find a new job and place to live, even if it’s not here? A year or two down the road when they have to move because there’s no where for them to live, or that they can afford to buy, they will be missing all that money they spent fixing up a doomed property.

5  – My friend was given a guesstimate of 2 months before she’d be back in her place of business. It’s past 3 months now. The landlord says they don’t know when the store will be available. I know that nothing has been done for weeks and I’ve learned that nothing will be done until an engineer or geo-tech gets in to look at it. Which might not be for months. Every month that goes by my friend loses 12 to 14 thousand dollars. If she’d known this months ago she might have made alternative plans for the interim but now she’s out of pocket over $20K and it goes up (or down) every month she’s not back in a store.

There might be more lessons learned but those are the ones most pressing to my mind.

 

Categories
politics social commentary

There was this dream . . .

Trump is reported to have called a lot of places ‘shit holes’ and ticked off many people and nations around the world.
After years of building and maintaining a global reach for their economy, culture and military might, the top spot in the dreams and aspirations for people and nations struggling around the world – along comes Donald Trump who erodes it and then spits on it with a shitty comment about shit-hole countries. What a shithead thing to do.
Whether or not he’s Putin’s stooge, he is unilaterally doing much to boost the power and influence of China just as it expands out in to the world.
Why do I say that?
Every country he ticks off, every deal he reneges on gets attention soon afterwards from China. China is making friends and deals in the vacuum Trump leaves behind as he dismantles the Dream of the USA in the minds and hearts of all those who dreamt it out there in the wide world outside the USA.
As more and more dreamers begin to think the USA is not the place they really want to be, and that it doesn’t want them also, one could say they begin to wake up. And once they’ve woken they might find the rose colored glasses they’ve been regarding the USA with are gone. And the USA then becomes just another country . . . maybe special in some ways but not the end all be all they used to think it was.
At some point enough of the cultural trend setters in nations around the world will wake up. And their effect on those who they influence will not be good for the USA.
Already technical schools in India and China are regarded as viable, or desirable, alternatives to American ones by a growing number of bright future scientists, engineers, and intellectuals in many ‘developing’ nations.
Bollywood makes more movies than Hollywood.
China is ramping up to also be major competitors in that game, making ‘hollywood’ movies with American actors and directors in China.
As time moves on more and more bastions of what used to be uniquely American culture will be invaded, or replaced, with products, ideas and art from other countries.
The USA will drop from the Top of the heap down into the ranks of being Just Another Country.
And as it’s influence wanes so might its economic fortunes.
The status and standard of living it promotes require a certain basic minimum amount of economic prosperity. I find it hard to think that a drop in status and influence wouldn’t be reflected in a downward change of economic fortune as well.
What worries me is when the USA gets screwed into a corner economically and begins to find it hard to pay its banker. Or its Bonds. That narrows their options greatly. In bygone times when this happened to monarchs one of the options open, and sometimes taken, is to not pay your banker. And fight them, destroy them, if you have to.
Apparently China is their banker.
Reportedly it owns their debt.
It makes most of what they buy.
But that won’t happen, you say. Saner heads will prevail before it comes to that, you suggest.
But will they? I ask.
They had a tough time for a few years. Courtesy of unrestrained greed in their financial industry. It also roughly coincided with the rise of the Tea Party and a rising wave of distrust of institutions within the USA. And in reaction they elected Donald Trump president. And he’s talking tough and rough and pissing off many people within and without of the USA.
Who will be in control when the whole mess has slid into the dumper and shit hits the fan a few more years down the road?
When faced with intractable politics, and nearly unfixable economics, will that President take some ‘God given right’ tack about the USA getting its own way?
What a pickle.
For all of us.
As we chew on that more dreamers are waking up. Realizing that the fortunes they dreamed of in that far off place called America aren’t going to happen. But maybe they can remake the places they live to be more like where they want to live.
The more of them that wake up the closer we get to that world described above . . .
Categories
politics

Canada Cuba US Business Hazards

With President Trump’s recent rollback of Obama era changes to Cuban relations have come new challenges to Canadian firms.

In this CBC articleU.S. punishes American firm after its Canadian subsidiary leases cars to Cuban embassy in Ottawa” a number of pitfalls are pointed at.

The gist of the article is that a Canadian subsidiary of American Honda Finance Company leased 13 vehicles to the Cuban embassy in Ottawa. The US government has regulations that forbid US firms from dealing with Cuba and they have fined the American parent company $89K in response.

Even though it’s a Canadian company doing business in Canada it is a subsidiary of an American company being held to American law which the US government feels it has a right to do. Some think this is “interference with a Canadian business transaction.”

How about Canadian companies doing business in or with Cuban companies?

It’s complicated.

From the text of the article:

“in 1992 Canada enacted the Foreign Extraterritorial Measures (United States) Order, which was passed in response to the passage of the Cuba Democracy Act in Washington the same year.

The order requires any Canadian company that is contacted by U.S. authorities responsible for enforcing sanctions to notify the Canadian federal government. The order also bars Canadian companies from complying with any U.S. law that seeks to limit their business dealings with Cuba.

A Canadian businessman who pays a fine such as the one levied on Honda could face five years in a Canadian prison as a result.”

So what’s a Canadian business to do: comply with Canadian law or American law?

Let’s say you are a Canadian business person who wants to comply with Canadian law but also desires to do business in Cuba. If you have business interests in the US then you have exposure – the US government could retaliate by punishing those businesses directly. If you don’t then you have to only worry about what might happen if you find yourself visiting the USA because if they find your violation serious enough in their eyes then you could be arrested and detained until they decide what to do with you.

Situations like this are part of the power of the US embargo. It keeps businesses afraid of doing business with Cuba.

It gets worse though . . .

“One new prohibition in the measures announced by Trump in Florida Friday could have particular consequences for Canadian companies that have U.S. affiliates or U.S. ownership.

They specifically prohibit all business dealings with businesses owned by the Cuban Armed Forces.

… many of the island’s hotels are majority-owned by the Cuban military …

Consequently, almost any foreign company involved in Cuban tourism is likely to have dealings with the Cuban military’s enterprise group, GAESA, or one of its holding companies, such as the Gaviota Group.

… Gaviota works with numerous Canadian entities, including Sunwing Vacations, Air Canada Vacations and Transat Holidays.”

Those last three companies are subsidiaries of Canadian airline companies.

What’s the worst that could happen?

Let’s say the US government tells those companies to stop what they are doing – cease arranging vacations for Canadians (and anyone else) in those Cuban hotels. And let’s say that they try to comply with the Canadian law that counters that.

The US could theoretically impound every Sunwing, Air Canada and Transat airliner that finds itself on a tarmac within the USA. Passengers would be left to find their own way home because employees of said companies could also be detained and prevented from doing their jobs. That would be disaster for those companies and disaster for US/Canada relations.

Potentially flights from Canada to Mexico and points south would have to circumvent US airspace because if they found themselves within the territory of the USA they could be forced to land at a US airstrip and face legal measures.

Think I’m being alarmist?

This New York Times article ) from 1996 tells the tale of a Canadian mining company doing business in Cuba and the legal issues it faced. The US government warned that non-compliance meant that executives, and their families, would be barred from entry into the US if the firm did not comply. This same threat was posed to executives from telephone companies in Mexico and Italy.

This was the Helms-Burton law and it was enacted under Bill Clinton. For more info here is the Wikipedia article on the Helms-Burton Act.

The first point is “International Sanctions against the Cuban Government. Economic embargo, any non-U.S. company that deals economically with Cuba can be subjected to legal action and that company’s leadership can be barred from entry into the United States. Sanctions may be applied to non-U.S. companies trading with Cuba. This means that internationally operating companies have to choose between Cuba and the U.S., which is a much larger market.”

Now I still to do more research on the history of application of the Helms-Burton act over the past two decades to find more useful information. But my inner Cassandra is having a field day with this because Trump has added this twist about doing business with the Cuban Military and, like the Egyptian and other militaries around the dictatorial world, they have their fingers in many of their country’s economic pies.

 

 

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politics social commentary

Do your jobs correctly or we all pay

A few times I’ve pointed out to councils that wording and language of (by)laws is important. You get it wrong and your law is wrong or ineffective. The wording may come from professional staff but it might also come from a group of people who won a popularity contest too.
Well it turns out that back in 2002 the Missouri state legislators made a few changes and no one noticed until recently that an unintended consequence is that most ‘stealing’ offenses are no longer felonies but misdemeanors … so those charged and / or convicted of a felonious theft in that state since 2002 have a strong case to fight that and get it whittled down to a misdemeanor. I say strong because the state supreme court has agreed – the legislators really screwed up.
I predict a booming business in headache remedies near courts and state attorneys offices . . .

 

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politics Uncategorized

Breaking up for profit

It’s late and I’m reading the latest on how much of the mainstream media seem to want to pile on the anti-Bernie hobby horse, this time the way they have gone along with the New York Daily News’s crappy editing of their editors’ interview with Bernie. Portraying him as weak and wishy washy about one of his main planks – breaking up the too-big-to-fail (TBTF) banks.

The New York Times gets it right in this piece: http://www.nytimes.com/2016/04/07/upshot/yes-bernie-sanders-knows-something-about-breaking-up-banks.html?_r=0

Anyway – the point of this post isn’t about how corrupted and manipulated the media can be, nope it’s about that plank. Breaking up the TBTF Banks.

When I read the part where Bernie is asked about his bill and the statement “Speaking broadly, you said that within the first 100 days of your administration you’d be drawing up…your Treasury Department would be drawing up a too-big-to-fail list.” And then after that the Times piece points out that “The legislation says that, in no more than 90 days, the Financial Stability Oversight Council, a high-level regulator set up by the Dodd-Frank Act of 2010, would have to draw up a list of firms that appear to be too big to fail. Then steps would be taken to break them up.

A number of things all simultaneously happened at that point. I hadn’t really thought about it and part of me found the idea vaguely unpleasant on first blush. The unhappy feeling of people mucking with the banking system that is rather important to the proper function of our society.

But almost right away I heard another little voice pop up in my head that said: “Would that be so bad?” And that was answered right away by that same little voice saying “Wait – wouldn’t that be like a Good Thing from a shareholder’s point of view? Like maybe that would be more profitable in the long run … wouldn’t it?”

I could tell that this part of my brain was reflecting on the stories, books, documentaries and movies I’d been exposed to over the past few years. In large part the Big Short and Flash Boys, by Michael Lewis, informed my thinking.

In Flash Boys there’s a part where he explains that one of Brad Katsuyama’s team members had done a study of financial system regulation, and systemic response, going back over a century.  What he found was that every regulation brought in to close a loop hole that had been abused for profit created another. The sharp operators in the system then identified the new loop holes and worked out ways to exploit them profitably and that was business as usual until it became greedy profit taking with grievous consequences. Which made the regulators come up with new regulations to close those holes but inevitably flaws exposing exploitable loop holes were found. And the wheel goes round and round and never seems to stop. Greedy people with lots of money employ sharp minds to find ways to make more money with these flawed systems.

So some part of my mind was ‘thinking deviously’ when it looked at the idea of breaking up TBTF banks. And I remembered when I’d seen that before: AT&T. After long years of the USA vs AT&T it came to a watershed moment when AT&T got broken up into 22 smaller phone companies. And within the decade some of those ‘baby bells’ became some of the more profitable companies in the American economy.

So think of it like stock splits. The stock price per share gets higher and higher as the company’s value increases. So the 10,000 shares you bought at 22 cents each climb to $22 and then $220 and somewhere north of that they split the stock and instead of having 10K or $220 each stocks you have 50K of $44 each stocks. Your value is intact, just the numbers expressing them are different.

Well if a TBTF bank is broken up it’s not like they’re being punished for being bad. They’re being split into smaller units. If you had shares in the big TBTF entity before the break up you’ll have some sort of equitable part of one of more of the new entities coming out of the process. And if you do end up with investments in multiple things that means your risk is spread over multiple things.

So I’ve got to think that the smart money will figure out a way to have this work out for them. And the process of getting big enough to be broken up could just become a new part of the evolution of American businesses. Something akin to the change that happens when a privately held company goes public. Founding -> growth -> IPO -> massive growth -> breakup => smaller entities => growth.

It could become a sign of having made it – becoming a TBTF entity. Maybe a thing to strive for … a profitable thing … maybe.

It might be a stupid idea but the again is it any weirder and stupider than Credit Default Swaps being treated as something real in any sense other than they make someone money?

 

 

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politics Uncategorized

Ted Cruz says more cops for Muslims

It’s the day after the March 22 Terrorist Attacks in Brussels.

I just read an article on the Washington Post about would-be-presidential-candidate Ted Cruz saying law enforcement should ‘secure’ Muslim neighborhoods. That they need to “patrol and secure Muslim neighborhoods before they become radicalized” is part of the quotation.

Now I’m a bit perplexed because this doesn’t jive with a conversation I heard last night in the immediate aftermath.

In that conversation a ‘talking head’ was explaining the differences between Muslim communities in European countries and the USA and how their respective relationships with the national community worked for or against radicalization.

The gist of his argument was that in many European nations there are large communities of Muslims who feel distinct from the national populace through the forces of poverty, racism, language/cultural barriers. In these communities the people aren’t as disposed to talk with anyone from the government or police about the disturbing behaviors some of the unemployed young men might be up to. But in the USA the experience has been that parents, imams and community people with real concerns have felt okay to come forward to authorities with those concerns.

That made sense to me.
If people feel like they are part of the community at large then they will buy into concepts like civil obedience, obeying the law, and looking out for the community at large. If they have jobs they’re happy – if they don’t they’re unhappy.
If they can’t find a job they get depressed. If they feel shut out mistrusted, marginalized and segregated they get angry. These conditions are perfect for radicalism. Even if not all of them exist depressed, unemployed people can be persuaded the rest of those conditions do exist.

The talking head was trying to reassure the American news person that this difference helps insulate America from radicalism in a way that many European nations aren’t.

So what if the police followed Ted Cruz’s desires? More cop cars cruising more often.

What if you were a member of a minority and the government / police all of a sudden began patrolling your neighborhood more often. Began public outreach programs that showed how afraid they were of you, your family and friends. Would you feel more inclined or less inclined to go to them with your concerns about a sibling, cousin, friend, neighbor who is sliding towards radicalism?

I suspect most of you, if you’re being honest with yourselves, would feel less trusted by and in turn be less trustful of the government that did that to you. And feel that instead of getting help with getting your cousin back on the right path the government might be more inclined to put them on the path to Guantanamo instead.

Ted Cruz may be serious about his suggestion to police the Muslims better but he’s also running a political campaign. And statements like that are all about garnering sympathy (and votes) from the fear of a part of the population that should know better but for whatever reason does not.

If anyone needs more attention to keep them from hurting the rest of us with their radicalization it’s the politicians – especially those running for the candidacy of the Republican party in the USA. Not because of their party affiliation, this is the party of Lincoln after all, but because of the extreme statements coming out of their mouths. Words of fear, mistrust, anger and ignorance don’t jive with being the most powerful nation on the planet OR being the example of freedom and democracy for everyone else.