Saturday, September 15, 2007

Perpetuating the Big Lie

The Big Lie: If you repeat it frequently enough people will sooner or later believe it. Source: Wikipedia

Dan Miles is the Director of Communications in the office of the Federal Minister of Finance, Jim Flaherty. So it's no surprise that Dan Miles would attempt to spin a tale to make Jim Flaherty look good. Today's Regina Leader-Post quotes Mr. Miles:

"When he [Garth Turner] says the markets lost $25 billion in value following the income trust announcement on Oct. 31, 2006, he fails to mention the market subsequently recovered much of that value."

The problem is the market-based facts don't match the Department of Finance fantasy. Since Jim Flaherty announced a surprise 31.5% tax on October 31/06, Income Trusts continue to lag the broader market. Where is the 'value recovery' Dan Miles is talking about?

The following two charts tell essentially the same story:
  • The TSX index is up 12.1% since October 31/06.
  • The TSX Income Trust Index is down 10.5%, lagging the TSX by 22.6%.
  • REITS have fared somewhat better, only lagging the TSX by 13.0%. Notice that after the March Federal budget, REITS began their Flaherty-induced descent as well.
  • The most damage is in the TSX Energy Trust sector,down 16.3% and lagging the TSX by 28.4% since October 31st last year. This at a time when oil prices are nearing $80 US a barrel.

At best Dan Miles doesn't understand the issue or hopes nobody will verify his story. At worst he is a yet another practitioner of 'Big Lie' tactics.

You know the 'Big Lie' strategy I'm talking about, perpetuated by a failed politician from another era:
  • Never allow the public to cool off;
  • Never admit a fault or wrong;
  • Never concede that there may be some good in your enemy;
  • Never leave room for alternatives;
  • Never accept blame;
  • Concentrate on one enemy at a time and blame him for everything that goes wrong;
  • People will believe a big lie sooner than a little one; and
  • If you repeat it frequently enough people will sooner or later believe it. Source: Wikipedia
One thing is certain, and that is an informed voter can figure out what a DoF Director of Communication cannot. And that makes it easy to conclude who has a credibility deficit and who does not.


PerfChart ($TSX,$RTRE,$RTEN,$RTCM) Interactive Performance Comparison Chart

Critic's flipflop on trusts
- Leader Post