Update on COMER Litigation

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By Rocco Galati, May 13, 2015
On March 26, 2015, COMER served and filed its amended statement of claim.
On April 26, 2015, the Department of Justice indicated that it would not be filing a statement of defence, but would again move to strike the claim.
Shortly thereafter, I was served with what
is an abusive motion to strike which:
1. Purports to take a second run at the ruling of Justice Russell, and what he determined was justiciable and upheld by the Federal Court of Appeal on July 26, 2014; and
2. The motion further repeats grounds on issue(s) removed from the original claim. (Clearly the amended claim was not read with any attention).
So, what we have is a repeat of the same motion in disregard to the judicial rulings.
I have requested, and Department of
Justice is not opposing, that any motion be
placed before Justice Russell so as to not
duplicate unnecessary time, resources and
In addition, and concurrently, in light of the above, abusive motion, COMER is seeking leave, to the Supreme Court of Canada, from the Federal Court of Appeal, for not having simply ordered the matter to proceed to trial, on the main justiciable issues, rather than maintain the striking of the claim and order an amended statement of claim, albeit that we complied with filing the amended claim.

A Report to Accompany the Update on COMER Litigation

The government’s latest maneuver is both encouraging and disgusting.
It’s encouraging, for it demonstrates how desperate the government is to keep us from getting our day in court. Why? What are they afraid of?
It’s disgusting that, having lost two of three rounds, they should try to start all over again! Are they hoping we’ll give up? Are they hoping we’ll bankrupt ourselves?
It’s especially repugnant, given what their strategy of postponement is costing taxpayers! (And has any other Canadian government cost Canadian taxpayers more in unsuccessful attempts to frustrate legal action
by Canadians seeking social justice?)
The international relevance of this lawsuit is being recognized around the world. My favourite response continues to be that of the Netherlands. Their email message quoted Nietzsche, who said, “And those
who were seen to be dancing were thought insane, by those who could not hear the music.”
In Canada and the US there has been a remarkable surge of interest in the case, promoting many new opportunities for COMER to get its message out. In a call from Connecticut, someone from a TV station said, “The whole world knows about this! How come we’re just finding out?”
At last, the mainstream media has begun to report on the issue. Rocco Galati has been much in demand. A recent interview by CBC’s Amanda Lang, drew an avalanche of response.
Interest coming out of Québec has been particularly exciting.
On a recent visit to London, Ontario, I was shown Québec news videos of “manifestations” there, against austerity. I was shocked by the police violence demonstrators had encountered and astonished that I had heard no word of it in our English newscasts.
At about the same time, COMER received an email from someone in Montreal who wants to set up a COMER chapter there. Another group from Montreal expressed a wish to raise money to support the lawsuit. They invited COMER to send one or more speakers to an event they proposed to organize. Subsequently, Rocco Galati and I attended an afternoon seminar at the University of Quebec in Montreal. It was well attended, and a highly encouraging experience!
The weekend we spent there and the wonderful activists we met were an inspiration! Out of that development have come enthusiastic offers of help to spread the word in French in Quebec.
Both the CBC interview and the Montreal event are available at the comer.org website.
There is no way – whatever it may take – that we can give up on this case! The one response that is constant – whether at meetings, in emails or phone calls, and in often deeply moving messages that accompany
donations – is a heartfelt, “Thank you for what you are doing!”
Most COMERites have already donated generously to the cause. Bill Krehm continues to support the suit to the limit of his ability. We are doing everything we can to solicit help from new sources. Now, whether we are subjected to an other motion to strike or given the leave we seek to the Supreme Court of Canada, we’ll need to raise a significant amount of money. Anything you can do to help will be sincerely appreciated.
Every cent so far donated has been recorded and accounted for and, as far as possible, personally acknowledged.
Donations can be made electronically through www.gofundme.com/COMER or by cheque made out to COMER. Please specify “Lawsuit” on the memo line.

Cheques should be sent to:
COMER, c/o Ann Emmett
83 Oakwood Avenue
Toronto, Ontario M6H 2V9

(Out of 44 cases at the supreme court level the government has won 1!)
good to be true but this is the reality of a fiscally sovereign government.

The Government Could Spend More

Can the government just spend as much as it wants on whatever it wants? Of course not, the result would be out-of-control inflation. Can it spend a lot more than it currently is without substantial negative consequences? Absolutely.
The much discussed “quantitative easing“ in the US, UK and EU is an example of this kind of spending (though very poorly targeted). The US Federal Reserve has created trillions of dollars out of thin air and used it to buy risky financial assets and government bonds in order to take the risk off the balance sheets of financial institutions and improve their supply of money. The money was created with keystrokes on a computer which simply credit the accounts that these financial institutions hold with the Federal Reserve. There has been no runaway inflationary impact of this “printing” of trillions of dollars.
This reality of fiat currency is very difficult for many people to grasp but it’s not quite the magic pudding that perhaps it appears to be. When a government creates oney, it isn’t creating value from nothing. The value lies in the human and capital resources that are underutilised in the economy. The money created by the government is simply the lubricant needed to mobilise these resources.
So, productive government spending is limited by the capacity of the economy to provide the goods and services that the government wants to purchase plus the goods and services the non-government sector wants to purchase. During economic downturns, and especially in recessions, there is spare capacity in the economy which can be employed by government. It’s possible, with this in mind, to quite easily return to the
post-war days of genuine full employment even during an economic downturn.

Some Basic Realities

Until people understand the basic realities of monetary economics we cannot have a meaningful discussion of government finances.
Rather than worrying about deficits and surpluses we should be asking whether the economy would benefit from greater or lesser government expenditure or taxation. This calculation balances unemployment, spare
capacity, and the need for infrastructure and services against inflation risk. It’s a complex calculation but the underlying principles are pretty straightforward.
Let me just restate for emphasis: the need for balanced federal budgets is a myth. Like many myths, it does have some factual historical origins.
Back when currencies were backed by gold it was possible for governments to go broke. Because modern currencies are not backed by anything material, sovereign governments cannot run out of money and can
never be insolvent in their own currency. Somehow, mainstream political thinking hasn’t kept up with the dramatic changes in the monetary system that occurred more than 40 years ago.
The first of our politicians to really understand this and to communicate it effectively to the public will have at their disposal the tools to completely reshape our economy for the better. I know politicians can be slow off the mark but 40 years is long enough. It’s time they caught up.
Warwick Smith is a research economist at the University of Melbourne and is a freelance writer.

Our Comment

Perhaps from his position between that rock and a hard place, Joe Hockey’s perspective will bring him fresh insight into the opportunity that crisis so often generates. He may be forced to shift focus from “the deficit surplus thing,” which is a distraction, to the “reality of fiat currency.” (Fiat currency: money that has no intrinsic value but has exchange value because it is generally accepted. Modern money is fiat money.)
Household analogies are equally popular with Canadian governments, exploiting unwary taxpayers, preying on their limited understanding of the “reality of a fiscally sovereign government.”
That the government does not have to borrow or tax in order to finance spending because they can create money – yet do – is directly related to what is really at issue. That is, should the system’s priority be private profit, or the common good?
Alas! That the truth sounds too good to be true, makes it all too easy to discredit it.
The inflation argument against government-created money has been another important feature of neoliberal propaganda. It is not who creates the money that causes inflation – indeed, nothing is more inflationary than high interest rates, the solution favoured by private banks to fight inflation!
Inflation determines the limit to how much money a sovereign can spend. The productive capacity of the economy is the regulator.
As Graham Towers, first governor of the Bank of Canada confirmed: “Anything physically possible and desirable can be made financially possible.”
Why wait for a slowing economy to exercise fiscal sovereignty? Why not avoid a slowing economy by investing control over the nation’s currency and credit in the nation’s government, “as its most conspicuous and sacred responsibility”? (Prime Minister Mackenzie King) This could end the destructive boom/bust pattern of the present system, and has been historically demonstrated to be a viable practice.
If, without causing inflation, governments can create trillions of dollars out of thin air to bail out failed financial institutions after their irresponsible pursuit of private profit, why shouldn’t they create money to promote the common good, instead?
The proof of the “pudding” has been demonstrated in Canada and other countries. Why should money – which was originally designed as a means to an end – to facilitate the exchange of goods and services essential to society, be privatized, and allowed to become an end in itself?
We need to rethink full employment. Could the fact that mainstream political thinking has promoted the conversion of money into a cancerous medium of power account for the “somehow”?

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