Where, fishy, fishy?

Trump, Furey, and the road avoided

Winston Churchill demonstrating his attitude to crooks, fools, and idiots.

Howard Lutnick is Donald Trump’s commerce secretary. He told senators during his confirmation hearing that he thought the ideal time in the United States was 1900 when the Americans had tariffs on all imports and there was no income tax. He is a fool in an administration of fools, crooks, and idiots. But the fool has told you what this tariff shift in American policy is all about. Well, one thing anyway.

A tariff is a tax and among other things, the billionaires in the Trump oiligarchy want to shift the cost of running the United States government from them to everyone else. A tariff functions like a sales tax.

Governments have been shifting to sales taxes - like the HST - because they are easier to administer and appear fairer on the surface. Income tax came along during the First World War as a way of raising lots of cash for the war effort, easily. And the most money came from taxing people with big incomes. Incomes from people like Lutnick who runs Cantor Fitzgerald or Elon Musk. Think of these tariffs as a sales tax.

At the end of the war, the income tax didn’t go away and in later years, income tax helped finance the huge social improvements that raised the living standards of all the people who used to get screwed by tariffs but who weren’t hit so heavily by income taxes. Happened not just in the United States but in Canada, Britain, and other developed economies. Tariffs are crude and remain the tool of countries that are autocratic or have less advanced administrative skills. But some Americans want to go backwards.

Lutnick is not stupid. He knows who will benefit from lowering income taxes and it won’t be the people who are paying more for everything else because the North American economies are so heavily integrated and he and Trump have tariffed everything that moves. So if you want to get your head around why the Trump crowd hit Mexico and Canada with huge tariffs on a trumped up excuse, there’s your start. A couple of easy targets.

They also don’t give two shits that they’ve been saying and most Americans believe that other people will pay the tax, not them even though Trump voters are the folks paying the tariffs. All this talk about the External Revenue Service plays on that built-in ignorance of basic things across so much of North America. Trump and Lutnick and the others know the truth but they also know you can lie to people easily and get away with it. They may be fools but they are not stupid.

For a nation to try to tax [tariff] itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle. - Winston Churchill, Free Trade League, 1904.

This is what the quote popular among American anti-tax, anti-government types actually referred to. Now they are all standing in the bucket, tugging the handle.

Whatever the Americans behind Donald Trump are up to it is not about fentanyl and illegal immigrants, that’s for sure. That’s just the excuse they are using for their real play, which is about American domestic politics and the oligarchs self-interest. Maybe some larger agenda for greater economic co-operation and possibly just Trump’s outsized ego. All of that’s another reason why any tit-for-tit retaliation is more foolish than the foolishness of the tariffs and the excuses for it.

The original reason and the most sensible reason not to retaliate is that the tariffs applied by the federal government last night come from *Canadian* pockets, not Americans and overall, those tariffs will do little to hurt Americans. Something like hiking the price of energy in the US would have hit the Americans but none of the Canadian Premiers would agree to that, apparently. That would have been way more effective than heavily taxing American bourbon or buying a generic brand of soft drink - from Walmart, as one social media meme suggests - rather than Coke or Pepsi. And by the way, just to show Americans have not cornered the market on stunnedness, one Canadian pointed out to me that it isn’t Walmart. It’s Walmart Canada, like it was some Canuck clone completely cut-off from the American parent company.

The only thing stunneder than that in Canada on Saturday was Canadian media. CTV was half-decent and used lots of interviews with people who knew what they were talking about to explain the implications of the tariffs. Evan Solomon, late of CBC, dragged the overall quality down by drooling over the need to hit back hard at the Americans. He’d have been at home on the CBC, if it were possible to shoe-horn his outsized ego into the shot with Rosie, Adrienne, and Cochrane pontificating among themselves, back-to-back, all day long on stuff they literally know nothing about beyond what someone fed to them or what they made up out of their own biases. Adrienne Arsenault waving around Trump’s 1980s vintage, ghost-written celebrity book as the clue to his psyche was an especially cringy moment.

But David Cochrane, hugely experienced parrot that he is, took the prize for most risible running-off-at-the-mouth time filler as he repeated what someone government official gave him to say or explained the way Elon Musk can supposedly turn on an army of social media zombies to do his bidding at the click of a button. Katie Simpson got added to the mix sometimes from Washington and was very much in the fashion of the others: all half-baked opinion, bias, and recited scripts from one political source or another passed off as insight and “analysis.”

What was missing from all their blather was the same thing that’s been missing from the beginning on the Canadian side, namely an explanation of what the Americans are up to, the different perspectives on the same events, and what sensible alternatives there might be for Canada from different perspectives. That’s analysis. There was some of that from Fen Hampson, an academic with some considerable knowledge of international relations, but he was quickly dismissed by the parrots as a lone voice, as if fitting in with the majority was somehow automatically the blessing of rightness on anything.

Andrew Furey got into the CBC ego-fest for a second and added nothing but his usual vague platitudes. Other Premiers did their own thing, avoiding television, and announcing what their governments would do in response to the tariffs, meaningful or not. Andrew Furey offered one of his signature social media white screens consisting of three paragraphs of fluff. “I join Canadians across the country condemning the unjustified tariffs the U.S. introduced on Canadian products entering the American market. These taxes will be paid by Americans, hurting people in both countries.” His white board simply said the tariffs “are very troubling.” Buy local. And “we will respond” and “support those affected.”

A second version on Sunday announced the provincial government would pull American made wine, beer, and alcohol from its booze store shelves. That’s it. The advance notice lets the Newfs hit buy up all the American booze and wine at full price along with the GNL’s horrendous tariffs, thereby fattening the government bank account. No sense in letting a crisis go to waste.

Deputy Premier Siobhan Coady was not any better. “To my American friends and family,” she wrote on the American-owned Facebook, “I am incredibly saddened that you have declared economic force [did she edit this from the original “war”?] on your friend and ally, Canada. We have had your back thru world wars and welcomed you with open homes and hearts during 911. Why would you allow your President to do this? It harms you with a higher cost of living, higher inflation and it hurts your friends here in Canada. Do you not want our oil, our electricity, our natural resources? This really will be a nasty breakup and you will hurt as much as we will.”

The harm Coady refers to is primarily to the Americans so it’s hard to understand the extreme rhetoric of trade war. Maybe it has something to do with politicians who are going to the polls soon. Like Doug Ford. *Americans* will pay the tariffs. Canadians, especially in Newfoundland and Labrador, can weather this storm. We have alternatives. In Newfoundland and Labrador, we imported less than a billion dollars of goods and services from the United States in 2023 while exporting to America about $4.5 billion worth of goods, mostly oil and fish. The Americans are our largest foreign import source but little they send us is irreplaceable.

The Great Prosperity from the 1990s into the first two decades of the 21st century was the result of freer trade among countries and within Canada. New Protectionists like Trump and other antediluvians want to drag us all back to a time when everyone was poorer. We have been there before. In the 1890s, Newfoundland and Labrador ran into two separate crises as a result of a protectionist government in Britain that stopped the self-governing colony of Newfoundland from trading freely with Americans. In one case, the Brits blocked a treaty between Newfoundland and the United States to protect Canadian trade with the Americans. In the second, Britain blocked an American free trade deal with Newfoundland that would have undermined the British.

At home, though, Newfoundland was staunchly protectionist. Local businesses hid behind high tariffs on imported clothes and other goods that protected the local wealthy and their businesses but that beggared everyone, including themselves, ultimately. Once those tariff walls came down in April 1949, their manufacturing businesses closed up and they all became agents of Canadian manufacturers. Had they supported free trade, their country might not have disappeared under the crushing weight of economic idiocy but even after Confederation, the new Canadian province of Newfoundland and Labrador simply adopted the same protectionist policies of other provinces, despite the black letter of the written parts of the constitution.

In the years after 1949, we simply carried on old habits of protectionism and indolence. Perhaps lost in the anxiety last week over tariffs was yet another report from the Canadian Federation of Independent Business that gave Newfoundland and Labrador yet another failing grade on red tape. The reason is simple: administration after administration refuses to make economic growth and development a priority even though it is the answer to so many of our current problems.

The best they offered last year to the CFIB report was a brain fart from the townie Bored of Trade to hire some people to point businesses to the entrance of the government bureaucracy horrorshow. Stolen from the Nova Scotians, but missing the crucial part, which was the Nova Scotian emphasis on overhauling how government regulated everything. We know the benefits of free trade. We know the harms of protectionism. We should pay attention to our own experience.

People wonder what we could do to cope with this current American fracas. The first thing would be to understand that we are living right next door to the largest economy in the world, we are heavily integrated with it, and this ain’t going away any time soon. The second thing would be to understand this is not just about one president. This has been coming for some time and both Republicans and Democrats all represent some version of the same thing when it comes to trade. Third thing to accept is that countries have interests, not friends, and Canadians have been neglecting their own interests in trade, defence, and security and a host of other things for the past decade. It’s time to grow up and be serious people for the first time in a long while.

But in another sense, what we could do and what would be most helpful in dealing with the changing world is to change ourselves. The ideas we could follow are as simple to describe and as effective as they have been impossible to get anyone in the province with power to endorse, at least until now, maybe. The reason is that it threatens their power and more particularly the power of the bureaucrats and businesses who dominate the current, unworkable set-up.

Getting government out of the way of economic development would be huge and it affects everything from general economic performance to the need for more housing or jobs for immigrants and people across the country. Slashing away at the bureaucratic overgrowth like barriers to trade in Canada would also lower the cost of government, magnifying the impact of new economic development. These are all issues regular readers are familiar with. Search the archive for them. Lowering or eliminating trade barriers between the provinces in Canada would also create more jobs in Newfoundland and Labrador. That's only good.

Besides, it’s in the constitution that there would be no barriers to trade between provinces. Instead, we cannot move beer and wine across provincial borders without paying a huge hit to the provincial tax collector. If you don’t like tariffs suddenly, then understand you pay huge tariffs to the government through the liquor corporation. They just aren’t called tariffs. And no one notices that whenever the liquor corporation boasts of higher profits, all that cash is coming from those tariffs, bolstered by the liquor corporation's monopoly on every aspect of alcohol sales including the licensing of bars and restaurants, which NLC bilks ruthlessly.

So yeah, there’s lots of stuff we can do in Newfoundland and Labrador to get through this time and come out better off on the other side. And if nothing else, we can recognize that if there is a fentanyl problem in North America, and the border really is the issue, the borders we need to secure are the ones between Canada and the rest of the world, not the one or not just the one with the Yanks.

Andrew Furey is broke.

No money.

No ideas.

Unfortunately, he’s not alone.

That’s why, when Furey called provincial industry leaders together last Thursday, they wondered what the federal government was going to do when the Americans slap tariffs on Canadian exports to the United States. So Furey asked for handouts. Furey told reporters that the feds “have levers that provincial governments don't have — they have monetary policies, they have different fiscal room, they have different fiscal instruments, different fiscal capacity — than we do, here, as a provincial government.”

Furey would have some of those, like fiscal room - meaning room to spend or borrow - if he had done anything suggested by Moira Green’s crowd four years ago. Instead, he spent as wildly as his predecessors. He has policy instruments too, meaning he has things the provincial government could do differently to either avoid the jam we are in or shift to a better place. Again, Andrew Furey and his cabinet colleagues deliberately decided not to use those instruments. They didn't want to change direction.

And now he’s looking miserable and expecting Uncle Ottawa to bail him out. Furey wants people to buy local, which is meaningless since most of the things people need - like food - simply isn’t grown locally and can never be grown locally at a price anyone would afford. Besides, anything people from the oil industry or the fishing industry or the whatever industry are now talking about, like diversifying markets, is something they should have been doing anyway if they were interested in economic growth, creating jobs, and otherwise not just carrying on business as usual.

That should tell you that most business and political leaders in the province aren’t all that clued in to the world around them beyond the provincial borders. In itself that’s part of the larger problem in the province these days with leadership. We lack it. Across the board. And the people making decisions don’t really understand what’s happening.

Good example: in the House of Assembly this time last month, one member in favour of this deal with Quebec, admitted she didn’t even know Quebec owned a chunk of the Churchill Falls plant. She admitted it. Others may not have admitted it but were likely equally surprised. More than few - including those at the very top of the government pile who back it - don’t understand how Quebec got its sweetheart deal on electricity and bamboozled the NALCOR team who the politicians just gifted with Confederation 75 medals for their outstanding work. For Quebec. There’s a lot of that going around and for a very long time, that’s the way the province has been run.

As for the rest of us, look at how we react. On social media, there are your fair share of people scolding me the past 24 hours for not jumping on the Team Whatever bandwagon. We did that in 2010. We did it with COVID. Some still want to do it with the ‘69 Deal and again now with this “trade war.” Shutting off our brains. Closing our minds to ideas we do not understand or disagree with doesn’t work. We know it doesn’t work and yet people are lining up to do it again.

We need to recognise that we have met the enemy and, as Walt Kelly put it, they is us. We need to understand that all the anti-Trump insults folks indulge in, the talk of declaring war on us with a few tariffs is more of the unhelpful attitudes that push people deeper into their hard positions, frustrate an agreement or understanding, and just make things worse. Besides, they are also wrong. Factually wrong.

They reflect instead the currently popular tendency to sort ourselves into camps, disregard anyone else as Others, and to give us the benefit of their “analysis” which is entirely missing any sort of *understanding* either of the topic as a whole or the people involved and their differing perspectives. That was CBC Saturday. 100%. And it’s part of how we got here.

That’s the problem.

We need change.

And all we get is more of the same, which is no change at all.

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