CBC offered “pure propaganda”

erikAfter a CBC radio offering that made little effort to provide a complete story, economist Erik Andersen sent a message to CBC Early Edition. Erik keeps a close eye on public policy, particularly when natural resources are involved.

If one looks at economic disasters of the past, one thing is certain. Warning signs were obvious to people who paid close attention but were ignored by the rest.

Mervyn King, the former governor of the Bank of England, wrote this in the Wall Street Journal five months ago:

A decade ago, the global financial crisis was under way. A year later, the banking system of the industrialized world was on the verge of collapse. Before those events, I told a gathering of business leaders in London, “Excessive leverage is the common theme of many financial crises of the past. Are we really so much cleverer than the financiers of the past?”

Well, we weren’t. Excessive leverage once again proved to be the weak point of our financial system. And wisdom does not seem to be on an upward trend.

A decade on, one might expect that leverage would have been significantly reduced. And in the majority of large banks, that is indeed true.

But the opposite is the case for much of the rest of our economy. Indeed, total debt relative to gross domestic product is higher now than it was immediately before the crisis…

You can be sure that Erik’s concern arises from paying attention to rising debt levels and how the ordinary public will ultimately be left with an unaffordable burden. He wrote this to CBC:

Your morning business commentator, on a decision by Shell Oil to sell off a Canadian oil field position, left the listeners with the idea that Canadian politics were wanting when it comes to oil field developments. This is pure propaganda and I wish you reporters would start connecting the dots.

The seven largest global petroleum companies have had to confront the reality that they do business using a finite natural resource. This has been known about since the 1950s when “Peak Oil” was first publicly identified by an industry insider with the name King Hubbert.

More recently these seven producers have accumulated about US$500 billion of corporate debt, up from $60 billion only seven years ago. All but one is still paying a dividend and using borrowed money to do so.

The recent advice to the Norwegian Government has been to divest all its oil and gas investments from their sovereign wealth fund. This likely was the work of a consultant hired to conduct a “value at risk” analysis, something the CPP Fund has resisted doing for at least 5 years despite being asked by myself to do so on several occasions.

The future holds little to celebrate for the oil and gas sector yet in Canada we continue to think otherwise and feed the beast with our money. Please refrain from giving opinions that suggest the future is bright for this sector when the global centre of the industry is mostly trying desperately to find a way out from under huge debts. Canadian pension plans should not lend a hand, as I suspect has been the case with the CPP. The Bank of England has already targeted the pension industry for the role in being the saviours of the commercial banks holding non-credit worthy loans as bank assets. Saving the oil and gas sector is likely also in the mix.

Published with permission.

Categories: CBC, Journalism

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9 replies »

  1. Two issues with this:

    1) The CBC has been reduced to a child’s puppet show, with wheasy news and even more wheasy commentary. it is the government’s propaganda machine, where lies are truth and truth is spin.

    2) The oil & gas sector is on the down side of history, yet the greedy players and the even more greedy politicians refuse to deal with facts and hide from them like a child hiding from the bogey man.

    Truth is no longer in the CBC’s lexicon.


  2. The CBC reported something in Feb?
    I thought they had become the jingoistic Olympic Channel for the entire month of Feb?
    When they’re not breathlessly reporting on the latest curling stats they’re spending 5 – 10 minutes “interviewing” sympathetic socialists for the CBC “cause”.
    ie Gender neutrality and socialism at any tax rate.

    The CBC was once nicknamed “The Corpse”.
    I believe it should be renamed “The Zombie” since it’s been long dead, staggering around oblivious to its surroundings, stinking up the airwaves……

    Pull its taxpayer funding.
    Severance off its bloated bilingual staff.
    Save the taxpayers billions.


  3. Do not kill the CBC, because once it’s gone it will be gone forever!!!! Perhaps somewhere down the road a new ruling party may want to make it what it should be or used to be. Remember Petro-Can and what it could have been. Try and get it back. Don’t destroy, change.


    • A good point. But, have we seen any changes since HarperCons were disposed? It may be that both of the old line parties are satisfied with the current style. Tweedledum and Tweedledee share the same establishment interests and CBC seems to reflect that.

      Liked by 1 person

  4. Mr. T junior is the most disappointing federal political hopeful I have ever seen. All the things that Harper did and appointments he made (NEB, CBC, etc) should have been axed on day one, but junior took a look and said I like this and changed nothing. On CBC I can comment on Trump but not on Trudeau or any other important item. The board has to be changed but the little turd has done nothing. There is no left/right in this county, there is only right/con or right/lib.

    Liked by 1 person

  5. perhaps we can get some Canadian politicians to listen to this but it is doubtful. its so much easier and to many more comforting to think oil and gas will be there forever making buckets of money. Jason Kenny being one of them and Notley wanting to stay in office, is playing the game. Not a good move.

    Maintaining the status quo is easier for politicians and it keeps their corporate friends happy. If CPP fails they figure they can either just forget about paying it or paying it out of general revenue, as they once did. neither case is going to work and we might want to give that some really, really serious thought.

    We might want to have a serious look at what emerging economies are going to. When you look at Iran and their move to solar you really have to question our staying with oil and gas. it doesn’t make a lot of sense.


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