The counterfeit motives and false claims of Mark Carney
Counterfeit motive: altruism
False claim: tax leakage
A classic Globe & Mail article from February 2005 featured a photo of Mark Carney and profiled the new members in the Department of Finance. Mark Carney was held out to be some kind of altruistic boy wonder -- who gave up the comfortable life of Wall Street and his job at Goldman Sachs to “do good” for Canada in the Department of Finance.
How selfless of him!
Subsequent events, such as interaction with many executives in the income trust industry and his testimony at the public hearings at Flaherty’s side, have cast serious doubt on whether Mark’s career move was anything remotely resembling altruism. It seems that it was rather a career move, a trade-off between getting rich the slow and predictable way at Goldman Sachs or foregoing the immediacy of today’s payday and “investing in the long term” by entering the civil service and making the wheels of government do his Machiavellian bidding. all the while catapulting him to levels unthinkable as just another everyday intermediate level Goldman Sachs investment banker.
Smart move!
That trade-off made was made rather obvious by the G&M article, in which the altruistic spin on Mark’s career move was in complete disharmony with his compensation musings of:
“Several thoughts flashed through Carney's mind. He was due to take over as senior associate deputy minister of finance (No. 3 in the department hierarchy) in a few weeks, and the Petrocan windfall was a lot bigger than expected. Yet he also knew there would be about $15 in new spending requests for each dollar raised. He briefly imagined some new tanks for the military, or saving a plant full of workers, but he also realized he would never see details of any requests, just the total dollar figures. The 39-year-old former investment banker with Goldman Sachs did a quick mental calculation as well: At his public service salary, he'd have to work about 250 years to earn the equivalent of the $56 million in fees paid to the investment banks that acted as underwriters on the Petrocan deal. "I don't think there are many transactions in Canadian Capital Market history that have worked out better for the client," said one investment banker involved in the sale. "And Carney was the engineer behind the deal." (Globe and Mail, February 2005)
Doesn’t sound very altruistic to me. More like selfish remorse and second thoughts about his career move decision.
It is also oddly coincidental that this same article reported that tax leakage from income trusts was costing the government $50 million a year (according to Deputy Minister of Finance Ian Bennett). Funny that after Mark Carney took over the file, he had found a way to pump up that bogus number by ten fold to $500 million a year. You'd think the income trust market had grown by tenfold from February 2005 to February 2007. It hadn't. But that didn't stop Flaherty and Carney from “talking up” that inflated and thoroughly fanciful figure at the Public hearings into Income Trusts in 2006 and “pumping it up” to the press. See http://caiti-online.blogspot.com/2007/10/pump-it-up.html
Here is the relevant passage:
“Income trusts are another headache. Companies that convert themselves into trusts are allowed to pay out the lion's share of their cash flow to investors very tax efficiently. There has been a deluge of trust conversions over the past few years, and more than 15% of the issues on the Toronto Stock Exchange are now trusts of one form or another. In total, they cost Ottawa about $50 million a year in lost revenue. That's modest, but what if every business in the country converted itself? Of course I worry about these things," says Bennett.”
We are simply left to ponder the ultimate end game behind the counterfeit motives and artifice claims of Mark Carney. He must have pleased his new employers though, because he catapulted over the several others who were in line to head the Bank of Canada.
Step right up folks!
Here is the full text of the article.
Monday, November 12, 2007
There's a sucker born every minute
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4 comments:
As some historical figures and many others have pointed out:
"Tell a lie often enough, and people will believe it as fact."
Politicians are especially adept at using this philosophical approach. Repeat a lie and use disingenuous spin to justify a policy, rather than creating or adjusting a policy based on facts and evidence. Continue, even if the facts, evidence and consequences prove the policy to be in error, so as to avoid embarrassment and the appearance of incompetence.
As Brent has pointed out, Mr. Carney was very obliging in this approach when assisting Harper and Flaherty with their ruinous income trust policy.
Let's also not forget, again as Brent has previously mentioned, Mr. Carney's helpful hand in eliminating the 15% withholding tax on interest flowing to US and other foreign-based entities, including non-Canadian leveraged buyout companies and hedge funds.
He also assisted Flaherty in creating the capital raising restrictions that crimp growth for Canadian income trusts. Of course, though, US and other foreign-based entities, including those taking over our Canadian trusts, face no such restrictions.
So, in summary, we have a policy that has:
1)wiped out $35 billion of Canadians' savings
2)caused losses in the Canada Pension Plan, other pension plans, RRSPs, RRIFs and various mutual funds
3)placed a punitive new tax on Canadian publicly traded income trusts (while no such tax applies to private trusts)
4)eliminated a viable and desired investment choice for ordinary average Canadians (while favouring wealthy private interests)
5)placed seniors, retirees and other Canadians' futures in jeopardy
6)increased the cost of capital for Canadian businesses structured as trusts
7)reduced the ability of these Canadian businesses to make acquisitions
8)placed restrictions on the ability of these Canadian businesses to grow (while US and other foreign-based entities face no such restrictions)
9)eliminated a competitive Canadian advantage and a natural hedge against foreign takeovers
10)encouraged US and other foreign takeovers, especially in the trust sector
11)allowed US and other foreign-based entities to remove income from Canada entirely tax free
12)eroded the Canadian tax base.
With Conservative government measures like these, and Mr. Carney, a former US Wall Street carpetbagger, leapfrogging to head up the Bank of Canada, conspiracy theorists may wish to ponder some of the motivations behind this policy.
The injustices abound, compound and confound.
CON philosophy in the movie 12 Angry Men:
"Don't give me that, I am sick and tired of facts."
"You're like everybody else, you think too much, you get mixed up."
It starts with lies & deception , which leads to more lies & more deception.
We could be speaking about any number of people in the case of income trusts--Stephen Harper , Jim Flaherty , Mark Carney , Jack layton , Judy , Diane--a small cast that invoked a massive amount of damage on a very large & specific group.
It appears that these lies about trusts have yet to catch up with this lot.
However , Mr Mulroney may have catapulted himself into the mix in a round about way with his possible involvement with the Airbus affair & his links with our Prime Minister.
How ironic this could be that since Mr Mulroney & his new employers could be the direct beneficiaries of the trust tax , that it may be his involvement in the nefarious Airbus fiasco , that could cause the removal of the Harper gov`t & the eventual reversal of the trust tax.
Would that not be sweet!!!!
Dec. 8, 2007: Would you have believed that Mulroney was on the take? He not only took 300,000, he took lots on the Airbus. The money he stole from Schreiber. I would be curious to know what "dirty money" is floating around with the taking over of Income Trusts. BCE is another crooked deal. We need to hire a private detective.
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