Prologue – What sled dogs and the Yukon teach us about the importance of trust

 

Many years ago I visited Whitehorse, Yukon. It is a truly magical place. To visit the Yukon is to feel that you are experiencing another planet.  Amazingly, it’s easily accessible. During that visit I met a man who ran a “Sled Dog Tour” business. The dogs would run together – each dog doing its part. A sled dog racing team operates as a “well oiled” unit. Each dog – whether the lead dog or one of the dogs pulling from the middle – has a very specific and well understood role. Together the dogs worked together to create an outcome.  That outcome far exceeded what any one dog could achieve individually. I asked the man running the business how it was that  the dogs worked so well together. He answered that the effectiveness of the dogs as a unit was the result of one simple thing:

“Trust in each other”

He meant that individually the dogs trusted each other to work toward a common goal and each dog trusted that the other dogs would behave as they were expected to behave.

That’s obvious. But, sometimes the obvious can be difficult to see. If the dogs did not trust each other they could not  operate as an effective unit. Absent trust, each dog would be left to only his own capabilities. With trust great things could be accomplished. (Political systems are organized around the question of what things are better left to individuals and which things are achieved better as a group. For example, should a country have a national health card system?)

What’s true of the effectiveness of “sled dogs” is true of the interaction of countries.

Trust isn’t everything! It’s the only thing!

It’s also true that the Yukon is an incredible place to visit!

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Seasons Greetings And A Celebration of  14 years of the Isaac Brock Society

 

The Isaac Brock Society officially began on December 10, 2011 with a post written by Pretros about the FBAR. Fourteen years letter the FBAR is still an issue for Americans abroad and fourteen years later the Isaac Brock Society continues on. I take this opportunity to thank some (perhaps not all) of the original founders of Brock who had the vision, courage, generosity and skills to create Brock. The site was created following the “OVDI Summer of 2011” and the fear and trauma that caused. The combination of the IRS, the tax compliance industry and the media were combining to deliver the message that a “U.S. birthplace” made one a target for retroactive taxation, forms and penalties. The message was made more powerful because of the alignment of the voices of the IRS, the tax compliance community and the media. The reality was that none of the three understood the situation of Americans abroad. Yet, it took some time for their ignorance to become clear. The Isaac Brock Society was conceived in the message to bring clarity, calm and understanding to the hysteria. The founders of Brock deserve special thanks and acknowledgementt. In that spirit I offer a special shout out to Petros, Calgary411, Pacifica and Deckard.

Those founders of Brock “dug the foundation” on which the Isaac Brock Society was built. Once that foundation was built, the contributors and commenters completed the “house of Brock” and generated the massive commentary. An example is this holiday post from 2019 which captures the essence of the Isaac Brock Society.

Two of the many lessons and observations from that period include:

1. The whole is often greater than the sum of the parts.

When working together individuals, groups and institutions can achieve more than if they work separately. The fear instilled by the IRS, tax compliance industry and media working together (although not a deliberate conspiracy) was far more effective when it came collectively.

2. “Trust isn’t everything. It’s the only thing.”

The 2011 OVDI program, the enforcement of FBAR, the rollout of FATCA and the enforcement of citizenship taxation was a horrible time for Americans abroad. It included a crisis of trust. No longer did Americans abroad trust the United States to be their friend and supporter. Many began to view the United States as a threat to their very existence.

The “OMG” (“Oh My God”) Moment and the erosion of trust …

In 2011 Americans abroad experienced their OMG (“Oh My God”) moment.

For many individual Americans abroad, the enforcement of FBAR, FATCA, citizenship taxation, etc. was the moment that they understood that they could not trust the United States to consider their interests. The United States of America – the country of their birth -became a threat to their lives

In 2025 the rest of the world experienced a collective OMG moment.

The OMG moment included the realization that the United States could not be trusted to maintain its relationship to other countries that had existed for  80 years. The United States reputation as a country that could be trusted came to an end. (Obviously no country is tied to another for eternity. That said the “expectation interest” developed in many relationship dictates that relationships should be ended with notice and concern for the impacts on the other party.)

As Charlie Munger said:

“… reputation and integrity are your most valuable assets and can be lost in a heartbeat.”

For Americans abroad the OMG moment included the terrifying realization that the U.S. government was a threat to the stability of their lives.

For other countries the OMG moment included the terrifying realization that a trusted friend could no longer be trusted.

Trust is a casualty of the OMG moment.

 

Trust lost is difficult to regain

We know from the school of life, that once trust is broken it’s difficult to regain that trust.

Trust is the foundation for a functioning society and economy. If people don’t or can’t trust you, they are unlikely to interact with you. A perception that you are trustworthy is a necessary condition for success in your personal life, business life and public life. Although trust is subjective, it is influenced by the  perception that people have of you and  and the reputation that you enjoy in the community.

As the legendary Charlie Munger is rumored to have said:

Trust v. Agreement: To trust somebody is not the same as agreeing with somebody or approving of what they do

You can trust somebody and not agree with them. Trust is an expectation that a person will behave in a predictable way. You can disagree with the way they behave or agree with the way behave. You don’t have to agree with them to trust them.

2025 – The year the United States ceased to behave as expected and ceased to be trusted

In 2025, the United States ceased to behave in a way that was consistent with the expectations of the last 80 years.

If we analogize the first world democracies to a “sled dog” team it would be rational to see (or have seen) the United States as the “lead dog”. For approximately 80 years the United States, as the “lead dog” behaved in a trustworthy and predictable way. Whether on issues of defence, trade, access to the U.S. market, tourism, student visas  or a general commitment to freedom and democracy, the United States was a trustworthy (albeit imperfect) “lead dog”. The United States and the rest of the team were pulling together in a consistent direction. To be clear, the United States was by far the biggest beneficiary of this arrangement.

In 2025 “trust” evaporated and the world learned that the United States could no longer be expected to behave as it had since the end of World War 2. The trust in the United States was shattered. The “lead dog” was no longer moving in the same direction as the rest of the team.

2025 – How “Fortress America” has caused a loss of trust in America

2025 has been a transformational year of change for the United States, Canada, Europe and the rest of the world. Much of the trauma, change and opportunity has come from a U.S. administration that has created a kind of “Fortress America”. Although difficult to define, the creation of Fortress America has been the creation of a world where (1) Physical access to America, with respect to people, goods or services and (2) What leaves America (whether goods, services or people) is highly regulated. In general the effect has been to create uncertainty and cost if one wants to deal with America.

By creating Fortress America, the  United States undermined confidence in the security, social and trade architecture that has existed since end of the second world war.

Changes in American policy with respect to people or products entering the United States include:

– imposing tariffs on goods entering the United States

– making it more difficult for individuals to enter the United States

– making it more difficult for those inside the United States to remain in the United States

Questioning long held assumptions about who is an American citizen leading to the question of whether the individual has the right to be in the United States:

– the presumption of “birthright citizenship” has been called into question

– the forcible removal of individuals who may be American citizens

A general breakdown in the expectation that individuals can expect procedural protections in the U.S. legal system:

– the bald denial that an individual was an American citizen in the absence of legal process

– the refusal to administer laws as they are understood

– expansive and aggressive interpretations of what is authorized under the law

– seeking, identifying old laws that have not been applied

Declining trust and the probability of geopolitical change

– would the United States abide by its NATO commitments?

– to what extent does the United States have a moral (or other) obligation to defend Ukraine?

– are the principles of international law binding on the United States?

Some of these questions provide fodder for future posts.

How should Canada and other countries respond to the loss of trust in the United States?

One can acknowledge the world as it is or acknowledge the world as you wish it would be.

As various world leaders have stated, the “rules based international order” is over. The United States can no longer be trusted to act in the interests of western style democracies (as imperfect as they may be). Although it is theoretically possible to restore trust lost, it would take a very long time

A tragedy Canada, the world, but ESPECIALLY the United States

The world needs the United States. It needs a United States that is fully engaged in the world and that exhibits moral leadership. The United States needs to be trusted. There is no other country that can play as effectively the important role of leadership and  a commitment to the ideals of freedom and democracy.

Regrettably the United States has elected to NOT play that role. Can the rest of the first world democracies encourage the United States to become part of “Team Freedom and Democracy?”

How should Canada and other countries behave differently in new world?*

In the interests of their sovereignty, Canada and Europe must pay the considerable price of deleveraging from the United States. They must maximize trade with other countries. They must not enter into agreements with the United States that impose undue restrictions on their sovereignty. They must develop payment mechanisms that minimize the use of the U.S. dollar as a reserve currency. They must  renegotiate tax and extradition treaties which currently allow the United States to export U.S. laws around the world. They must resist the U.S. claim that it may use its rules of citizenship taxation to claim the residents of other countries as U.S. tax residents.

Q. Will this be difficult?

A. It will be difficult.

The road to sovereignty is a long process and is achievable. People and countries overestimate what they can do in the short run and underestimate what they can do in the long run.

To quote from a recent Substack post written by former Liberal leader Michael Ignatieff:

 

Now that we are on our own, we need to snuff out the deferential reflex inside us and seize the opportunities opened up by American decline. The emperor is not a serious person. His very unreliability spreads dread and fear but his enemies have his number and have concluded his threats are bombast. This creates dangers aplenty, but equally, new opportunities to rebuild our political and economic sovereignty.

 

About change – the opportunity and necessity of rebuilding political and economic sovereignty

It is clear that Canada, the United States and other first world democracies require both economic and political change. Change is often good and is always uncomfortable. For many change is a threatening and to be feared. Change is and should be enthusiastically embraced as an investment in Canada’s sovereignty and long term viability.

“Democracy is not a spectator sport” – Individual voters must reclaim the democratic process!

In Canada, the United States and other first world democracies, the political process is a playground for the political parties. Individuals do NOT matter. The result is that individuals are forced to react to change without playing any part in what the changes should be.

In Canada and other countries deleveraging from the United States should be accompanied by political and electoral reform at home.

Happy New Year to all! 2026 will be a very interesting year!

 

John Richardson

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*Appendix – I suggest this video accurately expresses the events of 2025.