Remembering Veterans …

Today is Remembrance Day in Canada - what America calls Veterans Day - and everything except retailing and restaurants shuts down tight across the country, even in Québec.

Canada treats Remembrance Day observations much more somberly than do US celebrations. This may well be the result of how the British mercilessly used the colonial Canadian army as fodder in both World Wars and the US seems to view Veterans Day mostly as time for a one-day-only sale.

Also, I suspect Remembrance Day is such a somber commemoration in Canada not just because the country has had peacekeepers on constant active duty in various places around the world for as long as any Canadian alive can remember, but because one in 275 Canadians died in World War II, one in 100 in The Great War. Since half the population was female and a significant share of the men were either too old or young, two entire generations of men in this country were wiped out. Twice.

In World War I, British commanders like Gen. Kitchener sent Canadian troops over the top first and units were usually assigned impossible tasks such as taking and holding Vimy Ridge. Tens of thousands of Canadians died in a few days of fighting while the Brits stayed the flanks and took very little German fire. But Canadians held the ridge.

It was much the same thing in World War II.

When Winston Churchill decided to try a poorly planned mini-invasion of France way before D-Day, Lord Louis Mountbatten send a nearly all-Canadian force to Dieppe. Ill-considered, ill-trained, ill-equipped and ill-led by the British, almost everyone was either killed or captured, and those who returned to England suffered hideous wounds and injuries.

During the Italian campaign, Field Marshall Montgomery used Canadian troops to take the brunt of German resistance in the middle of the country as the British army fought its way up the relatively soft east coast of Italy.

Likewise, during and after D-Day: Canadians were first assigned to fight their way through the hardest of German reinforcements at Normandy and, later, sent alone to rout Germans during the Battle of the Veldt in the Low Countries.

On the other hand, the Dutch have been forever grateful to Canada for liberating their country.

It is Canada - not Britain or America - that holds a special place in Dutch hearts. The tulip gardens in front of Parliament in Ottawa are a thank you from the Netherlands for liberating the nation. Holland may be the only place on earth where Canadians hide the flag most of them have on their luggage. While elsewhere in the world the flag will bring a smile, a welcome or an open door, in Amsterdam a Canadian can hardly negotiate the handshakes and hugs from strangers when they walk down the street.

On a number of occasions over the years, I've been in bars in Holland where a friendly local happened to ask where I was from. When I answered Toronto, patrons wouldn't let me pay for a drink the rest of the evening.

My dad served in the US Navy in the Pacific during World War II. Other than a few anecdotes like how he found a way to scrounge more than his ship’s meager allotment of beef when a supply party went ashore, he barely spoke of his wartime experiences. Now that he is long dead, all I have from that period of his life are his officer’s dress uniform, a pair of shoulder bars showing his rank, a tiny handful of photos and an ash tray some Chief Petty Officer carved out of a shell casing after Guadalcanal.

Phil survived the war, went to law school on the GI Bill, and when he aged and needed medical help, the Veterans Administration hospital in St. Paul, Minnesota turned him away. Despite Congress’ promise to veterans in the Forties that “if you fight for your country, we’ll take care of your medical needs for life,” Ronald Reagan changed VA regulations and broke the promise. Phil would relate easily to the problems veterans of Viet Nam, Iraq and Afghanistan face nearly every day with the VA.

So, to Phil and the millions of others who served in war time, it is truly a day to remember all of you. Thanks.

Now For Something Completely Different ...

Sarah Palin’s father, Chuck Heath, told the AP that Palin spent “the weekend going through her clothing” to determine what belongs to the Republican Party after it spent $150,000-plus on a wardrobe for the vice presidential nominee (and possible Senate candidate? -Ed).

“She was just frantically … trying to sort stuff out,” Heath reports. “That’s the problem, you know, the kids lose underwear and everything has to be accounted for.”

Uhm, has anyone bothered to ask why contributors to the Republican Party were buying underwear for Palin’s children?

Meanwhile, in Wasilla, hometown backers put aside their disappointment over her unsuccessful Veep bid to focus on really important issues. Jessica Steele, for one, can’t wait to see what Sarah Palin does next – with her hair.

“That’s something I want to talk to her about: What’s our vision for her hair?” says Steele, proprietor of the Beehive Beauty Shop and keeper of the governor’s Bee Gee’s era up-do since 2002.

This just about sums up Sarah’s depth and that of her campaign and friends. ‘Nuff said.

Is Henry Paulson Channelling Chairman Mao?

One of Chairman Mao Tse Tung’s “sayings” immortalized in his Little Red Book deals with stealth in politics and war. “Make a noise in the east,” the Great Helmsman wrote, “and strike in the west.”

On Monday afternoon, I realised that Treasury Secretary Henry Paulson is channelling Chairman Mao. While everyone on the Hill and around America was focusing attention on the election and bank rescue plan – a noise in the east – on Sept. 30, Paulson struck in the west by quietly giving banks a $140-billion windfall by issuing new regulations under an arcane provision of a seldom used 1980’s-era tax law involving corporate mergers.

According to The Washington Post, the change to Section 382 – a provision that limits a kind of tax shelter arising in corporate mergers – came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, bank lobbyists told the Post, its opponents thought it would be nearly impossible to revamp the section because it would look like a corporate giveaway.

It would look like a giveaway because that’s exactly what Paulson intends it to be, and Goldman Sachs best friend in Washington pulled a fast one on Congress and the American people while everybody was looking the other way.

If people called Bill Clinton “Slick Willy,” this must make Henry Paulson a 21st century Wily Coyote. He’s like Willy Sutton, the once-famous bank robber: Sutton said he robbed banks because “that’s where the money is” and Paulson robs taxpayers for the same reason.

Muck And Mire

Listen to Treasury’s rationale: Spokesman Andrew DeSouza says Paulson has the legal authority as part of his power to interpret the tax code and provide legal guidance to companies. He described the Sept. 30 notice, which allows some banks to keep more money by lowering their taxes, as a way to help financial institutions during a time of economic crisis.

Apparently, Paulson doesn’t think that Seven Hundred Billion Dollars is enough of a helping hand to get clever, greedy bankers with their voracious appetite for grabbing someone else’s cash out of their own muck and mire.

Even more egregious, noted tax lawyers and other experts around the country say Paulson’s gimmick isn’t even legal.

"Did the Treasury Dept. have the authority to do this? I think almost every tax expert would agree that the answer is no," George K. Yin, the former chief of staff of the Joint Committee on Taxation, told the Post’s Amit Paley. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

Adds Candace A. Ridgway, a tax partner at the law firm Jones Day, "It was a shock to the tax law community. It was one of those things where it pops up on your screen and your jaw drops.

"I've been in tax law for 20 years and I've never seen anything like this," Ridgway asserts in an interview with Paley.

Today, I spoke briefly with 10 US tax lawyers I know well in New York, Washington, Chicago and Minneapolis. All said Treasury has no legal authority to unilaterally change the meaning of Sect. 382; at least two of the 10 were aghast Paulson would try pulling such a stunt in the waning days of an administration already blamed for being too cozy with Wall St. and causing the financial crisis.

Now What?

Here’s the rub.

If either Treasury repeals its own regulation or Congress does it for Paulson, there’s a serious risk that more than a few of the recent bank mergers – many engineered by Treasury, the Fed or the Federal Deposit Insurance Corp. to prevent weak banks from collapsing – will unravel. The tax benefit Paulson created is likely to be one of the driving forces behind a healthy bank’s willingness to take over a sick sister; in some cases, the acquiring bank might well have its entire, potential exposure covered by tax breaks generated by the deal.

About the best thing would be for Congress – preferably the lame duck session that convenes shortly or at least the new one in January – to turn back Paulson’s slight-of-hand trick without toppling existing merger deals. No one would gain by a sudden rash of unexpected bank failures, and the ensuing losses would put the FDIC at risk.

Still, if anyone needs proof at this late date of the deceitful behavior of Henry Paulson and the rest of the Bush gang, they need look no further than the Sept. 30 regulations for Sect. 382. Someone better lock the cash register now, before the door slams into their backside as they leave office Jan. 20, 2009.