Mr. Big

He’s been exploding TikTok lately. Jag dances. He skateboards. He flexes his manly muscles. He flirts with his wife. He even lets his long hair down. And the kids have responded with hundreds of thousands of up-votes and follows.

Meanwhile the NDP’s poll numbers are tracking at 20%. Compare that with the 18.2% support that party leader and icon Jack Layton received in the 2011 election (when the Dippers won 37 seats). The worry in both Con and Lib camps is that as Justin Trudeau stalls and accumulates new baggage (houses nobody can afford, a disgraceful exit from Kabul) electoral support will bleed left. That would kill the hopes of a Liberal majority and mean any Con minority would be short-lived. Jagmeet now matters. Especially since the Mills and Zs outnumber the Boomers.

What does this mean for investors, markets, public policy and the economy?

Nothing good. But there may be inevitability here worth preparing for. The New Democrats are, more than ever, focused on wealth redistribution. They want higher taxes on the wealthy, the ultra-wealthy, 1%ers, corporations and high income-earners. The influence on Trudeau is already evident – in his recent 10% “luxury” tax, the expectation of another top tax bracket and his pledge this week to hammer bank profits with a tax increase on profitable financial corps of 18.75%.

The fiction persists that by taking money from the most successful in society services can be extended to everyone and new debt avoided. It’s at the heart of Jag’s platform – a wealth tax on total family assets, separate from and in addition to taxes on income which now range up to 54%. Polling shows eight or nine of every 10 Canadians support this. And why not? Jeff Bezos went into space, so he can damn well afford to pay for your child care, right?

That’s how you think when you get your news from 7-second vids on TikTok. It’s why Singh is all over the platform. He’s cool. He’s all about slogans. Up the people. Down the wealthy. They love it.

“With each passing day a self-proclaimed ‘overeducated’ youthful generation reminds us that our financial ills would be solved if only we’d adhere to the left wing mating call ‘Tax the Rich’,” says blog dog and financial dude Lee. “My question, has anyone done the math on that?  I did, a little, and even the small amount that I did indicates that the overeducated crowd may have missed some important classes.”

Here’s the reality. Personal and public (federal and provincial) debt in Canada is $4.5 trillion. Of that $1.1 trillion is the national debt and $1.7 trillion is owed on mortgages. Last year the Liberals spent $354 billion more than they took in, and every day of this campaign has brought more spending promises. Interest rates are in the ditch and can only rise. This suggests we’re in serious financial trouble already – unable to service debt if rates rise – even without new spending ($10-a-day child care, a UBI, new taxless home savings account, more wrinklie pogey, billions extra for doctors etc). So can taxing the ‘ultra-wealthy’ as the NDP proposes (and soon, the Libs) solve this?

Well, if all of the wealth of all the billionaires in Canada was confiscated, here’s how it would stack up against the money we’ve already borrowed. (It wouldn’t even come close to fixing things.)

Eat the Rich – it won’t accomplish much

Click to enlarge.

“I honestly believe these are the numbers that the left wing of the political spectrum can’t allow anyone to see or understand,” says Lee. “Their illusion of income class warfare and perpetual deficit generation couldn’t survive if Canadians truly understood that the debt accumulated is multitudes beyond what could ever be repaid… by the rich or otherwise.  Any shortfall from the nonsensical ‘Tax the Rich’ movement pales in comparison to the irresponsible/irreparable damage being done by the very politicians conducting the finger pointing.”

Even wiping out the wealth of the richest 25,000 households in the country (with $20 million or more) would hardly make a dent. And in doing so we’d have obliterated, alienated and likely driven away the very people who are responsible for most job creation and economic activity. It would be Jag’s depression.

In fact, our debt may already be unsustainable. Unrepayable. Junk. Mr. Trudeau has in six years accumulated more of it than all the prime ministers who went before. Including his father. Meanwhile many wealthy business-owning families became wealthier through Covid by adapting to the pandemic. This wealth inequality is not a failure of capitalism. It is capitalism. It’s why 1.3 million people have jobs because of Bezos. Rather we have a failure in leadership. Spending in the pursuit of power. It’s what this election is all about.

CBC’s ‘poll tracker’ is giving the Cons a 1% chance of forming a majority government, while T2 has a 58% chance of retaining his minority – supported by the TikTok guy.

You know what that means… The wealthy will not be wiped out. They’re too clever. Nor will whacking them change anything. Instead people like Singh and Trudeau will be coming for you. What a consequential day September 20th is turning into.

About the picture: “My girlfriend has been breeding Purebred Boston Terriers full time for ten years,” writes Dave from London. “She presently has six breeding females, and every one is treated as royalty… to the extent that they live in special kennels in the house, with one or two occasionally getting the “Queen Bee” treatment, being allowed to sleep in the bedroom. She is proud of her litters and has an excellent reputation with both her customers and other breeders. She has always had waiting lists for puppies since she first started dog breeding.  When the Covid lockdown hit last spring, she filled up her 2020 waiting list in less than a week….the 2021 waiting list took another two weeks….and by now 2022 is completed as well….altogether over a hundred anxious “new parents”.  If you were interested in one of her pups, unfortunately the earliest I could get you on the list would be late December of 2022….she’s very strict on absolutely NO que jumping!  (Garth WHO?!?) Keep smacking folks upside the head and between the eyes with your wit and common sense investing agenda. Yours is a “must-read” site every day.”