Quotulatiousness

March 29, 2012

Federal budget highlights (and lowlights)

Filed under: Cancon, Economics — Tags: , , , , , — Nicholas @ 15:26

My local MP also happens to be the federal Minister of Finance, who got his moment in the spotlight today as he unveiled the government’s 2012 budget. The media folks who were in the budget lock-up are just starting to publish their reports on the “wins” and “losses” as they see them in the new budget.

Initial Tweets concentrated on these headline-friendly moves:

  • Old age pension eligibility will rise to 67
  • Civil service will shrink by 19,000 positions
  • Coinage change: we’re abandoning the penny (they cost 50% more to make than they’re worth, and we didn’t make it up in volume)
  • Return the budget to balance by 2015-2016 and begin running a surplus after that
  • Pravda The CBC, our government-owned TV/radio network, will see a 10% cut in funding

I’ll update this post as new information gets published.

Update: John Ivison at the National Post calls it “A grand vision of still-big government”:

For a government that has forsworn the vision thing to this point, Budget 2012 is Obama-esque in the audacity of its hope for the future.

“We see Canada for what it is and what it can be… Today we step forward boldly, to realize it fully — hope for our children and grandchildren; opportunity for all Canadians; a prosperous future for our beloved country,” said Jim Flaherty in his speech to the House of Commons, boldly going where no Conservative Finance Minister has gone before — save perhaps Sir George Foster, who served Sir John A. Macdonald.

Mr Flaherty summoned up Sir George in his speech, quoting the need “for long vision, the fine courage of statesmanship and the warm fires of national imagination….Let us climb the heights and take a look forward.”

If the rest of the contents fail to live up to that level of rhetoric, they do at least amount to a serious attempt to move beyond the naked bribery of budgets past.

Paul “Inkless” Wells calls it “Harper’s very political budget”:

Revolution, ladies and gents! Light the torches! In his December year-end interviews, Stephen Harper used the term “major transformations” a half-dozen times. He made fun of earlier majority prime ministers. They let the bureaucrats put them to sleep! For years! No chance of that happening to Harper. Major transformations, coming right up.

Fast forward to this afternoon. “We will eliminate the penny,” Jim Flaherty told the Commons. It was literally the first new policy measure he announced. “Pennies take up too much space on our dressers at home.”

Now you know why Trudeau and Mulroney and Chrétien were such snoozers. It was the pennies. Weighing them down all day. Cluttering their dressers at night. Pennies wear a guy down. Harper, the Interac Prime Minister, will be fleet of foot, full of vim, and ready for —

— major transformations? No. I don’t have a searchable electronic text of Flaherty’s speech, but I do not see the word “transformation” anywhere in it. The rhetoric is altogether more reassuring. “The reforms we present today are substantial, responsible, and necessary,” he said, and “We will stay on course,” and “We will maintain our consistent, pragmatic, and responsible approach to the economy,” and “We will implement moderate restraint in government spending.”

From the Budget overview itself, a welcome change to Canadians who shop in the United States:

Every year, Canadians take some 30 million overnight trips outside of Canada, often returning with goods purchased abroad. Modernization of the rules applied to these purchases is long overdue. Economic Action Plan 2012 proposes the most significant increase in the duty- and tax-free travellers’ exemptions in decades. The travellers’ exemption allows Canadians to bring back goods up to a specified dollar limit without having to pay duties or taxes, including customs duty, Goods and Services Tax/Harmonized Sales Tax, federal excise levies and provincial sales and product taxes.

The Government proposes to increase the value of goods that may be imported duty- and tax-free by Canadian residents returning from abroad after a 24-hour and 48-hour absence to $200 and $800, harmonizing them with U.S. levels. This measure will facilitate cross-border travel by streamlining the processing of returning Canadian travellers who have made purchases while outside Canada. This change will be effective beginning on June 1, 2012. It is estimated that this measure will reduce federal revenues by $13 million in 2012–13 and by $17 million in 2013–14.

Campbell Clark at the Globe and Mail says the budget marks a strong change in the government’s formerly pro-military stance:

The Harper government is slashing spending on Canada’s international presence, with deep cuts to the military, aid and diplomacy.

It marks a reversal to the Conservatives long-ballyhooed policy of beefing up the military: It’s no longer just slowing the growth of Defence spending, but cutting it back, and delaying billions of dollars in capital spending on military hardware for seven years.

[. . .]

In fact, neither the budget nor the host of government officials attending a lockup to explain it provided a figure for the Defence budget for the coming year, and in the years affected by the cuts. Officials said that information was not being presented on budget day.

Still, it was clear that the impact will be deep. Since 2006, the Harper government has touted year-over-year increases for military spending, even when it announced two years ago the growth would be slowed. Now it’s cutting.

By 2014-15, more than $1.1-billion a year will be lopped off the regular Defence budget. But that’s not all. In addition, $3.5-billion in capital spending — the sums the military uses to buy equipment like planes, ships, trucks, tanks and weapons — will be put off until seven years from now, so that the government can save an average of $500-million a year.

Hmmmm. Slowdowns in major equipment purchases? I wonder if we’re about to get a Defence White Paper. We’re probably overdue for one of those…

March 28, 2012

“[T]he Government of Canada is [like] a big national insurance company with a side business as a tax collector for the provinces”

Filed under: Cancon, Economics, Government — Tags: , , , — Nicholas @ 10:17

Kevin Milligan in the Globe and Mail:

The first question to ask of any budget announcement is whether the dollars are recurring or one-time only. If we change a tax that brings in $1-billion a year, the budget changes not just this year but in future years as well. […] Politicians and commentators often choose the time frame that suits their current argument. Confusion results. A good economist keeps her eye open to these tricks and tries to ensure we compare numbers on similar time-frames.

Next up is properly adjusting future dollars to account for inflation and our ability to pay. Dollars spent in the future are different than dollars spent now. Imagine that inflation averages 2 per cent a year, and inflation-adjusted economic growth is 1.5 per cent a year on top of that. In just 20 years, prices will increase by 50 per cent and the size of our economy — and our ability to pay for programs priced in nominal dollars — will double.

[. . .]

As a final note, it is always useful when crunching the numbers to keep in mind what the Government of Canada actually does with our tax dollars. Transfers to individuals for insurance programs (such as Employment Insurance and Old Age Security) are 25 per cent of spending. Transfers to provinces and territories (health and other transfers) are another 20 per cent. Interest takes a further 11 per cent. The best way to think of the Government of Canada is a big national insurance company with a side business as a tax collector for the provinces. (This is only slightly different from the US Government, which has been called by Ezra Klein an insurance company with a standing army.) Everything else the Government of Canada does — from fisheries management to culture to the military — takes the remaining 44 per cent. Making any change to the trajectory of total spending when insurance and inter-government transfers are both projected to grow rapidly requires very large changes to that residual 44 per cent.

The “Greatest Generation”, then the “Luckiest Generation”, and now the bill comes due

Filed under: Economics, Government, Politics — Tags: , , , , , — Nicholas @ 10:01

John Kay on the luck of the Baby Boomers:

I belong to a lucky generation: too young to have experienced the Depression, or the second world war, or postwar austerity. The first political figure I recognised was Harold Macmillan, who told voters they had never had it so good.

His statement was true, if foolish, and my contemporaries and I benefited. The government paid us to go to university. We took for granted we would choose between attractive job offers. I was quickly appointed to a post from which it was practically impossible to be fired and which offered a pension scheme with generous, index-linked benefits. I bought a flat with a mortgage whose value was wiped out by inflation. By the time I was paying a higher rate of income tax, the level had been cut from 83 per cent to 40 per cent. My life expectancy is several years longer than my father’s, and I have already considerably exceeded the age at which his father died.

If young people today want to attend university, they will have to pay for tuition and borrow to meet living expenses. When they graduate, they face a much more competitive job market. Few careers will offer the job security once characteristic of middle-class employment. Defined benefit schemes have almost disappeared from the private sector, and public sector pensions are to be substantially less generous. Tax rates must rise, partly to pay for the care and medical treatment I will demand as senility advances. The only financial consolation for the next generation is the windfall when we leave them our houses.

The first half of the baby boom generation certainly were the luckiest cohort in human history. The second half of that generation didn’t do quite as well, the Gen X kids and the Millennials are going to be stuck with most of the bill for all the government-provided goodies that the early boomers have arranged for themselves. Pensions and healthcare, in particular, will have to be reined in for younger workers … just as the bulk of the early boomers have squeezed all the juice out of the system.

Aside from retroactively cutting back the benefits to baby boomers, the only other way to mitigate the financial burden is growth, but most governments in the west are pursuing goals that will not help and in many cases will retard economic growth.

March 27, 2012

The Quebec student protests as a harbinger of the coming “entitlement wars”

Filed under: Cancon, Economics, Education, Government — Tags: , , , — Nicholas @ 10:30

Bill Morrison in the National Post:

This past week, the streets of Quebec have been full of marching students, displaying a degree of anger and solidarity the likes of which have not been seen in Canada for many years. The fact that this protest is focused on naked self-interest — maintaining the province’s ridiculously low tuition fees rather than world peace, global poverty or even the inchoate agenda of the Occupy movement — speaks volumes about the emergence in Canada of an inter-generational struggle over entitlements.

Everyone knows that a clash over entitlements is in the offing in Canada as a whole. It may come, as the political right argues, because government coffers are close to empty, and cutbacks have to be made. It may be, as the left suggests, that governments have been hijacked by low-tax, pro-corporation policies, and no longer care about equality and social safety nets. It even could be, as still others argue, that the public usage of our core institutions — hospitals, colleges and universities — has simply outstripped our capacity or willingness to pay.

As for the specific example of tuition, the simple fact is that university education is underpriced in Canada, particularly for the middle and upper classes that benefit from impressive tax savings along the route of getting their children to and through university. It is a much smaller subset of the total student body — children from low-income families — that deserves greater financial support and attention. Instead, and in a mix of self-interest and a commitment to equality, students demand the same concessions for all.

March 26, 2012

Stephen Gordon: financial headlines you’ll never see

Filed under: Cancon, Economics, Media — Tags: , , , — Nicholas @ 08:00

In the Globe & Mail Economy Lab column, Stephen Gordon points out the monotonous message we get from our financial news sources every time a foreign company buys a Canadian firm:

Here is a headline that will never, ever run over a foreign takeover story: “Foreign buyers taken to cleaners by savvy Canadian investors.”

The reason you will never see that sort of a headline is that all stories in which foreigners buy Canadian-owned assets are based on the assumption that foreign investors are — yet again! — snapping up Canadian-owned assets on the cheap, and why oh why won’t Ottawa intervene and put a stop to it? The notion that Canadian investors are fully capable of assessing the value of their holdings and that they might earn a tidy profit in selling them never seems to make an appearance in these accounts.

Debating “granny tax” and generational warfare

Filed under: Britain, Economics, Government, Health, Media — Tags: , , , — Nicholas @ 07:38

In the Guardian, Patrick Collinson looks at the media’s response to the British government’s recent “granny tax” moves:

In case you missed every newspaper front page (the Telegraph went for “Granny tax hits 5m pensioners”, the Daily Mail said “Osborne picks the pockets of pensioners”, but Metro won with “Gran theft auto”), at issue is the decision to freeze and then scrap the higher personal allowances for people over 65.

But let’s first ask why people in retirement are awarded better income tax breaks than those who are working? There was a fascinating analysis in the Financial Times last weekend of the economically “jinxed generation” — and they’re not pensioners. It found that today’s adults in their 20s will be the first generation who won’t be better off than their parents. What’s more, the disposable income of people in their 60s is now higher than people in their 20s, for the first time ever. We’ve created a society where the non-working retired earn more than working people — and that’s before adding up the largely unearned wealth tied up in the houses of those in their 60s.

It wasn’t like this when the welfare state started. Before the second world war, retirement was for most people short and miserable. It was entirely right that as a rich society we found a way to improve the lot of the elderly with better state pensions and free healthcare. Along the way, we added better personal allowances, fuel payments, free bus passes, free TV licences, free prescriptions and so on.

March 25, 2012

Reason.tv: 3 Reasons to End Obamacare Before it Begins!

Filed under: Economics, Government, Health, Law, USA — Tags: , , , , , — Nicholas @ 08:36

March 24, 2012

The state of Pakistan: grim and getting grimmer

Filed under: Asia, Books, Economics, Education — Tags: , , — Nicholas @ 10:00

Robert Fulford in the National Post, examines the evidence presented in Ahmed Rashid’s book, Pakistan on the Brink: The Future of America, Pakistan and Afghanistan:

In rich, persuasive detail, Rashid describes corrupt leaders and a despairing population, an army that obeys orders only when it wants to, a stagnant economy, disastrous relations with neighbouring countries — and above all, a persistent national tendency, exemplified by Zardari, to blame others when anything goes wrong. Americans are often seen to be at fault, and sometimes Israelis. India is considered permanently blameworthy.

Half of school-age Pakistanis don’t attend school. At the state’s founding in 1947, 52% of the citizens were literate; in 65 years that number has been raised to 57%. In the last 20 years, Rashid notes, Pakistan has not developed a single new industry or cultivated a new crop. On the level of imagination, it has died or lapsed into a coma.

Politicians and military officers take turns forcing each other out of power; that’s the only system of regime change that operates, and it does nothing to eliminate corruption.

Rashid makes it clear that Pakistan’s core problem is as much a moral as a political failure, a matter of shirked duties, profound dishonesty and rancid hatreds that encourage murder. Reforms don’t happen, he believes, because neither political, nor military leaders have the courage, will and intelligence to carry them out.

March 23, 2012

Millennial generation not following the script

Filed under: Economics, History, Liberty, USA — Tags: , , , , — Nicholas @ 11:57

They’ve been subjected to more “sharing/caring” and “we are the world” propaganda than any group of youngsters since the Young Pioneers and the Hitler Youth, yet they appear to be shrugging off the programming in double-quick time:

Young Amer­i­cans care less and less about the the en­vi­ron­ment, pol­i­tics, and the world around them in gen­er­al, a study has found; even the idea of seek­ing a mean­ing­ful life is out of fash­ion.

In­stead, mon­ey, im­age and fame are the idols of our time.

“Pop­u­lar views of the mil­len­ni­al genera­t­ion, born in the 1980s and 1990s, as more car­ing, com­mun­ity-oriented and pol­i­tic­ally en­gaged than pre­vi­ous genera­t­ions are largely in­cor­rect, par­tic­u­larly when com­pared to ba­by boomers and Genera­t­ion X at the same age,” said the stu­dy’s lead au­thor, Jean Twenge, a psy­chol­o­gist at San Die­go State Uni­vers­ity and au­thor of the book Genera­t­ion Me. “These da­ta show that re­cent genera­t­ions are less likely to em­brace com­mun­ity mind­ed­ness and are fo­cus­ing more on mon­ey, im­age and fame.”

[. . .]

The wish to save the en­vi­ron­ment, an ar­ea of par­tic­u­lar con­cern to mil­len­ni­als, showed some of the larg­est de­clines, with three times as many mil­len­ni­als as ba­by boomers at the same age say­ing they made no per­son­al ef­fort to help the en­vi­ron­ment. Fif­ty-one per­cent of mil­len­ni­als said they made an ef­fort to cut down on elec­tri­city use to save en­er­gy, com­pared to 68 per­cent of boomers in the 1970s.

[. . .]

In the Amer­i­can Fresh­man sur­vey, the pro­por­tion of stu­dents who said be­ing wealthy was very im­por­tant to them rose from 45 per­cent for ba­by boomers (sur­veyed be­tween 1966 and 1978) to 70 per­cent for Genera­t­ion Xers (sur­veyed be­tween 1979 and 1999) and 75 per­cent for mil­len­ni­als (sur­veyed be­tween 2000 and 2009).

The frac­tion who said it was im­por­tant to keep up to date with pol­i­tics dropped, from 50 per­cent for boomers to 39 per­cent for Genera­t­ion Xers and 35 per­cent for mil­len­ni­als. “Be­com­ing in­volved in pro­grams to clean up the en­vi­ron­ment” fell from 33 per­cent for boomers to 20 per­cent for mil­len­ni­als. “De­vel­op­ing a mean­ing­ful phi­los­o­phy of life” de­creased the most across genera­t­ions, from 73 per­cent for boomers to 45 per­cent for mil­len­ni­als.

Software patents: a legal minefield with no accurate maps

Filed under: Economics, Law, Technology — Tags: , , — Nicholas @ 10:33

In the Atlantic, Timothy B. Lee explains why most software companies are effectively ignoring the patent system:

A major reason for the recent explosion of patent litigation is that it’s hard for software firms to figure out which patents they’re in danger of infringing. There are hundreds of thousands of software patents in existence, with more than 40,000 new ones issued each year. Indeed, in a recent paper, Christina Mulligan and I estimated that it’s effectively impossible for all software-producing firms to do the legal research, known as a “freedom-to-operate” (FTO) search, required to avoid infringing software patents — there simply aren’t enough patent attorneys to do the work. That’s a major reason why most software firms simply ignore the patent system.

One of the striking things about the patent debate is vast gulf between the views of computer programmers on the one hand and patent attorneys on the other. Steve Lundberg is a patent attorney and blogger who mentioned our paper in a blog post exploring the challenges of performing FTO searches in the software industry. I don’t want to pick on Lundberg, because I think you’d get similar arguments from many patent lawyers. But his post shows a fundamental lack of understanding of how the software industry works.

I work in the software industry (although not as a programmer), and I’ve lost count of the number of times I’ve seen software patents granted for things that clearly do not meet the stated criteria for granting patents. It could be a geeky party drinking game: guess whether a particular common programming technique or decades-old user interface element is patented or not, take a drink when you guess wrong. It’d be educational, although guessing “patented” every time might leave you stone cold sober at the end of the party.

As a matter of patent theory, Lundberg is absolutely correct. Patent law’s novelty and obviousness requirements are supposed to narrow the scope of patent protection. But in practice he’s dead wrong. The patent office issues a seemingly endless stream of patents on broad, obvious concepts like emoticon menus, one-click shopping, and wireless email.

And the existence of these broad, obvious patents means that software companies are constantly infringing each other’s patents by accident. The companies with the largest patent portfolios, such as Microsoft and IBM, have tens of thousands of patents, allowing them to credibly threaten almost anyone in the software industry. Even Yahoo, with its relatively modest cache of 1000 patents, was able to find ten patents to assert against Facebook.

March 22, 2012

Reason.tv: Jim the Realtor

Filed under: Economics, Humour, USA — Tags: , , — Nicholas @ 08:01

“When I come into a house with buyers, I start picking it apart,” says San Diego’s Jim Klinge, known on the internet as ‘Jim the Realtor,’ a wise-cracking real estate agent who posts his honest, painful, and sometimes hilarious assessment of bank-owned properties on his Youtube channel: youtube.com/jimtherealtor.

While both the Bush and Obama administration have advocated programs aimed at keeping people in their homes, Klinge argues that this is the exact wrong approach and is only prolonging the agony in the housing market.

March 21, 2012

This is why Paul Ryan’s budget proposals will go nowhere

Filed under: Economics, Government, USA — Tags: , , — Nicholas @ 09:40

It’s because he’s not only requiring the middle classes to take a hit for the team, but he’s also trying to get rid of all the custom-crafted deductions, loopholes, shelters, and special favours in the tax code. Middle class voters have been sending their elected representatives to Washington to add to the special tax “tweaks” that disproportionally benefit the middle class. That’s how politicians ensure their re-election chances.

Unveiling his new budget proposal, Paul Ryan once again reminds us that he is one of the few men in Washington with guts and brains operating in harmony. His budget asks the big question in American politics: What is the middle class willing to give up in order to save the country?

I am afraid that the answer will be: Not very much.

[. . .]

The reaction to Ryan’s tax plan will be the truly telling thing. He proposes to create two relatively low tax brackets but to do so in a way that achieves revenue neutrality by eliminating most deductions and exclusions. Almost certainly this will mean reducing or eliminating the mortgage-interest deduction, deductions for state and local taxes, and deductions for charitable giving. (Ramesh’s beloved child tax credit probably will survive, unfortunately.) The Committee to Reinflate the Bubble will fight tooth and talon to defend the mortgage-interest deduction, and they’ll have a great many middle-class homeowners behind them.

H/T to Kathy Shaidle for the link.

Update: Nick Gillespie thinks that the Ryan budget proposal is merely an echo of Obama’s plan, not a serious attempt to get the government’s finances in order:

In brief, the Ryan plan is not as bad as [President Obama’s] budget, which wants to spend $3.8 trillion in FY2013 and envisions spending $5.8 trillion in FY2022. Over the next 10 years, Obama assumes that federal spending would amount to 22.5 percent of GDP while revenues would average just 19.2 percent of GDP. That ain’t no way to run a country.

In this sense, Ryan’s plan is slightly better but still doesn’t pass the laugh test. He would spend $3.5 trillion in 2013 and $4.9 trillion in 2022 (all figures in the post are in current dollars unless otherwise noted). Spending as an average of GDP would average 20 percent of GDP and revenue would amount to just 18.3 percent.

[. . .]

Yet Ryan’s plan is weak tea. Here we are, years into a governmental deficit situation that shows no sign of ending. How is it that Ryan and the Republican leadership cannot even dream of balancing a budget over 10 years’ time? All of the discussion of reforming entitlements and the tax code and everything else is really great and necessary — I mean that sincerely — but when you cannot envision a way of reducing government spending after a decade-plus of an unrestrained spending binge, then you are not serious about cutting government. If Milton Friedman was right that spending is the proper measure of the government’s size and scope in everybody’s life, then the establishment GOP is signaling what we knew all along: They are simply an echo of the Democratic Party.

March 20, 2012

“You’d have to be blind and deaf not to know how much this project has gone off the rails”

Filed under: Cancon, Economics, Military, Technology — Tags: , , , , — Nicholas @ 11:22

In the National Post, John Ivison explains why he thinks the new Auditor-General will have a field day examining the F-35 project:

Alan Williams is a retired assistant deputy minister, responsible for procurement at DND in the early years of the F-35 project, and recently he shared his thoughts on the shortcomings of the tendering process with the Office of the Auditor-General. “The whole process was twisted to suit the needs of the military, with the acknowledgment and support of ministers. It was totally unacceptable,” he said.

He thinks the government should write a new statement of requirement and put the whole project out to an open competition.

“You could run a competition today and have it done within two years,” he said. “You’d have to be blind and deaf not to know how much this project has gone off the rails.”

He said that in his experience, maintenance costs on sophisticated military equipment run at two to three times acquisition costs. He believes the eventual cost to taxpayers for the F-35s is likely to be $25- to $30-billion — double the current government estimate.

It’s quite possible that the F-35 purchase was a bad idea, and that the military rigged the competition from the start. Not inevitable, but possible. The criticism of the military procurement process in the article is a bit over-done, especially here in Canada where almost any military spending has to be assessed primarily for political advantage and regional distribution before the actual military benefit or value to the taxpayers is taken into account. Every major project’s specifications are “tweaked” to meet certain overriding criteria.

To oversimplify, if the item in question is available from two different suppliers that provide effectively the same function, tacking on a secondary requirement that only one of the suppliers can readily meet distorts the process to favour that supplier. It’s not usually that blatant, but if it happens when the item in question is as simple as network cable or packaging material or socks, you can be certain that it happens for multi-billion dollar purchases whose specifications are the size of paperback novels.

Australian billionaire claims Greenpeace accepts CIA funding to fight coal exports

Filed under: Australia, Economics, Environment, Pacific, USA — Tags: , , — Nicholas @ 08:41

Australian bush hats can apparently be made of tinfoil:

Australian Mining Magnate Clive Palmer has declared the CIA is behind a Greenpeace campaign that aims to slow the growth of Australia’s export coal industry.

[. . .]

The Greenpeace campaign centres on a document titled Stopping the Australian Coal Export Boom (PDF) which explicitly states that “Our strategy is to ‘disrupt and delay’ key projects and infrastructure while gradually eroding public and political support for the industry and continually building the power of the movement to win more.” Greenpeace hopes to do so in order to build support for fuels other than coal, in order to reduce global carbon dioxide emissions.

The Greenpeace document says it is “… based on extensive research into the Australian coal industry, made possible by the generous support of the Rockefeller Family Fund.”

That statement is Palmer’s smoking gun, as he said at an event today, as reported by the Australian Broadcasting Commission and other outlets, that “You only have to go back and read the Church Report in the 1970s and to read the reports to the US Congress which sets up the Rockefeller Foundation as a conduit of CIA funding.”

March 19, 2012

Finland’s cold-cut warrior, RIP

Filed under: Economics, Europe, History, Media, Russia — Tags: , , , , , — Nicholas @ 10:13

The most unusual cold war hero died recently. Eero Iloniemi tells the story of Finland’s Väinö Purje and how his TV commercials featured in the Cold War in the Baltic:

While Purje is virtually unknown in the West his exploits are legendary in the Baltic States, especially in Estonia. Alo Lohmus of Estonia’s leading daily Postimees referred to Purje’s contribution to the Cold War as part of a ‘spiritual nuclear bomb’ that blew apart a corrupt system.

High praise, indeed, for a modest tradesman. That a butcher could gain such a position in a global conflict is one of the most curious chapters of Cold War history.

Due to its proximity to the Baltic Soviet republics, Finnish television broadcasts penetrated the Iron Curtain, into Estonia and on occasion Latvia. Purje, who was the star of Finnish retail chain Kesko’s food adverts, became a cult figure in Estonia. From 1974 to 1981 he featured in more than 100 television spots showcasing sausages and cutlets, all virtually unknown in the then Soviet republics.

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