Mock Turtle

It’s amazing how self-reinforcing some concepts can be. For example, the idea that a GST cut is a stimulative action.

It’s true that consumer spending in Canada hit new highs concurrent with the 1, then 2 per cent cut in the GST. Other factors, such as the wealth effect from a peaking stock market, ballooning house prices, and overshooting oil prices, and the short-lived period of Canadian dollar parity with the U.S. dollar at the same time were, of course, the real cause of consumer buoyancy.

But then the UK, as part of a comprehensive stimulus package introduced last month, brought in a cut of 2.5% in the VAT. One small, and somewhat derided element of a 20 billion GBP package that included far blunter tools, and now everyone thinks it’s a good idea.

OK, maybe not everyone. But Derek Decloet this morning has a column suggesting that a GST holiday could be just the stimulus the Canadian economy needs — perhaps a perfect way to help Canada’s beleaguered automakers. Right. Because while no one’s buying cars at the fire sale prices now available, another 5% off, and they won’t be able to resist!

Has Decloet talked to any of the other people in the ROB newsroom? Retailing reporter Marina Strauss, for example, who might be able to talk about the 20% drop in sales some retailers are experiencing this Christmas, even though they’re offering Boxing Day pricing 3 weeks before Christmas? Or maybe Greg Keenan, the auto reporter, who could show him a neat graph showing how sales and prices of vehicles are falling simultaneously in Canada? (OK, I don’t know if he has a graph.)

But not to single out Decloet. There are also the folks at economics blog Worthwhile Canadian Initiative, who have begrudgingly come around to the idea that things *might* get bad enough in we’re-so-special Canada to require, at some ever-closer point in time, fiscal stimulus of some sort. While in theory they’ve no objection to infrastructure projects, our construction workers, they believe, are going to be tied up for the foreseeable future in endless condo building and [cancelled] oil sands projects, so why not just cut the GST — it’s easier! To be fair, they raise some questions of their own:

A GST cut, announced as temporary, like in the UK, could be the weapon of last resort. People would increase spending while taxes are low. It could be implemented quickly if needed. It could have a big temporary bang for the fiscal buck. But we cannot be 100% certain that people would increase spending. And I’m not 100% certain how it would influence deflationary expectations.

Again — prices for many goods, such as flat-screen TVs, are lower this Christmas than last. Aren’t the “deflationary expectations” already there? Does no one else read the retail news in the paper? Does online shopping blind us to changing price environments? Another 5% off is not going to cause anyone to buy anything if they think they can get it for 10% less in two months. Just back away from the GST cut, please, and find another instrument in that fiscal toolbox.

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I’ve long thought that Thomas Frank, author of What’s the Matter with Kansas and One Market Under God, editor of the late, much-lamented The Baffler, and current WSJ columnist, was my psychic twin. Here, from his latest book, The Wrecking Crew: How Conservatives Rule, comes the proof:

Now, I’m the kind of guy who believes there is a wholesome quality to cynicism. I think it’s healthy to laugh at the powerful and the at the rococo fantasies they dream up in order to rationalize their exalted place in the world. One of my favourite books is a 1931 compilation called Oh Yeah? made up entirely of optimistic quotations from the great economists and bankers of that era, interrupted every now and then with charts and headlines about the ongoing disaster in Wall Street.

I must find a copy — or start drafting my proposal for Oh Yeah – 2008 Edition.

This little gem from a later chapter, on Moral Majority founder Howard Phillips’ imperative to “defund the left,” might sound just a little familiar after these last couple of weeks:

As political entrepreneurship goes, this was something new: a plan to systematically destroy or redirect the income of the other side.
….
In explaining his “defund the left” approach, Phillips was fond of quoting a Thomas Jefferson pronouncement — “To compel a man to furnish funds for the propogation of ideas he disbelieves and abhors is sinful and tyrranical” — the idea being that by spending tax dollars on programs conservatives disliked, the government was violating basic American rights.

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We’ve now had a chance to sample (er, consume) most of the wines we bought in Niagara on the Labour Day weekend.

We liked all the Niagara College Teaching Winery wines we bought, without falling in love with any of them. They all struck us (perhaps predictably, in retrospect) as somewhat textbooky, good examples of what they’re supposed to be without being really interesting. We seem to have managed to consume both bottles of the 2006 Chardonnay without taking notes on either one of them. The 2006 Pinot Noir was more memorable: intense cherry-raspberry “Pinot Noir” fruit with notes of cedar and sandalwood. No terroir to speak of, though, and a sense of inflated body — “alcohol that is not very integrated” as J. put it. Not very interesting but decent value for Pinot at $15.95. I thought the best of the three was the Cabernet Franc from the warm 2005 vintage — nose of dried prune with toast and oak and plumminess. Good example of a new-world style Cabernet — doesn’t disintegrate with air, has good tannin. J. thought too much oak, not much fruit, and not much enjoyment.  I don’t think we’d go out out of our way to look for NCT but they are all very reasonable wines and decent value for money.

We’ve now tried both our Black Paw and Red Paw 2006 Cabernet Francs from Coyote’s Run. Unfortunately the Red Paw struck us both as rather anonymous — more of an ungenerous Pinot Noir than a Cabernet Franc. Still they manage to avoid the cabbage-patch underripe Cab Franc effect and it’s not too oaked for what the juice will bear. Young vines, not so good vintage conditions. Worth another try in a better year. Contrary to expectations we liked the the 2006 Black Paw better — cherry, pomegranate, “cabernet spice” and a hint of cedar and toast on the nose. Just a bit more interesting all things considered.

Other Niagara: We’ve had a chance to try both the 2004 Lailey Pinot Noir and the Coyote’s Run 2004 Red Paw which we bought several years ago when we were in Niagara. We liked them both better than the NCT — both well-made wines with red cherry, spiciness, sandalwood and cedar on the nose. We liked the nose of the Coyote’s Run better, while finding the nose on both more impressive than the palate. Usual story — the ideal Pinot for $20-25 simply doesn’t exist. We have another bottle of the Red Paw which we are saving for another few months to see if the oak settles further.

We’ve picked up a number of 2007 whites already from the LCBO. Unfortunately we’re a bit underwhelmed with the standard entry-level Rieslings: both the Cave Spring off-dry and the Pelham Reserve — both excellent in 2006 — are kind of flabby and uninteresting. On the other hand, the 2007 entry-level Peninsula Ridge INOX — a real value at $12.95 at your local LCBO — is excellent: minerals, earth, grassiness, tropical fruit with a hint of citrus. So perhaps avoid the Riesling and go for the unoaked Chards instead this year.

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Caves de Rasteau Tradition Rasteau, regularly available at Vintages, used to be one of our favourite bargain-ish wines (about $16.95). It comes from Rasteau, which if memory serves is a sub-AOC in the Cotes-du-Rhone Villages AOC. (It’s one of the Villages.) It used to be one of those fun southern Rhones with a lot of character for the money. We’ve probably praised it here at some point.

No longer. We brought a bottle to P&C’s last as a complement to a delicious braised beef dish and, well, it’s gone all carbonic. They’re releasing the 2007 vintage now, which should have been our first clue. (It’s also been re-branded as Ortas Tradition Rasteau, with Caves de Rasteau in the fine print to mislead the wary.) Dark colour, forward fruit, no terroir to speak of, and the inevitable cotton candy overtones. It’s still drinkable, but it used to be really good.

Sigh.

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Someone the other day was quoted as saying “$25 is the new $200″ — that is, the new outlier target for oil prices is now $25/barrel. With the price per barrel at $40.81 and continuing to fall, it doesn’t seem like a bold call. The tumbling price of crude has put numerous projects in the oil sands — large construction projects such as upgraders — on indefinite hold, dimming the growth prospects of Alberta, and Canada. And oil wouldn’t have to fall much further from its current level to wreak serious havoc on even existing production:

In a report to clients yesterday, Merrill Lynch & Co. estimated almost 800,000 barrels a day of crude — almost 30% of Canadian total output — could go “off line” if oil prices dip below US$38 a barrel, the break-even price for some projects. Another 800,000 b/d could be shut in if oil falls below US$30.

Commodity prices have fallen off a cliff. Canadians have been assured by their ideologically clueless government that Canada will face a milder, “technical” recession rather than the deep and painful slowdown in the United States. I think the opposite scenario is equally realistic. With a Canadian economy that has become increasingly — since the (once-)high dollar and concomitant neglect by an Alberta-focused government together shrank the productive sectors of the economy — dependent on oil, gas, and mineral extraction, how is it possible that Canada would not, in fact, be harder hit if one-third of Canadian oil production just stops?

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Anti-coalition protester in Ottawa holds up a hand-drawn picture of Stephane Dion as some kind of Communist commissar. Unfortunately, what is written on the sign would be a non-existent word pronounced “ee-oo-yot” in Russian. I’m guessing they were going for “nyet.”

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Almost a decade ago, I was charged at the last minute with taking two Bloc Quebecois parliamentarians to a series of meetings in Moscow. They were more or less an afterthought, which is why they were assigned to me — the MPs from other parties were taken around, to many more meetings, by senior embassy officials. It was only as I was going to greet them that someone thought to ascertain that I, in fact, spoke French.

On the list of scheduled visits was one to the Russian Duma, where the two BQ MPs were to meet their Science and Technology Committee counterparts. The three Duma members, it turned out, were Communists, and hosted us in an office with a fresh and colourful print of Lenin on the wall. After some chit chat about research and development in their respective countries, and a video show by the Duma reps of their appearance at the launch of a rocket (fast-forwarded and rewound so we could see just how comically the beret one of them was wearing flew off his head), the conversation turned to the second Chechen war, recently begun, and Quebec’s own desire to separate.

“But you do want to separate,” pressed one of the Russians, after the BQ representative had tried to steer off the topic.
“We would like to be sovereign, it’s true. We love Quebec, we represent Quebec, but it’s not that we want to hurt Canada — we are really just only interested in Quebec.”
The Duma trio tried to get the Bloc MPs to go further into details on their sovereignty plans. Would they bear arms? Would they have another referendum? The BQ wouldn’t go there, and said, “We’re here today as part of a delegation of the Canadian parliament. It wouldn’t show respect to our hosts to talk about separatism.”

The BQers and I had some empty time on the schedule later — for some reason, there wasn’t a great deal of excitement about meeting Bloc MPs — and sat in a pastry shop continuing, tentatively, the conversation. My conclusion, right or wrong: the Bloc Quebecois, by that point at least, was (and is) not out to destroy Canada. It’s interested in making Quebec a great and prosperous place, and if there is ever a moment in which most Quebecois agree, in making Quebec a more independent nation with continued strong ties to Canada.

I know that from a certain kneejerk English Canadian perspective, this is supposed to make me break out in hives. It does not. And after spending the afternoon with my two intelligent, thoughtful, and well-spoken Bloc MPs, I gained new respect for them and the way they conduct themselves as parliamentarians. They may be guilty of not caring about issues that don’t affect Quebec, but they’re not out to harm the rest of Canada either. They work together with MPs from other parties on committees, they formed the Official Opposition for years, and while many think the seats they use up are a gaping chasm in the House, I’m doubtful the constituents who elect them — still, as of now, Canadian citizens — share the sentiment. There’s no reason for the Governor-General to consider their support for the coalition an impediment to its legitimacy, and there’s no reason for the fearmongering that has, so tiresomely, begun all over again.

…but feel free to disagree.

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First poll on the coalition: 76% of Quebecois are in favour.

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