Federal Conservatives took The Republic’s advice last week and applied new corporate taxes to income trusts. But Jim Flaherty, finance minister, failed to explain his government’s key problem with the rise of trust conversions among the nations biggest revenue-generating companies. Ideology prevents him.

Flaherty and Prime Minister Stephen Harper said it was the tax losses to the government that prompted their most unpopular move since forming the government a year ago. But the tax issue isn’t as big as they make it out to be.

Receipts collected by individual investors holding shares in income trusts are themselves taxed instead of the company, where normally the profit is taxed before disbursement of dividends to investors. Personal income tax rates may be higher or lower than corporate income tax rates, depending on who we’re talking about. It’s true that currently, with a normal company, corporate income is taxed twice in principle, once before disbursement of some profits as dividends, and a second time when investors report, and pay tax on, those same dividends. But that’s only true for those companies and investors who don’t use clever enough accountants. The actual difference in what the government in the end gets, whether from companies and investors, or from income trust investors alone, is close enough to a wash as to make Flaherty’s move to tax income trusts essentially neutral from the overall tax point of view.

But where the new income trust tax has a real and significant effect is in ensuring corporate Canada continues to re-invest in research, innovation, and growth. What the conversion of giant telecom BCE, for example, to an income trust meant was that current investors in BCE were paid funds that would normally be used by the company to reinvest in its future. The government allows companies to avoid taxes on income that they reinvest into research and development, because these activities are valuable to the Canadian economy. If the government allowed companies to continue diverting research and development funds to dividends for investors, the future of the Canadian economy would be a mere running out of the clock.

But this reason for the new tax, if admitted by Flaherty and Harper, would be tantamount to the Conservative Party admitting there is a legitimate role for government in the private economy using the levers of tax policy. This is exactly what socialists have all along argued, and it’s exactly the idea that the Conservative Party was created to combat.

Corporations as a species is a dumb animal that will eat it’s own nest if not wisely restrained by their parents, the government. Income trust conversions were the latest attempt by our corporations to stubbornly self-destruct, but thankfully, there is enough naturally-occurring socialism within the thick heads of even the most ardent Conservatives to keep corporate Canada from committing suicide. Bravo!

War Crimes

George Bush and the rest of his war cabinet should be careful how they respond to news that Saddam Hussein has been sentenced to the hempen cravat, as one Republic correspondent calls a hanging. The British regime of Tony Blair came out strongly against the death penalty right away, saying it isn’t appropriate punishment for anyone, Hussein included. Themselves too, they might have added: Hussein was convicted because 140 insurgents bent on overthrowing his regime were killed some years ago. It’s nothing Blair himself, who sent troops to participate in a blatantly illegal war of aggression, can’t be convicted for, with killings on his hands a multiple of what Hussein will hang for.

Bush and Co of course famously support the death penalty. The Republic is opposed, but would not stand in the way if that were the verdict, some day, for the lot of them at the White House.

Glen Clark target of US military

A new book by military historian John Clearwater alleges that Canadian defense officials were in a panic about what sort of American reaction would greet then-Premier Glen Clark’s threat to shut US access to the Nanoose Bay torpedo range, off Nanaimo, BC, in 1999. The panic—its’ not clear if it was inspired by actual US threats to Canada’s economy or to the stability, even, of the Chretien regime—was behind the federal government’s decision to expropriate the military testing range.

At the time, most local pundits dismissed Nanoose Bay as in insignificant military installation, and belittled Clark for picking a pointless target to goad the US into restarting negotiations over Pacific salmon fishing treaties. Now, it is acknowledged that Nanoose Bay is “considered the most advanced ocean weapons proving ground in the world,” according to the Globe and Mail. And Clearwater’s book says the Chretien regime worried they’d be covertly overthrown by a US plot similar to the one former Prime Minister John Deifenbaker always alleged was behind his surprising election loss to the Lester Pearson Liberals in 1963.

No evidence has been uncovered, but there can be little doubt that some sort of threat was relayed to the Chretien Liberals by the Bill Clinton Democratic regime of the day. A high-level meeting took place in the days before Chretien announced the highly rare act of expropriation to take the NDP’s Clark’s hands off the issue. Shortly thereafter, figures associated with federal fix-it men like Jean Carl were involved in a series of scandals—none of them in the end amounting to any convictions—that brought down the Clark government in a huge crash. Chief among them are RCMP investigator Peter Montague, who retired after the Clark deck-building scandal that he oversaw (spending over $5 million in an eventually fruitless investigation of Clark), and Ujjal Dosanjh, then the Attorney General of BC (and who went on afterward to become federal Liberal health minister). Dosanjh was the man who announced publicly that Clark was under RCMP investigation, the act that prompted Clark’s inglorious resignation.

After organizing the hit on Clark, Carl left the Prime Minister’s office to take a job heading up Montreal’s Just for Laughs comedy festival.

Re-install Hussein, says CanWest

The day has arrived: a CanWest News Service story printed in the Vancouver Sun, written by stalwart commentator and senior editor Matthew Fisher, actually suggests that what Iraq needs now is exactly what CanWest newspapers backed the US war to remove: “The only way that Iraq may survive,” Fisher wrote, “is for it to be ruled by someone like” Saddam Hussein. The deck on the story makes clear what Fisher, the Vancouver Sun, and CanWest are floating here: “Stability in the divided nation may only be possible under an autocrat.”

Well ain’t that special: no WMDs were found, democracy is not starting there nor spreading from there, and now, the first glimmerings of a call to return to rule there of a regime every bit as brutal as the one the US has spent 3,000 of its own lives, and 200,000 of Iraqi lives, to take out.

Why not go one step further: why doesn’t CanWest call for the return to power of Saddam himself? The Republic predicts this idea will at least be floated out there in the mainstream media within the next six months.

Peak Oil, Part XXXI

Now the IMF/World Bank-backed International Energy Agency (also supported by the governments of the US, Canada, Germany and Japan, among others) is predicting global peak oil production within the next decade and inexorably rising prices due to unrestrained demand. In particular, its new report calls on governments of all levels to do what is possible to curtail growth in demand for fossil fuels, or face economic turmoil and risk collapse.

Memo to Kevin Falcon, minister of highways, and Mr Done Deal on the Highway One expansion: “A business-as-usual approach invites severe consequences for the environment as well as the economies of developed as well as developing nations,” the Vancouver Sun paraphrases the report.

And please don’t trot out that idiotic line about highway-speed cars burning less fuel than congestion-tied up idling cars. The way to compare the two is to average the speed of the trip. A congestion-slowed car, let’s say, averages 60 kl/hour for, say, a 90 kl trip, taking 90 minutes to complete the trip; a non-delayed car does the trip at an average speed of 90 kl/hour, say, taking 60 minutes to complete the trip. An engine averaging 90 kl/hour burns more gas than one averaging 60 kl/hour, but it does so for only two-thirds of the time. Which car ultimately burns more? It’s hard to say, and the actual results might be close to the same either way. No significant gas burning is avoided by enabling cars to achieve higher average speeds for their daily trips. The line about an improved highway saving gas by avoiding idling in congestion is a total crock.

The total bitch!

When political commentator Norman Spectre called Liberal MP Belinda Stronach a bitch on Bill Good’s morning talk show on CKNW, you can hear Good snort as though through a smile. Though Spectre repeated the ad hominem two more times, still Good did nothing to respond or correct his regular guest, nor to distance himself from the comments during or immediately after the episode. Only later, when the comment made national news, did Good offer a feeble and wholly incredible remark: I couldn’t believe he said that and I was too stunned to reply, he said.

Old boy networks will be old boy networks; ‘NW and Good both refuse to fire Spectre, who also maintains his regular column in the Globe and Mail, by the way.

He should be fired most of all for making up facts: he still claims that Oxford defines “bitch” as “one who is treacherous.” It doesn’t, and nor has anyone on the planet ever previously thought so. What else does he make up to argue his points?

First we take the j-schools

Thomas Homer-Dixon, in a Globe and Mail interview, made two intriguing assertions: Wikipedia, the on-line open-source encyclopedia provides a potential model for a renewed democracy retooled to meet the challenges of environmental degradation and peak oil, and governments need injections of courage to make new policies in the broad public interest because there isn’t any other source of change.

The Republic feels that government naturally follows the people, or risks becoming tyranny, which they will reject and subvert, and that the people are known to government through the same means by which the government is known to the people: the media. The Wikipedia model, when applied to the media, generates a vision of broad, volunteered collaboration in journalism, a journalism exactly opposite to the professionalism and accreditation-ism that has been constructed by journalism schools and their corporate financiers over the past 30 years or so.

Media and journalism, even more than—and certainly sooner than—government, needs to be broken out into broad, volunteer, open-source collaboration systems if solutions to dire problems are to be found, applied, and bought into by companies, people and governments in time to avert catastrophes.

Death to journalism schools we say, and take out to pasture all those journalism professors droning away within them too: they are not needed on this voyage, and nor are most of the hollowed-out numb-skulls they produce, those who go on to staff the profession at all those corporate rags.

Rumsfeld out

Even after he resigned in utter disgrace the day after his Iraq war policy cost the Republicans control of both the House and the Senate, media like CNN still persisted in the illusion that Donald Rumsfeld’s lightning strike at Baghdad in April 2003 was brilliant war-making, albeit with success being short lived.

What remains missing from all analysis in media, even though it is available in plain sight—in Bob Woodward’s latest book, State of Denial, for example—is that the Baathist regime in Baghdad took one look at the technologically superior US military in Afghanistan, and devised a strategy to fall back, melt away, stash small weapons everywhere, and launch an insurgency.

There was no success in getting to Baghdad with a small force in quick time: that was Saddam Hussein’s strategy, not Rumsfeld’s, and the result that we see today, that which is called a terrible surprise for American war planners, was the whole point of Hussein’s plan. He didn’t even burn bridges on roads to Baghdad. That alone should have tipped someone off; it certainly should be revealing today, when the fool who lead the US into the biggest trap in military history resigns in disgrace. But no. They all still say the initial drive into Iraq was very successful.

The man replacing Rumsfeld is Bob Gates, a key figure in the Iran-Contra Affair, during which Gates served as CIA director. Gates was alleged to have played the role of passing critical information to Saddam Hussein enabling the Iraqis to push back the Iranians in their vicious war in the 1980s, and also to gas the Kurds, but the evidence against him was too thin to proceed with prosecution, the panel investigating him decided.

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