Mitch Wolfe: The Playful Contrarian

In my previous Huffington Post article, “Harper’s Huge Political Blunder,” I strongly suggested that Prime Minister Harper was committing a huge political mistake by permitting Flaherty to revive his obsession with imposing a single federal securities regulator on the provinces.

Such a proposal will unify Quebec against the Feds and alienate Alberta, Saskatchewan and Manitoba from Ottawa and Ontario. Flaherty’s Folly will be hugely divisive for Canada — politically and economically.

Especially when in 2015, Canada will have two competing securities regulatory systems: the Alberta/Quebec model versus the Ottawa/Ontario/B.C. model. Each fighting among themselves and both competing to attract local and foreign capital, issuers and investors to their competing and conflicting regulatory systems. Thus jeopardizing Canadian companies and the employment of Canadian workers, in this highly balkanized, uncertain and investment-unfriendly environment.

What is less obvious are the devastating economic consequences that the Wynne-Liberal government will inflict upon the Ontario economy, by signing on to Flaherty’s securities regulatory scheme.

Say what?

But Ontario Finance Minister Sousa just happily signed on to Flaherty’s scheme. Why is such a single securities regulatory scheme contrary to Ontario’s economic and fiscal interests?

There are many reasons why this is a very bad deal for Ontario, grasshopper.

Here is one such reason.

I firmly believe that Flaherty’s scheme will restrict Ontario’s ability to access the capital markets, in order for Ontario to fund its annual deficits and its rapidly growing provincial debt. Thus forcing Ontario to drastically raise corporate and personal taxes and drastically cut its annual social welfare, health care and educational expenditures.

Under the current system in Ontario, the federal government led by Harper and Flaherty has no power over the ability of Ontario to regulate its securities and capital market.

Ontario’s securities and capital market are governed by the Ontario Securities Act (the “Securities Act”). The Securities Act consists of hundreds of pages of laws, regulations, rules and policies, that have been developed over decades by the Ontario Securities Commission, various Ontario governments and Ontario securities lawyers.

The Securities Act is administered by the Ontario Securities Commission, (“OSC”) an independent Ontario Crown Corporation.

The OSC is one of the most powerful government agencies in Canada.

It is self-funded by all the public companies and public entities that use the Ontario capital markets, through filing fees and registration fees. The OSC has an annual budget of over $90 million. The OSC employs hundreds of senior and experienced lawyers, administrators and investigators, many of whom earn well over $100,000 annually.

Since the Ontario capital market represents about 80 per cent of market activity in the entire Canadian capital market, it follows that the OSC which regulates Canada’s largest capital market, would be Canada’s largest, most powerful and most experienced securities regulator.

The powerful OSC is accountable to the Ontario Government through the Ontario Finance Minister.

So the Ontario Government currently controls and regulates 100 per cent of Canada’s largest securities and capital market through its own highly-developed Securities Act and its powerful Crown Corporation, the OSC.

Being in this position has its privileges for the Wynne Government.

Typically any public corporation or public entity which wants to raise funds by selling shares or issuing debt in Ontario’s capital market, must spend an enormous amount of time and money preparing a prospectus, obtaining OSC approval and issuing a prospectus which describes in great detail the issuing company and the nature of the security sold and the related risks, as outlined in the Securities Act.

However, the Ontario government, working with its own OSC and its own Securities Act, several years ago, amended its own Securities Act. In effect the Ontario Government exempted itself from having to incur the huge financial costs and the enormous time of preparing prospectuses for the numerous Ontario bonds that the Ontario government must sell regularly to the capital markets in order to fund its annual deficits and the interest on its growing provincial debt.

Section 73 of the Securities Act states:

“Exemptions, debt securities of governments in Canada.

The prospectus requirement does not apply to a distribution of any of the following debt securities:

1. Debt securities issued or guaranteed by the Government of Canada or the government of a province or territory of Canada.”

Obviously, the extensive review and approval of its own regulator, the OSC, is not necessary.

However, by the Wynne Government unwittingly signing on to Flaherty’s federal regulatory scheme, the Wynne Government risks giving up its ability to be Master of its own House. Or in this case, Master of its own Debt and Economy.

Flaherty’s proposed single set of securities rules for all the provinces, does not include a special prospectus exemption for the Ontario government.

In other words the federal government and other powerful provinces — i.e. B.C., Alberta and Quebec — could insist upon imposing onerous and costly conditions upon the Ontario government when it tries to sell its Ontario bonds to pay for its annual deficits and growing debt.

In addition, the federal government led by Harper and Flaherty could insist that it is in Canada’s national interest, for the Ontario government to stop incurring more provincial debt and instead pay down its debt by drastically increasing corporate and personal taxes. And drastically reducing its huge expenditures on social programs, health care, and education.

Flaherty’s plan is to reduce federal debt by pushing the rising costs of healthcare down onto Ontario . Also by controlling the federal securities regulator, Flaherty will have the power to prevent Ontario from incurring more debt to pay for these healthcare costs.

Great for Flaherty, but an economic and fiscal disaster for the Ontario government and the Ontario people.

In my next article, I will show how Wynne joining Flaherty’s federally-controlled “co-operative” scheme, will also lead to a serious decline in Toronto’s financial jobs and financial-related jobs, which will kill the Ontario economy.

Premier Wynne, you proclaim your desire to properly manage Ontario’s economy.

Just say No to Flaherty’s Folly, or you will be responsible for the irreversible decline of Ontario’s economy.

When Quebec Premier Pauline Marois launched her Charter of Quebec Values last week, she fully expected that there would be adverse reaction from Liberal Leader Trudeau, NDP Leader Mulcair and from the federal Conservatives.

In fact she counted on exploiting negative feedback in persuading French Quebec that the rest of English Canada was unwilling to support Quebec’s national identity as a secular French state. And that Quebec independence was Quebec’s only real option to realize and preserve its true and unique identity.

What Marois and her band of provocateurs did not contemplate, was harsh and stinging criticism from French Quebec sovereigntists, in her own backyard, to her nefarious proposal.

In the past, I have not been very sympathetic to Bloc Quebecois members. The raison d’etre of the Bloc is Quebec independence from Canada. Which the Bloc hoped to achieve by paradoxically becoming elected federal members of the Canadian Parliament. The very same Parliament, the Bloc wished to destroy by causing the break-up of Canada, and the separation of Quebec from the rest of Canada.

However, the case of former Bloc member Maria Mourani is unique and different and worthy of some empathy, even from this unrepentant and staunch Canadian federalist.

Apparently, according to Ms. Mourani, she and her family, originally from Lebanon, chose Quebec over France, because of Quebec’s alleged greater tolerance of minorities. Mourani astutely argued that the fact that Marois was using France’s own secularism model as a model for Quebec’s Charter of Values, would be a disaster for Quebec because France had a terrible record of integrating immigrants into French society.

In a CBC radio report, Mourani, claimed that upon arrival in Quebec, she truly wanted to integrate into Quebec society, so she joined the Quebec sovereigntist movement. She then spent many years as an active volunteer in the provincial Parti Quebecois and the federal Bloc Quebecois. And then as an elected member of the BQ, promoting the fact that the Quebec independence movement was open to and inclusive of immigrants.

However, Mourani, in a recent interview at her Ahuntsic home riding office, articulately attacked the proposed Charter of Quebec Values as a calculated election-driven strategy for votes at the expense of the defense of basic human rights.

Mourani further argued that all the previous efforts of the PQ and the Bloc to woo immigrants, and her own efforts over many years, to the sovereigntist cause, have been destroyed by the publication of this Charter of Quebec Values.

Mourani further admitted that Marois for short term electoral advantage, was clearly appealing to the ethnic nationalists of the French Quebec population. A taboo topic in PQ and BQ circles, which clearly implies that the Quebec independence movement is at its core, an appeal to intolerance, xenophobia, and racism.

That is, to the French Quebec suburban/rural/public union vote, where there are few visible minorities, and the fear and ignorance of the “Other”, are most pronounced.

Mourani also questioned how Marois hoped to leverage this Charter into widespread support for Quebec independence, when it was very clear that many Montreal-based sovereigntists, ( ie students, intellectuals, professionals, workers and activists) were strongly opposed to this Proposed Charter.

Note, because of Mourani’s heartfelt and public criticism of the proposed Charter, Daniel Paille, the Bloc leader, apparently influenced by Marois and her Party executive, kicked Mourani out of the Bloc caucus, whereupon, Mourani quit the Bloc party.

Interestingly, much to Marois’ chagrin, the cause of Mourani has been taken up by such leading Quebec sovereigntists as former PQ leader Bernard Landry, a personal friend, and Lise Lapointe, the wife of former PQ leader Jacques Parizeau and even the great Parizeau himself.

I predict Marois’ internal conflicts with her own Montreal PQ members and separatists will further undermine support for her own party, her own government, her ill-conceived Charter of Quebec Values and will further divide the Quebec independence movement.

Last Friday, sovereignty activist Jocelyn Desjardins announced the launch of a citizen petition denouncing the expulsion of Mourani.

By 6 p.m., the petition had been signed by 100 people — many of them high profile members of the movement.

Marois’ Charter is thus influencing public opinion in Quebec and outside of Quebec, that the PQ’s base is in fact, rural, redneck and racist French Quebec Tea Party types, backed by a French Quebec civil service of Kippa Kops and Turban Troopers.

And the much maligned Marois is fast becoming the Sarah Palin of French Quebec.

President Barack Obama rose to prominence and power on the wings of his inspirational rhetoric. It is only fitting that his soaring rhetoric will lead to his own Icarus-like rise and tragic fall.

In his address to the nation on Tuesday night, Obama seemed to argue for two conflicting approaches at the same time.

On one hand, Obama made a methodical argument for military action. He explained why the world shunned chemical weapons, pointed to evidence that the Assad regime used them, and argued that it is in the national security interest for the U.S. to respond to that attack.

Obama also claimed that while he had resisted calls for military action in the country’s civil war, the situation “profoundly changed” after the Assad regime “gassed to death” hundreds of people last month. He said a “targeted military strike” would not embroil the U.S. in another war, and vowed he would “not put American boots on Syria.”

Even a limited strike will send a message to Assad that no other nation can deliver,”Obama said.

In other words, Obama was addressing the American people and American Congress, for a call to limited military action.

But, on the other hand, at the same time, and almost in the same breath, Obama spoke eloquently about his securing a way to take this military option off the table, in favour of an improbable Putin-driven diplomatic initiative.

That is, due to the good offices of Russian President Putin, Syrian President Assad, has agreed to willingly identify and hand over to Russia and a friendly UN group of inspectors (note no Americans will be part of this team) all of Syria’s chemical weapons.

This Putin proposal is beyond reason and belief. But more about that later in this piece.

Michael Gerson of the Washington Post nailed the vacuity and emptiness of Obama’s internally contradictory speech when he asserted in a recent column:

“The resulting message was boldly mixed. Assad is a moral monster — who is now our partner in negotiations. The consequences would be terrible ‘if we fail to act’ — which now seems the most likely course. America ‘doesn’t do pinpricks’ — especially when it does not do anything. ‘The burdens of leadership are often heavy’ — unless they are not assumed.”

This strangely ambiguous speech seems to have further undermined Obama’s credibility, with Congress and the American people. And internationally, Obama’s speech and his poorly-planned action of jumping to accept Putin’s chemical weapons gambit, seems to have led to many consequences unfavourable to the U.S. and its allies.

Gerson further notes in his column:

“Vladimir Putin offered Obama an escape, which he gratefully took. But there are implicit costs. An American military strike is off — something Putin thought inevitable just a few weeks ago. Russia’s Syrian client, Bashar Assad, stays in power. The Syrian opposition is effectively hung out to dry. Russia gains a position of influence in the Middle East it has not held since Anwar Sadat threw the Soviets out of Egypt, allowing Moscow to supply proxies such as Syria and Iran with weapons while positioning itself as the defender of international law and peace. Iran sees that America is a reluctant power, with a timid and polarized legislature, that can be easily deflected from action by transparent maneuvers.”

It is fascinating to note that some of the most vociferous critics of Obama are former liberal admirers of Obama. Bill Keller in a recent New York Times column is brutal in his criticism of Obama being played by the wily Putin.

Keller, referring to Putin clearly outmaneuvering the feckless Obama, writes:

“While seeming to help President Obama out of a political fix, he has made the American President seem even more the captive of events. A president who once seemed sure-footed, combining prudent diplomacy with the occasional bold stroke (killing Osama bin Laden) now stands accused of being, as his Texan predecessor might have put it, all hat and no cattle. He vowed to bring the Benghazi killers to justice, to stand against the return of military rule in Egypt, to arm the rebels in Syria, to enforce a red line against weapons of mass destruction. So far, he has accomplished none of the above.”

As to the probability of Syria handing over its chemical weapons to a UN sponsored team for destruction in the middle of a civil war, the odds are next to nil. The practicalobstacles to success are overwhelming .

Also Putin is demanding that any UN Resolution on this matter omit recourse to a military solution if Syria does not comply.

And that should not fly with the U.S. and its allies, unless Obama is so desperate that he will do anything to cater to Putin in order to avoid a military strike option against Syria.

The thuggish Putin thinks that Obama and the U.S. are so weakened, that he had the chutzpah to pen a highly critical Op Ed Piece in the New York Times, criticizing, among other things, America’s view of itself as exceptional and unique. And criticizing hypocritically the U.S. for contemplating a military action, when Russia has been supplying arms to Assad to assist his regime in killing and gassing 100,000 of his own people.

According to liberal CNN on Wednesday night, all the panellists agreed that Putin’s Op Ed piece in the NY Times, was Putin’s way of flipping the bird to Obama and the American people.

This is what happens to the U.S. when its President leads from behind, or worse.

President Obama is finally bringing together the unruly and ideologically opposed factions of Congress.

But unfortunately for Obama and his administration, the once fractious and dysfunctional American Congress is unifying in opposition to Obama’s proposed limited military strike against Syria.

And becoming a very strong and vociferous coalition of the unwilling and unsympathetic.
This is American history in the making, folks.

Rarely has an American President, who has sought Congressional authority to use limited force in a foreign war, been so decisively rejected by the elected representatives and the American people.

Recall that there are 433 members in the US House of Representatives. Obama needs 217 votes in order to pass his use of force measure for a limited US military strike on Syria.

As of Sunday, September 8, 2013, according to informal polling by the Washington Post, 111 reps are against military action; 115 reps are leaning to no military action; 182 reps are undecided and 25 reps are for military action.

Of those against military action 24 reps are Democratic and 87 are Republicans. Of those leaning against military action, 38 are Democrats and 77 are Republicans. Of the undecided, there are 120 Democrats and 62 Republicans. Only eight Republicans are strongly in favour of military action. And only 17 Democrats are strongly in favour of military action.

As of Sunday, if all those House members against military action and those leaning against military action do not change their positions, then Obama’s attempt to seek Congressional support will fail.

Obama has to win over all the undecided, about 182 reps and especially, 62 undecided Republicans. Which is highly unlikely.

Time is running out for Obama.

Obama is planning a Tuesday evening, September 10, prime-time national television speech. The Senate is to vote this upcoming week. And next week, the House of Representatives will have a decisive vote.

It is fascinating to note that though the Obama Administration is pressing House Democrats to vote for the measure in order to preserve Obama’s credibility both in the US and abroad, progressive Democrats are clearly resisting this last desperate pitch.

Progressive House Democrat Alan Grayson of Florida has come out very publicly in opposition to his own President on this measure. Grayson has stated that embarrassing the president by tanking Obama’s authorization is the furthest thing from his mind.

“We’re talking about war and peace. We’re talking about money and blood. We can’t be making our decisions on that basis,” [referring to the need to support the pro-war measure in order to salvage Obama’s personal reputation and his authority] he said after a classified briefing on Thursday.

Similarly, House Democrats who are opposed to this war measure do not want to appear traitors to their own party. Therefore they are categorizing their probable vote against their own President, as votes of conscience.

These issues are not about a party position. These are votes of conscience,” said Democrat Rep. Rosa DeLauro of Connecticut. She too is undecided — a position where many Democrats feel most comfortable several days before they will be asked to vote “yea” or “nay.”

Another serious problem for Obama is that Democrats opposed to the strike aren’t just dovish liberals. For example, Senator Joe Manchin of West Virginia, a conservative Democrat, has already publicly announced that he cannot support the resolution. And undecided Democrats are more apt to ask critical questions of Obama on Syria than automatically back the president.

“We can’t afford another…Iraq and Afghanistan, two long, drawn-out engagements that cost a lot of lives,” said undecided Democrat Senator Mark Begich of Alaska. “We have a lot of questions still to be answered here, even though the commitment is no boots on the ground. Where does this leave us?”

In addition, many Democrats who may have supported Obama are opposed to this war measure, because such an American military action against Syria lacks UN authority and may be considered illegal under international law, as this military action cannot be categorized as the US acting in its own self-defence.

Furthermore, this proposed action lacks the support of NATO and even Britain, America’s staunchest military ally in the Afghanistan and Iraq wars.

In summary, as a result of Obama’s ill-conceived effort to seek Congressional support for this Syrian war measure, one can say that Obama has finally united the red states and the blue states, at least temporarily.

But in opposition to his own Presidency.

Once again, life has a funny way of seeking revenge, especially against someone whose overweening pride and sense of his own grandeur has led to his own downfall and personal failure.

President Obama, “no good deed, goes unpunished.”

And you will be punished by the coalition of the unwilling Americans.

President Obama and his key political strategist David Axelrod, think they have the Republican-controlled and pro-militaristic House of Representatives, over a foreign policy barrel.

For over four years, Obama has been waging war against Congressional Republicans over the majority of his policy initiatives: Obamacare, greater gun control, the budget, the debt ceiling, the sequester and immigration reform, to name a few.

In each case, Obama has vainly tried, and mostly failed to secure the support of any Congressional Republican for his policy proposals.

This time, Obama believes he has executed a brilliant winning strategy, against the obstructionist Congressional Republicans.

Obama and Axelrod are confident that the Congressional Republicans will put aside their personal disdain for Obama and domestic partisan concerns and support Obama’s limited military strike against Syria for the sake of defending America’s national security interests and enforcing the international prohibition against the use of chemical weapons.

I predict Obama will not obtain Congressional support and will suffer a humiliating personal and political defeat.

Let me elaborate why Obama is going to lose this vote in Congress next week.

Firstly, Obama has the constitutional authority to order a military strike against Syria as Commander in Chief, without Congressional approval. It would have been sufficient for Obama to confer and consult with the Senate and House leaders of both parties. Provide them with intelligent reports and briefings. And then he would have obtained their unqualified and active support. And with the cover of bipartisan Congressional leadership support, Obama could have attacked Syria militarily in a limited but effective fashion, without suffering any major political negative fallout.

Instead, Obama has in effect transferred the constitutional power to engage in a limited military strike from the President to Congress. A representative body, more interested in domestic politics, public opinion and the 2014 midterm elections than in the long-term national security interests of America.

I submit that Obama has unnecessarily lost control of his agenda. And domestic politics will trump his more national security and international security concerns.

Secondly, public opinion polls indicate that the American people are about 60% opposed to any military strike against Syria, as opposed to about 40% in favour of such a military action. Thus making it easier for Congressional Republicans and some Congressional Democrats to vote against the President.

Thirdly, there is a strong faction in the Congressional Republicans, who are Tea Party/Libertarian/isolationists, (i.e. staunch followers of Republican Senator Rand Paul) who are adamantly opposed to the US spending good money on arms and weaponry, to partially attack Syria and its President Assad, just for the limited purpose of symbolically expressing US displeasure. They will definitely oppose Obama on this action.

Fourthly, there is a strong faction in the Democratic Party who are pacifistic, anti-war and in favour of multilateral peaceful negotiations through the good offices of the UN. They recall all too well the lessons of the misadventures in Iraq and Afghanistan. Especially the former situation, where the US attacked Iraq on faulty intelligence and without clear cut UN support. As is the case once again, in terms of the lack of UN authorization. Though Democratic leader Pelosi, will try to whip up Democratic support, I predict that many Democrats will vote their conscience against their own President.

Fifthly, there is a serious disconnect between Obama’s military objective of stopping the Syrian Government from using chemical weapons and the actual end result of such a limited military strike. Notwithstanding that over 100,000 Syrian lives have been lost to date, and that two million Syrian refugees have been created, over about two years of civil war, Obama is only acting now, due to the alleged use of chemical weapons, which have apparently killed about 1,400 people. It will be really tough to convince Republicans and the American people, that there is a moral imperative to now fight against the loss of 1,000 lives due to chemical weapons, when there was no such moral imperative, when over 100,000 Syrian lives have been lost to date.

Obama has also stated that cruise missiles launched from US warships will be the thrust of the military strike.

Practically, such a strike may damage Syrian airfields and some airplanes, but in no way will such a long distance strike, destroy or adversely affect the Syrian Government’s extensive holdings of chemical weapons, which are probably hidden in very deep underground bunkers and storage centres.

As Obama has stated, such a limited strike, is no more than a symbolic “shot across the bow”. This is another reason why many Congressmen will oppose this limited military strike. What is the point, if the practical result will be the failure to destroy Syria’s large cache of chemical weapons?

Sixthly, the old saying may kick in for President Assad. What does not literally kill him, will literally make him stronger. Secretary of State Kerry has admitted that the military objective is not regime change, so that the Syrian President will survive a limited American military strike. As a result, the Syrian President may be emboldened by his survival and may continue to wage civil war and continue to kill his fellow citizens. So what has Obama accomplished by this strike? On the face of it, not so much.

Seventhly, America’s own security interests are not directly affected by the Syrian civil war. It also does not make a lot of sense to suggest that America’s national interests are best served by such a limited strike, because such a strike will provide greater protection to US allies in the region such as Israel, Turkey and Jordan.

It actually serves Israel’s interests if its three major enemies, Syria and Hezbollah and Iran are caught up in this Syrian civil war and many of their own men are being killed in the fighting.

A US military strike against Syria, although symbolic, may lead to Syria and Hezbollah and Iran attacking Israel, which event will clearly undermine Israel’s security, not enhance it.

Lastly, Obama and his people will argue that for the US to do nothing after Obama has stated over a year ago that the use of chemical weapons was a red line that should not be crossed, would result in the US losing international credibility.

Well, I hate to break this to Obama and his sycophantic followers, but that proverbial ship has sailed months, if not years ago. Obama has been dithering while Syrians burned. His public and pathetic displays of indecision and navel gazing and internal soul searching, for the last two years, if not longer, have all contributed to undermining America’s international standing in the world.

This proposed limited military strike will do nothing to enhance Obama’s and America’s diminishing power and diminishing deterrent force.

For this reason and the above reasons, Congress will cast a resounding ” no” vote against Obama, which will further undermine his Presidency.

Perhaps Obama should bring back to his Administration the only senior government official with steel cojones, Hillary Clinton. Now there is a one tough Democrat who would strike fear in the hearts of the Syrians, Iranians and Hezbollah.