#TakeAKnee

The #TakeAKnee movement is only superficially about race, class, or the effrontery of well-remunerated football players. The reason why it provokes such passions is because it’s really about religion. Namely, the American civil religion: its rituals, its iconography, and especially who is or isn’t allowed to influence them.

The basic mistake that affirmative atheists of the Richard Dawkins / Sam Harris variety make is that they think the driver of religion is its intellectual content. Let the Catholic church make claims about the body and blood of Christ and “No, no,” they’ll say, “you’re doing it wrong. Remember Copernicus, remember Galileo, that so-called blood is still chemically indistinguishable from wine, etc.”. But religion isn’t about what it says; it’s a mechanism for forming and maintaining identity. No two religions make exactly the same claims about humanity, God or gods, or the nature of existence; but they are as one in providing their adherents a way to understand who they are. On the one hand, think of Protestants and Catholics in Northern Ireland bitterly divided from one another, no matter that they don’t look any different. On the other, think of Malcolm X returning from Mecca with a new understanding after meeting blond, blue-eyed fellow Muslims for the first time.

The American civil religion is no different. The USA has its own Last Supper, its own communion of saints and martyrs, its version of the Rapture, and its master narrative to which it requires that all others be subordinate. But the long-simmering conflict over the American identity is now surging toward a boiling point, as control of the narrative slips ever further from those who have long held it. (And to hold something is to deny it to others; that’s the definition of property.)

More than fifty years after the March on Washington, there are still those who feel the need to rise up and demand that the nation “live out the true meaning of its creed: ‘We hold these truths to be self-evident, that all men are created equal.'” In response, there are those who say: “No, no, you’re doing it wrong. Asians learned to fit in; you need to learn to fit in too. Fix the way you talk. Act respectable.” And, unspoken but clear: “Stop making me feel threatened by you and your demands.”

It’s not going to stop. African Americans, and other minorities as well, are part of America and have been from the beginning. They and their experience are part of the substance of the nation — just as they are, not as scolds and remonstrants would have them be. What they want is for that fact to be recognized.

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Home Capital Group

Canadians need to be paying close attention to how their government addresses what just happened with Home Capital Group. The way this unfolds will tell us whether we have an honest and reliable cop on the beat, or if the thieves are now running the store.

Back in 2014, HCG announced that it was letting go of some mortgage brokers due to concerns of fraud. A couple of weeks ago, the Ontario Securities Commission moved ahead with allegations that the company delayed disclosure, made misleading statements and falsely certified an annual report in the wake of those frauds. This move by the OSC caused the company’s stock price to tank and prompted a run on deposits. (Here’s the Financial Post blaming the OSC for doing its job.)

To cover its obligations, HCG has turned to the Healthcare of Ontario Pension Plan (HOPP) which is furnishing a $2 billion line of financing. This deal comes with a $100 million non-refundable fee, and has 200% collateral in the form of mortgages held by HCG. In other words, HOPP may gain $4 billion worth of mortgages for a $2 billion outlay. Meanwhile this financial stopgap bears an interest rate of at least 15% on funds drawn, plus additional interest on funds not yet used. This spells doom for HCG, while allowing HOPP to strip assets from the company at basically no risk to itself, leaving nothing for HCG’s creditors come the eventual bankruptcy.

Here’s the fun part: The CEO of HOPP, Jim Keohane, is an HCG board member and Kevin Smith, HCG’s chairman, is on the HOPP board as well. For these men to use HCG’s distress to serve HOPP is a glaring conflict of interest and may constitute fraudulent conveyance, or hiding of assets from creditors. (For more, read this article from John Hempton.)

There’s a lot of talk that the downfall of HCG is the beginning of the end for Canada’s real estate bubble, and that may be the case. But bubbles are one thing, while honest governance is another. People entrust their livelihoods and futures to financial institutions. When insiders serve themselves by playing fast and loose with other people’s money, that trust is abused. We’ve seen a lot of financial chicanery go unpunished in the last few years. I’m going to consider this case a test of whether our country is capable of keeping its financial industry in hand and not the other way around. Let’s see if our regulators have it in them to do what needs to be done.

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On bathrooms

I read James Howard Kunstler’s blog regularly, but being busy in real life this week, I haven’t taken the time to engage with the comments section. So I don’t know what the tenor of responses to Jim’s pensées about gay and transgender people, the acceptance of gay marriage, et cetera has been. But I just did a quick text search and the word “vomit” only matched once, in the text of his post, but no responses. So no one appears to have taken up what to me was the singular point that I took away from reading him this week.

In brief, Jim Kunstler holds gay and trans people to be the human equivalent of plastic vomit. Regarding transgender people in particular, he offers the following options: “a psychological disturbance, a developmental problem, an extreme fashion statement, or a fantasy.” Why any of these should render trans people fit targets for discrimination or disqualify them from the full protection of the laws isn’t spelled out. It seems that, since they’re a parody of humanity (“plastic vomit”), not actual humans (Edouard Manet’s Luncheon on the Grass), the notion of them enjoying equal status with the rest of us just rubs him the wrong way.

Regarding homosexuality as distinct from transgender, Jim’s attitude toward “that behavior” is likewise dismissive, implicitly attempting to define or demean it out of existence. When I first read A History of the Future (I have my copy here), I was struck early on that the character Andrew Pendergast is introduced as a ‘reformed’ homosexual who has basically wised up and gotten real. In Kunstler’s depiction, if not in reality, the discipline required to survive in the new times just doesn’t leave space for such fripperies and affectations. Likewise in this week’s posting, Jim denounces “state approbation of homosexual behavior” (the Windsor decision) as motivated by “feelings” and thus illegitimate. One might note in response that in the past, and to a great extent in the present, homosexuals have faced relentless social pressure and the most extreme legal sanctions. In Europe they were burned at the stake; in Britain within living memory, Alan Turing, one of the great geniuses of the twentieth century, was forced to take hormones in an attempt to ‘cure’ him; today in Saudi Arabia, gay people face fines, years in prison, and hundreds of lashes with a bullwhip. Yet despite all this, gay people have continued to be gay and to act like it.

Whether the phenomenon of people who don’t fit the gender binary corresponds to any of Jim’s characterizations or not, one thing they clearly are is part of the spectrum of humanity, whether or not we deign to recognize “actually a real sexual category”. That gay people continue to be who they are in the face of everything straight people, backed by the power of the state, can throw at them ‘feels’ to me like an authentic expression of their humanity as they live it — their “pursuit of happiness” — not an affectation. Might this not constitute a rejoinder to Kunstler’s dismissiveness?

Jim’s final point is about the elimination of boundaries. In his view, the DOJ apparently has overstepped itself and “antagoniz[ed] large numbers of males and females by coercing them to consort with transgender people”. Consort! As if transgender people haven’t been here all along, urinating and defecating like all us humans do. (Land sakes, they’ll be using the drinking fountains next.) Which bathrooms trans people happened to use hadn’t been an issue until bigots in state legislatures decided to make it one. Then the federal government stepped up and reminded everyone that it has laws of its own, and won’t neglect to enforce them. The effrontery.

It’s true that when you push people’s boundaries, they push back. That makes for trouble and ruckus, and sometimes controversies that people feel passionate about really can destabilize societies. That’s not a trivial issue. But some boundaries deserve to be pushed, and pushed hard — especially the kind of boundaries that accord people on one side full humanity, and others not. Mr. Kunstler may imagine that he’s being generous in extending the olive branch of civil unions, but the question of “separate but equal” was settled in the courts decades ago: it’s not fit for a free society.

It’s not “extreme relativism” to insist that America live out the meaning of its creed and accord equal treatment to all under the law. It’s the exact opposite. I hope Mr. Kunstler will consider the truth of that statement.

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Ready to pop

Unlike the rest of my family, I’ve always been a renter, and because we’re all surrounded by cultural programming that drums it into our heads that it’s better to own than to rent (“Pay yourself first!”, etc.), I’ve always felt a little bad about it. So a few years ago, when mortgage insanity was at its height and interest rates were bottoming out, I did poke around a house or two and looked into what kind of mortgage I could get. I didn’t take the plunge then, and what I’ve been learning since then makes me feel a whole lot better about the whole thing. In Windsor, renting is a perfectly good deal, and if I lived in a hotter real estate market, it would be much better still.

In a recent article from the Toronto Star, Susan Pigg asks a pertinent question in these troubled economic times: is home ownership really a smart investment? She uses the example of a Toronto home purchased in 1906 for $1,200 which just sold for an astonishing $825,000. Adjusted for inflation, this represents an average gain of 3.9 percent – and from 1947 onward, just 2.3 percent (again, inflation-adjusted). This notably underperforms the stock market over the same time period, even with all its ups and downs. The difference would be even more stark were it not for the recent astonishing run-up of prices in Toronto and other Canadian markets (not Windsor, as far as I know), doubling over the past ten years. Nor does it take into account the necessary expenses of maintaining a place to live:

“A house is not a good investment, it is a roof over your head,” says James McKellar, director of the real estate and infrastructure program at York University’s Schulich School of Business. … Studies have shown that it’s $800 a month cheaper to rent a 1,000-square-foot home than to own it, he notes. “By any empirical study, houses do not inflate. They are a cost. But we all have to live somewhere.”

There’s more to this than just our individual choices to buy or rent. According to this article from The Economist, Canada is one of a number of advanced countries in the midst, or perhaps approaching the end, of a serious housing bubble. In Canada, the magazine calculates that the ratio of housing prices versus income is running 29% above its long-term (since 1975) average, while the ratio of housing prices versus rents is an astonishing 71% above its long-term average. Reality has to catch up sooner or later: when people start to realize that no one will pay the additional premium that gives their “investment” its notional value, the market will revert to the mean. Price discovery takes over, and a lot of people’s seeming equity will transform overnight into unserviceable debt, just as we’ve seen in the United States, Ireland and elsewhere. As a country, much of the wealth we think we have will turn out to be just an artifact of collectively pretending that an expense is really an investment. This has ominous implications for our economic future, and for the lives of millions of Canadians.

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White House pushes Keystone XL decision back a year

Has anyone else been noticing how, even though it’s mid-November, we’re still getting temperatures in the mid-teens here in southern Ontario? Environment Canada Is predicting highs of 16 and 17 degrees for Windsor this coming Sunday and Monday; it’s 14 and 15 degrees C for Toronto, so it’s not just our somewhat-milder Essex County microclimate, either. Jacket weather, surely, but I’m still wearing short sleeves underneath. By now it should be turning downright cold and we should be on the lookout for snow showers. And this is still just the beginning. From here on, climate change deniers are going to have an ever more desperate time clinging to their delusions.

On that note, there is some good news for a change, at least provisionally. There is a big push on to build a new pipeline called Keystone XL from Alberta to the southern U.S., to transport oil from the tar sands to where it can be refined, burned, and emitted into our already overheated atmosphere. The power to greenlight the thing lies in the hands of the Obama administration, not Congress, so for a few months now activists have been picketing the White House, making nuisances of themselves, getting arrested en masse and basically doing everything possible to draw attention to what may be the worst idea in the long, sad history of bad ideas (to quote The Lost World). Thank God, they are getting results: the White House has pushed back by a year any decision to allow the Keystone XL pipeline to be built. That’s another year for the ever-mounting scientific consensus to push back against denialist propaganda and for people to see for themselves how our climate is changing around us. We might beat this thing yet. It’s just one battle in the giant fight against the destruction of our environment, but a good thing is a good thing.

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Looks like I spoke too soon

So, about that whole George Panandreou “democracy” thing, there’s this from today’s Report on Business:

“I will be glad even if we don’t go to a referendum, which was never a purpose in itself,” Mr. Papandreou said in the text of his talk to the cabinet, which was released to reports [sic], according to Reuters. “I’m glad that all this discussion has at least brought a lot of people back to their senses. If the opposition comes to the table to back the bailout, a referendum is not needed.”

So he’s not actually a democrat; he was just using the threat of permitting the Greek people to rule on their own fate to try and shore up his position against his political opposition. Good to know.

 

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Papandreou still a democrat after all

The Euro crisis is close to the implosion point, where no one will be able to pretend anymore. The economic “rescue” plan intended to pull Europe back from the brink will come down on Greece like a ton of bricks, imposing a decade of harsh austerity, unemployment and misery, leaving them in the year 2020 with the same debt-to-GDP ratio as when the crisis started. The Greeks are expected to endure this in order to minimize pain for lenders and, crucially, enable the pretense that Greece has not defaulted on its sovereign debt. If Greece officially defaults, that will trigger payouts on endless numbers of financial derivatives called credit default swaps (CDS), which are basically insurance policies that lenders take out with other lenders to hedge against just this possibility. No one knows exactly how much money has been wagered on likelihood of a Greek default or who the ultimate bag holders are, but the entire structure of mutual obligation is basically a house of cards. If lenders actually have to face reality, and if the European Central Bank continues its intransigent policy of refusing to print new money (which the Germans, with their vivid memories of Weimar-era hyperinflation, adamantly oppose), then everything comes tumbling down and there will be a mad scramble for the exits: bank runs, economic chaos, cats and dogs living together, mass hysteria.

The thing is, the people of Greece are not meekly accepting the fact that they are being reduced to debt peonage, and their Prime Minister, George Panandreou, has shocked everyone by actually agreeing with them and calling for a referendum on the proposed deal. Good for him! Democracy may not actually be dead in the land of its birth. Our own Mark Carney is on the right side of this issue as well. As for those who insist that debts have to be paid, you’re not wrong, but there are two sides to every transaction, and the people who lent money to the Greek government didn’t do it out of the goodness of their hearts. It was a business transaction, done in the expectation of gain, and I fail to see why only one party should suffer the consequences of its failure — especially when it means a boot stamping on the face of ordinary Greeks for the foreseeable future.

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