Modeling Journey

Buffet expects the US federal government to step in with billions more to rescue more companies and also cities and states:

" As the year progressed, a series of life-threatening problems within many of the world’s great financial institutions was unveiled. This led to a dysfunctional credit market that in important respects soon turned non-functional. The watchword throughout the country became the creed I saw on restaurant walls when I was young: “In God we trust; all others pay cash.”

By the fourth quarter, the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country. A freefall in business activity ensued, accelerating at a pace that I have never before witnessed. The U.S. – and much of the world – became trapped in a vicious negative-feedback cycle. Fear led to business contraction, and that in turn led to even greater fear.
This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone “all in.” Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.

Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly.

Whatever the downsides may be, strong and immediate action by government was essential last year if the financial system was to avoid a total breakdown. Had that occurred, the consequences for every area of our economy would have been cataclysmic. Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat."

However, Buffet is still very confident that America's best years lie ahead, and that tumultuous times can be good times to buy.

Rick Mercer Report: Hazel McCallion

I have met Hazel McCallion several times and she is quite the lady. Good segment between her and Rick Mercer. Mississauga is in great hands for now.
-Darryl

Having persuaded Ignatieff that the coalition government was a bad idea, and having gained Ignatieff's support for his budget, Harper just cannot resist showing Ignatieff just who is boss on Parliament Hill.

True to form, the prime minister whom Ignatieff said MPs could not trust, is going to force Ignatieff to eat crow and vote for his decision to give the Treasury the right – without consulting Parliament and without any input by the majority MPs in the House – to spend up to $3 billion on a fast track stimulus implementation.

And the Liberal reaction?

"Liberal Finance critic John McCallum called the fund a “blank cheque” and his NDP counterpart Thomas Mulcair likened it to a “slush fund” – a charge that made Mr. Harper bristle yesterday while talking to reporters in Vancouver."

A toothless reaction, akin to the countless times the Liberals were forced under Dion to kowtow to the bullying Tories and vote to keep them in power.

How sad.

14 million a waste of taxpayer money on Mulroney

I noticed today that Warren Kinsella is all excited about the Mulroney inquiry and calling it a "Conservative nightmare". In reality this is a nightmare for the Canadian taxpayer. At a time when Obama is putting partisan politics aside and the economy first; the Liberal Party of Canada is ready for more partisan games. This time the cost will be $14,000,000 dollars to hold a public inquiry into Schreiber and Mulroney's dealings. The money could be better spent in a thousand different ways. This process of course will further delay Schreiber's deportation to Germany where they are waiting to bring the man to justice for alleged crimes over there. It is also interesting watching Liberals jump on a story that happened over a decade ago and attempt to link it to Stephen Harper ignoring the Liberal sponsorship scandal of recent memory. During this recession we need to be focused on matters that impact Canadians during these tough economic times. It is a shame that parliament and the media is going to be distracted with this partisan witch hunt that is of no concern to the average Canadian. At the end of the day it will be interesting to see if anything comes out of this. I suspect the biggest scandal here will be the money pissed down the drain on inquiry. Anyone care to comment on how you would like to see that 14 million spent instead?

Update: Look who is back in the Liberal Party. So much for that ban for life after the sponsorship scandal.
-Darryl

Why Kinsella blogged about Lois Brown today. Statement in the House of Commons.

For those wondering why Warren Kinsella made a post about Lois Brown today, here is the statement she made in the House of Commons today.
-Darryl

Cannon meets Hillary Clinton

More evidence of the growing relationship between Stephen Harper's Conservatives and the Barack Obama administration. The November election will mean good things for Canada-US relations. Help is on the way in Afghanistan. Omar Khadr was discussed.
-Darryl

Update: Some video of Hillary and Cannon from today. Hillary is coming to Canada and is looking forward to skating on the Ottawa canal. Cannon briefs reporters on his meeting.

"In the light of Canada's experience in Kandahar, I also offered to share the lessons Canada has learned in Kandahar in the areas of training the Afghan National Police, border management and overall reconstruction and development work," Cannon said

Harper's relationship with Obama means "Yes We Can" to a Conservative Majority

Well it looks like Stephen Harper has a hidden agenda after all. It is one of “hope” and “change”. It is an attitude of “yes we can” in our relations with the United States. Yesterday, Stephen Harper did well on his media tour in New York. Canada is on the radar in the United States, and the visit from President Obama has turned around the momentum in favor of Stephen Harper. In the past under George Bush; Harper took a lot of heat for “hidden agendas” and for being “too close to George Bush” or for “supporting the Republican Party”. Ironically, past statements from Michael Ignatieff would indicate that he is actually the George Bush clone who also would have led our troops to war in Iraq.

Today with George Bush gone and a popular US President replacing him, it is now fashionable to be close with the United States and after years of taking heat for his agenda South of the Border; Harper now finds himself with a close friend in Washington that can be worked with and who validates his past positions. On the environment we are not heading to Kyoto, we are heading to a global solution that includes the US, China and India – a position Harper has been pushing for years. Obama has promised to cut spending so that the US deficit is cut in half. He talks about tax cuts for the Middle Class. He offers an opportunity for Canadians to work with him on the auto sector, environment, economy, Afghanistan, trade and international affairs. Obama is a huge supporter of the mission in Afghanistan, an issue Stephen Harper has shown leadership on for quite some time. Obama also had praise for our financial system and the action Canada has taken to prepare for this global economic crisis. The endorsement of Harper policies from Barack Obama is huge, and Conservatives have every reason to play them up for electoral gain. Frankly, the better Harper’s relationship with Obama – the more likely we will be in obtaining our majority government.

Yesterday in the House of Commons, Obama’s name was mentioned frequently. Expect this to continue as Lawrence Canon meets with Hillary Clinton today. Prime Minister Stephen Harper has an opportunity to play President Obama’s best friend and have a real impact on foreign affairs issues. Politically it will become an asset and not the liability we have seen for the past 8 years. Given that Stephen Harper and Barack Obama are so close on their views, I wonder what this means for Jack Layton who ripped Obama’s campaign style off in the last election. Right now Layton and Duceppe seem to be acting like “cynics” and demonstrating a “No We Can’t” attitude while Prime Minister Harper is saying “Yes We Can”. Clearly Layton’s policies would clash with the new administration and Canadians should not be fooled by his cheap imitations. Obama is not a socialist nor is he on the extreme left. As for the Liberals, they may have a pro-American leader but they are not a pro-American party as people like Carolyn Parrish have demonstrated in the past. That leaves Prime Minister Stephen Harper as the best option for dealing with this new Barack Obama administration along with the Conservative Party. So far they are doing a great job protecting Canadian interests while at the same time expanding ties with our top ally and largest trading partner.

During the primaries and US general election, I took a fair amount of heat for campaigning and rooting for Obama to become President. Now that he has been elected, quite frankly he is our best bet for a majority government going forward in these uncertain economic times. It is good to see our party embracing him the way I did well over a year ago. It is now time to move forward on the agenda of increased economic, security and other integration with the US that could not be accomplished under the previous American administration. We have a friend in the White House who is loved by Canadians. Frankly there is no doubt in my mind that if Barack Obama was a Canadian politician and kept his views consistent with what they are right now, he would be more likely to find a home in the Canadian Conservative Party as oppose to the Liberals or certainly the NDP, Greens or Bloc. “Yes We Can” to a majority Stephen Harper. “Yes We Can!!!!”
-Darryl

Conservative Statements in the Hansard and Media over the past few days:

Mr. Speaker, contrary to what the hon. member is professing, the doomsaying scenario which he seems to luxuriate in, I can tell the House that we are working very closely with the sector, of course, with Premier McGuinty and the Government of Ontario, and with the Obama administration, to ensure that we have a vibrant car industry, not only for the present but for the future as well. That is what we are focused on, on this side of the House.
-Tony Clement

Mr. Speaker, as the hon. member opposite will know, President Obama visited last week and praised the efforts that had been made by Canada, by the Canadian government, with respect to our economic stimulus. Canada, quite frankly, is a leading light in the world and is being used as a model in the G20, with respect to the way to handle the financial system and the way to regulate. Canadians can be proud of our financial sector.
-Jim Flaherty

Mr. Speaker, we do not agree with that suggestion. We have a plan to reduce greenhouse gases by 20% by 2020. These targets are more rigorous than the targets proposed by Mr. Obama, the President of the United States.
-Jim Prentice

Mr. Speaker, the hon. member dwells in the past in terms of 1990.

This is a government that is going forward, working on a plan that has been developed with the new administration in the United States. This is a plan that will lead the world in terms of the development of new energy research and clean energy technology. We are working on a dialogue with President Obama and his government that will provide leadership to the world in dealing with this problem, something that has never happened before in our country.
-Jim Prentice

Mr. Speaker, our position remains exactly the same as that already taken by previous governments. We all know that the individual in question has been charged with serious crimes against Americans. In that respect, President Obama has established a procedure. We intend to follow that procedure through to the end.
-Lawrence Canon

"There was lots of speculation that President Obama wanted to do a wholesale renegotiation of NAFTA," Day said. "We understand now that that's not on and we think there's ways of accommodating the environmental concerns and the labour concerns."
-Stockwell Day

“The President and I agree that both our countries must take immediate action to restore economic growth by lowering taxes, ensuring access to credit and unleashing spending that stimulates economic growth. We also agreed to strengthen our cooperation in the areas of environmental protection and global security,”
-Stephen Harper

Article from the Star: “Obama a closet Conservative”
http://www.thestar.com/news/insight/article/590950

Video: Harper on Fox News, CNBC Today

Credit: Springer at http://www.sortofpolitical.com/2009/02/harper-on-fox-business-news.html

Overall I think Prime Minister Harper represented us well on Fox News where he spoke directly to a US audience.
-Darryl

Update: Here is Harper on CNBC

Harper meets Ban Ki-moon

Harper always shines on the world stage in my opinion. I will have the video of his Fox News interview when it is available. It looks like the Conservatives are pushing hard to get to work on US-Canada relations following the Obama visit. Tomorrow our foreign affairs Minister Lawrence Canon has a meeting with Hillary Clinton.

Globe coverage of the UN meeting and Fox News interview

I also like this article as well that appeared in the Toronto Star this morning.

Excuse me, but are you guys looking for a right winger?

'We're assuming he's a Leaf fan,' players say after meeting Harper

http://www.thestar.com/Sports/Hockey/article/591581

and one more article on the same subject...

http://www.tsn.ca/nhl/story/?id=268352&lid=sublink03&lpos=headlines_nhl

Governments of Canada and Ontario Make Infrastructure Investments in Newmarket & Aurora
(Newmarket-Aurora, Ontario, February 20, 2009) - Residents of Newmarket and Aurora will benefit from joint federal, provincial and municipal funding to rehabilitate the Old Town Hall in Newmarket and waste water infrastructure in Aurora, announced Newmarket-Aurora MP Lois Brown. Both projects are examples of all levels of government working together to stimulate the economy by reducing red tape, creating jobs and getting shovels into the ground.

The governments of Canada and Ontario will each invest up to $1,698,621 for Newmarket's Old Town Hall renovations and $1,580,000 for Aurora's waste water infrastructure rehabilitation. The municipalities will contribute the balance of the total eligible project costs of up to $5 million and $4.8 million respectively. Funds for these projects will enhance local facilities and services when the need for economic stimulus is the greatest.

"Newmarket and Aurora's growing communities will benefit from these strategic investments," said Brown. "This announcement shows how governments are working together for the benefit of the residents they serve. Our government is pleased to be taking quick action following the January 27 budget to boost the local economy and move these projects forward. Investments in infrastructure create jobs, contribute to a cleaner environment and provide lasting benefits for residents. I'd like to thank Aurora Mayor Phyllis Morris and Newmarket Mayor Tony Van Bynen for their assistance in preparing and submitting their proposals for these important projects."

"We're creating jobs for families and making our communities stronger by investing in infrastructure in rural Ontario," said Leona Dombrowsky, Ontario Minister of Agriculture, Food and Rural Affairs. "This is another example of how the McGuinty government is keeping Ontario moving with targeted investments that matter to people in their everyday lives."

"These investments in important infrastructure projects in Newmarket and Aurora are particularly timely given the economic climate," said Newmarket-Aurora MPP Frank Klees.

These projects are two of 289 across the province that will soon break ground thanks to a federal-provincial-municipal investment of more than $1 Billion. The governments of Canada and Ontario have taken steps to get shovels in the ground and to flow money faster for targeted infrastructure projects in Ontario Communities for the 2009 and 2010 construction seasons. Because the federal and provincial governments understand that infrastructure investments will stimulate the economy, nearly 85 per cent of project applications were approved for funding.

Lois Brown, MP Newmarket-Aurora
16600 Bayview Ave., Ste. 206
Newmarket, ON L3X 1Z9
(905) 953-7515
BrownLo@parl.gc.ca
www.loisbrown.ca


*Also see the local media coverage from the Era on this announcement*

PC Ontario Policy Convention in Niagara Falls a Success

I am now back in Newmarket, and left Niagara Falls with a positive direction about the PC Party, John Tory and our chances of forming government in 2011.

When the weekend was said and done, one person who I was extremely impressed with was Laurie Scott. She got the loudest applause of the weekend and delivered a fantastic speech. Her selfless sacrifice, loyalty and determination to get John elected in the upcoming by-election was inspiring. At the same time it was disappointing to see such as great MPP and strong female voice in our party resign her seat. I really hope she gets back into the legislature in 2011 because I believe she has a bright future in our party and is exactly the type of MPP we need to move forward as a party. Laurie is a class act and deserved the standing ovation she received Saturday evening. It was a pleasure to have the opportunity to meet her in Niagara Falls.

John Tory also delivered a very good speech that shows why he is going to be Premier in 2011. Economically, he has more credibility than Dalton McGuinty and has been proposing solutions and warning about this recession in Ontario for a very long time. While some may question his decision on faith based schools, some of his policy positions and the time it has taken to find a seat in the legislature; no one can question his tireless work ethic. His efforts in the by-election, with fundraising and debt repayment and in the amount of people he has taken the time to consult with cannot be challenged. I am looking forward to him getting back into the legislature and holding Premier McGuinty accountable at Queens Park. Those who have had the opportunity to meet John and his wife Barbara can vouch that both are genuine down to earth people. I am very happy that things are turning around positively for John and the PC Party of Ontario. While he has taken some hits within his own party, it is clear that the media is far more friendly to Tory than perhaps other Conservatives including Stephen Harper.

Speaking of Stephen Harper it was great to see him address the PC Ontario convention via video. Federal support throughout the weekend was impressive with several MPs hosting hospitality suites. Jason Kenney delivered a great speech on outreach to various cultural communities. Van Loan, Clement and the federal party’s Ontario MPs hosted hospitality suites. Jim Flaherty was in attendance as were several other cabinet ministers and Conservative MPs. Many of the people from Ontario who I saw in Winnipeg were also in Niagara Falls. I support a strong integration between the federal Conservative Party and our equivalent provincially.

I was also happy to see Jane Pitfield at the convention in Niagara Falls as well as other Conservative events over the past few years. Given the current leadership in Toronto, I would be very happy to support Jane in another run for mayor. I would also be happy if she instead decided to throw her hat in the ring for a provincial or federal seat in a Toronto riding. She would make a great MPP or MP. It is important to recruit strong candidates in the GTA to ensure representation in Ontario’s capital and Canada’s largest city. The media has so far underreported the type of gains being made in the 416 over the past three elections.

On a personal note, it was great to see such a large representation from the University of Windsor and the city of Windsor in general. I would love to see more ridings in that area elect more Conservatives such as Jeff Watson who has brought real results for that community.

The overall crowd on Saturday was around 1000. Media coverage was positive based on what I have seen in the papers. It is clear that the free ride for Dalton McGuinty is over.

It was also great to network in the hospitality suites. I had the opportunity to meet and hang out with bloggers Gerry Nicholls, Stephen Taylor and Andrew Prescott. York Region MPPs Frank Klees, Julia Munro and Peter Shurman had a great hospitality suite as did John Tory and Ken Zeise.

Overall I left the convention optimistic about the direction of the Ontario PC Party and our chances to form government in Ontario in 2011. I am looking forward to heading out to Lindsay to campaign for John Tory over the next few weekends leading up to the March 5 by-election. I expect to see some gains once Mr. Tory is back at Queens Park. The provincial budget on March 26 could be a key opportunity with John back in the legislature to challenge Premier McGuinty’s handling of the Ontario economy. I think our party is now united and ready to do the work required to prepare us for the 2011 election.

Off to Niagara Falls for the PC Ontario Convention

I will be taking my laptop and try and provide updates on what is going on at the convention in Niagara Falls this weekend. Various constitutional matters will be discussed along with policy. There will also be hospitality suites including one hosted by Frank Klees and another hosted by the federal Conservative Party Saturday night. I am hearing turnout will be around 750 people. The convention will take place in the middle of John Tory's by-election with voting taking place in Laurie Scott's former riding March 5.
-Darryl

Yesterday a Big Win for Stephen Harper

I thought yesterday was a very good day for Prime Minister Stephen Harper and the Conservative Party. Clearly Prime Minister Stephen Harper and President Barack Obama got along well and came to agreement on many issues. Both men represented their nations with honour. For Barack Obama it was important that his first foreign trip was a success. There is no question that he did all the right things. He was well briefed on Canada and was up to speed on our issues and media. He took some time to acknowledge his supporters in Canada and also those who campaigned for him during the primaries and general election. He stopped in the Ottawa market. I was also happy that he recognized our military efforts in Afghanistan and thanked our soliders while paying tribute to those brave men who have fallen as part of the mission there. He had a good 33 minute meeting with Stephen Harper and also had a strong press conference. There were no controversies and clearly there is a new attitude with regards to relations between Canada and the United States at least among Canadians. Gone was the usual anti-Americanism from the left in this country. It was terrific to see an American president greeted by fans and well wishers as oppose to the protesters that were common under the previous president. President Obama can now go back to Washington with a successful foreign trip under this belt and evidence that his election is repairing America’s image in the world that was damaged under the previous administration.

For Stephen Harper, this was the day I was waiting a long time for. In the past, Harper has took it on the chin for being “too close to Bush” or “too close to Americans”. Ironically that quickly turned around into a positive as under this president he can work together to further enhance the relations between our two nations without the usual criticism from the opposition and media. There was a lot of pressure to show that he could build a relationship with the popular US President. I think there was chemistry between the two and there is no question that Harper achieved his objectives of building a relationship with Obama while presented himself as an equal and someone willing to stand up for Canadian interests when necessary. I think Obama largely endorsed Harper’s position on the economy and environment. He gave credit to Canada’s financial institutions and actions that helped prepare us for this international economic crisis. He stressed the need for a climate change agreement that included India and China; a position Harper has been criticized in the past. There was no talk of Kyoto – a treaty that is now officially dead and irrelevant. There were no harsh statements on the oil sands, in fact based on Obama’s position on “clean coal” it seems that the environment will take a back seat to economic and energy issues. There were compliments on our commitment to Afghanistan, an issue that is sometimes controversial here. Finally, Obama went out of his way to show that he supported trade reducing concerns about previous statements on NAFTA and also the “Buy America” provision in the US stimulus package. I couldn’t help but notice how Harper and Obama sounded similar on the important issues of the day. If anyone was disappointed yesterday, it would be the left in this country who assumed that Obama was some kind of super Liberal or socialist. The reality that I couldn’t help but notice was that if Obama was a Canadian; his positions would be closest to the Conservative Party here. That makes sense as America in general is to the right of the political spectrum when compared to Canada.

As for the opposition, Michael Ignatieff and Bob Rae (was he representing the NDP?) got their meeting but with little media attention. This foreign visit seemed to move Ignatieff’s positions closer to Harper’s as outside of Omar Khadr there was not much difference in what both leaders were saying in their meetings with Obama. It will be interesting to see what this means in terms of the polls. I suspect Prime Minister Stephen Harper and the Conservative Party will get a slight bump as it was clearly Harper who enjoyed the majority of the spotlight during this crucial visit by the new American President.

Outside of partisan politics, I think yesterday was a good day for improved relations between Canada and the United States. The biggest winners will be the citizens in both countries who will enjoy the benefits of increased trade, coordination on the economy and enhanced ties between our nations. Yesterday I was very proud of the United States and very proud of the way Stephen Harper represented Canada during this visit. Barack Obama and Stephen Harper’s people should be very proud of a successful meeting that was organized and met the objectives of both leaders and both countries interests.

-Darryl

Full Obama and Harper press conference video

I think the visit was a huge success for both men
-Darryl

Obama thanks Canadians who helped campaign for him



You are very welcome!
-Darryl



"I want to also, by the way, thank some of the Canadians who came over the border to campaign for me during the election," Obama said. "It was much appreciated."

Welcome to Canada President Obama

Today is a day I have been waiting for a long time. For a few days leading up to Super Tuesday, I had the pleasure of driving out to Chicago to call Democrats in the various primaries encouraging them to come out and vote for Barack Obama who at the time was in a tough nomination race with Hillary Clinton. On the second last day of the trip, I had the opportunity to see Mr. Obama speak at the Regency Hyatt on the night of Super Tuesday. Following the speech, he came around and shook hands with his supporters in the first few rows in front of the podium where he spoke. I shook his hand and said “Canada loves you too”. He gave me a thumbs up.

Since that time, Barack Obama has become President of the United States. The election excited America and the world. Supporters of Barack Obama believe in the change he talks about and have a hope that he can lead us through these extraordinary times. I am very much pro-American and had accepted that it was impossible for Prime Minister Stephen Harper to move forward enhancing our relationship with the United States while the unpopular George Bush was in power. Today instead of protesters, hundreds of thousands of fans will make the trip to Ottawa to welcome President Obama to Canada. The visit will be short, but crucial both to Canadian interests in general; and Stephen Harper’s political fortunes.

There has been a lot of speculation about how Stephen Harper and Barack Obama will get along. I have every confidence they will hit it off in a manner that reflects the strong ties between our two nations. America is our largest trading partner. NAFTA is the world’s largest free trade agreement. A billion dollars in trade crosses the Canada/US border every day. I saw this first hand when I went to school in Windsor and lived close to the Ambassador Bridge there. We are allies in NATO, NORAD and make a contribution to NASA. We share a culture and many of us have friends and family South of the border. Our military has fought along side the United States through many historical battles. Today we are fighting shoulder to shoulder with the US army in Afghanistan. During the last US election, hundreds of Canadians crossed the border to assist Obama in swing border states such as Ohio and Michigan. Unlike George Bush, Barack Obama visits Canada with an approval rating higher than any Canadian political leader and with the Canadian public firmly approving the job he has done thus far as President. It will be a historic visit even if it is going to be quite brief. Stephen Harper has an interest in building strong relations with the new President because of his popularity here. Barack Obama is going to want to make his first foreign trip a success.

The top agenda item for today’s meeting will largely be to build a relationship between the Canadian and American leaders. Other issues that will surely be discussed include the economy, trade/NAFTA, the auto industry, the war in Afghanistan, a North American energy/environment strategy, borders and security and possibly Omar Khadr. I do not expect any major announcements or breakthroughs on any of these issues, but this will be a good time to reset the American-Canadian agenda under a new administration. Bob Rae and Michael Ignatieff will also meet Obama for 15 minutes at the Ottawa airport.

After a long campaign, today is the day that many have been waiting for. It will be interesting to see the outcome of this visit as it will pave the way for future summits down the road. It is time for a new era in Canada-America relations.

PM Harper on CNN Situation Room, Obama on CBC National

I think Stephen Harper represented himself very well on US television. A very good interview. I also think Barack Obama did a great interview with Peter Mansbridge. Clearly he was very well briefed on Canada. I expect a great meeting between the two leaders today.
-Darryl

An honest assessment of where all the parties stand after the coalition and budget

I am going to try and take off my partisan hat and put myself in the shoes of each of the opposition parties following the coalition and budget.

Green Party:

The Green Party got a small win during the coalition debate in the sense Elizabeth May got back in the news despite having no seats in parliament. They may have taken a huge loss because their very existence depends on events outside of their control. Perhaps there was some excitement that a Senate seat and cabinet position would be good for the Green Party. This scenario though, points to the very difficult choice for Greens about Elizabeth May as leader. I appreciate this post, and my response is the Green Party today is not the Green Party of Jim Harris under Elizabeth May. The move to the far left (scrapping NAFTA for example) and the frequent endorsements of the Liberals and Stephane Dion make it impossible for any "Progressive Conservative", "Reformer" or Libertarian like myself to support the Green Party today. What was once seen as a party that represented at least the potential to have some of the grassroots excitement that was generated under the Reform Party (that I joined at 14) now seems like nothing more than a special interest group trying to advance Elizabeth May's career and the Liberal Party over their own principles and candidates. I am always up for a beer and I have many friends in the Green Party that I enjoy debating with. In my opinion during the last election Greens such as the candidate in my riding were sold out when May did this deal with Dion. Her comments during the last election about strategic voting in my view were unfair to her own candidates, party and supporters. For example in Newmarket-Aurora, everyone in the community knows it is a two horse race between Liberals and Conservatives. By advocating strategic voting to stop Harper, Glenn Hubbers was held out to try while Green voters were encouraged to back Tim Jones. Tim Jones is a good man, but does not have the environmental credentials and green lifestyle that my friend Glenn Hubbers offers. I think what May did to her candidates such as Hubbers was nothing short of a stabbing in the back. I was always an advocate for including the Greens in the debate for the purpose of enhancing democracy but I think that huge opportunity for Greens was wasted when May seemed to spend more time attacking Harper and defending Dion than promoting her own party's platform to Canadians who are still unfamiliar with what they stand for. I think that also hurt the Green Party because they still haven't broken out of the shell of being an environment only party in the minds of most Canadians. After this unite the left movement, I am buying more into the David Suzuki argument about the Greens. If you are serious about the environment you can probably accomplish more by joining the Conservative Party, Liberal Party or as a single Coalition Party on the left. If May had got her cabinet post, I honestly believe it would have been more likely the Greens would have got tarnished with the Liberal brush as oppose to getting any tangible benefits that would present an argument for the survival of the Green Party. Would Jim Harris or David Chernushenko consider running as a candidate for the Conservatives as a way to combine sound fiscal policy with environmental concern? At this point it is a myth that anyone on the right is considering the Green Party as an option. Greens do not draw their voters from the right and left; they further split the left vote with the NDP, Liberals and in Quebec the Bloc. Even if you stand for proportional representation and democratic reform, how do you advance that goal by supporting a coup using technicalities of a first past the post system and having your leader appointed to the unelected senate?

Greens now face two choices. Keep May as leader because she increased votes in the last election, got into the debates, got serious media coverage but seems committed to herself personally as oppose to the party at large. Otherwise turf her as leader and then what? I am not sure if this party can survive in the long term. I think odds are more likely that we will see a merger of the left than an elected Green in parliament down the road. If May is offered a Senate seat in the future she should take it and never give it up. She has no chance of beating Peter MacKay in Central Nova during an election campaign and it would probably still have to be a monumental achievement for her to win in any other riding. For Greens the question now is are they still relevant? What is our argument to get into the debates next time given that they lost their only seat in parliament? Will proportional representation ever happen regardless of what party controls a majority or minority government? If they cannot come up with good answers, the risk is either Conservative majorities due to vote splitting or a two party first past the post system by merging the left at least among the 3 federalist parties to get that "62% majority" for real.

Greens need to get out of bed with the Liberals and come up with a reason why voters and the media should take them seriously going forward. To do that, there needs to be an honest and aggressive debate on Elizabeth May's leadership and the overall platform and direction of the party following the last election. The Green image I have right now is tree huggers who stand for outdated Kyoto and stopping Harper. As a Conservative, I do not see them as an alternative where perhaps they would have been my second choice under Mr. Jim Harris.

NDP:

The NDP and Jack Layton have clearly become a joke. The coalition for Jack Layton was a huge opportunity to take advantage of Liberal weakness to advance his party's standing. Stephane Dion was desperate to avoid being a question in trivial pursuit as one of the few Liberal leaders never to become Prime Minister. He was willing to sell his soul to the union movement and separatists for the chance to be Prime Minister. The move cost Dion his job, but Layton his credibility. After pushing the coalition for months, Layton finds himself with nothing to show for those efforts except an endorsement Liberals will use against him in the next election campaign. Gone are the dreams of Jack and Olivia in cabinet. So much for the hope that various unions would be running Ottawa. Gone are the days when the NDP can take advantage of weak Liberal leadership, a sponsorship scandal and a record of abstaining. If they couldn't become official opposition under those past scenarios, who seriously thinks it will ever happen now? Jack Layton running to be Prime Minister??? If only he would win over 100 more seats. The NDP cannot even say anymore that they want to make parliament work after Jack Layton declared he would vote against a budget that he had not even seen. In Ontario there is a provincial leadership race going on. You wouldn't know it from the press and it would be impossible to name any of the candidates without the support of Google or the provincial NDP website. Pandering to union interests during the York University strike for leadership purposes showed exactly what the NDP stands for. This is not the party of students, the poor or working class people. It is a party hijacked by the union movement and as a result incapable of expanding past their fringe party status. Even during the pro-coalition rallies, buses of union workers were sent in to counter the public opposition to the coalition with no success. A few years ago Buzz Hargrove was kicked out of the NDP for advocating strategic voting. Will Jack Layton now be kicked out for proving that Buzz was right? After spending months promoting the Liberals as a better alternative to Stephen Harper's Conservatives, how is he now going to stop strategic voting in the next election?

Going forward the NDP, like the Greens might have signed their own death warrant with the coalition. The coalition showed that in the past the leftist parties were splitting the vote and as a result Stephen Harper and the Conservative Party were winning key seats and ultimately the election. Jack Layton has racked up a massive debt for the NDP promoting how great things would be under a Liberal Prime Minister. Elizabeth May has squandered historic media attention and inclusion in the debates to promote Liberals as well. I think if they are serious about Canada being a left wing or progressive country; the best thing both of these parties could do is fold and merge with the Liberals. Obviously from the Conservative perspective that would present a major challenge; but the reality is that both the Greens and NDP are spinning their wheels and are virtually irrelevant today in Canadian politics. Policies like adding a "buy Canadian" provision to the stimulus package, pulling all troops out of Afghanistan immediately or raising taxes on corporations during a recession just highlight their fringe status capped at a maximum of 20% of the total vote. Jack Layton is a nice guy, but it may also be time to consider his leadership. Thomas Mulcair, David Miller, various Western NDP Premiers and Buzz Hargrove will likely be next in line once NDP supporters realize what Jack has done to their party.

Bloc Quebecois:

I don't completely understand Quebec politics and that province in particular is always volatile with their voting intentions. Something that looks firm today, can switch on a dime. At one point it looked like there would be a massive Conservative breakthrough in Quebec. The last election showed that was not the case as Conservatives basically stayed stagnent while provincially the ADQ was basically wiped out as a viable party. Conservatives under Harper who looked to appease Quebec for that majority now seem to be focused on Ontario and BC basically throwing in the towel in Quebec. Liberals who were blown out of Quebec following the sponsorship scandal seem to be making some kind of comeback under Ignatieff in the province. The Bloc that at one time seemed irrelevant still seems capable of holding at least 50 of the provinces 75 seats. Jean Charest who was once the champion of federalism and respected by all parties and premiers now seems to be isolated by his provincial counterparts with bridges burned with the party media reports suggest he might be interested in leading one day. While Gilles Duceppe saw the coalition as a huge win for separation and the Bloc's fortunes in Quebec, ultimately also resulted in a strong showing for Pauline Marois strengthening her leadership in the PQ - the position that ultimately Mr. Duceppe dreams of holding one day. The ADQ are now without a leader. Charest holds a razor thin majority. Marois is now basically the Premier in waiting. Duceppe and the Bloc now find themselves not so much interested in attacking the Conservatives who might be in serious trouble in Quebec but defending their seats against Michael Ignatieff; the Liberal leader who seems to be making a comeback in Quebec at the expense of the Bloc.

The coalition gave the Bloc two key benefits. One, Harper's attacks on the coalition, separation and the Bloc as a party may have hurt his chances and made his seats vulnerable. Second, gone are the days when Liberals and Conservatives can say "all the Bloc can do is oppose". Dion and the Liberals offered Duceppe and his separatist party the chance to serve in the Canadian government. That is proof that they can do more than simply oppose and federalism is weaker because of this power grab by Liberals. On the negative side, the Bloc must now attack a leader and party that no too long ago they endorsed to lead a coalition. If Michael Ignatieff is to become the Prime Minister through an election, that is only possible if he makes a major breakthrough in Quebec. Two months ago it looked like the Bloc would have been able to extort a kings random from the Liberals, bringing back pork to their ridings and province and ultimately strengthening their hand to perhaps 60 seats in the province. Today they will be lucky to hold what they have and will most likely drop seats in the next election.

Canadians are going to go to the polls likely in June or the fall. Quebecors will now have to ask themselves how they want to be represented in the federal parliament. Do they want to be important to the Conservative Party or the Liberal Party? Do they want to continue minority governments by sending a large Bloc of MPs to Ottawa that are disliked by the rest of the country as evidenced in the coalition polls and considered taboo to ever joining the government formally? Will Jean Charest attempt to bridge his differences with Harper or will he continue his attacks that like with Danny Williams will ultimately hurt his leverage with the government of the day in Ottawa? Will Gilles Duceppe lead the BQ in the next election or is retirement a potential option now that his PQ dreams have been smashed? I predict the Bloc will ultimately remain a force in Quebec holding at least a majority of Quebec seats. I also predict that they will drop some seats in the next election, likely around Montreal to the Liberals. Has support for separation actually increased? If not, again the Bloc finds themselves forced to justify their existence in federal politics.

The Liberal Party

I am not sure if the coalition was a blind power grab, or a well executed strategy but either way things have worked out well for the Liberals since the coalition and budget. The first positive for Liberals is that Stephane Dion is gone. Prior to this coalition proposal, he was going to hang around as leader until a new leader was chosen in June. A full leadership race had the potential to divide the party and place further financial pressure as leadership candidates sucked up donations that might have otherwise gone to the Liberal party's campaign budget. When the Liberals began to collapse in the polls, MPs got nervous and decided to part with any kind of grassroots process and appoint Michael Ignatieff as leader through a caucus vote. Once we came back in January, Liberals had a new leader and a fresh start.

Before we look at Michael Ignatieff, let us remember that there are still major issues in the Liberal Party itself. The party remains broke and at a huge financial disadvantage compared to the Conservatives as last year's fundraising numbers demonstrate. The Liberal Party being in debt and still not raising much in fundraising will ultimately have an impact on when the next election is. Second, the lack of a leadership race means that Liberal candidates will not become as well known as perhaps they became during the last contest. Dominic LeBlanc and Bob Rae will play roles in the new shadow cabinet, but the party did not get a chance to debate any firm policy platforms or a direction for their party. I cannot remember the last time that the Liberals have had any kind of policy convention since losing power. There are also still huge mountains for Liberals to climb regionally in this country. While Ignatieff seems to be making roads in Quebec, the entire West including BC remains a problem for them as does most of the rural ridings. Ontario is a must win for Liberals and so far gains have been modest for them since Iggy became leader.

While there are still some problems in the Liberal Party, Conservatives can no longer underestimate their opponent. Michael Ignatieff is clearly not Stephane Dion and he does not have any baggage from the sponsorship scandal or feuds between Martin and Chretien. He will not run on a carbon tax and there is not an obvious negative route that Conservatives can rely on in the next campaign. He has managed to unite his caucus and stop harmful leaks that in the past have undercut previous Liberal leaders. There is no question that the media attention he has recieved has been Obamalike. So far he has received a free ride from the Conservative Party. He has increased Liberal poll numbers at least during his honeymoon. The economy only helps him gain momentum going forward as Liberals cheerlead for a depression to help their own political fortunes. Ignatieff is much better in press conferences, speeches and during Question Period than Stephane Dion. I do not think he has set Canada on his fire with his leadership at this point, but I do think he represents a credible alternative to the government and unlike Dion it is not hard to picture him as Prime Minister unfortunately.

Michael Ignatieff has been off to a great start but the honeymoon will end. Polls may present an optimal time for him to call an election, but can the Liberal Party afford one? He played the coalition well, but at some point will he look like Dion abstaining and supporting Conservative legislation only to criticize it later? How long can he prop up the government without looking weak? How long can he hope for the economy to get worse before it looks like he is putting his own political interests ahead of the country? When is he going to take firm positions on the issues? He signed a coalition document and was later against it. He was a huge supporter of the Iraq war only to write a New York Times piece saying he was wrong. He called the Israel actions in Lebanon a war crime but in the Gaza conflict changed his position and said Israel was acting in self defense. He first introduced the idea of a carbon tax but is now one of the Liberals pretending Dion and his platform never happened. He praised George W. Bush and supported using “torture” in the war on terror only to now turn around and demand Omar Khadar come home. He told his MPs to support the budget, allowed Newfoundland MPs to oppose the budget and now says he opposes it and that it isn’t working fast enough yet allowed it to pass on several votes. In the past he has supported extending the Afghanistan mission and also Quebec as a nation. Will those positions hold firm against internal Liberal opposition? Leadership is not an easy quality and it will be interesting to see what happens when eventually Mr. Ignatieff is forced to put his vision and positions on the record. At this point it is not clear what he stands for. His biggest asset is that he is not Stephane Dion and in some circles he is not Stephen Harper.

Stephen Harper vs. Michael Ignatieff will be a battle for the ages. There are many similarities between the two men. I suspect that one way or the other we are looking at an election between June and the fall. The impact of the budget and the state of the economy will play a major role in determining who wins that election. Before Liberals are ready though, they must rebuild their finances, improve their standing in Quebec, BC and Ontario, reignite their organization and base, allow Canadians to get to know their new leader and find a platform and vision that redefines Liberalism in Canada. To Ignatieff’s credit he could have just taken power immediately through the coalition. Instead he has decided to do things the hard way – but the right way. Liberals are excited again but should be cautious. There is still a lot of work that must be done before they can realistically expect to get power again through an election campaign.

Conservative Party:

This is a column all by itself and will be my next post.

Thanks for reading…

-Darryl

Random Thoughts: Budget, Coalition, Human Rights Commission, Tory, Coyne, Phelps, Auto Industry, Miller, Economy, Middle East and the Leafs

I am so proud of the representation we have in Newmarket right now at all levels. Lois Brown is doing a terrific job and is a tireless worker. Frank Klees as usual is one of the most responsive MPPs in Queens Park. Mayor Tony Van Bynen and Newmarket council are also doing a phenomenal job.

Update: I have just been informed that Lois Brown has brought 3.2 million to the riding of Newmarket Aurora as part of the budget infrastructure package.

Is bi-partisanship ever possible??? When you look South of the border, Barack Obama promised that there were no red states; no blues states; just the United States. He said that his administration would move past the old right left divide. He said he would do things different in Washington. Initially he got off to a good start appointing some Republicans into his cabinet and attempting to reach out to his opponent John McCain. As we saw yesterday there are some limits. The stimulus package (like in Canada) is not universally popular. Republicans who were battered in the last election are now trying to rebuild and find themselves again. In many ways what is in it for them to demonstrate near universal support for Barack Obama and his policies? Following the resignation of Republican Senator Judd Gregg as Commerce Secretary one wonders if there will ever be such a thing as bi-partisanship among politicians. Perhaps it is just not in the culture. I don’t necessarily blame the Republican party here. During the era of cooperation, Democrats attempted to take control of drawing out the different districts for future elections for their own partisan advantage. As is always the case with the US Congress and Senate, an initial budget document was loaded with pork and earmarks ballooning an already massive and irresponsible deficit. Personally I would love to see someone like Ron Paul named to the Commerce Secretary post so that his views can be taken more seriously in Washington. Despite my preference though, I fear that we are going to go back to the same old politics with or without Obama in the White House. Partisanship is important in the Ottawa and Washington bubble. Unfortunately it turns off the average Joe Voter however.

As I watch the constant layoffs and bad economic news (Personal bankruptcies up 50 percent in December, new trade deficit, auto sales, housing stats, employment numbers, retail sales, consumer confidence, earnings reports, reduced government revenues at all levels, credit card debt skyrocketing, lack of savings and retirement preparation, high levels of student debt etc.) I cannot help but wonder if this is simply going to be a quick recession cycle. Are we heading for depression? Is this something much more? Ron Paul constantly points out that a country fails when it overextends themselves militarily and their currency becomes worthless. Is that where America is heading? We saw the UK collapse and later the Soviet Union. Is it now America’s turn? What is China planning right now? It is outright scary how much American currency they currently hold. Is America still the world’s only superpower? If so, for how much longer? What does that mean for Canada and other Western nations?

Is the G7 still relevant? It doesn’t even represent the 7 largest economies. I think the G20 would be a better vehicle to coordinate international efforts on this international financial crisis.

Would the coalition have been better for Conservatives in the long run? After reading Andrew Coyne and after seeing a budget that will add at least 85 billion in new debt for future generations; I cannot help but think we might have been better off if we did not prorogue the parliament. Imagine Prime Minister Stephane Dion held hostage by the socialist NDP (buy Canada policy) and the separatists attempting to govern during this recession and possible depression. The public would have been outraged as they were when the coalition was initially proposed. Barack Obama, Dalton McGuinty and Stephen Harper are all going to find it difficult maintaining their popularity during these economic times. I would have preferred the coalition wear the bad economic news but because we survived; it is now our baggage. While most Conservatives I talk to agree with Mr. Coyne; others are celebrating the fact that the coalition was killed and we stayed in power. To those supporters I ask are we really still in power? The recent budget was written simply to appease Michael Ignatieff. Going forward we really have two choices; implement a Liberal agenda or face the people in an election. I prefer an election over doing Liberal bidding. The sooner the better because there isn’t much reason to believe we are going up in the polls anytime soon.

Reading Coyne’s article; I cannot help but be depressed but reminded about why I got involved in politics in the first place. Citizen based referendums, an elected senate, recalling politicians who do not keep their promises, free votes for individual MPs, balanced budgets, reduced spending/smaller government, no corporate handouts, flat tax, respect for the grassroots, changes to EI, CPP, privatizing the CBC, strengthened military and reforming equalization were ideas that inspired me to get involved. Will those ideas ever come back?

Finally some progress on the Human Rights Commission it seems. A resolution passed overwhelmingly in Winnipeg at the Conservative convention. After the recent budget, taking action on this file might be away to do something significant for the supporters, donors, volunteers and voters who elected 143 Conservative MPs.

I do not want to see Maxime Bernier leave the federal Conservatives to become leader of the ADQ. I would love to see former ADQ leader Mario Dumont join the federal Conservatives though. I wish Andre Arthur joined us officially. General Hillier would also make a terrific Conservative and it would be nice to have someone to counter Danny Williams in that province.

John Tory is finally running in a by-election and most expect he will get back into the legislature. He has had a rough ride among some of his own supporters, but quite frankly there is a good chance he will be Premier in 2011. If the economy is hurting Harper in the polls, than it cannot be good for the current Ontario Premier either. We cannot afford any mistakes however and the PC Party has to do more to get its platform out there and have an impact in the legislature. Niagara Falls should be an interesting convention on Feb 21, 22.

This has virtually nothing to do with politics, but how ridiculous is it that police are going to file charges against Michael Phelps for a picture taken in the past? Today I wish Marc Emery a very happy birthday. I must say I agree with a recent letter written by the Toronto Star. Legalizing and taxing marijuana would be a good way to get some extra government revenues and reduce this massive deficit. Prohibition was eliminated in the 30s as an economic stimulus. Perhaps that is part of the solution during these economic times. Can’t think of a better way to help our farmers. Wonder if we are missing a good ethanol source that will not raise food prices. In the words of Ron Paul, the best way to get rid of drug crime is to get rid of drug laws. Don’t Conservatives stand for individual freedoms?

How did David Miller get elected and re-elected? Anyone surprised he raised taxes again? The socialist has got to go. Sadly I would be happy to work alongside Warren Kinsella or any Liberal to get a different mayor – any different mayor. Smitherman are you still interested??? Pinball Clemons???

Does anyone take Jack Layton seriously anymore? The NDP might have been the biggest casualty over the past two months federally. Provincially the decision to delay legislation designed to end the York University strike was also a disaster for them.

Is the TTC ever coming to York Region? More GO Trains to Newmarket? A link between the airport and Union Station? Public transportation in Toronto sucks compared to most major cities. Was this addressed in the federal budget or the Toronto budget? How about the upcoming Ontario budget?

I am hoping Tzipi Livni can form some kind of coalition following the Israeli elections. Any government coalition that requires the support of Avigdor Lieberman will almost certainly clash with the Obama administration and their desire to move the peace process forward. Given the results though, I think we are looking at a far right coalition that will feature Benjamin Netanyahu as Prime Minister backed by the support of Lieberman and the various settler and orthodox religious parties. There is talk that Livni and Netanyahu might form a centrist coalition with Labor’s Barak. At this point that might be the best hope for the region. Speaking of elections, one is currently underway in Iran. Will this mean the end of Ahmadinejad? Will that make talks with Iran more practical as far as Obama is concerned?

So the countdown begins for the 2010 Vancouver Olympics. When it is all said and done how much will it cost?

Hopefully the new power sharing agreement in Zimbabwe will improve the lives of ordinary citizens there.

Anyone got any tips on how I can quit smoking cigarettes? I have failed quitting on every single new years since 2000.

I just bought a new Nissan Infinity and absolutely love it. I would recommend it to anyone considering purchasing one. The auto bailout will not work until the big three reduce their labour costs and management starts producing and marketing cars that people actually want. GM dropped the ball big time when they cancelled the EV-1. How would they being doing today if they were the first to have an electric car on the market? Many people ask me why I didn’t buy North American. The reality is that Canadian jobs are no longer just provided by Chrysler, GM and Ford. Close to my riding is a massive Honda plant that employs many people. I pass by the site where they are building their new headquarters on the 404 to work every day. Toyota has a big plant coming to Woodstock. It is time we start treating Canadian workers at the Japanese plants with the same concern we have for the big three.

Am I the only one excited about the trade deadline this year now that Brian Burke is the GM of the Toronto Maple Leafs? The trade deadline is one of my favorite days of the year. March 4 will be interesting for Leaf fans.

Am I the only one who hates Valentines Day? I feel so left out when I am single and so broke if I am in a relationship. I do like Family Day though, perhaps the only legislation that Dalton McGuinty has passed that I agree with.

Sorry for the all over the place views. It has been awhile since I last did a blog update.

Thanks for reading...

Darryl

Fresh from the Senate vote on his $800 billion stimulus plan, Obama will have to turn to explaining to Wall Street and Main Street what his FSP is. His new Treasury Secretary, Timothy Geithner, tried to do that, but fluffed it a bit, causing markets to fall, pundits to pontificate, and media – the ignorant, ill-educated, lazy press and TV corps – to flounder in helplessness, deprived of their sound bites.

What is Obama trying to do?

“Our plan will help restart the flow of credit, clean up and strengthen our banks, and provide critical aid for homeowners and for small businesses. As we do each of these things, we will impose new, higher standards for transparency and accountability.”

Note the three prongs of Obama’s FSP. Each one is important, and they are different.

Why is it needed?
No credit for businesses, banks not lending, international trade is contracting, jobs are being lost, and a ‘dangerous dynamic’ is taking place … In the words of Geithner:

“Without credit, economies cannot grow at their potential, and right now, critical parts of our financial system are damaged. The credit markets that are essential for small businesses and consumers are not working.

.. Many banks are reducing lending, and across the country they are tightening the terms of loans. .. Trade among nations has contracted sharply, as trade finance has dried up. Home prices are still falling, as foreclosures rise and even credit worthy borrowers are finding it harder to finance the purchase of a first home, or refinance their mortgage…

Instead of catalyzing recovery, the financial system is working against recovery. And at the same time, the recession is putting greater pressure on banks. This is a dangerous dynamic, and we need to arrest it.

It is essential for every American to understand that the battle for economic recovery must be fought on two fronts. We have to both jumpstart job creation and private investment, and we must get credit flowing again to businesses and families.””

What will Obama’s FSP do?

“Our plan will (1) help restart the flow of credit, (2) clean up and strengthen our banks, and (3) provide critical aid for homeowners and for small businesses. As we do each of these things, we will impose new, higher standards for transparency and accountability.” [My brackets].

What about the Junior Bush’s actions last year?

“The actions your government took were absolutely essential, but they were inadequate.”

OK. Bush screwed up. Regulators screwed up. Rating agencies screwed up. Banks screwed up. Government and Americans screwed up by borrowing too much. And it all imploded.

Now what? Now comes the Obama Revolution, lead by this FSP:

“Our challenge is much greater today because the American people have lost faith in the leaders of our financial institutions, and are skeptical that their government has – to this point -- used taxpayers' money in ways that will benefit them. This has to change. To get credit flowing again, to restore confidence in our markets, and restore the faith of the American people, we are fundamentally reshaping the government's program to repair the financial system.”

And there must be transparency:

“Government support must come with strong conditions to protect the tax payer and with transparency that allows the American people to see the impact of those investments.”

And now for the key act of faith of the Obama/Geithner FSP – the use of the principle of leverage, first invented by Archimedes, who famously said: Give me a place to stand and I will move the earth.

That is what Obama is aiming to do: use the strength of leverage to arrest the dangerous dynamic, and stop the spiral downwards of the American financial system.

Leverage works because the application to one end of a lever of a small amount of force (or, in Obama’s FSP, government money or government guarantee) results in a massive amount of force at the other end of the lever.

So Obama is trying to apply the ‘government force’ on the economic lever, and achieve results far in excess of anything which the government might be able to achieve by using only its money. And the FSP plans to do this by using private money as part of its solution. It wants the money available to arrest the dangerous dynamic to be huge, with most of it non-governmental.

And the key to this use of minimal force to achieve maximal aims?

Two things: firstly, avoid going back to the Congress well right now for more money, given the tough time Obama had in persuading three Republican senators to pass the $800 billion stimulus plan. To go back now with cap in hand and ask for a half billion or more of government money from Congress is risky.

So Obama’s plan is to bypass Congress in the beginning, produce some results, and then go back for more money, once they have demonstrated that their FSP is working. That’s the political reality Obama is faced with, and his response to it: do an end run around the Senate until he has results – and public opinion – on his side.

But he still needs some money to use as the minimal government force on the one end of the lever. Where does he get it from?

Simple. He already has it. Last year, Bush stampeded the Senate and House to pass the $700 billion rescue plan. Only half was used – and with very little in the way of positive results, and very little transparency.

So Obama has $350 billion in his piggybank right now, to play with in his FSP. And he has the power to make the Federal Reserve do things without having to go to Congress for approval.

How is he dividing it up? He said he had three things to achieve (see above). Geithner has indicated the money is earmarked this way:

$50 billion for homeowners whose mortgages are under threat of foreclosure. Let’s call it the Foreclosure Fund.

$20 to 100 billion for a Financial Stability Trust (FST or Bank Trust), which will fund banks once they’ve been vetted to make sure everybody knows what assets they have and what liabilities they have.

$200 to 280 billion for the Public-Private Investment Fund (PPIF or Toxic Fund or as some call it Bad Bank) which will buy toxic assets from banks. This along with the private sector money will fund the Toxic Fund or Bad Bank with up to $500 billion, perhaps $1,000 billion.

Plus, the Obama FSP calls for government will commit another trillion dollars to support a Consumer and Business Lending initiative, designed to free up credit for business and individuals so that they can produce goods or buy goods (let’s call this the TAFL).

A bit more detail on each of these three items.

The Foreclosure Fund:

The $50 billion assistance to those with mortgages will be fleshed out later: “The President has asked his economic team to come together with a comprehensive plan to address the housing crisis. We will announce the details of this plan in the next few weeks.”

The Bank Trust:

The Bank Trust money used will come from the Government and will be “a bridge to private capital. The capital will come with conditions to help ensure that every dollar of assistance is used to generate a level of lending greater than what would have been possible in the absence of government support. And this assistance will come with terms that should encourage the institutions to replace public assistance with private capital as soon as that is possible.”

The Bad Bank or Toxic Fund:

The Toxic Fund “provide government capital and government financing to help leverage private capital to help get private markets working again. This fund will be targeted to the legacy loans and assets”

The Toxic Fund will have two kinds of money: government money and private sector money, from investors (whoever that might be – hedge funds, private equity funds, foreign governments like Saudi Arabia or China, whoever else has money and wants to invest in a high yielding, secure basket of assets).

The key is the value placed on the toxic assets bought from the banks by the Toxic Fund (or Bad Bank, as some call it). This will be a matter for negotiation between the private sector financiers, and the government, but the government will use third parties to help set the value: “Our objective is to use private capital and private asset managers to help provide a market mechanism for valuing the assets.”

The government’s moneys that go into the Toxic Fund or Bad Bank will take the first hit if the Toxic Assets re indeed toxic. But my guess is that the hit will – presumably – only be up to an agreed amount, hence the use of third parties to decide what level of risk the private sector money takes.

The total of $500 billion to start with and perhaps $1,000 billion a little later seems low, given that the subprime mortgages and bad credit cards and derivatives held by the banks are, by some estimates, as high as $2 trillion, if not more.

The TAFL:

“Third, working jointly with the Federal Reserve, we are prepared to commit up to a trillion dollars to support a Consumer and Business Lending Initiative. This initiative will kickstart the secondary lending markets, to bring down borrowing costs, and to help get credit flowing again.
In our financial system, 40 percent of consumer lending has historically been available because people buy loans, put them together and sell them. Because this vital source of lending has frozen up, no financial recovery plan will be successful unless it helps restart securitization markets for sound loans made to consumers and businesses – large and small.

This lending program will be built on the Federal Reserve's Term Asset Backed Securities Loan Facility, announced last November, with capital from the Treasury and financing from the Federal Reserve.

We have agreed to expand this program to target the markets for small business lending, student loans, consumer and auto finance, and commercial mortgages.”

There you have it - $350 billion from last years Bush $700 billion, together with $1 trillion from the Treasury and the Federal Reserve (which Obama can make happen without going to the Senate or Congress for approval).