The federal government is deliberately making housing affordability worse.
When you get a large increase in interest rates, that is supposed to have a large negative impact on housing prices. And while prices are down in Canada, they are nowhere near down enough to erase the insane rise that occurred before and during the pandemic. One big reason: the Liberal government is protecting people who can’t pay their mortgage. The Canadian Mortgage Charter isn’t a law, but it lays out the government’s “expectations” on how the banks should treat borrowers, which is very gently. Missing payments gets you a polite email from your banker asking if he can help. Amortizations are being adjusted to where some owner’s monthly payments are only covering the interest. The stress test, which is a key method for determining whether people can actually afford their house, has been eliminated for people renewing their mortgage.
It's somewhat understandable why the government is doing this. Trudeau doesn’t want to be blamed for a wave of defaults. But it's a very risky move by the Liberals to stop the housing market from functioning like it's supposed to. Firstly, their measures will only work if interest rates go back down and the economy stays relatively strong. Any exogenous shock – war, pandemic, etc. – that hurts the economy or spikes inflation could lead to a full-on banking meltdown (2008 ring a bell?). Canadians are the most indebted people in the developed world, with debt levels at roughly 170 percent of disposable income. That isn’t sustainable. You can kick the can down the road, but eventually you run out of road and fall into the ditch.
Secondly, the Liberals don’t seem to care that there are millions of young Canadians that can’t afford current home prices and have been waiting years for them to come down significantly. A market only works if prices can go up and down. Refusing to let the market work as it’s supposed to is another subsidy for homeowners at the expense of non-owners and renters. Affordability has become a huge issue and it will surely be a central talking point for Poilievre and the Conservatives come election time. Besides, Trudeau is already getting blamed for the housing situation, because it’s ‘his fault’ interest rates went up in the first place. To those people who thought 2 percent mortgages were normal and would last forever, well, I got nothing for ya. If you are underwater on your mortgage, the only person you should blame is yourself.
Environmental problems are economic problems, and we are all going to be paying more for just about everything.
I’ve already wrote about insurance and how rates are skyrocketing, but that’s just the tip of the iceberg. Environmental issues are hitting your wallet in myriad ways right now. For instance, a good chunk of the food inflation we’ve experienced has been due to environmental factors. While climate change is the biggest problem, it is unfortunately nowhere near the only one.
1) Plastics and other pollutants are killing birds and fish at an exponentially growing pace. Plastic microparticles are killing fish before they can reproduce, which, when combined with overfishing, is leading to rapidly diminishing populations. Fish are the primary source of protein for about 40 percent of the world population. I’d be willing to bet a lot of seafood will be mostly unavailable to us in 10 years, and if it is, the cost will be many multiples of what it is now.
2) About half the freshwater in the US is too polluted to drink, and while the US has always been bad on this issue, it’s not a stretch to extrapolate this level to the rest of the world. The main cause is agricultural chemicals running off into rivers and streams. Add to this the extreme droughts we now experience regularly, and you see how dire an issue water will be in the near future. Water will become a major expense, a radical change for a resource many people have long taken for granted.
3) Food waste has ballooned over the last 20 years. About 60 percent of all the food produced in Canada is wasted, a figure that should make you feel like tossing your cookies. Food thrown away becomes methane (25 times worse than CO2), and if this waste were a country, it would be the third largest carbon emitter in the world. Wasting food means we are also wasting gobs of water, energy and chemicals. The main culprits are fickle consumers, greedy companies, and illogical and unsustainable long-distance supply chains. Waste is a major factor in the increase in food prices. And in a world where a couple billion people don't have enough to eat, this can't be allowed to continue.
I could go on and on, but the gist should be clear. Whenever you hear someone whining that we can’t afford to address environment issues, understand that we’re already paying a lot because of them, and that it’s only going to get much worse.
The outlook for Ukraine is looking more dire than ever, and that is very bad news for all of us.
The war in the Ukraine has become a prolonged, costly and bloody stalemate, and this favors Russia. Putin is counting on NATO getting tired of aiding the Ukrainians, so he is happy to have the war settle into a holding pattern. Many of the right-wing politicians in Europe and the US – people that Putin not coincidentally helps win elections with his massive disinformation programs – are already trying to stop the flow of military aid to Ukraine.
Without help, Ukraine won’t be able to hold out much longer. Russia is a much bigger country, and Putin has successfully buffeted his economy by switching a large swath of manufacturing to armaments (high oil prices are helping a lot, too). I have been wrong on this; I misjudged how well Putin would cope with a protracted war, mainly because I gave the everyday Russian too much credit. In any other place, a hundred thousand soldiers dying for a dictator’s vanity project would entail serious political upheaval. But apparently, not in today’s Russia.
It is always the wrong move to cave in to maniacs. If Putin succeeds in Ukraine, it won’t be long before he attacks another country – Poland, Finland, the Baltic states. These are all NATO countries, but the future of the alliance is in some doubt because Trump has repeatedly talked about abandoning NATO. If that happens, autocratic powers like Russia and China will have free rein, and the world will become incredibly dangerous and chaotic.
We can hold the line now in the Ukraine, or pay a far, far greater price later on. (A lot of people have obviously forgotten about Neville Chamberlain.)
The main thing propping up democracy right now is that the wannabe fascists are too dumb to do anything right.
Putin aside, it hasn’t been a good year for right-wing nuts, which shouldn’t come as a surprise; relying on delusions, prejudice and lies is never a formula for success. Still, the scale of epic failure is pretty impressive. Let’s start with Israel, where every week brings a new revelation on how badly the Netanyahu government botched its handling of Hamas. How about Erdogan in Turkeye? Inflation is running at a mind-boggling 62 percent. Orban’s Hungary? The economy has been in recession for almost two and half years, coupled with near 10 percent inflation. This is called stagflation and it is the worst economic outcome you can have. Modi in India? His government has been humiliated by revelations they ordered assassinations in the US and Canada of Sikh separatists, a movement that doesn’t even seem to have any significant popular support amongst Sikhs living in India. Meloni in Italy? Faced with a cold dose of reality, she promptly dumped most of her election promises in the sewer - which is exactly where they belong.
Unfortunately, people don’t seem to be learning anything from all this. Support for far-right parties is holding strong or gaining throughout Europe. Russian and Chinese disinformation campaigns are still extremely effective; just check up on some of your Facebook friends for proof. There is a good chance more pseudo-fascists are elected in 2024, including Trump in the US. This isn’t hard, folks. If you vote for bad people, you get bad results. What else would you expect?
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